Smartsheet stock is surging after its Q2 report, and investors are betting a buyout could be on the horizon.
Smartsheet (SMAR 5.92%) stock is posting big gains in Friday’s trading. The productivity and collaboration software specialist’s share price was up 5.8% as of 12:30 p.m. ET, according to data from S&P Global Market Intelligence.
Smartsheet stock is climbing after the company published better-than-expected results for the second quarter of its 2025 fiscal year (which ended July 31). Today’s bullish momentum follows big gains yesterday after it was reported that the company was potentially on track to be acquired by a group of private-equity firms.
Smartsheet crushed Wall Street’s Q2 earnings target
Smartsheet posted non-GAAP (generally accepted accounting principles) adjusted earnings per share of $0.44 in fiscal Q2, which came in far better than the average analyst estimate’s call for adjusted earnings of $0.29 per share. Meanwhile, revenue increased roughly 17% year over year to hit $276.4 million — beating the average Wall Street target by $1.94 million. Annualized recurring revenue increased 17% year over year to hit $1.093 billion, and the company posted $57.2 million in free cash flow — a new record for the business.
What’s next for Smartsheet?
For the third quarter, Smartsheet is guiding for sales to be between $282 million and $285 million. This target range actually fell short of the average analyst target’s call for sales of $285.2 million in the period, but the company’s earnings guidance came in ahead of expectations. Management expects to report adjusted earnings between $0.29 per share and $0.31 per share, beating the average Wall Street target’s call for per-share earnings of $0.29.
For the full year, Smartsheet is targeting revenue between $1.116 billion and $1.121 billion. This guidance range once again fell short of the average analyst target, which had called for $1.12 billion in sales, but earnings guidance also beat Wall Street’s expectations. Management is targeting adjusted earnings per share between $1.36 and $1.39, coming in far better than the average analyst estimate’s call for adjusted earnings per share of $1.26.
Smartsheet’s Q2 report and forward guidance were strong on their own, and the report is bolstering the idea that the company is an attractive acquisition target. A group of investors including Vista and Blackstone is reportedly in talks to acquire the business, and the software specialist’s recent report could help to push a buyout price higher.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Blackstone and Smartsheet. The Motley Fool has a disclosure policy.
