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: Smartsheet stock falls more than 10% as forecast suggests free cash flow will underperform for the rest of the year

Smartsheet Inc. SMAR shares dropped in the extended session Wednesday after a light free-cash-flow outlook upset an otherwise beat-and-raise quarter. Smartsheet shares dropped as much as 14% after hours, following a 5.2% decline in the regular session to close at $49. For the year, the company forecast free cash flow, or FCF, of $110 million, while analysts surveyed by FactSet are estimating $110.9 million. For the first quarter, Smartsheet reported FCF of $31.9 million, while the Street was looking for $23.5 million, suggesting that free cash flow for the remainder of the year will underperform expectations by a greater degree than the $900,000 gap in the annual estimates would indicate. The cloud-based work-management platform provider reported a first-quarter loss of $29.9 million, or 23 cents a share, compared with a loss of $70.5 million, or 42 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were 18 cents a share, versus a loss of 18 cents a share in the year-ago period. Revenue rose to $219.9 million from $168.3 million in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of 8 cents a share on revenue of $214.1 million, based on the company’s forecast of 8 cents to 9 cents a share on revenue of $213 million to $215 million. The company forecast adjusted net income of 7 cents to 8 cents a share on revenue of $228 million to $231 million for the fiscal second quarter, while analysts expect 7 cents a share on revenue of $230.4 million. Smartsheet expects adjusted earnings between 37 cents and 44 cents a share on revenue of $943 million to $948 million. Analysts estimate 35 cents a share on revenue of $945.9 million for the year.

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