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In Q4, 98 customers expanded their Smartsheet ARR by more than a hundred thousand dollars. We now have 65 customers with ARR over a million dollars up from 45 a year ago, and we ended the quarter with annualized recurring revenue with $1.031 billion and more than 14.3 million Smartsheet users. In Q4, we expanded with customers such as Nutanix, University of Southern California, Genesis Motor America, the City of San Jose and Dairy Queen, among others. This past quarter we saw significant expansion with a multinational information technology company. Smartsheet has been used within the marketing and sales departments at the company for a number of years. After a detailed RFP process for an organization-wide collaborative work management solution, Smartsheet was selected over competitors for enterprise-grade scale and world-class security.

Adoption has been high with a growing demand for licenses and implementation across marketing operations, M&A and more. These units have been leveraging the full breadth of premium capabilities of Smartsheet to replace manual processes, increase efficiency and improve collaboration. We had an expansion deal with the European-based leading global science and technology company. Their need for enterprise-grade security and governance was key to our expansion deal that included an upgrade to Advanced Gold. The company's IT group underwent an extensive evaluation to consolidate their project management needs under one solution across their three main business divisions of life sciences, electronics, and healthcare. The company selected Smartsheet and has consolidated their thousands of users under a one Smartsheet program in a transformation of our partnership with them.

Going forward, the company will extend the use of its Smartsheet use to other units in their drive towards efficiency and optimization. We saw significant expansion with a leading global entertainment and ticketing company. Previously, the team relied on very manual processes to market the high-profile and high-budget tours they manage all around the world. After engaging with our customer outcomes journey team, the customer discovered how Smartsheet could drive greater value by automating repeatable work efficiently, adapting to changes, and improving communication. Now the company is using a tailored solution to manage all marketing operations in regards to their concert tours and artists and benefiting from an integration with their Salesforce-based system of record.

Going forward, the company has planned additional phases of implementation to expand the transformation and efficiency already realized with the marketing and tour management solution to other parts of the organization. The ability to rapidly scale was a key element to a recent international expansion at an APJ-based multinational corporation that provides digital transformation consulting to enterprises. A unit focused on their Middle East delivery region needed a scalable solution for reporting on financials across their portfolio of projects, which involve multimillion-dollar contracts with their customers. We worked with a key channel partner to deliver solution leveraging the Smartsheet platform. This initial solution will support one regional delivery team with a plan to scale to all their global delivery teams.

FY ‘24 was a big year for our platform in the area of Gen AI our first two AI features became generally available to customers on our enterprise plans at the beginning of last month. The first capability allows our customers to create tailored formulas for their input, speeding up data-driven decisions. The second interprets customer data for clear text summaries and translations, the customer response and usage for AI has been strong, and since the beginning of February, more than a third of our enterprise customers have leveraged these new tools. Also, in FY ‘24, we launched our free plan and the self-discovery of our capabilities both continue to perform well. And while contribution to our Q4 results was small, we are encouraged by the compounding growth rates we're seeing from these initiatives.

Our free plan which launched at the beginning of FY ‘24, has seen steady growth. Through the fiscal year, our free plan has grown across thousands of domains in January we added 500 paying new customers via the free plan, a new monthly record. In Q4, over $2 million of capability bookings were the result of self-discovery trials. This is up from less than a million dollars in Q3, and this motion continues to drive exposure of our capabilities to more and more customers. Nearly half of our Q4 self-discovery sales were with customers who purchased the capability for the first time. Given the success, we will apply this approach to additional capabilities in FY ‘25. As I mentioned earlier, we surpassed 1 billion in ARR in Q4. We got to this point by focusing on our customers and building an enterprise-grade platform that can scale to their most demanding needs.

I'd like to call out our Chief Revenue Officer, Mike Arntz, who is retiring today. When Mike joined Smartsheet over seven years ago, our ARR was under a $100 million and our average customer contributed less than a $1,000 per year. During Mike's tenure, our ARR and contributions per customers has grown by 10x. I'm grateful for his service and wish him all the best in retirement. Mike will remain on as a consultant through mid-May to support the transition to his successor. As we enter the post $1 billion ARR growth phase of the company, the strategy that underpins our go-to-market and product and innovation will be refined and expanded. Executing this strategy will be a leadership team consisting of proven executives each motivated for the next tier of growth and customer success.

Today, we announced that Max Long has joined Smartsheet to service President of Go-to-Market. Max has over three decades of experience leading commercial teams for global tech companies with diversified offerings, including Microsoft and Adobe, and most recently NetApp, where he served as Chief Commercial Officer. We will be unifying go to market operations under Max and unifying product and innovation under Praerit Garg, newly appointed President of Product and Innovation. Prior to joining Smartsheet in 2019, Praerit served in leadership roles at Microsoft and Amazon, and under his product leadership at Smartsheet, our platform has been recognized as the leading enterprise platform in work management, serving the largest number of sophisticated scale deployments in the category.

We're setting the foundation for the next era of profitable growth with proven more efficient go-to-market motions paired with enterprise-grade product innovation informed by decades of data, work patterns and customer use cases. We see a significant opportunity to win additional market share by delivering AI enhanced collaborative workflow solutions for customers. I see it as a tremendous opportunity representing multiple vectors of growth. In the enterprise segment, productized and scalable, no-code workflow solutions are undercutting more expensive slower to deploy alternatives, regardless of the macro environment significant demand exists for more efficient solutions to power critical workflows. Smartsheet is well-positioned to capture this opportunity due to our category leading scalability, no-code platform and enterprise-grade security.

In an effort to drive performance, particularly in the SMB segment, we will deploy our simplified design pricing and onboarding experiencing during the course of the year. We are on a mission to remove friction and maximize self-directed experiences for our customers to enable faster time to value. We are taking the right steps to execute our strategy and to bring our enterprise-grade work management platform to organizations of all sizes all around the world. We are well positioned for our next phase of growth to $2 billion and beyond. Now let me turn the call over to Pete.

Pete Godbole: Thank you, Mark. Our performance at FY ‘24 demonstrated our ability to drive durable growth with improving profitability despite a challenging business environment. We outperformed our guidance in Q4, however, similar to prior quarters, we continue to see tighter domestic spending tied to the current macro environment negatively impacted expansion, particularly in the SMB segment of our business. This served as a headwind to our overall growth rate. The macro impact on our SMB segment in Q4 was worse than Q3, and we're expecting the segment of our business to continue to be under pressure in FY ‘25. In FY ‘24, we took steps to reduce our use of stock and compensation structure. This resulted in our stock-based compensation as a percentage of revenue to decline in FY ‘24 from the previous year.

We expect our SPC as a percent of revenue to continue to decrease in FY ‘25 and beyond. Additionally, in response to investor feedback, going forward we will be disclosing and guiding to annualized recurring revenue or ARR rather than billings. ARR provides a better reflection of our quarterly net bookings performance. One additional call out. In the past, we have used ARR and ACB interchangeably in our non-financial metrics. Starting this call, we will be standardizing on ARR. I will now go through our financial results for the fourth quarter and the full year, unless otherwise stated all references to our expenses and operating results on a non-GAAP basis, and are reconciled to our GAAP results in the earnings release and presentation that was posted before the call.

For the full fiscal year ‘24, we ended with total revenue of $958.3 million of 25% year over year, and billings of $1.069 billion up 20% year over year. Non-GAAP operating income was a $100.9 million, representing an operating margin of 11% and free cash flow was $144.5 million, representing a free cash flow margin of 15%. Turning now to our quarterly results. Fourth quarter revenue came in at $256.9 million, up 21% year over year. Subscription revenue was $244 million representing year-over-year growth of 23%. Services revenue was $2.9 million. Revenue from capabilities made up 34% of subscription revenue. Turning to billings, fourth quarter billings came in at $341.9 million representing year-over-year growth of 19%. Approximately 95% of our subscription billings were annual with about 2% monthly.

Quarterly and semi-annual represented approximately 3% of the total. Annualized recurring revenue or ARR grew 21% in the fourth quarter to $1.031 billion. Moving on to our reported metrics. The number of customers with ARR over $50,000 grew 22% year-over-year to $3,924, and the number of customers with ARR over a $100,000 grew 28% year-over-year to $1,904. These customer segments now represent 66% and 53% respectively of total ARR. The percentage of our ARR coming from customers with ARR over $5,000 is at 91%. Next, our domain average ARR grew 15% year-over-year to $9,672. We ended the quarter with a dollar-based net retention rate inclusive of all our customers of 116%. The full churn rate was 4%. Now, turning back to the financials, our total gross margin was 85%.

Our Q4 subscription gross margin was 88%. Overall operating income in the quarter was $39.6 million or 15% of revenue. Free cashflow in the quarter was $56.3 million, a new quarterly record for our company. Now let me move on to guidance. We're electing to remain conservative with respect to our FY ‘25 guidance. Given changes in our sales leadership, the timing of our initiatives aimed at driving incremental growth and the ongoing macro influence spending constraints. For the first quarter of FY ‘25, we expect revenue to be in the range of $257 million to $259 million, and non-GAAP operating income to be in the range of $32 million to $34 million. We expect non-GAAP net income per share to be $0.26 to $0.27 based on diluted weighted average shares outstanding of 141 million.

For the full fiscal year ‘25, we expect revenue of $1.113 billion to $1.118 billion representing growth of 16% to 17%. We expect services to be around 5% of total revenue. We expect our non-GAAP operating income to be in the range of $135 million to $145 million, representing an operating margin of 12% to 13% and non-GAAP net income per share to be a $1.06 to a $1.13 for the year based on $142.2 million diluted weighted average shares outstanding. We expect our FY ‘25 ARR growth to be 14%. Regarding seasonality, we expect quarterly ARR growth rates to follow a similar trend as last year with higher growth rates at the beginning of the year. Based on the relationship between dollar-based net retention rate and ARR, we expect our net retention rate to follow a similar trajectory as ARR through the course of the year.

We also expect our FY ‘25 free cash flow to be $200 million. To conclude in FY ‘24, we made significant progress on our profitability and free cash flow while navigating a difficult economic climate. Moving into FY ‘25, we're laser-focused on growing our enterprise leadership position and further expanding profit margins. This next phase of growth will be driven by an energized team committed to streamlining our go-to-market efforts and compelling product innovations. Now let me turn the call over to the operator. Operator?

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