Smartsheet Inc. (SMAR): Business Model Canvas [Dec-2025 Updated]

You're digging into how Smartsheet Inc. (SMAR) is actually making money right now, especially with that big pivot to AI and the new pricing structure they rolled out in 2025. Honestly, looking at their engine, it's clear the subscription model is the core, hitting $273.7 million in Q3 FY2025 alone, pushing their Annualized Recurring Revenue to $1.133 billion as of that same quarter. With 85% of the 2024 Fortune 500 relying on them, this isn't just a project tool; it's enterprise infrastructure. I've mapped out the entire nine-block canvas for you below, showing exactly where they partner, what they spend on R&D, and how they keep those high-value customers locked in. See how the pieces fit together.

Smartsheet Inc. (SMAR) - Canvas Business Model: Key Partnerships

You're looking at how Smartsheet Inc. scales its enterprise reach through alliances as of late 2025. The partnership strategy is clearly focused on cloud hyperscalers, channel sales expansion, and deep application integration to embed the platform across the customer's tech stack.

The relationship with Amazon Web Services (AWS) solidified with a new multi-year Strategic Collaboration Agreement (SCA) announced in November 2025. This agreement builds upon a prior development relationship, now focusing on sales and go-to-market collaboration. This SCA is set for a three-year term, initiating a global co-sell motion across North America, EMEA, and APJ. A key financial benefit for customers is the streamlined procurement through the AWS Marketplace, which is expected to reduce transaction times by up to 60 percent, allowing eligible committed AWS spend to be drawn down for Smartsheet purchases.

The channel ecosystem is a significant revenue driver, accounting for about one quarter of Smartsheet Inc.'s total business as of late 2025. The Smartsheet Aligned partner program is the core structure for this ecosystem.

Here's a look at the scale of the partner network:

Smartsheet Inc. has distinct tracks within the Aligned program to address different partner capabilities. This includes a specialized, upgraded track for Global Systems Integrators (GSIs) designed to support large-scale deployments and customization needs across multinational regions. While specific reseller agreements with CDW, Carahsoft for US Government, and Zones are part of the broader Reseller track, the focus is on rewarding deep expertise and scale, as evidenced by the new Global Partner Badge coming in February 2026.

Integration depth is critical for platform stickiness. Smartsheet Inc. offers over 175 integrations, with built-in connections for over 140 apps. This allows data to flow directly from Smartsheet to other enterprise systems, reducing manual workarounds. You see this connectivity across key enterprise tools:

• Jira Software for request and ticket management.
• Salesforce for linking CRM deals to project plans.
• Microsoft Power BI for data visualization and embedding analytics.
• Slack for team communication and alerts.

This level of integration helps Smartsheet Inc. serve its base, which includes 123,000 customers and usage across 85% of the Fortune 500.

Finance: review the Q4 2025 channel revenue contribution against the one quarter target by end of next week.

Smartsheet Inc. (SMAR) - Canvas Business Model: Key Activities

You're looking at the core engine driving Smartsheet Inc.'s value creation as of late 2025. The focus is clearly on embedding intelligence and scaling the enterprise footprint, especially while navigating that major ownership transition.

Developing and enhancing the core AI-enhanced work management platform.

Smartsheet Inc. is actively pushing its platform transformation, centering on AI capabilities. This is a major activity to keep the platform competitive against evolving work management solutions. You saw evidence of this momentum in Q2 Fiscal Year 2025, where there was a nearly 50% sequential growth in the number of users utilizing their AI tools.

The platform enhancements are concrete, not just talk. At the November 2025 Engage conference, Smartsheet Inc. unveiled the latest evolution of its product, which included:

• Scenario planning capabilities.
• Portfolio reporting capabilities.
• Generative and agentic AI features, such as a new Smart Assist AI companion and digital gateway tool.

Furthermore, in Q3 Fiscal Year 2025, the company introduced a Smartsheet connector for Amazon Q Business to expand AI-enabled work insights. This development work is crucial for maintaining the platform's description as the "AI enhanced enterprise grade work management platform."

Executing the new pricing and packaging model transition for existing customers in 2025.

A significant operational activity this year involved migrating the customer base to a new structure. Smartsheet Inc. introduced a new subscription model and self-service capability for premium features back in Q2 Fiscal Year 2025. The plan was that all existing customers would transition to this new model during calendar year 2025. This transition is a key activity that directly impacts near-term revenue recognition and retention metrics. Honestly, you need to watch the stabilization of expansion metrics closely, as the decline in the overall dollar-based net retention rate to 111% in Q3 FY2025 was noted as consistent with commentary about smaller customer churn during this pricing model migration.

Expanding the global partner ecosystem and channel sales footprint.

Smartsheet Inc. is clearly focused on channel leverage to drive global reach. The company reported having about 800 channel partners, with approximately one quarter of the company's business coming through that channel as of November 2025. This is a deliberate effort to expand beyond direct sales. The partner ecosystem is formalized under the Smartsheet Aligned program, which boasts over 750 partners.

Key activities in this area include formalizing strategic relationships. For instance, Smartsheet Inc. announced a three-year Strategic Collaboration Agreement with Amazon Web Services (AWS) in November 2025, adding joint sales and go-to-market efforts. The focus on channel excellence was highlighted by the 2025 Partner Award Winners announcement on November 3, 2025.

For context on the structure, a February 2023 profile indicated that Smartsheet Inc. had a total of 254 partner engagements, with Consulting Services, IT Management, and Business Process Applications comprising 75.4 percent of that total. That structure is definitely evolving with the new focus on global systems integrators (GSIs) and expansion into Asia and Europe.

Here's a look at the customer cohort growth that partners are helping to drive:

Maintaining enterprise-grade security, compliance, and platform uptime.

Security and compliance are non-negotiable key activities for an enterprise platform. Smartsheet Inc. builds security into the platform, using encryption for data at rest (AES 256) and in transit (TLS 1.2). They contract third parties for audits, including a SOC2 Type II assessment and attestation.

Compliance-wise, Smartsheet Gov is FedRAMP authorized and assessed at DoD Impact Level 4 (IL4). Even though Smartsheet Inc. is no longer publicly traded, they elected to maintain SOX-aligned internal controls to support strong financial governance.

Operational availability is supported by 24/7 event and incident monitoring via an in-house response team. The platform uses infrastructure provided by Amazon Web Services, Inc. ("AWS").

Driving customer expansion to increase dollar-based net retention rate.

This activity is measured directly by the dollar-based net retention rate (DBNRR), which reflects upsells net of contraction/attrition from the prior year's cohort. The DBNRR trend shows the challenge of expansion versus retention:

• Q3 Fiscal Year 2025 DBNRR: 111%.
• Q2 Fiscal Year 2025 DBNRR: 113%.
• Q1 Fiscal Year 2025 DBNRR: 114%.

The expansion component is still strong at the enterprise level; the enterprise retention rate was 120% for Q2 Fiscal Year 2025. This is supported by the growth in average spend per customer. In Q3 Fiscal Year 2025, the average ARR per domain-based customer reached $10,708, a 16% increase year-over-year. Furthermore, Annualized Recurring Revenue (ARR) hit $1.133 billion, up 15% year-over-year in Q3 FY2025.

The company is seeing success in landing larger deals, which is a direct driver of expansion. For example, in Q3 FY2025, the number of customers with $100,000+ ARR rose 20% year-over-year to 2,137.

Finance: draft 13-week cash view by Friday.

Smartsheet Inc. (SMAR) - Canvas Business Model: Key Resources

You're looking at the core assets Smartsheet Inc. relies on to deliver its value proposition, the things that make their platform hard to replicate. These aren't just line items; they are the engine of the business.

The primary asset is the cloud-based, AI-enhanced Intelligent Work Management platform itself. This is the technology backbone that lets customers manage and automate complex workflows at scale. It's the core product that generates the subscription revenue you see in the financials.

Next, consider the intangible moat: the proprietary data model and intellectual property for workflow automation. Smartsheet owns and enforces a number of patents with the United States Patent & Trademark Office, including, but not limited to, U.S. Patents No. 7,107,268 and No. 9,652,446. They use copyright laws to protect the code for the platform and its commercial offerings. This IP protects the unique ways their system handles work orchestration.

The customer base is a massive resource, especially the depth within the enterprise segment. Smartsheet Inc. serves approximately 85% of the 2024 Fortune 500 companies. This penetration validates the platform's enterprise-grade capabilities and acts as a strong reference point for new sales. The platform powers mission-critical work for thousands of organizations worldwide.

Financially, the scale of committed revenue is a key resource for planning and stability. As of the third quarter of fiscal year 2025, the Annualized Recurring Revenue (ARR) base stood at $1.133 billion. This figure reflects strong customer commitment and recurring income streams. To give you a clearer picture of the platform's financial health and customer expansion at that point in time, here are some related metrics:

The human capital-the skilled engineering and product development talent-is defintely crucial. This team is responsible for the continuous innovation that keeps the platform competitive, including the integration of new AI features. As of late 2024, Smartsheet had more than 3,300 employees, representing the specialized knowledge required to maintain and evolve this complex enterprise system.

You can see the impact of these resources in the operational highlights from that quarter:

• GAAP net income was $1.3 million, a significant shift from a loss in the prior year period.
• Non-GAAP operating income reached $56.4 million.
• Customers with ARR of $100,000 or more grew by 20% year over year.
• Free cash flow was $61.8 million.

Smartsheet Inc. (SMAR) - Canvas Business Model: Value Propositions

You're looking at the core reasons why large enterprises, including 85% of the Fortune 500, commit to Smartsheet, which as of late 2025, supports almost three million active projects across its 123,000 customer organizations.

Centralized, Flexible Platform for Diverse Work Management and Project Types

Smartsheet Inc. offers a platform that handles structured work with the familiarity of a spreadsheet but scales to complex portfolios. This flexibility is key for enterprises managing diverse work styles. The platform's scale is evident in its financial performance; for instance, in Q3 Fiscal Year 2025, Annualized Recurring Revenue (ARR) reached $1.133 billion, showing deep customer commitment.

Here's a look at the enterprise commitment:

AI-Driven Features for Summarization, Content Generation, and Formula Creation

The platform embeds AI to augment human intelligence, moving teams from reactive tracking to predictive execution. This is where the platform helps reclaim time lost to context-switching. For marketing and creative professionals surveyed in their 2025 report, AI usage resulted in significant time savings:

• 84% save over five hours weekly using AI.
• 30% report saving more than 10 hours weekly.

The AI capabilities directly support tasks like generating content, summarizing long discussion threads (the 'Get the Gist' feature), and easily generating complex formulas. Adoption shows a divide: 94% of executives use AI at least occasionally, compared to 69% of individual contributors.

Enterprise-Grade Governance, Security (SSO), and Audit Reporting for CIOs

For CIOs, trust and control are non-negotiable, which is why Smartsheet Inc. emphasizes its security posture. The platform guarantees its AI models do not train on customer data, a critical trust factor. Governance is supported by established compliance standards:

• Holds SOC 2 Type II audit reports.
• Holds ISO 27001 audit reports.
• Offers HIPAA-ready options.

Administrators can choose from three governance models-decentralized, centralized, or shared-to manage spend, security controls, and user access. Key enterprise controls like Single Sign-On (SSO) are typically included in the higher-tier plans.

Improved Staff Efficiency and Productivity, Saving Customers Hours Weekly

The value proposition here is directly tied to reducing the friction of fragmented tools. The data shows that the pain point is significant before adopting a unified platform. For marketing professionals, switching between tools causes an average loss of 7.3 hours per week. By breaking down silos and automating workflows, Smartsheet aims to eliminate this wasted time, allowing teams to focus on strategic work. The platform's focus on Intelligent Work Management is designed to help teams execute with unprecedented speed and precision.

Single Source of Truth by Integrating Siloed Data from 140+ Apps

Smartsheet Inc. acts as an orchestration layer, connecting data from disparate systems to create a central hub. This breaks down the silos that hinder real-time visibility. The platform offers over 175 integrations with enterprise tools. This ecosystem includes connections to major platforms like:

• Salesforce and Microsoft Dynamics (CRM)
• Google Workspace and Microsoft Teams (Collaboration)
• Tableau and Power BI (BI Platforms)

The platform's tools, like Data Shuttle, allow for automated import/export of data from most systems, replacing manual export/import processes. Finance: draft 13-week cash view by Friday.

Smartsheet Inc. (SMAR) - Canvas Business Model: Customer Relationships

You're looking at how Smartsheet Inc. keeps its growing base of enterprise and mid-market customers engaged and expanding their spend. The relationship strategy is clearly tiered, reflecting the value and complexity of the customer segment. It's a move to ensure high-value accounts get white-glove treatment while scaling efficiency for the rest.

Dedicated account management and customer success for Enterprise clients.

For the largest customers, the relationship is high-touch. Smartsheet Inc. focuses its dedicated account management and customer success teams on driving deep platform adoption and expansion within the 85% of Fortune 500 companies that use the platform. This focus is paying off, as the enterprise segment shows strong stickiness; the enterprise retention rate was reported at 120% for the second quarter of fiscal 2025. Furthermore, in that same quarter, over 70 customers expanded their Annualized Recurring Revenue (ARR) by more than $100,000, which is a direct indicator of successful, proactive relationship management driving significant upsell. The recent appointment of a new Chief Revenue Officer, who oversees Customer Success and Services, signals a continued organizational commitment to optimizing this entire customer lifecycle.

Proactive, value-adding support moving beyond reactive break-fix.

The shift is away from simply fixing problems to actively demonstrating value that prevents issues and drives better outcomes. This is evident in the focus on enterprise expansion and the rollout of advanced features. For instance, the number of customers with ARR over $100,000 grew to 2,137 as of the third quarter of fiscal 2025, an increase of 20% year-over-year. This growth is fueled by showing customers how to scale their work, which requires proactive guidance on new use cases and governance, not just technical troubleshooting. The platform's evolution into an Intelligent Work Management system itself supports this proactive stance by embedding insights directly into workflows.

AI-assisted support for automated deflection and faster agent research.

Smartsheet Inc. is heavily embedding Artificial Intelligence to manage support volume and accelerate issue resolution. The adoption of their AI tools saw nearly a 50% sequential growth in users during the second quarter of fiscal 2025. This AI integration is already showing tangible results, with approximately 47,000 users saving an estimated 1 million hours through AI automations and performance improvements. New features like the Project Manager Smart Agent, designed to proactively monitor progress and suggest mitigations, represent the next step in agentic, value-adding support, moving beyond simple deflection to active work augmentation.

Self-service and community support for Pro and Business tiers.

For the Pro and Business tiers, which have published per-member pricing of $9 and $19 per month, respectively (billed yearly), the relationship model relies more on scalable, lower-cost channels. The new licensing model, which grants broader access to platform features including AI for more users, is designed to facilitate this self-service adoption. While specific community engagement statistics aren't public, the structure implies that users on these tiers leverage in-app guidance, documentation, and community forums to resolve common queries, reserving high-touch support for Enterprise escalations.

Partner-led professional services for complex deployments and training.

Complex deployments and specialized training are often routed through the partner ecosystem. While direct Professional Services revenue was $13.2 million in the third quarter of fiscal 2025, management projected that services delivered by partners would comprise 4.5% of total revenues for the full fiscal year 2025. This suggests a strategic reliance on partners to handle the heavy lifting of initial configuration and deep integration for large-scale, complex enterprise rollouts, allowing Smartsheet Inc. to keep its direct services revenue stream lean and focused on high-margin subscription growth.

Here's a quick look at how the relationship strategy maps to the customer tiers:

The platform's move to license members instead of just editors, starting the transition for existing customers in 2025, is a key relationship lever designed to increase user engagement and drive future expansion by making the full platform, including AI features, more accessible.

Smartsheet Inc. (SMAR) - Canvas Business Model: Channels

The channels Smartsheet Inc. uses to reach and serve its customer segments are a mix of high-touch, direct engagement for the largest accounts and scalable, digital/partner-led motions for broader market penetration. This hybrid approach is critical, especially following the company's transition to private ownership in January 2025.

Direct Sales Force for Enterprise and Advanced Work Management Plans

The direct sales force remains the primary channel for securing and expanding the largest, most complex Enterprise and Advanced Work Management plan contracts. This high-touch model aligns with the focus on customers with significant Annualized Recurring Revenue (ARR). As of the third quarter of fiscal year 2025, Smartsheet Inc. reported having 2,137 customers with ARR of $100,000 or more, up 20% year over year [cite: 1 in second turn]. This segment requires dedicated, in-person or high-touch virtual engagement from the internal sales team to drive adoption and expansion, evidenced by the 120% enterprise dollar-based net retention rate reported for Q2 FY2025 [cite: 4 in second turn].

Online Self-Service Portal for Pro and Business Plan Subscriptions

To capture the mid-market and smaller teams, Smartsheet Inc. has been actively enhancing its lower-tier self-service options. A key development in fiscal year 2025 was the introduction of a self-service capability for premium features in Q2, with the expectation that all customers would transition to the new subscription model during calendar year 2025 [cite: 2 in previous turn]. This move supports the Pro and Business plans, making procurement simpler for smaller deployments. The Pro plan is priced at $9 per member/month (billed yearly), and the Business plan starts at $19 per member/month (billed yearly) [cite: 7 in second turn].

Global Network of Resellers and Distributors

Smartsheet Inc. relies on a global network to extend its reach, particularly in regions or segments where local presence is key. This network includes Business Partners who function as resellers and/or distributors, providing licenses along with added value like support and training [cite: 6 in third turn]. The overall ecosystem consists of over 750 Smartsheet partners [cite: 6 in third turn]. Key players in this channel include recognized entities like Carahsoft, which was honored as the Partner of the Year for the US Government segment in 2025 [cite: 5 in first turn].

Cloud Marketplaces like AWS Marketplace for Simplified Procurement

The company is actively simplifying procurement through major cloud marketplaces. Smartsheet Inc. expanded its transactability on the AWS Marketplace under a new multi-year Strategic Collaboration Agreement with AWS, signed in late 2025 [cite: 6, 11 in first turn]. This channel is designed to drive efficiency for enterprise buyers, translating directly to a reported 60% faster procurement process through the Marketplace [cite: 11 in first turn]. This allows customers to draw down committed AWS spend, accelerating time-to-value.

Marketing and Sales Through the Smartsheet Aligned Partner Program

The Smartsheet Aligned partner program is the formalized structure for channel engagement, designed to reward deep expertise and drive partner profitability. Enhancements rolled out in late 2025 aim to reduce quote-to-close time and expand multinational delivery [cite: 6, 8 in first turn]. The program supports various partner types, including those focused on reselling and those specializing in services, with the goal of driving partner services revenue at a ratio of 4:1 to product revenue through custom solutions and consulting [cite: 12 in first turn].

The distribution of revenue across these channels can be inferred by looking at customer tiers and strategic focus:

The overall strategy emphasizes driving high-value enterprise deals through the direct team while using the partner network and cloud marketplaces to scale the customer base efficiently. The company's total revenue for Q3 FY2025 reached $286.9 million, with ARR at $1.133 billion [cite: 1 in second turn].

Smartsheet Inc. (SMAR) - Canvas Business Model: Customer Segments

You're looking at how Smartsheet Inc. segments its user base, which is definitely shifting as they move to a new licensing model and get acquired. Honestly, the focus is clearly on landing and expanding within the biggest accounts.

The core of the business is built around Large Enterprises that need to manage complex, cross-functional work. This segment is where the real money is, evidenced by the fact that Smartsheet Inc. powers mission-critical work for approximately 85% of the 2023 Fortune 500 companies. For these top-tier clients, the stickiness is high; for instance, the enterprise retention rate hit 120% in the second quarter of fiscal year 2025.

To give you a clearer picture of the revenue stratification, here's how the customer base looked based on Annual Recurring Revenue (ARR) tiers as of the second quarter of fiscal year 2025. You can see the clear focus on driving those higher-value contracts.

The very top tier represents the most valuable customers. As required, we note that Smartsheet Inc. has 77 customers with over $1 million in ARR. This segment saw a 50% year-over-year increase in the first quarter of fiscal year 2025, showing aggressive expansion at the top end.

For Mid-sized Businesses, the value proposition centers on scaling automation and getting a handle on team workload tracking. While the overall dollar-based net retention rate was 113% in Q2 FY2025, the enterprise segment is clearly outpacing the smaller segments, which reportedly saw slightly elevated churn rates.

The segment for Small Teams and Individuals, often using the Pro plan, is being reshaped by the new subscription model that began rolling out in 2025, which shifts from free collaborators to paid members or viewers. The total number of verified companies using Smartsheet Inc. as of August 17, 2025, was 16,508, giving you a sense of the total addressable market penetration.

Finally, Smartsheet Inc. targets specific sectors, including the Public Sector/Government, often facilitated through partners like Carahsoft. The platform also has deep adoption across key verticals:

• Government
• Construction
• Financial services
• Higher education
• Nonprofit

The total Annualized Recurring Revenue (ARR) for the company reached $1.133 billion by the third quarter of fiscal year 2025, which is a direct result of successfully capturing these diverse customer segments.

Smartsheet Inc. (SMAR) - Canvas Business Model: Cost Structure

You're looking at the cost side of Smartsheet Inc.'s operations as of late 2025. Since the full fiscal year 2025 (ending January 31, 2025) data isn't fully public yet, we'll anchor this analysis on the most recently completed full fiscal year, FY2024 (ended January 31, 2024), and supplement with Q3 FY2025 performance metrics to show current scale. Honestly, for a high-growth SaaS company, the cost structure is dominated by spending to acquire and service enterprise customers.

The largest cost buckets are personnel, Sales & Marketing (S&M), and Research & Development (R&D). For context on scale, Smartsheet reported total revenue of $286.9 million in the third quarter of fiscal year 2025, with Annualized Recurring Revenue (ARR) hitting $1.133 billion. Smartsheet also had more than 3,300 employees as of late 2024, meaning personnel costs are a massive component of the overall spend.

Here's a look at the expense breakdown from the last fully reported fiscal year, FY2024 (in millions USD):

High investment in Research and Development (R&D) for AI and platform innovation.

Smartsheet Inc.'s commitment to platform innovation, especially around AI, is clear from the R&D spend. In fiscal year 2024, R&D expense was $234.07 million. That represented about 24.4% of the total revenue for that year. This investment fuels the development of features like the new generative AI capabilities mentioned in their Q4 FY2024 release, which is crucial for maintaining a competitive edge against other enterprise work management platforms.

Significant Sales and Marketing (S&M) expenses to drive enterprise adoption.

Driving enterprise adoption requires a heavy lift on the go-to-market side. The combined Selling, General & Administrative (S&M + G&A) expense for FY2024 was $661.15 million. This figure represents the bulk of the operating cost, consuming roughly 69.0% of the total revenue for that period. This spend covers the sales force, marketing campaigns, and the overhead to support global operations, defintely including the teams focused on landing those large enterprise contracts.

Cloud infrastructure and hosting costs for the SaaS platform.

The core cost of delivering the Software as a Service (SaaS) platform falls under the Cost of Revenue, which is separate from the operating expenses listed above. For FY2024, the Cost of Revenue was $186.45 million. This figure directly includes the necessary cloud infrastructure and hosting expenses required to run the platform, which scales with usage and attachment storage, such as the 1 TB storage offered on the Business plan.

• Cloud infrastructure is a variable cost tied to subscription revenue.
• The Cost of Revenue for Q3 FY2025 was not explicitly broken out, but total revenue was $286.9 million.
• Professional services revenue, which has lower margins, was $13.2 million in Q3 FY2025.

Personnel costs, defintely including customer support and professional services teams.

Personnel is the single largest driver within both R&D and S&M/G&A. With over 3,300 employees reported in late 2024, the payroll, benefits, and stock-based compensation for engineering, sales, and support staff are substantial. Customer support and professional services teams are directly responsible for onboarding and retaining the enterprise base. While we don't have a specific personnel cost line item, it is the primary driver of the $234.07 million R&D spend and a major part of the $661.15 million S&M/G&A spend.

General and Administrative (G&A) costs to support global operations.

G&A is bundled with S&M in the available data as $661.15 million for FY2024. This covers the necessary overhead to run a global public company, including finance, legal, HR, and executive functions. The move toward profitability, evidenced by a Non-GAAP operating income of $56.4 million in Q3 FY2025 (up from $19.4 million in Q3 FY2024), suggests management is focusing on scaling revenue faster than these fixed operational costs.

Finance: draft 13-week cash view by Friday.

Smartsheet Inc. (SMAR) - Canvas Business Model: Revenue Streams

The revenue generation for Smartsheet Inc. is heavily weighted toward its recurring software-as-a-service (SaaS) model. This focus provides predictable cash flow, which is a key indicator for investors.

Subscription Revenue is the dominant stream, totaling $273.7 million in Q3 FY2025. This figure represents the vast majority of the company's top line, showing strong customer commitment to the platform.

The core of this subscription revenue comes from Tiered Subscription Fees, which Smartsheet Inc. structures to capture different levels of organizational need. You can see the base annual pricing structure below:

The Enterprise tier is where custom pricing applies, supporting the largest organizations with advanced features. The transition to a modern pricing and packaging model for all customers during calendar year 2025 is a key factor influencing current and future subscription metrics.

Another component feeding the recurring revenue base is the Annualized Recurring Revenue (ARR), which hit $1.133 billion as of Q3 FY2025. This metric is crucial for assessing the health and future scale of the subscription business.

Beyond subscriptions, Smartsheet Inc. generates revenue through Premium App/Add-on Sales. This revenue is derived from advanced capabilities that extend the core platform functionality. These include:

• WorkApps for creating custom, role-based applications.
• Advanced connectors for synchronizing data with critical systems like Salesforce and Jira.
• Work Insights for deeper analytics.

Finally, Professional Services Revenue provides a smaller, non-recurring component. This stream, which includes implementation, consulting, and training services, totaled $13.2 million in Q3 FY2025. This figure actually saw a slight year-over-year decrease of (2)%, partly because partners are delivering a higher percentage of these services.

Finance: review the impact of the new pricing model migration on Q4 ARR projections by Monday.