Smartsheet (NYSE:) shares plunged 18% in premarket Thursday after the company's billings numbers trailed analyst estimates.

While EPS of $0.18 and of $219.9 million (up 31% year-over-year) came in better than the consensus estimates of $0.08 and $214.1M, respectively, billings missed the consensus by $2M.

Subscription revenue grew 33% year-over-year to $206.0M. Professional services revenue came in at $13.9M, representing a 7% year-over-year growth.

“We are seeing strong demand from our enterprise customers, who continue to choose Smartsheet to help them accomplish their mission critical work and solve their toughest problems. Looking ahead, we’re planning to expand the AI-based capabilities in our platform to help our customers unlock new, higher value work,” said CEO Mark Mader.

For the full year, the company expects Q2/24 EPS in the range of $0.07-$0.08, compared to the consensus of $0.07, and revenue in the range of $228M-$231M, compared to the consensus of $230.4M. However, the company's FQ2 billings guide came in $19M below consensus.

For the full year, the company expects EPS in the range of $0.37-$0.44, compared to the consensus of $0.35, and revenue in the range of $943M-$948M, compared to the consensus of $946M.

Citi analysts lowered the price target to $49 per share on the Neutral-rated SMAR shares.

"While the rev/EBIT guides continue to look conservative, we are more cautious on the FY billings guide that assumes both improvements in close rates and contributions on expanded marketing spend," they said.

Morgan Stanley analysts also cut the price target, going to $55 on the Overweight-rated SMAR stock.

"Slightly weaker than expected Q1 combines w/ more material Q2 billings downside, creating tougher 2H setup to reach unchgd 20% FY24 billings growth. Margin upside may be discounted as investors question its contribution to weaker top-line. New initiatives combine w/ Enterprise momentum keeping us OW," the analysts said.

(Additional reporting by Senad Karaahmetovic)