Shares in customer service and support software firm Freshworks Inc. rose after the company topped estimates in its latest quarter.

For its second quarter ended June 30, Freshworks reported a loss before costs such as stock compensation of six cents per share, compared with a loss of eight cents per share in the same quarter of last year. Revenue came in at $121.4 million, up 37% year-over-year.

Analysts had been expecting a loss of seven cents per share on revenue of $118.19 million.

Net cash used in operating activities was negative $6.8 million compared with a positive $900,000 in the second quarter of 2021. Free cash flow was negative $10.2 million and cash, cash equivalents and marketable securities sat at $1.2 billion as of June 30.

Highlights in the quarter included Freshworks seeing the number of customers with more than $5,000 in annual recurring revenue increasing 22% year-over-year, to 16,212. The company’s net dollar retention rate was 111%, compared with 115% in the first quarter and 118% in the same quarter of last year.

New Freshworks customers in the quarter included Angi Inc., Cloudera Inc., Dynatrace Inc., Sterling Bank Plc, Thomas Cook Tourism (UK) Co. Ltd. and World Market. The company also expanded its ecosystem of partners, including new Freshchat and Freshdesk integrations with Google Business Messages, Instagram, Five9 and Injixo.

“We delivered a solid second quarter of results with 40% year over year revenue growth on a constant currency basis,” Freshworks Chief Executive Girish Mathrubootham said in a statement. “In a changing macro environment, I’m confident that our products will continue to provide incredible value to our customers around the world and drive our long-term growth.”

In the third quarter, Freshworks said, it expects an adjusted loss of five to seven cents a share on revenue of $124.5 million to $126.5 million. Analysts had expected a loss of 16 cents a share on revenue of $127 million.

For the full year 2022, the company is predicting a loss of 16 to 18 cents per share on revenue of $493 million to $497 million. Analysts had expected 16 cents and $497 million.

Investors liked the unexpected earnings beat combined with a better-than-expected third-quarter earnings outlook, as shares in Freshworks rose 3.6% to close regular trading at $13.95.

Photo: Freshworks/Facebook