Freshworks shares rise on better-than-expected earnings and revenue
Shares in Freshworks Inc. rose in after-hours trading after the customer service and support software firm reported better-than-expected earnings and revenue in its latest quarter.
For its third quarter that ended Sept. 30, Freshworks reported a loss before costs such as stock compensation of one cent per share, down from a loss of four cents per share in the same quarter of 2021. Revenue rose 33% from a year ago, to $128.8 million. Analysts had expected a loss of five cents a share on revenue of $125.54 million.
Freshworks ended the quarter with $1.2 billion in cash, cash equivalents and marketable securities. Free cash flow in the quarter was minus $7.2 million and net cash from operating activity was minus $4.2 million.
Highlights in the quarter included the number of customers with annual recurring revenue of $5,000 or above rising 19% year-over-year, to 16,713. Freshworks’ net dollar retention rate was 107% and the company welcomed new customers, including Altasciences Co. Inc., Clark College, Dwyer Instruments LLC, Dynata LLC, HelloFresh SE, Media.Monks, Plume Design Inc. and Viessmann Climate Solutions SE, among others.
“We delivered a strong quarter of results with revenue up 37% on a constant currency basis and significantly improved our operating efficiency,“ Girish Mathrubootham, founder and chief executive officer and Freshworks, said in a statement.
For its fiscal fourth quarter, Freshworks predicts an adjusted loss of three to five cents per share on revenue of $129.2 million to $131.2 million. For the full year 2022, the company predicts a loss of 11 to 13 cents a share on revenue of $494 million to $496 million.
Alongside the earnings report, Freshworks also announced updates to various products, including Freshchat, Freshdesk, Freshmarketer and Freshsales to assist companies automate their entire customer lifestyle. The “infusion of artificial intelligence” is said by Freshworks to enhance its customer experience solutions.
Features included automated customer relationship management with intelligent lead scoring, social media campaigns, smart replies, conversation widgets, auto triage and integrations with Slack and Microsoft Corp.’s Teams. The latter is said to deliver seamless collaboration by empowering support agents with the ability to start conversations on Slack from the Freshdesk Customer Success interface and to use Microsoft Teams to stay updated on assigned tickets quickly.
Investors liked the numbers, with Freshworks shares up almost 5% after the close of regular trading.
Photo: Freshworks/Facebook
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