Shares in Freshworks Inc. rose more than 5% in late trading today after the customer service and support software firm impressed investors with revenue and earnings beats in its fiscal second quarter.

For the quarter that ended on June 30, Freshworks reported adjusted earnings per share of eight cents, up from seven cents in the same quarter of last year, on revenue of $174.1 million, up 20% year-over-year. Both were beats, as analysts had expected six cents per share on revenue of $169.05 million.

In the quarter, Freshworks saw its number of customers spending over $5,000 per year in annual recurring revenue grow 14% year-over-year, to 21,744. Those customers are mostly sticking around as well, with the company’s net dollar retention rate sitting at 106% as of the end of the quarter.

Freshworks saw net cash provided by operating activity in the quarter come in at $36.3 million, up from $19.9 million in the second quarter of 2023 and fresh cash flow came in at $32.8 million, up from $18.1 million. As of the end of the quarter, Freshworks had a healthy $1.02 billion in cash, cash equivalents and market securities on hand, positioning the company well for months and years ahead.

“Our results reflect our increasing financial discipline and our ability to meet the needs of customers with our AI-powered solutions,” Dennis Woodside, chief executive of Freshworks, said in the company’s earnings release. “With clear strategic priorities in place, we are well positioned to seize the massive opportunity in front of us.”

Woodside was announced as CEO on May 1 alongside quarterly earnings that saw Freshworks shares plunge. Though on the job for only three months, the results today are certainly a positive start for his tenure at the company.

For its fiscal third quarter, Freshworks expects to see adjusted earnings per share of seven cents to eight cents on revenue of $180 million to $183 million. Analysts were expecting an outlook of eight cents per share on revenue of $178.7 million.

For the full year, the company expects adjusted earnings per share of 32 to 34 cents on revenue of $707 million to $713 million. The share outlook was in line with an expected 33 cents, while revenue was ahead of the consensus estimate of $699.4 million.

Photo: Freshworks