Freshworks Cuts Q3 Loss To $29.9 Mn, Revenue Soars 21% YoY

SUMMARY

Freshworks trimmed its consolidated net loss by 3.5% YoY to $29.95 Mn in the third quarter of 2024 from $31.03 Mn in the year-ago period

Total revenue jumped 21.4% to $186.6 Mn in the quarter ended September 30, 2024, compared to $153.6 Mn in the same quarter last year

Freshworks aims for its Q4 2024 revenue in the range of $187.8-$190.8 Mn, registering a 17-19% growth YoY

Nasdaq-listed Indian SaaS major Freshworks trimmed its consolidated net loss by 3.5% year-on-year to $29.95 Mn in the third quarter of 2024 from $31.03 Mn in the year-ago period.

However, net loss widened over 48% quarter-on-quarter from $20.1 Mn in the April to June quarter.

Total revenue jumped 21.4% to $186.6 Mn in the the quarter ended September 30, 2024, compared to $153.6 Mn in the same quarter last year, driven by increasing customer adoption of its AI-powered products.

Sequentially, total income rose 7% from $174.1 Mn in the second quarter of 2024.

Dennis Woodside, CEO and president of Freshworks, said the company delivered strong revenue growth in the third quarter, with net cash provided by operating activities margin improving to 23%, and free cash flow margin improving to 21%.

“We continue to see mid-market and enterprise companies choose Freshworks as the AI-powered service platform that enables them to scale with exceptional customer and employee experiences,” he added.

On the other hand, Freshworks’ gross profit surged 23.16% to $156.76 Mn in Q3 2024 from $127.28 Mn in Q3 2023.

Freshworks saw its total operating expenses climb to $195 Mn in the reported quarter, compared to $166 Mn in the corresponding period last year.

Number of customers contributing over $5,000 in ARR rose 14% YoY to 22,359 during the quarter under review, while net dollar retention rate stood at 107%.

The company added over 800 customers during the quarter under review, taking the total tally to 69,600. Republic Airways, City of Bellevue, ChampionX, University of Oxford, Sparebank 1, TechStyle Fashion Group were among the new customers added in Q3.

The company’s free cash flow stood at $40.1 Mn at the end of Q3 2024, compared to $22.1 Mn in the third quarter last year.

Freshworks aims for its Q4 2024 revenue in the range of $187.8-$190.8 Mn, registering a 17-19% growth YoY.

For the full calendar year 2024, Freshworks expects revenue in the range of $713.6-$716.6 Mn, clocking a growth of 20% YoY.

Meanwhile, Freshworks said that its board has approved a stock repurchase program of up to $400 million of the company’s outstanding Class A common stock.