Freshworks’ Loss Narrows 58% YoY To $58.3 Mn In Q3 2022, Revenue Jumps 33%

SUMMARY

Freshworks’ non-GAAP loss more than doubled to $3.1 Mn from $1.5 Mn in the September quarter of 2021

The SaaS giant’s revenue rose 33% year-on-year to $128.8 Mn

Freshworks has given guidance for a 22%-24% YoY growth in revenue to $129.2 Mn-$131.2 Mn during December 2022 quarter

US and Chennai-based SaaS company Freshworks reported a 58.45% decline in loss to $58.3 Mn in the quarter ending September 2022 from $140.3 Mn in the corresponding quarter of the previous year.

The non-GAAP (Generally Accepted Accounting Principles) loss doubled to $3.1 Mn from $1.5 million in the third quarter of 2021.

Meanwhile, revenue rose 33% year-on-year (YoY) to $128.8 Mn during the quarter under review.

Freshworks said that the rising SMB segment is one of the contributing factors to the increase in revenue. These are the companies that buy one subscription, rather than the whole suite.

The number of customers contributing more than $5,000 in ARR rose 19% to 16,713 during the quarter.

Overall, the SaaS startup, which got listed on NASDAQ in 2021, had more than 60,000 customers at the end of the September quarter, of which nearly 1,700 were added during the period under review.

Freshworks’ founder Girish Mathrubootham said that the company is cautious of the slow growth in the economy. Despite reporting a strong quarter, Freshworks’ is not immune to this slower economy and has thus slowed expansion, he added.

“We delivered a strong quarter of results with revenue up 37% on a constant currency basis and significantly improved our operating efficiency,“ said Mathrubootham. “In Q3, we continued to deliver on our promise of modern, powerful, easy-to-use software for everyone with new updates to our product suite.”

The company has given guidance for a 22%-24% YoY growth in revenue to $129.2 Mn-$131.2 Mn during December 2022 quarter. Non-GAAP loss is seen at $10.5 Mn-$8.5 Mn during the quarter.

Freshworks, founded by Mathrubootham and Shan Krishnasamy in 2010, offers a suite of softwares for customer service and support, customer engagement, and IT service management.

The company’s shares were trading 3% lower at $13.15 on Wednesday (November 2) at around 4 PM IST on the Nasdaq stock exchange. The company valuation has also fallen from $14 Bn in November 2021 to under $4 Bn in November 2022.