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 quarterly earning report.
For the quarter that ended Sept. 30, Freshworks reported a non-generally accepted accounting principles net loss per share of one cent compared to a loss of four cents in the same quarter of 2021. Revenue came in at $128.8 million, up 33% year-over-year. Analysts had expected earnings per share loss of five cents 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 increasing 19% year-over-year in the quarter to 16,713. Freshworks’ net dollar retention rate was 107% and the company welcomed new customers, including Altasciences Company 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, chief executive officer and founder of Freshworks, said in a statement. “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.”
For its fiscal fourth quarter, Freshworks predicts a non-GAAP EPS loss of three to five cents on revenue of $129.2 million to $131.2 million. For the full year 2022, the company predicts an EPS loss of 11 cents to 13 cents 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 Freshwoorks 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 4.71% after the close of regular trading.
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