Freshworks’ Q1 Revenue Exceeds Estimates, Increases 20% YoY to $138M
- ByStartupStory | May 3, 2023
Freshworks, a SaaS company listed on Nasdaq, experienced a 20% YoY growth in revenue for Q1 ended March 31, 2023, reaching $137.7 million thanks to customer acquisition. The company also achieved its first-ever quarterly adjusted operating profit of $3.9 million as a public entity. According to Girish Mathrubootham, the CEO and Founder of Freshworks, the company had a solid Q1 execution.
Freshworks’ Q1 results exceeded revenue growth estimates and marked its first quarter of non-GAAP operating profit as a public company. The company’s software, built to scale and cater to the evolving IT and customer needs, continues to attract more businesses. Freshworks’ net loss for the quarter decreased to $42.7 million YoY, while its GAAP loss from operations increased slightly from $47.1 million to $48.1 million in Q1 2023 compared to the same period last year.
Freshworks, originally from Chennai but now headquartered in California, achieved a free cash flow of $9.1 million in Q1 2023, a significant increase from the $1.4 million recorded in the same quarter last year. The number of customers contributing more than $5,000 in ARR rose to 18,441, an 18% YoY increase. Freshworks also secured new customers, such as Fila, Johnsonville, Los Angeles Dodgers, Smyths Toys, Sonata Software, and The City of Escondido in the first quarter. In addition, the company announced its plan to introduce GPT-based conversational enhancements to Freshworks’ AI-powered assistant, Freddy.
Freshworks’ CFO, Tyler Sloat, had previously stated that the company aimed to drive additional efficiencies in 2023, resulting in quarter-over-quarter improvements and sustained profitability in the future. Freshworks’ revenue for Q2 2023 is anticipated to range from $140 million to $142.5 million, with a full-year revenue projection of $580 million to $592.5 million. The company generated a consolidated revenue of $498 million in 2022. Freshworks also predicts that its non-GAAP operating loss will improve to negative $6 million in Q2, aiming for near breakeven in Q3 and a positive result by Q4.
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