Freshworks Reports Strong Q2 Results with 19% YoY Revenue Growth

• ByStartupStory     |    August 2, 2023

Software-as-a-service firm Freshworks has announced its second-quarter financial results, showcasing impressive growth and improved financial metrics. The company posted a 19% year-on-year rise in revenue, reaching $145.1 million for the quarter ending on June 30. Alongside this, Freshworks raised its full-year 2023 financial outlook midpoint for adjusted operating profit to $28 million.

Freshworks’ CEO and Founder, Girish Mathrubootham, expressed his enthusiasm for the company’s performance, stating, “Freshworks is building on the foundations we set at the start of the year to deliver faster product innovation and improve our efficiency.” He further highlighted the successful launch of new generative AI enhancements across their product lines, outperforming their estimates across all key financial metrics.

During Q2, Freshworks reported a narrowed net loss of $35.7 million ($0.12 per share) compared to $69.8 million ($0.24 per share) in the same period last year. Notably, the company achieved its first-ever quarterly adjusted operating profit of $11.7 million in Q2, significantly improving from a $15.8-million adjusted operating loss in the same quarter last year. In addition, Freshworks achieved a free cash flow of $18.1 million in Q2 2023, a notable increase from a negative $10.2 million in the corresponding previous quarter.

The number of customers contributing over $5,000 in annual recurring revenue saw an 18% year-on-year increase, reaching 19,105. The SaaS company added prominent names such as Claremont McKenna College, The State of Hawaii, Houston Museum of Natural Science, Pitchbook, and Smart Recruiters to its growing customer base during the second quarter.

Freshworks also unveiled advancements in its AI suite during Q2, expanding accessibility to artificial intelligence across workplaces. The additions include Freddy Self Service, Freddy Copilot, and Freddy Insights, building on the Freshchat and Freshmarketer beta programmes introduced earlier this year.

Looking ahead, Freshworks projects third-quarter revenue to range between $149 million and $151.5 million. For the full year, the company anticipates revenue in the range of $587 million to $595 million, up from the earlier forecast of $580 million to $592.5 million. Freshworks’ positive performance has been reflected in its stock price, which closed at $18.24, showing a 3.8% increase over the last six months and a 30.8% rise over the past twelve months.

The company’s success has led to the appointment of Frank Pelzer, Executive Vice President and Chief Financial Officer of F5, Inc., to the board of directors, adding valuable expertise to the leadership team.

With a strong Q2 performance and optimistic outlook, Freshworks continues to establish itself as a leading player in the software-as-a-service industry, driving innovation and delivering value to its expanding customer base.

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