Freshworks Reports 19% Revenue Surge to $153 Million in Q3, Aims for $1 Billion Revenue by 2026

SA TeamNovember 7, 2023

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Three points you will get to know in this article:

Freshworks projects 2023 total revenue at $593-$596 million, with Q4 revenues showing a slight increase to $156-$159 million.
The company raised its full-year free cash flow projections by $15 million to $75 million.
The company raised its non-GAAP operating income guidance to $38.5-$41 million from the initial $24-$32 million forecast.

Freshworks, a Software-as-a-Service (SaaS) company listed on Nasdaq, unveiled robust financial results on November 1st. During the third quarter of 2023, the company witnessed a remarkable 19% year-on-year surge in its consolidated revenue, reaching $153.6 million. This exceeded the company’s initial projections of $149-$151 million, a feat attributed to the acquisition of new customers and the retention of significant existing clients. In terms of Non-GAAP income from operations, Freshworks demonstrated a noteworthy performance, achieving $17.4 million. This marked a significant turnaround compared to the third quarter of 2022 when the company reported a non-GAAP loss from operations of $3.1 million.

Girish Mathrubootham, the Chief Executive Officer of Freshworks, expressed satisfaction during the earnings call on November 1st, stating, “We delivered another solid quarter of performance and exceeded our own expectations across key financial metrics. Our success can be attributed to the addition of new customers and our ability to retain and serve our existing clientele effectively.”

In the latest financial quarter, Freshworks, a Software-as-a-Service (SaaS) firm listed on Nasdaq, showcased an impressive 19% year-on-year surge in its consolidated revenue, reaching $153.6 million. This surpasses the firm’s initial projections of $149-$151 million, underscoring its robust performance driven by both acquiring new customers and retaining substantial existing ones.

Notably, the company’s Non-GAAP income from operations demonstrated substantial growth, standing at $17.4 million. This contrasts with a Non-GAAP loss from operations of $3.1 million reported in the same quarter of the previous year, reflecting a commendable positive shift.

Girish Mathrubootham, Freshworks’ Chief Executive Officer, expressed satisfaction during the earnings call held on November 1st, stating, “We delivered another solid quarter of performance and exceeded our expectations across crucial financial metrics.” In a separate address during the earnings call, the company’s President, Dennis Woodside, highlighted the key drivers propelling Freshworks’ growth in the quarter. Woodside emphasized the significance of new customer acquisitions, particularly notable in the case of larger clients. He reported a notable increase, with almost 1000 net customers added during the quarter, bringing the total Freshworks customer base to 66,600.

Woodside elaborated on the strategic focus, stating, “We are targeting larger and higher-yielding customers, and in Q3, customers contributing more than $50,000 in ARR grew by an impressive 32% year-on-year.” This strategic orientation indicates a concerted effort to tap into valuable markets and optimize revenue streams. On the pathway to its ambitious $1 billion revenue goal by 2026, the company highlighted that the engines of growth are propelling it forward.

“With our distinctive Go-To-Market strategy fueled by a blend of substantial enterprise clients and the vast SMB potential, we are confident this approach will expedite our journey to achieving the $1 billion revenue milestone within the next three years,” remarked Woodside. Interestingly, Freshworks’ direct rival, Zoho, proudly announced crossing the $1 billion revenue mark in 2022. Quite the dynamic landscape in the competitive world of business!

Freshworks, a Software-as-a-Service (SaaS) company listed on Nasdaq, reported impressive financial results for the third quarter of 2023. The company experienced a 19% year-on-year increase in consolidated revenue, reaching $153.6 million, surpassing initial projections. Non-GAAP income from operations also showed significant growth, with a positive turnaround compared to the previous year. The CEO expressed satisfaction with the performance, attributing it to the acquisition and retention of new customers. Freshworks aims to achieve a $1 billion revenue milestone by optimizing its Go-To-Market strategy. The industry landscape remains competitive, with direct rival Zoho already surpassing the $1 billion revenue mark.