Freshworks Inc (FRSH) Reports 19% YoY Revenue Growth in Q3 2023
Third quarter revenue grew 19% year-over-year to $153.6 million
Net cash provided by operating activities was $23.9 million, a significant improvement from $(4.2) million in Q3 2022
GAAP loss from operations was $(38.7) million, compared to $(58.3) million in Q3 2022
Non-GAAP income from operations was $17.4 million, a turnaround from a loss of $(3.1) million in Q3 2022
On October 31, 2023, Freshworks Inc (NASDAQ:FRSH) announced its financial results for the third quarter ended September 30, 2023. The company reported a 19% year-over-year growth in revenue, reaching $153.6 million. The GAAP loss from operations was $(38.7) million, a significant improvement from $(58.3) million in the same quarter of the previous year. The non-GAAP income from operations was $17.4 million, compared to a loss of $(3.1) million in Q3 2022.
Financial Performance
Freshworks Inc (NASDAQ:FRSH) reported a GAAP net loss per share of $(0.11), based on 294.1 million weighted-average shares outstanding, compared to $(0.20) based on 286.7 million weighted-average shares outstanding in Q3 2022. The non-GAAP diluted net income per share was $0.08 based on 302.6 million weighted-average shares outstanding, compared to a net loss per share of $(0.01) based on 286.7 million weighted-average shares outstanding in Q3 2022.
The company's net cash provided by operating activities was $23.9 million, a significant improvement from net cash used in operating activities of $(4.2) million in Q3 2022. Free cash flow was $22.1 million, compared to $(7.2) million in the same quarter of the previous year.
Key Metrics and Business Highlights
The number of customers contributing more than $5,000 in ARR was 19,551, an increase of 17% year-over-year. The net dollar retention rate was 108%, compared to 108% in Q2 2023 and 107% in Q3 2022. Freshworks welcomed more customers to its community, including ASPCA, Cenveo, Giant Eagle Inc., Kelly Benefits, Qualfon, Salvation Army Australia, and Tri Pointe Homes.
Financial Outlook
For the fourth quarter and full year 2023, Freshworks Inc (NASDAQ:FRSH) expects revenue to be between $156.7 million and $159.3 million and between $593.0 million and $595.5 million, respectively. The non-GAAP income from operations is expected to be between $5.5 million and $8.5 million for Q4 2023, and between $38.5 million and $41.5 million for the full year 2023.
These forward-looking statements are based on current market conditions and expectations, and actual results may differ materially due to various factors, including global economic conditions and market volatility.
Explore the complete 8-K earnings release (here) from Freshworks Inc for further details.
This article first appeared on GuruFocus.
