Freshworks narrows Q2 losses to $35.66 million on increased revenue
The company reported a consolidated revenue of $145 million during the second quarter, up 19 per cent year-on-year (YoY)
Bengaluru: Nasdaq-listed Software-as-a-Service (SaaS) major Freshworks narrowed its losses to $35.66 million in the quarter ended June 30, 2023, down 49 per cent over the same period last year.
The narrowing of losses was majorly owing to improvement in revenue and lower cost. The company reported a consolidated revenue of $145 million during the second quarter, up 19 per cent year-on-year (YoY). Non-GAAP adjusted operating profit of the company stood at $11.7 million, as compared to a loss of $15.8 million in Q2 of 2022 on the back of a rise in its large enterprise customers.
Freshworks founded by Girish Mathrubootham has major portion of its manpower operating out of India.
“Freshworks Q2 results outperformed our internal estimates. We continue to improve our business efficiency and have generated a free cash flow of $18.1 million in Q2 surpassing our expectations,” said Girish Mathrubootham, CEO and Founder of Freshworks during the earnings call.
The company's number of customers contributing more than $5,000 in ARR (Annual Recurring Revenue) saw a growth. Total number of such customers reached 19,105 in the second quarter, an increase of 18 per cent year-on-year. New customers added during the quarter under review include Claremont McKenna College, The State of Hawaii, Houston Museum of Natural Science, Pitchbook, and Smart Recruiters.
The SaaS company has started aggressive investment in the generative AI space with launch of three new generative AI products – Freddy Self Service, Freddy Copilot and Freddy Insights – during the quarter. “In Q2, we launched new generative AI enhancements across our product lines and outperformed our estimates across all our key financial metrics,” Mathrubootham said.
Freshworks better performance augurs well for the overall IT services industry as increase in SaaS spend indicates sound technology spending by enterprises. In the last two quarters, SaaS spending has come down sharply owing to slowdown in the US market.