Freshworks, a Nasdaq-listed Software-as-a-Service (SaaS) company, posted a consolidated revenue of $128.8 million for the third quarter that ended September 2022; up around 37 percent year on year, due to better-operating efficiency and customer additions.
“Overall macro pressures led to slower expansion activity in Q3, however, our customer mix from SMBs to enterprise-level continued to be durable even in this tougher macro environment,” the company’s chief financial officer Tyler Sloat said during the earnings call.
The firm’s operational loss was $58.3 million during the quarter under review, down from $67.4 million in the previous quarter due to cost-cutting initiatives implemented during the third quarter.
Freshworks’ net loss was $57.8 million, compared to a loss of $107.4 million in the same period last year. Freshworks’ revenue increased by roughly 5 per cent quarter over quarter, demonstrating the impact of the US market’s slump.
During the business’ results call, Girish Mathrubootham, CEO and founder of Freshworks, stated that the company is wary about the economy’s slow growth.
“While we have reported a strong quarter, we are not immune to this slower economy. While new businesses picked up, expansion slowed down even as we reduced our growth forecasts and headcount needs,” he said.
Mathrubootham added that despite the slow economic growth, the firm witnessed steady growth in markets like North America, in the mid-market in the enterprise segment. “However, in Q3, we continued to deliver on our promise of modern, powerful, easy-to-use software for everyone with new updates to our product suite.”
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In the third quarter of 2021, the company’s operating cash flow was negative $4.2 million, compared to $2.0 million in net cash utilised in operating activities. The company’s operative cash flow was negative in the prior quarter, totaling $6.8 million.
Freshworks’ free cash flow was minus $7.2 million in the third quarter of 2021, compared to $4.2 million in the previous quarter. As of September 30, 2022, it has $1.2 billion in cash, cash equivalents, and marketable securities.
