Software-as-a-service firm Freshworks’ revenue for the first quarter ended March 31, 2023 rose 20% year-on-year to $137.7 million, on the back of customer acquisition. The Nasdaq-listed firm also generated its first-ever quarterly adjusted operating profit of $3.9 million as a public company.
“Freshworks had a strong quarter of execution in Q1,” said Girish Mathrubootham, CEO and Founder of Freshworks.
“We exceeded our financial estimates for revenue growth and delivered our first quarter of non-GAAP operating profit as a public company. More companies are taking advantage of the opportunity to buy software that is designed to scale to meet their IT and customer needs,” he added.
Net loss for the quarter narrowed to $42.7 million, from $49.1 million a year earlier. GAAP (loss) from operations was $48.1 million, compared to $47.1 million in the first quarter of 2022.
The California-headquartered company, with roots in Chennai, recorded a free cash flow of $9.1 million in Q1 2023, compared to $1.4 million in the corresponding previous quarter.
The number of customers contributing more than $5,000 in ARR was 18,441, clocking an increase of 18% year-on-year.
Freshworks added customers including Fila, Johnsonville, Los Angeles Dodgers, Smyths Toys, Sonata Software, and The City of Escondido in the first quarter.
During the quarter, Freshworks also announced upcoming GPT-based conversational enhancements to Freshworks’ natively-built AI powered assistant Freddy.
Optimistic outlook
While announcing the results of the last quarter of 2022, Tyler Sloat, CFO at Freshworks, had said, “As we head into 2023, we’re driving additional efficiencies to show quarter-over-quarter improvement throughout the year. And we plan to maintain sustained profitability in the years ahead.”
Freshworks expects revenue for the second quarter to be $140 million to $142.5 million.
For the full year, Freshworks expects revenue of $580 million to $592.5 million. In 2022, Freshworks had registered a consolidated revenue of $498 million.
Freshworks expects non-GAAP operating loss to improve to negative $6 million in Q2. It hopes to near breakeven in Q3 and turn positive by Q4.
