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Freshworks reports 33% jump in Q3 revenue on rise in new customer acquisition

Freshworks, a San Mateo-based software company with roots in Chennai, said its revenue grew to $128.8 million in the third quarter of 2022, a 33% increase from the third quarter in 2021. The growth is 37% on a constant currency basis.

The increase in revenues was mainly due to an increase in new customer acquisition in the July-September period. The only SaaS company from India to list at the NASDAQ added customers, including Plume, Altasciences, Viessmann, and Dynata. 

The number of customers that contribute to over $5,000 in annual recurring revenue (ARR), a key metric for SaaS companies, increased by 19% on a yearly basis to 16,713. The company added 1,700 new customers approximately in the third quarter due to “good momentum in new business led by Freshservice”. Overall, Freshworks has over 61,000 customers now. 

The company reported a net loss of $57.8 million in the third quarter, 46% down from $107.4 million reported in the same period last year. 

Freshworks has retained its annual revenue expectations at the same level as in the second quarter. It hopes to clock revenues of $129.2-$131.2 million in the fourth quarter and $494- $496 million for the entire year.

The software company’s net dollar retention rate, a percentage of revenue earned from existing customers and an indicator of potential business growth, was 107% in the third quarter. This was marginally lower than 111% in the previous quarter and 117% in the third quarter of 2021.

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