Earnings To Watch: Freshworks (FRSH) Reports Q1 Results Tomorrow

Kayode Omotosho /
2024/04/30 3:06 am EDT

Business software provider Freshworks (NASDAQ: FRSH) will be announcing earnings results tomorrow after market hours. Here's what to look for.

Freshworks beat analysts' revenue expectations by 1% last quarter, reporting revenues of $160.1 million, up 20.2% year on year. It was a strong quarter for the company, with accelerating growth in large customers and a solid beat of analysts' billings estimates. The company added 710 enterprise customers paying more than $5,000 annually to a total of 20,261.

Is Freshworks a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Freshworks's revenue to grow 18.8% year on year to $163.5 million, slowing from the 20.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.08 per share.

Freshworks Total Revenue

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Freshworks has a history of exceeding Wall Street's expectations, beating revenue estimates every single time over the past two years by 2.7% on average.

Looking at Freshworks's peers in the sales and marketing software segment, only VeriSign has reported results so far. It met analysts' revenue estimates, delivering year-on-year sales growth of 5.5%. and delivered flat year-on-year revenue. The stock was down 4% on the results.

Read our full analysis of VeriSign's earnings results here.

Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts thanks to mixed inflation data, and while some of the sales and marketing software stocks have fared somewhat better, they have not been spared, with share prices down 3.5% on average over the last month. Freshworks's stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $26.1 (compared to the current share price of $18.07).

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