Earnings To Watch: Freshworks (FRSH) Reports Q3 Results Tomorrow

Jack Winthrop /
2022/10/31 4:45 am EDT

Business software provider Freshworks (NASDAQ: FRSH) will be reporting earnings tomorrow afternoon. Here's what you need to know.

Last quarter Freshworks reported revenues of $121.4 million, up 37.4% year on year, beating analyst revenue expectations by 2.95%. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter and a full year guidance missing analysts' expectations. The company added 573 enterprise customers paying more than $5,000 annually to a total of 16,212.

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

This quarter analysts are expecting Freshworks's revenue to grow 29.8% year on year to $125.4 million, slowing down from the 45.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.05 per share.

Freshworks Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time since going public on average by 5.06%.

Looking at Freshworks's peers in the sales and marketing software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Zendesk delivered top-line growth of 20.1% year on year, missing analyst estimates by 2% and UserTesting reported revenues up 27.8% year on year, exceeding estimates by 2.91%. Zendesk traded flat on the results, and UserTesting was up 91.7% on acquisition announcement at $7.5 per share. Read our full analysis of Zendesk's results here and UserTesting's results here.

Investors in the sales and marketing software segment have had steady hands going into the earnings, with the stocks up on average 1.96% over the last month. Freshworks is down 0.86% during the same time, and is heading into the earnings with analyst price target of $17.90, compared to share price of $13.78.

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The author has no position in any of the stocks mentioned.