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

Anthony Lee /
2023/10/30 3:06 am EDT

Business software provider Freshworks (NASDAQ: FRSH) will be announcing earnings results tomorrow after market close. Here's what you need to know.

Last quarter Freshworks reported revenues of $145.1 million, up 19.5% year on year, beating analyst revenue expectations by 2.57%. It was a good quarter for the company, with a decent beat of analysts' revenue estimates. The company added 664 enterprise customers paying more than $5,000 annually to a total of 19,105.

Is Freshworks buy or sell heading into the earnings? Read our full analysis here.

This quarter analysts are expecting Freshworks's revenue to grow 17.1% year on year to $150.7 million, slowing down from the 33.3% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are 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 over the past two years on average by 3.77%.

Looking at Freshworks's peers in the sales and marketing software segment, only VeriSign has so far reported results, delivering top-line growth of 5.44% year on year, missing analyst estimates by -0.75%. The stock was flat on the results.

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

The whole tech sector has been facing a sell-off and while some of the sales and marketing software stocks have fared somewhat better, they have not been spared, with share price declining 8.4% over the last month. Freshworks is down 7.07% during the same time, and is heading into the earnings with analyst price target of $25.2, compared to share price of $18.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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