Business software provider Freshworks (NASDAQ: FRSH) will be announcing earnings results tomorrow after market hours. Here's what you need to know.
Last quarter Freshworks reported revenues of $105.4 million, up 44.4% year on year, beating analyst revenue expectations by 5.12%. Despite the strong top-line growth, it was a mixed quarter for the company, with a decent beat of analysts' estimates but underwhelming guidance for the next year. The company added 735 enterprise customers paying more than $5,000 annually to a total of 14,814.
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 34.3% year on year to $108.2 million, slowing down from the 49.2% 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.
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 5.69%.
Looking at Freshworks's peers in the sales and marketing software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Zendesk delivered top-line growth of 30.2% year on year, beating analyst estimates by 0.96% and Qualtrics reported revenues up 40.6% year on year, exceeding estimates by 3.06%. Zendesk traded flat on the results, Qualtrics was up 4.3%. Read our full analysis of Zendesk's results here and Qualtrics's results here.
There has been a stampede out of high valuation technology stocks and sales and marketing software stocks have not been spared, with share price down on average 18.4% over the last month. Freshworks is down 9.29% during the same time, and is heading into the earnings with analyst price target of $31.2, compared to share price of $17.86.
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The author has no position in any of the stocks mentioned.