Freshworks (FRSH) Reports Q3: Everything You Need To Know Ahead Of Earnings

Business software provider Freshworks (NASDAQ: FRSH) will be reporting results tomorrow after the bell. Here’s what to expect.

Freshworks beat analysts’ revenue expectations by 3% last quarter, reporting revenues of $174.1 million, up 20% year on year. It was a very strong quarter for the company, with accelerating growth in large customers and an impressive beat of analysts’ EBITDA estimates. It added 1,195 enterprise customers paying more than $5,000 annually to reach a total of 21,744.

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 18.3% year on year to $181.7 million, in line with the 19.3% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.08 per share.

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 2.1% on average.

Looking at Freshworks’s peers in the sales and marketing software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. GoDaddy delivered year-on-year revenue growth of 7.3%, meeting analysts’ expectations, and VeriSign reported revenues up 3.8%, in line with consensus estimates. GoDaddy’s stock price was unchanged after the results, and VeriSign’s price followed a similar reaction.

Read our full analysis of GoDaddy’s results here and VeriSign’s results here.

There has been positive sentiment among investors in the sales and marketing software segment, with share prices up 5.8% on average over the last month. Freshworks is up 12.1% during the same time and is heading into earnings with an average analyst price target of $16.66 (compared to the current share price of $12.35).

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