Business software provider Freshworks (NASDAQ: FRSH) will be reporting earnings this Wednesday afternoon. Here’s what investors should know.
Freshworks beat analysts’ revenue expectations by 2.9% last quarter, reporting revenues of $204.7 million, up 17.5% year on year. It was a strong quarter for the company, with a solid beat of analysts’ EBITDA estimates and EPS guidance for next quarter beating analysts’ expectations. It added 700 enterprise customers paying more than $5,000 annually to reach a total of 23,975.
Is Freshworks a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, analysts are expecting Freshworks’s revenue to grow 11.9% year on year to $208.8 million, slowing from the 21.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.13 per share.
Analysts covering the company have generally 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 2.2% 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. ZoomInfo delivered year-on-year revenue growth of 4.7%, beating analysts’ expectations by 4.7%, and GoDaddy reported revenues up 10.3%, topping estimates by 2.7%. GoDaddy traded up 5.1% following the results.
Read our full analysis of ZoomInfo’s results here and GoDaddy’s results here.
Investors in the sales and marketing software segment have had fairly steady hands going into earnings, with share prices down 1.2% 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 $19.64 (compared to the current share price of $11.30).
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