Freshworks reports 19% rise in revenues, expects $28 million of operating profit for 2023

economictimes.indiatimes.com:

Freshworks on Tuesday reported a 19% rise in its revenues to $145.1 million for quarter ending in June, and raised its full-year financial forecast for 2023 midpoint saying it will hit adjusted operating profit of $28 million. The Chennai and San Mateo, California-headquartered company said its net loss shrank to $35.66 million, or 12 cents per share, in the first quarter ended June 2023, from $69.75 million, or 24 cents per share, a year earlier. The company had raised its full-year 2023 financial forecast to an adjusted operating profit of $5 million in the previous quarter ended March 31, 2023.

This was when it had booked its first ever adjusted operating profit of $3.9 million as a public company. Adjusted operating profit in this context helps standardise the operating income of the company by excluding large one-off cost items in any given financial period. In the quarter ended June 2023, the company reported $11.7 million in adjusted operating profit.

In the comparable quarter a year ago, the figure was an adjusted operating loss of $15.8 million. Free cash flow stood at $18.1 million in the quarter, compared to a negative $10.2 million in the second quarter of 2022. Net dollar retention rate was 108%, compared to 107% in the first quarter of 2023 and 111% in the second quarter of 2022.

This NDR rate, important for subscription-reliant businesses such as Freshworks, represents the change in ARR generated from clients that existed a year ago. Freshworks, founded in Chennai in 2010 and listed on the Nasdaq in 2021, primarily targets small and medium businesses with its customer relationship management software. Shares of the company had opened at $43.50 apiece compared with the initial public offering price of $36,