Live Nasdaq Composite: Markets Take Breather After Impressive Q2 Showing on Easing Oil Outlook
Q3 23 EPS
$0.08
BEAT +60.00%
Est. $0.05
Q3 23 Revenue
$153.6M
BEAT +1.89%
Est. $150.7M
vs S&P Since Q3 23
-120.8%
TRAILING MARKET
FRSH -45.2% vs S&P +75.6%
Market Reaction
Did FRSH Beat Earnings? Q3 2023 Results
Freshworks posted a strong third quarter, beating Wall Street estimates on both revenue and earnings as a meaningful profitability inflection took hold across the business. The cloud software company reported Q3 2023 revenue of $153.55 million, up 19… Read more Freshworks posted a strong third quarter, beating Wall Street estimates on both revenue and earnings as a meaningful profitability inflection took hold across the business. The cloud software company reported Q3 2023 revenue of $153.55 million, up 19.3% year over year and ahead of the $150.70 million consensus, while non-GAAP diluted EPS of $0.08 beat the $0.05 estimate by 60.00%, a sharp improvement from a loss of $0.01 per share in the year-ago period. The primary driver behind the bottom-line swing was disciplined expense management, with non-GAAP sales and marketing costs dropping to 46.4% of revenue from 53.9% a year earlier, allowing operating leverage to flow through as revenue scaled. Non-GAAP operating income reached $17.40 million, compared to a loss of $3.13 million in Q3 2022. Looking ahead, management guided Q4 revenue of $156.70 million to $159.30 million and raised its full-year 2023 revenue outlook to $593.00 million to $595.50 million, reflecting continued confidence in the company's growth trajectory.
Key Takeaways
- • 19% year-over-year revenue growth (18% constant currency)
- • Non-GAAP operating margin improved to 11.3% from negative 2.4% in Q3 2022
- • Net dollar retention rate of 108%
- • Customers contributing more than $5,000 in ARR grew 17% YoY to 19,551
- • Non-GAAP gross margin expanded to 84.0% from 82.8%
- • Sales and marketing expense as % of revenue declined to 59.1% (GAAP) from 67.5%
FRSH YoY Financials
Q3 2023 vs Q3 2022, source: SEC Filings
“We delivered another solid quarter of execution as we outperformed our estimates across our key financial metrics and further improved our profitability.”
— Girish Mathrubootham, Q3 2023 Earnings Press Release
FRSH Earnings Trends
FRSH vs Market 30 Day Price Reactions
30-day stock return vs benchmark after each earnings
FRSH EPS Trend
Earnings per share: estimate vs actual
FRSH Revenue Trend
Quarterly revenue: estimate vs actual
FRSH Quarterly Results
12 quarters of earnings data
| Quarter | EPS Est. | EPS Act. | Surprise | Revenue | Rev. Surprise |
|---|---|---|---|---|---|
| Q1 26 MISS | $0.11 | $0.11 | -2.14% | $228.6M | +2.44% |
| Q4 25 BEAT FY | $0.11 | $0.14 | +23.78% | $222.7M | +1.82% |
| FY Full Year | — | $0.66 | — | $838.8M | — |
| Q3 25 BEAT | $0.13 | $0.16 | +25.49% | $215.1M | +3.02% |
| Q2 25 BEAT | $0.12 | $0.18 | +55.84% | $204.7M | +2.89% |
| Q1 25 BEAT | $0.13 | $0.18 | +39.32% | $196.3M | +2.28% |
| Q4 24 BEAT FY | $0.12 | $0.14 | +16.86% | $194.6M | +1.19% |
| FY Full Year | — | $0.43 | — | $720.4M | — |
| Q3 24 BEAT | $0.08 | $0.11 | +37.50% | $186.6M | +0.00% |
| Q2 24 BEAT | $0.06 | $0.08 | +33.33% | $174.1M | +3.03% |
| Q1 24 BEAT | $0.08 | $0.10 | +25.00% | $165.1M | +0.00% |
| Q4 23 BEAT FY | $0.05 | $0.08 | +60.00% | $160.1M | +1.02% |
| FY Full Year | — | $0.26 | — | $596.4M | — |
| Q3 23 BEAT | $0.05 | $0.08 | +60.00% | $153.6M | +1.89% |
| Q1 23 BEAT | $-0.02 | $0.03 | +250.00% | $137.7M | +2.56% |