What happened
Enterprise software company Freshworks (FRSH -0.65%) easily surmounted Hump Day with a solid performance on the stock exchange.
The company's shares rose by nearly 19% in price, thanks to an estimates-trouncing performance in its freshly reported second quarter. This stock price leap was particularly impressive given that the mood on the exchange was generally grim, with the S&P 500 index dipping by 1.4% on the day.
So what
Those results actually came out on Tuesday after market hours. According to them, Freshworks' revenue was 19% higher on a year-over-year basis at just over $145 million. More impressively, the specialty tech company flipped to a profit on the bottom line, with non-GAAP (adjusted) net income coming in at $19.8 million ($0.07 per share) against the year-ago loss of $17.6 million.
Those numbers were well above the average analyst estimates. Pundits following Freshworks stock were collectively modeling $141 million and change on the top line, and a mere $0.02 for adjusted, per-share profitability.
Freshworks took pains to mention its involvement in the hot advanced technology of the moment, artificial intelligence (AI), when discussing its performance. It pointed out that during the quarter it rolled out AI enhancements throughout its product lineup. Although AI is in a relatively early stage of development, it is an area of huge interest to many clients of business software developers like Freshworks.
Now what
Freshworks also proffered guidance for both its current third quarter and the entirety of 2023. It believes it will experience year-over-year growth of 18% to 19% in revenue for the latter period over 2022, and post adjusted net income of $0.18 to $0.22 per share. If realized, such profitability would be quite an improvement over the $0.07 per share the company lost in 2022.
