Freshworks Inc. reported significant financial developments in its 10-Q filing for the quarter ending September 30, 2024. The company achieved total revenue of $186.6 million for the third quarter, marking a 22% increase from $153.6 million in the same period of 2023. For the nine months ended September 30, 2024, revenue reached $525.8 million, up 21% from $436.3 million year-over-year. This growth was primarily driven by subscription services, software licenses, and maintenance, which collectively contributed $184.4 million in Q3 2024, compared to $150.0 million in Q3 2023.
Gross profit for the third quarter was $156.8 million, reflecting a gross margin of 84%, slightly up from 83% in the prior year. However, the company reported a loss from operations of $38.9 million for Q3 2024, a marginal increase from a loss of $38.7 million in Q3 2023. For the nine-month period, the operating loss improved to $114.8 million from $130.1 million in the previous year. The net loss for Q3 2024 was $30.0 million, compared to $31.0 million in Q3 2023, while the nine-month net loss decreased to $73.5 million from $109.4 million.
Freshworks' cash and cash equivalents decreased to $391.1 million as of September 30, 2024, down from $488.1 million at the end of 2023. The company also reported total assets of $1.575 billion, an increase from $1.457 billion at the end of the previous fiscal year. Deferred revenue rose to $296.1 million, up from $266.4 million, indicating a growing backlog of future revenue.
In June 2024, Freshworks completed the acquisition of Device42 for approximately $238.1 million, which is expected to enhance its product offerings in IT asset management. The acquisition has led to the introduction of new revenue streams from software licenses and maintenance services. The company has also implemented a restructuring plan aimed at improving operational efficiency, which is expected to result in a 13% reduction in headcount and incur charges of $11 million to $13 million in Q4 2024.
The net dollar retention rate as of September 30, 2024, was 107%, slightly down from 108% a year earlier, attributed to macroeconomic pressures affecting customer expansion. Freshworks anticipates that its existing cash and marketable securities will be sufficient to meet its operational needs for at least the next 12 months.
About Freshworks Inc.
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