Freshworks Inc has reported over a 10-fold increase in net loss to $67 million in the second quarter ended June 30 as against $6-million loss in the year-ago period. Total revenue was up 37 per cent at $121.4 million ($88 million).
The increase in net loss was due to operating expenses more than doubling to $164.4 million ($76 million). Operating expenses increased in all the three categories — research and development; sales and marketing; and general and administrative — according to a statement.
Tyler Sloat, CFO, Freshworks, told analysts that the annual merit cycle takes effect during Q2 every year, resulting in higher personnel costs. And this drove the majority of the increase in all three expense categories. Additionally, for sales and marketing, there were increases in travel activity, field marketing initiatives and in-person events, including the Global Jam event, which contributed to higher expenses.
“We are maintaining our operating loss estimates for the full year. While we may see higher costs in certain areas, we plan to manage the business overall to deliver on our efficiency goals for the year,” Sloat said.
“We delivered a solid Q2 with 40 per cent year-on-year revenue growth on a constant currency basis,” said Girish Mathrubootham, CEO and founder of Freshworks. “In a changing macro environment, our products will continue to provide incredible value and drive long-term growth.”
For the full year 2022, the company expects revenue to be in the range of $493-497 million, growing 33 per cent to 34 per cent y-o-y. Net loss to be in the range of $42.5-38.5 million, said the release.