The share price hit a new high and low in the same week. Along with earnings, the company announced share sale by executives and employees, including founder Girish Mathrubootham who is reducing his stake by a little less than 1%
November 08, 2021
4 Min Read
Freshworks’ stock had quite a week. The share price hit a new high on New York-based Nasdaq, helping the software startup surpass the market capitalisation of long-time rival Zendesk, before falling to its lowest point.
Shares of Freshworks were down by nearly 25% during the week, ending at $38.29 after recovering from a low of $36.05 on Friday (November 5), close to the IPO price of $36. The 52-week high of $53.36 had preceded the slump.
The trends were linked to two developments: the announcement of a new pool of shares that will be available for trading and the company’s third-quarter results.
The company announced its results on Friday: net loss stood at $107.4 million on revenue of $96.61 million, which showed a growth of 46%. For the first nine months of the fiscal, revenue increased by 50% to $265.5 million and losses more than doubled to $117.3 million.
Interestingly, the business from customers billing more than $50,000 a year grew much faster, at 73%, compared to that from the grouping of clients contributing over $5,000, which was up by 31% compared to the same period last year. The bigger customers now account for 39% of Freshworks’ recurring revenues.
A large part of the losses in the third quarter was driven by a one-time expense — $138 million for stock-based compensation (SBC) related to its IPO.
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