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Zendesk Q3 Revenues Up 20% to $417M
by Daniel Newman and Michael Diamond | November 1, 2022

The News: Zendesk recently posted 20 percent year-over-year growth for its third quarter earnings for the period ending on September 30, 2022. The company is preparing itself for going private due to recently being acquired by a group of investment companies. Read the full Press Release on the Zendesk website.

Zendesk Q3 Revenues Up 20% to $417M

Analyst Take: Zendesk’s Q3 2022 revenue of $417 million and year-over-year growth of 20 percent indicates the continued resilience of the category and Zendesk’s strategy. Due to the company being taken private by investment companies Hellman & Friedman Advisors LLC and Permira Advisers LLC, the company has chosen not to issue forward-looking guidance.

  • Q3 2022 revenue of $416.9 million, up 20 percent year-over-year vs $347 million in the year ago quarter
  • Q3 2022 non-GAAP net income of $39.4 million, up 82 percent from $21.7 million one year earlier
  • Q3 2022 non-GAAP basic earnings per share (EPS) of $0.32, compared to $0.18 per share one year ago
  • Q3 2022 non-GAAP operating margins were 12 percent versus 8 percent from the year ago quarter.

Zendesk Q3 2022 earnings did not have a quarterly conference call with the management team adding additional color on how the operations performed. Based on the financial results, we can glean the company continues to operate in a market segment that remains in excellent demand versus other categories that have been negatively impacted by the threat of looming recessionary fears which has caused myriad organizations to elongate buying cycles, coupled with pruning staff. From a technology standpoint, it can be counted on that the company is building greater integrations and focusing on AI/ML to drive the experience platform to the next level and make its offerings stickier for its current customers and prospects.

However, notwithstanding concerns of an ailing economy, Zendesk’s Q3 2022 earnings indicate that despite economic malaise, customer centricity will remain a key digital transformation pillar that organizations will not be able to skimp on or risk losing valuable market share at a time when it’s critical to maintain relationships.

Zendesk’s Q3 2022 earnings reflect a company that continues to operate in a segment appearing to be more resilient than others as the threat of economic malaise sets in. In our opinion, with the extra strategic advisory and financial injection via Hellman & Friedman Advisors LLC and Permira Advisers LLC, it makes sense that the organization will continue to perform well in the future and could be in a better position strategically—especially with the benefit of being able to operate well beyond the quarterly horizon.

Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.

Other insights from Futurum Research:

Zendesk’s Intelligent Triage and Smart Assist Launches — Featuring Functionality Designed to Speed Customer Support Resolutions

Zendesk to Go Private in What Should Pan Out to be Its Best Route Forward

Zendesk Q2 Revenue Up 28% to $407M Just Before Going Private

Image Credit: Google

About the Authors

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio

Michael Diamond is an industry analyst and foresight professional with 25 years of experience in the IT channel and market research industry. He is a route-to-market expert covering desktop and mobile devices, collaboration, contact center, ProAV, data center infrastructure, and cybersecurity. Prior to joining Futurum Research, Michael worked for The NPD Group as the sole industry analyst covering indirect channels, cybersecurity, SMB and vertical market trends, data center infrastructure (e.g., enterprise storage, servers, networking), ProAV and PCs. He has been quoted by media outlets such as Bloomberg, Kiplinger, TWICE, OPI (Office Products International), Apple World today, Dark Reading, Enterprise Storage Forum, Credit-Suisse, Footwear News, CRN (Computer Reseller News), Channel Futures and Into Tomorrow.  Michael has presented at myriad events including The Channel Company’s Xchange, The Global Technology Distribution Council’s summit, SMB TechFest and more.