Freshworks Inc. · NASDAQ:FRSH
Freshworks — Q3 2024 Earnings Presentation
19 slides from Freshworks's earnings presentation, Nov 6, 2024
Slide 1: Q3 2024 Earnings Presentation
Q3 2024 Earnings Presentation November 6, 2024 © 2024 Freshworks Inc. All rights reserved.
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Freshworks Inc. (“Freshworks”) for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise, or representation by Freshworks or any officer, director, emp
Slide 3: Use of Non-GAAP Measures
Use of Non-GAAP Measures In addition to the U.S. generally accepted accounting principles (“GAAP”) financials, this presentation includes certain non-GAAP financial measures, including non-GAAP income (loss) from operations, non-GAAP operating margin, and free cash flow. This presentation also includes
Slide 4: © 2024 Freshworks Inc. All rights reserved.
© 2024 Freshworks Inc. All rights reserved.
Slide 5: Working with amazing brands around the globe
Working with amazing brands around the globe 68,000+ customers in over 120 countries over multiple verticals Retail, logistics, Financial Auto and Media and Hospitality and High-tech and ecommerce services manufacturing entertainment transportation © 2024 Freshworks Inc. All rights reserved.
Slide 6: Welcoming more customers every quarter…
Welcoming more customers every quarter… © 2024 Freshworks Inc. All rights reserved.
Slide 7: Freshworks solutions
Freshworks solutions Neo Platform and Freddy infuse AI across all products SOLUTIONS Employee Experience (EX) Customer Experience (CX) PRODUCTS Freshservice Freshservice Device42 Freshdesk Freshdesk Freshchat Freshsales Freshmarketer for Business Teams Omni* PLATFORM Freshworks Neo Freddy AI Freddy
Slide 8: Revenue by quarter
Revenue by quarter $186.6 ($ in millions) $180M $174.1 $160M $165.1 $160.1 $153.6 $140M $120M $100M Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 YoY Growth 19% 20% 20% 20% 22% YoY Growth CC* 18% 19% 19% 20% 22% *Note: Revenue growth rates adjusted for constant currency are based on average exchange rates in effect
Slide 9: Revenue by geography
Revenue by geography 3% 3% 3% 3% 3% 3% 14% 13% 13% 13% 12% 39% 39% 39% 39% 38% 45% 45% 45% 45% 46% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Rest of World Asia-Pacific Europe, Middle East, Africa North America © 2024 Freshworks Inc. All rights reserved. Note: Numbers rounded for presentation purposes and may not
Slide 10: Total customers
Total customers (in thousands) 70K 68.8 69.6 66.6 67.1 67.5 60K 50K 40K 30K Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 YoY Growth 8% 6% 4% 5% 5% © 2024 Freshworks Inc. All rights reserved.
Slide 11: Customer metrics
Customer metrics Customers >$5K ARR Customers >$50K ARR 25,000 3,000 3,008 2,750 22,500 2,839 22,359 2,500 21,744 2,593 20,000 2,497 20,261 20,549 2,250 19,551 2,268 17,500 2,000 1,750 15,000 1,500 12,500 1,250 10,000 1,000 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 YoY Growth 17% 1
Slide 12: Net dollar retention
Net dollar retention 120% 110% 108% 108% 106% 107% 107% 106% 106% 106% 106% 105% 100% 90% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Net Dollar Retention Net Dollar Retention CC* Net Dollar Retention Rate is calculated by taking the Ending ARR of the cohort of customers from 12 months prior divided by the Enteri
Slide 13: Non-GAAP income from operations
Non-GAAP income from operations ($ in millions) $25.0 $24.0 $20.0 $21.8 $15.0 $17.4 $10.0 $11.5 $13.1 $5.0 $0.0 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Note: 2024 financial data reflects unaudited results as of September 30, 2024. See Appendix for reconciliation of all GAAP to Non-GAAP financial measures. © 2024
Slide 14: Free cash flow
Free cash flow ($ in millions) $40.0 $40.1 $35.0 $38.7 $30.0 $32.8 $25.0 $28.6 $20.0 $22.1 $15.0 $10.0 $5.0 $0.0 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 We define free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized internal-use software. We believ
Slide 15: Financial outlook
Financial outlook ($ in millions except for per share data) Q4-24 2024 Revenue(1) $187.8 - $190.8 $713.6 - $716.6 Year-over-year growth 17% - 19% 20% Non-GAAP income from operations(1) (3) $22.0 - $24.0 $80.8 - $82.8 Non-GAAP net income per share(2) (3) $0.09 - $0.10 $0.38 - $0.39 (1) Revenue and no
Slide 16: GAAP to non-GAAP Reconciliations
GAAP to non-GAAP Reconciliations © 2024 Freshworks Inc. All rights reserved.
Slide 17: GAAP to non-GAAP Reconciliations: Revenue
GAAP to non-GAAP Reconciliations Revenue ($ in millions) Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 GAAP Revenue $153.6 $160.1 $165.1 $174.1 $186.6 YoY Growth rates 19% 20% 20% 20% 22% Add: Effects of foreign currency rate fluctuations ($1.9) ($2.2) ($0.6) $0.2 $0.1 Revenue adjusted for constant currency(1) $151.
Slide 18: GAAP to non-GAAP Reconciliations: Income (loss) from operations
GAAP to non-GAAP Reconciliations Income (loss) from operations ($ in millions) Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 GAAP (loss) from operations ($38.7) ($40.0) ($32.2) ($43.8) ($38.9) Add: stock-based compensation expense - employee awards $55.1 $50.6 $52.4 $55.1 $58.7 Add: employer taxes and employee stoc
Slide 19: GAAP to non-GAAP Reconciliations: Free cash flow
GAAP to non-GAAP Reconciliations Free cash flow ($ in millions) Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Net cash provided by operating activities $23.9 $30.9 $40.6 $36.3 $42.3 Less: purchases of property and equipment ($0.3) ($1.1) ($0.7) ($2.3) ($1.1) Less: capitalized internal-use software ($1.6) ($1.2) ($1.