Freshworks Inc. · NASDAQ:FRSH
Freshworks — Q3 2023 Earnings Presentation
18 slides from Freshworks's earnings presentation, Oct 31, 2023
Slide 1: Q3 2023 Earnings Presentation
Q3 2023 Earnings Presentation October 31, 2023 © 2023 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 and free cash flow. This presentation also includes certain non-GAAP metrics, i
Slide 4: Working with amazing brands around the globe
Working with amazing brands around the globe Retail, Logistics, Financial Auto & Media & High Hospitality & & E-Commerce Services Manufacturing Entertainment Tech Transportation © 2023 Freshworks Inc. All rights reserved.
Slide 5: Welcoming more customers every quarter…
Welcoming more customers every quarter… © 2023 Freshworks Inc. All rights reserved.
Slide 6: The Freshworks solution
The Freshworks solution IT & Employee Service Customer Service Sales & Marketing Freshdesk Freshchat Freshservice Freshservice Freshsales Freshmarketer for Business Teams Freshworks CS Suite Neo Platform Freddy AI Data & Analytics Unified Customer Experience Developer & Marketplace Experience © 2023
Slide 7: Revenue by quarter
Revenue by quarter ($ in millions) $160M $153.6 $140M $145.1 $137.7 $133.2 $128.8 $120M $100M Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 YoY Growth 33% 26% 20% 19% 19% YoY Growth CC* 37% 30% 23% 20% 18% Notes: Revenue growth rates adjusted for constant currency are based on average exchange rates in effect durin
Slide 8: Revenue by geography
Revenue by geography 3% 3% 3% 3% 3% 3% 15% 15% 15% 14% 14% 39% 38% 38% 39% 39% 44% 44% 44% 44% 45% Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Rest of World Asia-Pacific Europe, Middle East, Africa North America Note: Numbers rounded for presentation purposes and may not foot. © 2023 Freshworks Inc. All rights res
Slide 9: Total customers
Total customers (in thousands) 70K 65.6 66.6 64.9 60K 63.4 61.6 50K 40K 30K Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 YoY Growth 13% 13% 12% 10% 8% © 2023 Freshworks Inc. All rights reserved.
Slide 10: Customer metrics
Customer metrics Customers >$5K ARR Customers >$50K ARR 20,000 2,500 19,551 19,105 2,250 2,268 18,441 17,500 17,722 2,186 2,000 16,713 2,013 1,908 15,000 1,750 1,717 1,500 12,500 1,250 10,000 1,000 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 YoY Growth 19% 20% 18% 18% 17% YoY Growth
Slide 11: Net dollar retention
Net dollar retention 120% 110% 113% 110% 108% 108% 108% 108% 107% 107% 107% 106% 100% 90% Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Net Dollar Retention Net Dollar Retention CC* Net Dollar Retention Rate is calculated by taking the Ending ARR of the cohort of customers from 12 months prior divided by the Enteri
Slide 12: Non-GAAP Income (loss) from operations
Non-GAAP Income (loss) from operations ($ in millions) $20.0 $15.0 $17.4 $10.0 $11.7 $5.0 $3.9 $0.0 ($3.1) ($2.8) ($5.0) Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Notes: 2023 financial data reflects unaudited results as of September 30, 2023. See Appendix for reconciliation of all GAAP to Non-GAAP financial measur
Slide 13: Free cash flow
Free cash flow ($ in millions) $25.0 $20.0 $22.1 $15.0 $18.1 $10.0 $9.1 $5.0 $4.0 $0.0 ($5.0) ($7.2) ($10.0) Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 We define free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized internal-use software. We believe th
Slide 14: Financial outlook
Financial outlook ($ in millions except for per share data) Q4-23 2023 Revenue(1) $156.7 - $159.3 $593.0 - $595.5 Year-over-year growth 18% - 20% 19% - 20% Adjusting for constant currency(2) 17% - 19% 19% - 20% Non-GAAP income from operations(1) $5.5 - $8.5 $38.5 - $41.5 Non-GAAP net income per shar
Slide 15: GAAP to non-GAAP Reconciliations
GAAP to non-GAAP Reconciliations © 2023 Freshworks Inc. All rights reserved.
Slide 16: GAAP to non-GAAP Reconciliations – Revenue
GAAP to non-GAAP Reconciliations – Revenue ($ in millions) Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 GAAP Revenue $128.8 $133.2 $137.7 $145.1 $153.6 YoY Growth rates 33% 26% 20% 19% 19% Add: Effects of foreign currency $3.4 $3.9 $3.5 $1.2 ($1.9) rate fluctuations Revenue adjusted for constant currency(1) $132.2
Slide 17: GAAP to non-GAAP Reconciliations – Income (loss) from operations
GAAP to non-GAAP Reconciliations – Income (loss) from operations ($ in millions) Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 GAAP income (loss) from operations ($58.3) ($60.6) ($48.1) ($43.3) ($38.7) Add: stock-based compensation expense - $53.9 $57.0 $50.7 $54.2 $55.1 employee awards Add: employer taxes and empl
Slide 18: GAAP to non-GAAP Reconciliations – Free cash flow
GAAP to non-GAAP Reconciliations – Free cash flow ($ in millions) Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Net cash provided by (used in) operating activities ($4.2) $7.2 $11.5 $19.9 $23.9 Less: purchases of property and equipment ($1.9) ($1.8) ($0.4) ($0.3) ($0.3) Less: capitalized internal-use software ($1.1)