Slide 1: Q1 2024 Earnings Presentation
Q1 2024 Earnings Presentation May 1, 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 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 © 2024 Freshworks Inc. All rights reserved.
Slide 5: Welcoming more customers every quarter…
Welcoming more customers every quarter… © 2024 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 © 2024
Slide 7: Revenue by quarter
Revenue by quarter ($ in millions) $160M $165.1 $160.1 $153.6 $140M $145.1 $137.7 $120M $100M Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 YoY Growth 20% 19% 19% 20% 20% YoY Growth CC* 23% 20% 18% 19% 19% 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% 14% 14% 13% 13% 38% 39% 39% 39% 39% 44% 44% 45% 45% 45% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 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 9: Total customers
Total customers (in thousands) 70K 65.6 66.6 67.1 67.5 64.9 60K 50K 40K 30K Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 YoY Growth 12% 10% 8% 6% 4% © 2024 Freshworks Inc. All rights reserved.
Slide 10: Customer metrics
Customer metrics Customers >$5K ARR Customers >$50K ARR 22,500 2,500 2,593 2,497 2,250 20,000 2,268 20,549 20,261 19,551 2,186 19,105 2,000 17,500 18,441 2,013 1,750 15,000 1,500 12,500 1,250 10,000 1,000 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 YoY Growth 18% 18% 17% 14% 11% YoY
Slide 11: Net dollar retention
Net dollar retention 120% 110% 108% 108% 108% 108% 107% 107% 107% 106% 106% 106% 100% 90% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Net Dollar Retention Net Dollar Retention CC* Net Dollar Retention Rate is calculated by taking the Ending ARR of the cohort of customers from 12 months prior divided by the Enteri
Slide 12: Non-GAAP Income from operations
Non-GAAP Income from operations ($ in millions) $25.0 $20.0 $21.8 $15.0 $17.4 $10.0 $11.7 $11.5 $5.0 $3.9 $0.0 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Notes: 2024 financial data reflects unaudited results as of March 31, 2024. See Appendix for reconciliation of all GAAP to Non-GAAP financial measures. © 2024 Fre
Slide 13: Free cash flow
Free cash flow ($ in millions) $40.0 $35.0 $38.7 $30.0 $28.6 $25.0 $20.0 $22.1 $18.1 $15.0 $10.0 $9.1 $5.0 $0.0 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 We define free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized internal-use software. We believe
Slide 14: Financial outlook
Financial outlook ($ in millions except for per share data) Q2-24 2024 Revenue(1) $168.0 - $170.0 $695.0 - $705.0 Year-over-year growth 16% - 17% 17% - 18% Non-GAAP income from operations(1) $6.5 - $8.5 $58.0 - $64.0 Non-GAAP net income per share(2) $0.05 - $0.06 $0.32 - $0.35 (1) Revenue and non-GA
Slide 15: GAAP to non-GAAP Reconciliations
GAAP to non-GAAP Reconciliations © 2024 Freshworks Inc. All rights reserved.
Slide 16: GAAP to non-GAAP Reconciliations – Revenue
GAAP to non-GAAP Reconciliations – Revenue ($ in millions) Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 GAAP Revenue $137.7 $145.1 $153.6 $160.1 $165.1 YoY Growth rates 20% 19% 19% 20% 20% Add: Effects of foreign currency $3.5 $1.2 ($1.9) ($2.2) ($0.6) rate fluctuations Revenue adjusted for constant currency(1) $14
Slide 17: GAAP to non-GAAP Reconciliations – Income (loss) from operations
GAAP to non-GAAP Reconciliations – Income (loss) from operations ($ in millions) Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 GAAP (loss) from operations ($48.1) ($43.3) ($38.7) ($40.0) ($32.2) Add: stock-based compensation expense - $50.7 $54.2 $55.1 $50.6 $52.4 employee awards Add: employer taxes and employee $1
Slide 18: GAAP to non-GAAP Reconciliations – Free cash flow
GAAP to non-GAAP Reconciliations – Free cash flow ($ in millions) Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Net cash provided by operating activities $11.5 $19.9 $23.9 $30.9 $40.6 Less: purchases of property and ($0.4) ($0.3) ($0.3) ($1.1) ($0.7) equipment Less: capitalized internal-use ($2.0) ($1.5) ($1.6) ($1.