Slide 1: Q2 2024 Earnings Presentation
Q2 2024 Earnings Presentation July 30, 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 Freshservice Freshservice Freshdesk Freshchat for Business Teams Freshsales Freshmarketer 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) $180M $174.1 $160M $165.1 $160.1 $153.6 $140M $145.1 $120M $100M Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 YoY Growth 19% 19% 20% 20% 20% YoY Growth CC* 20% 18% 19% 19% 20% Note: Revenue growth rates adjusted for constant currency are based on average exchange rates in effect
Slide 8: Revenue by geography
Revenue by geography 3% 3% 3% 3% 3% 3% 14% 14% 13% 13% 13% 39% 39% 39% 39% 39% 44% 45% 45% 45% 45% Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 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 68.8 65.6 66.6 67.1 67.5 60K 50K 40K 30K Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 YoY Growth 10% 8% 6% 4% 5% © 2024 Freshworks Inc. All rights reserved.
Slide 10: Customer metrics
Customer metrics Customers >$5K ARR Customers >$50K ARR 25,000 3,000 2,750 22,500 2,839 2,500 21,744 2,593 20,000 2,497 20,261 20,549 2,250 19,551 2,268 19,105 2,186 17,500 2,000 1,750 15,000 1,500 12,500 1,250 10,000 1,000 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 YoY Growth 18% 1
Slide 11: Net dollar retention
Net dollar retention 120% 110% 108% 108% 108% 107% 107% 106% 106% 106% 106% 106% 100% 90% Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Net Dollar Retention Net Dollar Retention CC* Net Dollar Retention Rate is calculated by taking the Ending ARR of the cohort of customers from 12 months prior divided by the Enteri
Slide 12: Non-GAAP income from operations
Non-GAAP income from operations ($ in millions) $25.0 $20.0 $21.8 $15.0 $17.4 $10.0 $11.7 $11.5 $13.1 $5.0 $0.0 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Note: 2024 financial data reflects unaudited results as of June 30, 2024. See Appendix for reconciliation of all GAAP to Non-GAAP financial measures. © 2024 Fres
Slide 13: Free cash flow
Free cash flow ($ in millions) $40.0 $35.0 $38.7 $30.0 $32.8 $25.0 $28.6 $20.0 $22.1 $18.1 $15.0 $10.0 $5.0 $0.0 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 We define free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized internal-use software. We believ
Slide 14: Financial outlook
Financial outlook ($ in millions except for per share data) Q3-24 2024 Revenue(1) $180.0 - $183.0 $707.0 - $713.0 Year-over-year growth 17% - 19% 18.5% - 19.5% Non-GAAP income from operations(1) $13.0 - $15.0 $60.0 - $66.0 Non-GAAP net income per share(2) $0.07 - $0.08 $0.32 - $0.34 (1) Revenue and
Slide 15: GAAP to non-GAAP Reconciliations
GAAP to non-GAAP Reconciliations © 2024 Freshworks Inc. All rights reserved.
Slide 16: GAAP to non-GAAP Reconciliations: Revenue
GAAP to non-GAAP Reconciliations Revenue ($ in millions) Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 GAAP Revenue $145.1 $153.6 $160.1 $165.1 $174.1 YoY Growth rates 19% 19% 20% 20% 20% Add: Effects of foreign currency rate fluctuations $1.2 ($1.9) ($2.2) ($0.6) $0.2 Revenue adjusted for constant currency(1) $146.
Slide 17: GAAP to non-GAAP Reconciliations: Income (loss) from operations
GAAP to non-GAAP Reconciliations Income (loss) from operations ($ in millions) Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 GAAP (loss) from operations ($43.3) ($38.7) ($40.0) ($32.2) ($43.8) Add: stock-based compensation expense - employee awards $54.2 $55.1 $50.6 $52.4 $55.1 Add: employer taxes and employee stoc
Slide 18: GAAP to non-GAAP Reconciliations: Free cash flow
GAAP to non-GAAP Reconciliations Free cash flow ($ in millions) Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Net cash provided by operating activities $19.9 $23.9 $30.9 $40.6 $36.3 Less: purchases of property and equipment ($0.3) ($0.3) ($1.1) ($0.7) ($2.3) Less: capitalized internal-use software ($1.5) ($1.6) ($1.