Freshworks Inc. · NASDAQ:FRSH
Freshworks — Q1 2023 Earnings Presentation
18 slides from Freshworks's earnings presentation, May 2, 2023
Slide 1: Q1 2023 Earnings Presentation
Q1 2023 Earnings Presentation May 2, 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: Freshworks Solutions
Freshworks Solutions Business software that is easy to get up and running, and get to value, fast. Customer Service IT and the Modern Sales and Marketing Employee Experience Give your agents a single view of all customer Empower employees with integrated service Turn prospects into buyers with all-i
Slide 5: 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 6: Welcoming more customers every quarter…
Welcoming more customers every quarter… © 2023 Freshworks Inc. All rights reserved.
Slide 7: Revenue by quarter
Revenue by quarter ($ in millions) $140M $137.7 $133.2 $128.8 $120M $121.4 $114.6 $100M Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 YoY Growth 42% 37% 33% 26% 20% YoY Growth CC* 44% 40% 37% 30% 23% *Notes: Revenue growth rates adjusted for constant currency are based on average exchange rates in effect during the
Slide 8: Revenue by geography
Revenue by geography 3% 3% 3% 3% 3% 15% 15% 15% 15% 15% 40% 39% 39% 38% 38% 43% 43% 44% 44% 44% Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Rest of World Asia-Pacific Europe, Middle East, Africa North America © 2023 Freshworks Inc. All rights reserved. Note: Numbers rounded for presentation purposes and may not fo
Slide 9: Total customers
Total customers (in thousands) 70K 64.9 60K 63.4 59.9 61.6 58.1 50K 40K 30K Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 YoY Growth 15% 14% 13% 13% 12% © 2023 Freshworks Inc. All rights reserved.
Slide 10: Customer metrics
Customer metrics Customers >$5K ARR Customers >$50K ARR 20,000 2,250 18,441 2,000 17,500 2,013 17,722 1,908 16,713 1,750 16,212 15,000 15,639 1,717 1,648 1,500 1,547 12,500 1,250 10,000 1,000 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 YoY Growth 27% 22% 19% 20% 18% YoY Growth 54% 42
Slide 11: Net dollar retention
Net dollar retention 120% 116% 115% 115% 110% 113% 111% 110% 108% 108% 107% 107% 100% 90% Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Net Dollar Retention Net Dollar Retention CC* Net Dollar Retention Rate is calculated by taking the Ending ARR of the cohort of customers from 12 months prior divided by the Enteri
Slide 12: Non-GAAP Income (loss) from operations
Non-GAAP Income (loss) from operations ($ in millions) $5.0 $3.9 $0.0 ($3.1) ($2.8) ($0.6) ($5.0) ($10.0) ($15.0) ($15.8) ($20.0) Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Notes: Q1-23 financial data reflects unaudited results as of March 31, 2023. See Appendix for reconciliation of all GAAP to Non-GAAP financial
Slide 13: Free cash flow
Free cash flow ($ in millions) $10.0 $9.1 $5.0 $4.0 $0.0 ($1.4) ($5.0) ($7.2) ($10.2) ($10.0) ($15.0) Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 We define free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized internal-use software. We believe that free
Slide 14: Financial outlook
Financial outlook ($ in millions except for per share data) Q2-23 2023 Revenue(1) $140.0 - $142.5 $580.0 - $592.5 Year-over-year growth 15% - 17% 16% - 19% Adjusting for constant currency(2) 16% - 18% 17% - 19% Non-GAAP income (loss) from operations(1) ($2.0) - $0.0 $2.0 - $8.0 Non-GAAP net income p
Slide 15: GAAP to non-GAAP Reconciliations
GAAP to non-GAAP Reconciliations © 2023 Freshworks Inc. All rights reserved.
Slide 16: GAAP to non-GAAP Reconciliations – Revenue
GAAP to non-GAAP Reconciliations – Revenue ($ in millions) Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 GAAP Revenue $114.6 $121.4 $128.8 $133.2 $137.7 YoY Growth rates 42% 37% 33% 26% 20% Add: Effects of foreign currency $1.4 $2.6 $3.4 $3.9 $3.5 rate fluctuations Revenue adjusted for constant currency(1) $116.0 $1
Slide 17: GAAP to non-GAAP Reconciliations – Income (loss) from operations
GAAP to non-GAAP Reconciliations – Income (loss) from operations ($ in millions) Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 GAAP income (loss) from operations ($47.1) ($67.4) ($58.3) ($60.6) ($48.1) Add: stock-based compensation expense - $46.6 $50.1 $53.9 $57.0 $50.7 employee awards Add: employer taxes and empl
Slide 18: GAAP to non-GAAP Reconciliations – Free cash flow
GAAP to non-GAAP Reconciliations – Free cash flow ($ in millions) Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Net cash provided by (used in) operating activities $1.4 ($6.8) ($4.2) $7.2 $11.5 Less: purchases of property and equipment ($1.4) ($2.0) ($1.9) ($1.8) ($0.4) Less: capitalized internal-use software ($1.3)