NASDAQ$FRSH

Freshworks Inc · Q3 2024 earnings

Q3 2024 earnings · · Investor relations

Briefing

Freshworks delivered a strong Q3 2024 with significant revenue growth and improvements in operating activities and free cash flow margins.

Freshworks reported a strong third quarter with revenue of $186.6 million, a 22% year-over-year increase. The company saw improvements in net cash provided by operating activities margin to 23% and free cash flow margin to 21%.

  • Revenue grew 22% year-over-year to $186.6 million.
  • GAAP loss from operations was $(38.9) million.
  • Non-GAAP income from operations was $24.0 million.
  • Net cash provided by operating activities was $42.3 million.

Headline financials

Total Revenue

$187M

Previous: $154M+21.5%
EPS

-$0.10

Previous: $0.08-225.0%
Customers with >$5k ARR

22.4K

Previous: 19.6K+14.4%
Net Dollar Retention Rate

107.0%

Previous: 108.0%-0.9%
Operating Cash Flow Margin

22.7%

No prior period
Adjusted Free Cash Flow Margin

21.5%

No prior period
Non-GAAP Operating Margin

12.8%

No prior period
Capital Expenditures

-$4.11M

Previous: -$990K-315.2%
Free Cash Flow

-$34.1M

Previous: -$32M-6.4%
Net Income

-$30M

Previous: -$31M+3.5%
Operating Income

-$38.9M

Previous: -$38.7M-0.3%
Gross Profit

$157M

Previous: $127M+23.2%
R&D Expense

$47.9M

Previous: $34.9M+37.3%
Stock-Based Comp

$58.7M

Previous: $55.1M+6.5%

Revenue & EPS history

Freshworks · Revenue · Quarterly

$187M

Q3 2024+21.5%vs Q3 2023
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Forward guidance

Freshworks provided estimates for the fourth quarter and full year 2024, raising full year revenue, non-GAAP income from operations and non-GAAP net income per share guidance.

Tailwinds

  • Q4 2024 Revenue is expected to be $187.8 - $190.8 million, representing a year-over-year growth of 17% - 19%.
  • Full Year 2024 Revenue is expected to be $713.6 - $716.6 million, representing a 20% year-over-year growth.
  • Q4 2024 Non-GAAP income from operations is expected to be $22.0 - $24.0 million.
  • Full Year 2024 Non-GAAP income from operations is expected to be $80.8 - $82.8 million.
  • Q4 2024 Non-GAAP net income per share is expected to be $0.09 - $0.10.

Headwinds

  • Estimates are based on current market conditions and expectations.
  • Revenue growth rates are adjusted for constant currency.
  • Estimates are subject to various important cautionary factors.
  • Estimates for fourth quarter 2024 and full year 2024 include the estimates of Device42, Inc.
  • The company has not reconciled estimates for non-GAAP financial measures to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2024

Historical avgQ3 2024

-1.6%

Avg return

Earnings day

-2.6%

Avg return

5 days after

-4.6%

Avg return

30 days after

35%

8 / 23 earnings

Positive

+35.2%

Q3 2024

Best reaction

-21.6%

Q4 2021

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-0.5%-6.4%+2.9%
Q4 2025-16.4%-17.1%-6.9%
Q3 2025-2.1%+5.2%+16.1%
Q1 2025+3.0%+1.1%+6.5%
Q4 2024-0.3%-4.5%-16.7%
Q3 2024+35.2%+32.7%+33.5%
Q2 2024-6.1%-12.3%-11.9%
Q1 2024-17.8%-20.8%-27.8%
Q4 2023-2.4%+0.2%-14.4%
Q3 2023-0.4%+7.8%+13.6%
Q2 2023+15.8%+12.1%+17.2%
Q1 2023-2.9%-1.1%+16.6%
Q4 2022+4.1%-2.8%-10.1%
Q3 2022-9.9%-9.3%+11.8%
Q2 2021+3.2%+6.8%-13.6%
Q2 2022+12.2%+13.7%-0.7%
Q1 2021-12.0%-15.6%-3.9%
Q1 2022-7.1%-12.9%-10.3%
Q4 2019-5.2%-1.5%+8.1%
Q4 2021-21.6%-5.7%-26.7%
Q3 2020+2.9%-4.1%-28.1%
Q4 2020+2.9%-4.1%-28.1%
Q3 2021-10.7%-20.6%-33.0%
Q2 2020
Q1 2020
Q1 2019
Q4 2018
Q3 2018
Q2 2018
Q1 2018
Q4 2017
Q3 2017
Q2 2017
Q1 2017
Q4 2016
Q3 2016
Q2 2016
Q1 2016
Q4 2015
Q3 2015
Q2 2015
Q1 2015
Q4 2014
Q3 2014
Q2 2014

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