NASDAQ$FRSH

Freshworks Inc · Q4 2023 earnings

Q4 2023 earnings · · Investor relations

Briefing

Freshworks delivered a strong finish to the year, outperforming financial estimates and improving business efficiency.

Freshworks Inc. reported a 20% year-over-year increase in revenue for both the fourth quarter and full year 2023. The company's Q4 revenue reached $160.1 million, and it generated $28.6 million in free cash flow during the quarter and $77.8 million for the full year.

  • Q4 revenue grew 20% year-over-year, reaching $160.1 million.
  • GAAP loss from operations improved to $(40.0) million, compared to $(60.6) million in Q4 2022.
  • Non-GAAP income from operations was $11.5 million, compared to a non-GAAP loss of $(2.8) million in Q4 2022.
  • Free cash flow for the quarter was $28.6 million, compared to $4.0 million in Q4 2022.

Headline financials

Total Revenue

$160M

Previous: $133M+20.2%
EPS (adj)

$0.08

Previous: $0.01+700.0%
Customers with >$5k ARR

20.3K

Previous: 17.7K+14.3%
Net Dollar Retention Rate

108.0%

Previous: 108.0%+0.0%
Capital Expenditures

-$2.28M

Previous: $1.84M-223.6%
Net Income

-$28.1M

Previous: -$55.5M+49.4%
Operating Income

-$40M

Previous: -$60.6M+33.9%
Gross Profit

$133M

Previous: $108M+23.2%
R&D Expense

$35.8M

No prior period
Stock-Based Comp

$50.6M

Previous: $57M-11.2%

Revenue & EPS history

Freshworks · Revenue · Quarterly

$160M

Q4 2023+20.2%vs Q4 2022
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Forward guidance

Freshworks provides estimates for Q1 and full year 2024, based on current market conditions. Revenue growth rates are adjusted for constant currency.

Tailwinds

  • Q1 2024 Revenue: $162.5 - $164.5 million
  • Q1 2024 Year-over-year growth: 18% - 19%
  • Q1 2024 Non-GAAP income from operations: $12.5 - $14.5 million
  • Q1 2024 Non-GAAP net income per share: $0.07 - $0.08
  • Full Year 2024 Non-GAAP net income per share: $0.29 - $0.31

Headwinds

  • Estimates are subject to various important cautionary factors.
  • The company has not reconciled estimates for non-GAAP financial measures to GAAP due to the uncertainty and potential variability of expenses.
  • A reconciliation is not available without unreasonable effort.
  • The forward-looking statements are based on current expectations, estimates and projections.
  • Actual results may differ materially from those expressed in the forward-looking statements.

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 Q4 2023

Historical avgQ4 2023

-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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