Companies

Freshworks Inc Class A

NASDAQ: FRSH
$13.46
▼ $0.46 (−3.30%) today
Markets closed · 7:49pm ET

Q3 2024 Earnings

Reported Nov 6, 2024, 4:27pm ET · SEC source
$0.11
Beat +37.50%
EPS · est. $0.08
$186.6M
Beat +0.00%
Revenue · est. $186.6M
−3.7%
Trailing market
FRSH vs S&P since report
1 quarter
Consecutive EPS beats

Market Reaction

% change · around the report
−9%0+9%+18%Nov 6Nov 7report 4:27pm ETearnings+0.8%+17.6%
−9%0+9%+18%Nov 6Nov 7earnings+0.8%+17.6%
FRSH +17.6%S&P 500 +0.8%
−8%0+8%+16%Nov 6Nov 7report 4:27pm ETearnings+1.5%+17.6%
−8%0+8%+16%Nov 6Nov 7earnings+1.5%+17.6%
FRSH +17.6%NASDAQ +1.5%
−18%−9%0+9%Nov 5Nov 14report 4:27pm ETearnings+0.2%+11.8%
−18%−9%0+9%Nov 5Nov 14earnings+0.2%+11.8%
FRSH +11.8%S&P 500 +0.2%
−18%−9%0+9%Nov 5Nov 14report 4:27pm ETearnings+0.3%+11.8%
−18%−9%0+9%Nov 5Nov 14earnings+0.3%+11.8%
FRSH +11.8%NASDAQ +0.3%
+28.50%
Day of report
−2.26%
Next session
−2.97%
One week
−2.44%
30 days

S&P 500 over the same 30 days: +1.21%.

Did FRSH Beat Earnings? Q3 2024 Results

Freshworks delivered a strong third quarter, posting non-GAAP earnings per share of $0.11 against a consensus estimate of $0.08, a beat of 37.50%, while revenue of $186.57 million grew 21.5% year over year and landed precisely in line with expectations. The cloud software company attributed the momentum to accelerating customer adoption of its AI-powered products and solid performance across mid-market and enterprise segments, with free cash flow nearly doubling to $40.10 million and non-GAAP operating margin expanding to 12.8% from 11.3% a year ago. The quarter also carried significant structural news, as CEO Dennis Woodside announced a 13% global workforce reduction affecting roughly 660 employees, framing the realignment around three core priorities: Employee Experience, AI, and Customer Experience. The move sparked a sharp rally in the stock, reflecting investor relief that the reorganization was paired with raised guidance; Freshworks now expects full-year 2024 revenue of $713.60 to $716.60 million, representing approximately 20% growth, with non-GAAP EPS of $0.38 to $0.39.

Key Takeaways
  • 22% year-over-year revenue growth (22% on constant currency basis)
  • Non-GAAP operating margin improved to 12.8% from 11.3% in Q3 2023
  • Free cash flow margin improved to 21% from 14% in Q3 2023
  • Customers contributing more than $5,000 in ARR grew 14% year-over-year to 22,359
  • Net dollar retention rate of 107% (105% adjusting for constant currency)
  • Non-GAAP gross margin improved to 85.7% from 84.0% in Q3 2023

“Freshworks delivered a strong third quarter, with revenue growing 22% year over year to $186.6 million, net cash provided by operating activities margin improving to 23%, and free cash flow margin improving to 21%.”

Freshworks CEO, on the earnings call

Forward Guidance & Outlook

Freshworks raised full-year 2024 guidance. For Q4 2024, the company expects revenue of $187.8–$190.8 million (17%–19% YoY growth), non-GAAP income from operations of $22.0–$24.0 million, and non-GAAP net income per share of $0.09–$0.10. For full-year 2024, the company expects revenue of $713.6–$716.6 million (20% growth), non-GAAP income from operations of $80.8–$82.8 million, and non-GAAP net income per share of $0.38–$0.39. Revenue and non-GAAP income from operations guidance is based on exchange rates as of November 1, 2024.

FRSH YoY Financials

Q3 2024 vs Q3 2023 · SEC filings Q3 2023 Q3 2024
$0$70.0M$140.0M$153.5M$186.6MRevenue$127.3M$156.8MGross Profit$-38,992,676$-38,864,000Operating Income$-28,957,085$-29,959,000Net Income
$0$70.0M$140.0MRevenueGross ProfitOperating IncomeNet Income

Figures from SEC filings and company reports. Not investment advice.