Freshworks Inc. has announced financial results for its third quarter ended September 30, 2021.
“Our strong third-quarter results reflect the continued adoption of our modern and easy-to-use products by companies of all sizes,” said Girish Mathrubootham, CEO and founder of Freshworks.
He added, “We grew 46% year over year and saw healthy expansion activity from our customer base.”
Revenue: Compared to the third quarter of 2020, total sales were $96.6 million, marking a 46 percent increase.
GAAP (Loss) Income from Operations: In the third quarter of 2020, GAAP (loss) from operations was $(140.3) million, compared to $0.1 million in the third quarter of 2019.
Non-GAAP (Loss) Income from Operations: In the third quarter of 2020, non-GAAP (loss) from operations was $(1.5) million, compared to non-GAAP income from operations of $1.2 million.
GAAP Net (Loss) Per Share: On 95.9 million weighted-average shares outstanding, GAAP net (loss) per share was $(24.72), compared to $(3.49) on 76.9 million weighted-average shares outstanding in the third quarter of 2020.
Non-GAAP Net (Loss) Income Per Share: Based on 95.9 million weighted-average shares outstanding, non-GAAP basic and diluted net (loss) per share was $(0.04), compared to non-GAAP basic and diluted net income per share of $0.03 and $0.01, respectively, in the third quarter of 2020, based on 76.9 million and 233.6 million weighted-average shares outstanding, respectively.
Net Cash (Used in) Provided by Operating Activities: In the third quarter of 2020, net cash (spent in) operating operations was $(2.0) million, compared to net cash produced by operating activities of $12.8 million.
Free Cash Flow: Free cash flow was $(4.2) million in the third quarter of 2020, compared to $10.3 million in the previous quarter.
Cash, Cash Equivalents, and Restricted Cash and Marketable Securities: As of September 30, 2021, cash, cash equivalents, restricted cash, and marketable securities totaled $1.3 billion.
The section labeled “Explanation of Non-GAAP Financial Metrics” below contains a description of non-GAAP financial measures, as well as a reconciliation of GAAP to non-GAAP financial measures in the tables below.
– There were 14,079 customers who contributed more than $5,000 in ARR, up 31% from the previous year.
– The net dollar retention rate in the third quarter of 2020 was 117 percent, up from 118 percent in the second quarter of 2021 and 109 percent in the third quarter of 2020.
– The company completed an IPO and is now traded on NASDAQ under the symbol FRSH.
– Double Diamond Resorts, ForgeRock, Hunter College NY, Lucidworks, Phillips, Scotch and Soda, Smashburger, Toyota Connected India, Watsons, and more joined the Freshworks community.
– As a “Challenger” in the Gartner Magic Quadrant for IT Service Management (ITSM) Tools in 2021.
– Pam Sergeeff was promoted to Chief Legal Officer and General Counsel.
– Jennifer Taylor, SVP and Chief Product Officer of Cloudflare, and Zach Nelson, former CEO of NetSuite, have been appointed to the board of directors.
– Announced Refresh, Freshworks’ annual user conference, which will take place on November 11, will feature customer speakers from African Bank, Carrefour, Clopay, Dwyer, PowerSchool, Shopify, and others.
– Gain from an equity investment in a private firm that resulted in $24 million in cash.
Based on current market conditions and forecasts, we present estimates for the fourth quarter and full year of 2021. We highlight that these projections are subject to a number of key cautionary factors, including the risks and uncertainties connected with the ongoing COVID-19 pandemic, which are discussed in the section below labelled “Forward-Looking Statements.”
Freshworks presently forecasts the following results for the fourth quarter and full year of 2021:
Total revenue of $99.0 million – $101.0 million
Non-GAAP loss from operations of $13.5 million – $11.5 million
Non-GAAP net loss per share(1) of $0.07 – $0.05
Total revenue of $364.5 million – $366.5 million
Non-GAAP loss from operations of $21.0 million – $19.0 million
Non-GAAP net loss per share(1) of $0.22 – $0.20
Non-GAAP net loss per share was estimated, assuming 269.1 million and 130.4 million weighted-average shares outstanding for the fourth quarter and full-year 2021, respectively.
These are forward-looking statements, and actual outcomes could differ considerably. For more information on the risks that could cause our actual results to differ materially from these forward-looking statements, see the “Forward-Looking Statements” safe harbor section below.
Due to the uncertainty and probable fluctuation of future expenses, Freshworks has not reconciled its expectations for non-GAAP loss from operations to GAAP loss from operations or non-GAAP net loss per share to GAAP net loss per share. As a result, reconciliation is not possible without a great deal of effort. In the financial statement tables for its third quarter 2021 non-GAAP results included in this news release, Freshworks has given a reconciliation of various GAAP to non-GAAP financial measures.
