Freshworks (FRSH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 22% year-over-year to $186.6M, with strong free cash flow of $40.1M and non-GAAP operating income of $24.0M (13% margin), reflecting robust growth and operational efficiency.

• Customer base expanded to over 69,600, with net adds of 800, and customers with over $5,000 in ARR grew 14% year-over-year to 22,359.

• Strategic focus on Employee Experience (EX), AI innovation, and Customer Experience (CX) is driving durable, profitable growth, with continued onboarding of notable global brands.

• Device42 acquisition in June 2024 for $238.1M expanded product offerings and contributed to results.

• Announced a $400M share repurchase program and a 13% workforce reduction to support strategic priorities.

Financial highlights

• Revenue reached $186.6M in Q3 2024, up 22% year-over-year; Device42 contributed $8.8M.

• Free cash flow grew 82% year-over-year to $40.1M, with a margin of 21% and net cash from operating activities at $42.3M.

• Non-GAAP operating income was $24.0M (13% margin), up from $17.4M last year.

• Net loss for Q3 2024 was $30.0M ($0.10/share), improved from $31.0M ($0.11/share) last year.

• Ended Q3 with $1.05B in cash, cash equivalents, and marketable securities.

Outlook and guidance

• Q4 2024 revenue expected at $187.8M–$190.8M (17–19% growth); full-year 2024 revenue guidance is $713.6M–$716.6M (20% growth).

• Full-year 2024 adjusted free cash flow estimate raised to $150M.

• Non-GAAP income from operations for Q4 expected at $22.0–$24.0M; full year at $80.8–$82.8M.

• Non-GAAP net income per share guidance for Q4 is $0.09–$0.10; full year $0.38–$0.39.

• Preliminary 2025 outlook: revenue growth in low- to mid-teens, non-GAAP operating margin above 16%, and free cash flow margin above 25%.