Freshworks Inc. (NASDAQ: FRSH), a leading software company
empowering businesses to delight their customers and employees,
today announced financial results for its first quarter ended
March 31, 2022.
“We’re off to a strong start to the year with Q1
revenue growth of 42% year over year,” said Girish Mathrubootham,
CEO and founder of Freshworks. “We made progress on our 2022
product priorities with the launch of Freshworks CRM for
e-commerce, while increasing net dollar retention to 115%, and
continuing to run our business efficiently.”
First Quarter 2022 Financial Summary
Results
- Revenue: Total
revenue was $114.6 million, representing growth of 42% compared to
the first quarter of 2021.
- GAAP (Loss) from
Operations: GAAP (loss) from operations was $(47.1)
million, compared to $(1.7) million in the first quarter of
2021.
- Non-GAAP (Loss) from
Operations: Non-GAAP (loss) from operations was $(0.6)
million, compared to $(0.6) million in the first quarter of
2021.
- GAAP Net (Loss) Income Per
Share: GAAP basic and diluted net (loss) per share was
$(0.18) based on 278.2 million weighted-average shares
outstanding, compared to GAAP basic net income per share and
diluted net (loss) per share of $0.89 and $(0.01), respectively,
based on 77.7 million and 233.4 million weighted-average
shares outstanding in the first quarter of 2021, respectively.
- Non-GAAP Net (Loss) Per
Share: Non-GAAP basic and diluted net (loss) per share was
$(0.01) based on 278.2 million weighted-average shares
outstanding, compared to $(0.02) based on 77.7 million
weighted-average shares outstanding in the first quarter of
2021.
- Net Cash Provided by
Operating Activities: Net cash provided by operating
activities was $1.4 million, compared to $7.8 million in the first
quarter of 2021.
- Free Cash Flow:
Free cash flow was $(1.4) million, compared to $4.8 million in the
first quarter of 2021.
- Cash, Cash Equivalents and
Marketable Securities: Cash, cash equivalents, and
marketable securities were $1.2 billion as of March 31,
2022.
A description of non-GAAP financial measures is
contained in the section titled "Explanation of Non-GAAP Financial
Measures" below and a reconciliation of GAAP to non-GAAP financial
measures is contained in the tables below.
First Quarter Key Metrics and Recent
Business Highlights
- Number of customers contributing
more than $5,000 in ARR was 15,639, an increase of 27%
year-over-year.
- Net dollar retention rate was 115%,
compared to 114% in the fourth quarter of 2021 and 112% in the
first quarter of 2021.
- Welcomed new customers to the
Freshworks community including: California Credit Union, Kuka,
Marymount Manhattan College, Sodexo, Ticket Network, Thermo Fisher,
and more.
- Launched Freshworks CRM for
e-commerce, a solution built for consumer companies that integrates
conversational marketing and support.
- Announced new partnerships with
Shopify, Device42, Good Data and Yext, and the completion of 150
projects with Tata Consultancy Services (TCS).
Financial Outlook
We are providing estimates for the second
quarter and full year 2022 based on current market conditions and
expectations. We emphasize that these estimates are subject to
various important cautionary factors referenced in the section
entitled “Forward-Looking Statements” below.
For the second quarter and full year 2022,
Freshworks currently expects the following results:
Second Quarter 2022Total revenue
of $117.0 million - $119.0 millionNon-GAAP loss from operations of
$18.5 million - $16.5 millionNon-GAAP net loss per share(1) of
$0.08 - $0.06
Full Year 2022Total revenue of
$495.5 million - $501.5 millionNon-GAAP loss from operations of
$43.5 million - $37.5 millionNon-GAAP net loss per share(1) of
$0.18 - $0.16
(1) Non-GAAP net loss per share was estimated
assuming 284.4 million weighted-average shares outstanding for the
second quarter and full year 2022.
These statements are forward-looking and actual
results may differ materially. Refer to the “Forward-Looking
Statements” safe harbor section below for information on the
factors that could cause our actual results to differ materially
from these forward-looking statements.
Freshworks has not reconciled its estimates for
non-GAAP loss from operations to GAAP loss from operations or
non-GAAP net loss per share to GAAP net loss per share due to the
uncertainty and potential variability of expenses that may be
incurred in the future. Accordingly, a reconciliation is not
available without unreasonable effort. Freshworks has provided a
reconciliation of other GAAP to non-GAAP financial measures in the
financial statement tables for its first quarter 2022 non-GAAP
results included in this press release.
Webcast and Conference Call
Information
Freshworks will host a conference call for
investors on May 3, 2022 at 2:00 p.m. Pacific Time / 5:00 p.m.
Eastern Time to discuss the company’s financial results and
business highlights. Investors are invited to listen to a live
audio webcast of the conference call by visiting the investor
relations website at ir.freshworks.com. A replay of the audio
webcast will be available shortly after the call on the Freshworks
Investor Relations website and will be available for twelve months
thereafter.
Explanation of Non-GAAP Financial
Measures
In addition to financial measures prepared in
accordance with U.S. generally accepted accounting principles
(GAAP), this press release and the accompanying tables contain
non-GAAP financial measures, including non-GAAP gross profit,
non-GAAP gross margin, non-GAAP sales and marketing expense,
non-GAAP research and development expense, non-GAAP general and
administrative expense, non-GAAP loss from operations, non-GAAP
operating margin, non-GAAP net loss per share, non-GAAP net loss
attributable to common stockholders, and free cash flow. The
presentation of these financial measures is not intended to be
considered in isolation or as a substitute for, or superior to,
financial information prepared and presented in accordance with
GAAP.
We use these non-GAAP measures in conjunction
with GAAP measures as part of our overall assessment of our
performance, including the preparation of our annual operating
budget and quarterly forecasts, to evaluate the effectiveness of
our business strategies and to communicate with our board of
directors concerning our financial performance. We believe these
non-GAAP measures provide investors consistency and comparability
with our past financial performance and facilitate period-to-period
comparisons of our operating results. We believe these non-GAAP
measures are useful in evaluating our operating performance
compared to that of other companies in our industry, as they
generally eliminate the effects of certain items that may vary for
different companies for reasons unrelated to overall operating
performance.
Investors are cautioned that there are material
limitations associated with the use of non-GAAP financial measures
as an analytical tool. The non-GAAP measures we use may be
different from non-GAAP financial measures used by other companies,
limiting their usefulness for comparison purposes. We compensate
for these limitations by providing specific information regarding
the GAAP items excluded from these non-GAAP financial measures.
We exclude the following items from one or more
of our non-GAAP financial measures, including the related income
tax effect of these adjustments:
- Stock-based compensation expense.
We exclude stock-based compensation, which is a non-cash expense,
from certain of our non-GAAP financial measures because we believe
that excluding this expense provides meaningful supplemental
information regarding operational performance. In particular,
stock-based compensation expense is not comparable across companies
given the variety of valuation methodologies and assumptions.
- Employer payroll taxes on employee
stock transactions. We exclude the amount of employer payroll taxes
on equity awards from certain of our non-GAAP financial measures
because they are dependent on our stock price at the time of
vesting or exercise and other factors that are beyond our control
and do not believe these expenses have a direct correlation to the
operation of our business.
- Amortization of acquired
intangibles. We exclude amortization of acquired intangibles, which
is a non-cash expense, from certain of our non-GAAP financial
measures. Our expenses for amortization of acquired intangibles are
inconsistent in amount and frequency because they are significantly
affected by the timing, size of acquisitions, and the allocation of
purchase price. We exclude these amortization expenses because we
do not believe these expenses have a direct correlation to the
operation of our business.
We define free cash flow as net cash provided by
operating activities, less purchases of property and equipment and
capitalized internal-use software. We believe that free cash flow
is a useful indicator of liquidity as it measures our ability to
generate cash from our core operations after purchases of property
and equipment. Free cash flow is a measure to determine, among
other things, cash available for strategic initiatives, including
further investments in our business and potential acquisitions of
businesses.
Operating Metrics
Number of Customers Contributing More Than
$5,000 in ARR. We define ARR as the sum total of the revenue we
would contractually expect to recognize over the next 12 months
from all customers at a point in time, assuming no increases,
reductions or cancellations in their subscriptions. We define our
total customers contributing more than $5,000 in ARR as of a
particular date as the number of business entities or individuals,
represented by a unique domain or a unique email address, with one
or more paid subscriptions to one or more of our products that
contributed more than $5,000 in ARR.
Net Dollar Retention Rate. To calculate net
dollar retention rate as of a given date, we first determine
Entering ARR, which is ARR from the population of our customers as
of 12 months prior to the end of the reporting period. We then
calculate the Ending ARR from the same set of customers as of the
end of the reporting period. We then divide the Ending ARR by the
Entering ARR to arrive at our net dollar retention rate. Ending ARR
includes upsells, cross-sells, and renewals during the measurement
period and is net of any contraction or attrition over this
period.
Forward-Looking Statements
This release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements relate to, among other things, our GAAP
and non-GAAP estimates for the second quarter and full year 2022,
our financial outlook, our ability to continue to run the business
efficiently, and the usefulness of the measures by which we
evaluate our business, among other things. These forward-looking
statements are based on Freshworks’ current expectations, estimates
and projections about its business and industry, management’s
beliefs and certain assumptions made by the company, all of which
are subject to change. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as,
“future”, "believe," "expect," "may," "will," "intend," "estimate,"
"continue," “anticipate,” “could,” “would,” “projects,” “plans,”
“targets” or similar expressions or the negative of those terms or
expressions. Such statements involve risks and uncertainties, many
of which involve factors or circumstances that are beyond our
control, which could cause actual results to vary materially from
those expressed in or indicated by the forward-looking statements.
Factors that may cause actual results to differ materially include
our ability to achieve our long-term plans and key initiatives; our
ability to maintain or grow the momentum of our business and
operations; our ability to attract and retain customers or expand
sales to existing customers; delays in product development or
deployments or the success of such products; the failure to deliver
competitive service offerings and lack of market acceptance of any
offerings delivered; the impact to the economy, our customers and
our business due to global economic conditions, including market
volatility, continuing geopolitical instability resulting from the
conflict between Russia and Ukraine, and the ongoing COVID-19
pandemic; the timeframes for and severity of the impact of any
weakened global economic conditions on our customers’ purchasing
and renewal decisions, which may extend the length of our sales
cycles or adversely affect our industry; our history of net losses
and ability to achieve or sustain profitability; our ability to
sustain or manage any future growth effectively; potential
interruptions or performance problems, including a service outage,
associated with our technology and the impact of challenges related
to being a newly listed public company, as well as the other
potential factors described under "Risk Factors" included in
Freshworks’ Annual Report on Form 10-K for the year ended December
31, 2021 and other documents of Freshworks Inc. on file with the
Securities and Exchange Commission (available at www.sec.gov).
Freshworks cautions you not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof and are based on information available to Freshworks at
the time the statements are made and/or management’s good faith
belief as of that time with respect to future events. Freshworks
assumes no obligation to update any forward-looking statements in
order to reflect events or circumstances that may arise after the
date of this release, except as required by law.
About Freshworks Inc.
Freshworks makes it fast and easy for businesses
to delight their customers and employees. We do this by taking a
fresh approach to building and delivering software that is
affordable, quick to implement, and designed for the end user.
Headquartered in San Mateo, California, Freshworks has a dedicated
team operating from 13 global locations to serve 50,000+ customers
including Bridgestone, Chargebee, DeliveryHero, ITV, Klarna,
Multichoice, OfficeMax, TaylorMade and Vice Media. For more
information visit www.freshworks.com.
Investor Relations Contact:Joon
HuhIR@freshworks.com650-988-5699
Media Relations Contact:Jayne
GonzalezPR@freshworks.com408-348-1087
© 2022 Freshworks Inc. All Rights Reserved.
Freshworks and its associated logo is a trademark of Freshworks
Inc. All other company, brand and product names may be trademarks
or registered trademarks of their respective companies. Nothing in
this press release should be construed to the contrary, or as an
approval, endorsement or sponsorship by any first parties of
Freshworks Inc. or any aspect of this press release.
FRESHWORKS INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(in
thousands, except per share data)(unaudited)
|
Three Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
Revenue |
$ |
114,637 |
|
|
$ |
80,587 |
|
Cost of revenue(1) |
|
22,395 |
|
|
|
16,693 |
|
Gross profit |
|
92,242 |
|
|
|
63,894 |
|
Operating expense: |
|
|
|
Research and development(1) |
|
30,717 |
|
|
|
15,395 |
|
Sales and marketing(1) |
|
71,466 |
|
|
|
42,508 |
|
General and administrative(1) |
|
37,183 |
|
|
|
7,706 |
|
Total operating expenses |
|
139,366 |
|
|
|
65,609 |
|
Loss from operations |
|
(47,124 |
) |
|
|
(1,715 |
) |
Interest and other income,
net |
|
602 |
|
|
|
373 |
|
Loss before income taxes |
|
(46,522 |
) |
|
|
(1,342 |
) |
Provision for income
taxes |
|
2,537 |
|
|
|
1,073 |
|
Net loss |
|
(49,059 |
) |
|
|
(2,415 |
) |
Decretion of redeemable
convertible preferred stock |
|
— |
|
|
|
216,131 |
|
Undistributed earnings
allocated to preferred stockholders |
|
— |
|
|
|
(144,221 |
) |
Net (loss) income attributable
to common stockholders - basic |
$ |
(49,059 |
) |
|
$ |
69,495 |
|
Undistributed earnings
allocated to preferred stockholders |
|
— |
|
|
|
144,221 |
|
Decretion of redeemable
convertible preferred stock |
|
— |
|
|
|
(216,131 |
) |
Net loss attributable to
common stockholders - diluted |
$ |
(49,059 |
) |
|
$ |
(2,415 |
) |
|
|
|
|
Net (loss) income per share
attributable to common stockholders - basic |
$ |
(0.18 |
) |
|
$ |
0.89 |
|
Net loss per share
attributable to common stockholders - diluted |
$ |
(0.18 |
) |
|
$ |
(0.01 |
) |
Weighted average shares used
in computing net (loss) income per share attributable to common
stockholders - basic |
|
278,186 |
|
|
|
77,696 |
|
Weighted average shares used
in computing net loss per share attributable to common stockholders
- diluted |
|
278,186 |
|
|
|
233,440 |
|
______________________(1) Includes
stock-based compensation expense as follows (in thousands):
|
Three Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
Cost of revenue |
$ |
1,526 |
|
|
$ |
— |
|
Research and development |
|
8,309 |
|
|
|
— |
|
Sales and marketing |
|
12,536 |
|
|
|
— |
|
General and administrative |
|
24,254 |
|
|
|
— |
|
Total stock-based compensation expense |
$ |
46,625 |
|
|
$ |
— |
|
FRESHWORKS INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(in
thousands)
|
|
March 31,2022 |
|
December 31, 2021 |
|
|
(unaudited) |
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
603,466 |
|
|
$ |
747,861 |
|
Marketable securities |
|
|
594,332 |
|
|
|
575,679 |
|
Accounts receivable, net |
|
|
48,482 |
|
|
|
51,756 |
|
Deferred contract acquisition costs |
|
|
15,729 |
|
|
|
14,640 |
|
Prepaid expenses and other current assets |
|
|
37,681 |
|
|
|
31,440 |
|
Total current assets |
|
|
1,299,690 |
|
|
|
1,421,376 |
|
Property and equipment,
net |
|
|
21,089 |
|
|
|
21,478 |
|
Operating lease right-of-use
assets |
|
|
28,237 |
|
|
|
— |
|
Deferred contract acquisition
costs, noncurrent |
|
|
15,243 |
|
|
|
15,007 |
|
Intangible assets, net |
|
|
1,270 |
|
|
|
1,894 |
|
Goodwill |
|
|
6,181 |
|
|
|
6,181 |
|
Deferred tax assets |
|
|
5,858 |
|
|
|
6,284 |
|
Other assets |
|
|
13,113 |
|
|
|
10,592 |
|
Total assets |
|
$ |
1,390,681 |
|
|
$ |
1,482,812 |
|
Liabilities and
Stockholders' Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
3,798 |
|
|
$ |
6,321 |
|
Accrued liabilities |
|
|
53,100 |
|
|
|
55,829 |
|
Deferred revenue |
|
|
174,412 |
|
|
|
160,173 |
|
Income tax payable |
|
|
385 |
|
|
|
1,023 |
|
Total current liabilities |
|
|
231,695 |
|
|
|
223,346 |
|
Operating lease liabilities,
non-current |
|
|
26,934 |
|
|
|
— |
|
Other liabilities |
|
|
20,834 |
|
|
|
21,427 |
|
Total liabilities |
|
|
279,463 |
|
|
|
244,773 |
|
Stockholders' equity: |
|
|
|
|
Common stock |
|
|
3 |
|
|
|
3 |
|
Additional paid-in
capital |
|
|
4,435,568 |
|
|
|
4,509,724 |
|
Accumulated other
comprehensive loss |
|
|
(4,353 |
) |
|
|
(747 |
) |
Accumulated deficit |
|
|
(3,320,000 |
) |
|
|
(3,270,941 |
) |
Total stockholders'
equity |
|
|
1,111,218 |
|
|
|
1,238,039 |
|
Total liabilities and
stockholders' equity |
|
$ |
1,390,681 |
|
|
$ |
1,482,812 |
|
FRESHWORKS INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(in
thousands)(unaudited)
|
Three Months Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
Cash Flows from Operating Activities: |
|
|
|
Net loss |
$ |
(49,059 |
) |
|
$ |
(2,415 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
2,973 |
|
|
|
3,201 |
|
Amortization of deferred contract acquisition costs |
|
4,275 |
|
|
|
2,659 |
|
Non-cash lease expense |
|
1,404 |
|
|
|
— |
|
Stock-based compensation |
|
46,625 |
|
|
|
— |
|
Premium amortization on marketable securities |
|
766 |
|
|
|
363 |
|
Change in fair value of equity securities |
|
(85 |
) |
|
|
(27 |
) |
Deferred income taxes |
|
309 |
|
|
|
— |
|
Other |
|
754 |
|
|
|
(67 |
) |
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
3,160 |
|
|
|
(2,833 |
) |
Deferred contract acquisition costs |
|
(5,600 |
) |
|
|
(4,790 |
) |
Prepaid expenses and other assets |
|
(8,685 |
) |
|
|
3,299 |
|
Accounts payable |
|
(2,059 |
) |
|
|
689 |
|
Accrued and other liabilities |
|
(4,972 |
) |
|
|
(9,277 |
) |
Deferred revenue |
|
14,239 |
|
|
|
16,975 |
|
Operating lease liabilities |
|
(2,690 |
) |
|
|
— |
|
Net cash provided by operating activities |
|
1,355 |
|
|
|
7,777 |
|
Cash Flows from Investing Activities: |
|
|
|
Purchases of property and equipment |
|
(1,397 |
) |
|
|
(1,987 |
) |
Proceeds from sale of property and equipment |
|
17 |
|
|
|
102 |
|
Capitalized internal-use software |
|
(1,344 |
) |
|
|
(956 |
) |
Purchases of marketable securities |
|
(151,408 |
) |
|
|
(26,381 |
) |
Sales of marketable securities |
|
58,736 |
|
|
|
2,510 |
|
Maturities and redemptions of marketable securities |
|
69,750 |
|
|
|
42,462 |
|
Net cash (used in) provided by investing activities |
|
(25,646 |
) |
|
|
15,750 |
|
Cash Flows from Financing Activities: |
|
|
|
Proceeds from exercise of stock options |
|
28 |
|
|
|
21 |
|
Payment of withholding taxes on net share settlement of equity
awards |
|
(119,948 |
) |
|
|
— |
|
Payment of deferred offering costs |
|
(109 |
) |
|
|
(28 |
) |
Net cash (used in) financing activities |
|
(120,029 |
) |
|
|
(7 |
) |
Net (decrease) increase in cash, cash equivalents and restricted
cash |
|
(144,320 |
) |
|
|
23,520 |
|
Cash, cash equivalents and restricted cash, beginning of
period |
|
747,864 |
|
|
|
98,331 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
603,544 |
|
|
$ |
121,851 |
|
FRESHWORKS
INC.RECONCILIATION OF SELECTED GAAP MEASURES TO
NON-GAAP MEASURES(in thousands, except percentages
and per share data)(unaudited)
|
|
Three Months Ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Reconciliation of gross profit and gross
margin: |
|
|
|
|
GAAP gross profit |
|
$ |
92,242 |
|
|
$ |
63,894 |
|
Non-GAAP adjustments: |
|
|
|
|
Stock-based compensation expense |
|
|
1,526 |
|
|
|
— |
|
Employer payroll taxes on employee stock transactions |
|
|
(55 |
) |
|
|
— |
|
Amortization of acquired intangibles |
|
|
525 |
|
|
|
969 |
|
Non-GAAP gross profit |
|
$ |
94,238 |
|
|
$ |
64,863 |
|
GAAP gross margin |
|
|
80.5 |
% |
|
|
79.3 |
% |
Non-GAAP gross margin |
|
|
82.2 |
% |
|
|
80.5 |
% |
|
|
|
|
|
Reconciliation of operating expenses: |
|
|
|
|
GAAP research and development |
|
$ |
30,717 |
|
|
$ |
15,395 |
|
Non-GAAP adjustments: |
|
|
|
|
Stock-based compensation expense |
|
|
(8,309 |
) |
|
|
— |
|
Employer payroll taxes on employee stock transactions |
|
|
178 |
|
|
|
— |
|
Non-GAAP research and development |
|
$ |
22,586 |
|
|
$ |
15,395 |
|
GAAP research and development as percentage of revenue |
|
|
26.8 |
% |
|
|
19.1 |
% |
Non-GAAP research and development as percentage of revenue |
|
|
19.7 |
% |
|
|
19.1 |
% |
|
|
|
|
|
GAAP sales and marketing |
|
$ |
71,466 |
|
|
$ |
42,508 |
|
Non-GAAP adjustments: |
|
|
|
|
Stock-based compensation expense |
|
|
(12,536 |
) |
|
|
— |
|
Employer payroll taxes on employee stock transactions |
|
|
488 |
|
|
|
— |
|
Amortization of acquired intangibles |
|
|
(99 |
) |
|
|
(99 |
) |
Non-GAAP sales and marketing |
|
$ |
59,319 |
|
|
$ |
42,409 |
|
GAAP sales and marketing as percentage of revenue |
|
|
62.3 |
% |
|
|
52.7 |
% |
Non-GAAP sales and marketing as percentage of revenue |
|
|
51.7 |
% |
|
|
52.6 |
% |
|
|
|
|
|
GAAP general and administrative |
|
$ |
37,183 |
|
|
$ |
7,706 |
|
Non-GAAP adjustments: |
|
|
|
|
Stock-based compensation expense |
|
|
(24,254 |
) |
|
|
— |
|
Employer payroll taxes on employee stock transactions |
|
|
(29 |
) |
|
|
— |
|
Non-GAAP general and administrative |
|
$ |
12,900 |
|
|
$ |
7,706 |
|
GAAP general and administrative as percentage of revenue |
|
|
32.4 |
% |
|
|
9.6 |
% |
Non-GAAP general and administrative as percentage of revenue |
|
|
11.3 |
% |
|
|
9.6 |
% |
|
|
|
|
|
|
|
|
|
Reconciliation of operating (loss) and operating
margin: |
|
|
|
|
GAAP (loss) from operations |
|
$ |
(47,124 |
) |
|
$ |
(1,715 |
) |
Non-GAAP adjustments: |
|
|
|
|
Stock-based compensation expense |
|
|
46,625 |
|
|
|
— |
|
Employer payroll taxes on employee stock transactions |
|
|
(692 |
) |
|
|
— |
|
Amortization of acquired intangibles |
|
|
624 |
|
|
|
1,068 |
|
Non-GAAP (loss) from operations |
|
$ |
(567 |
) |
|
$ |
(647 |
) |
GAAP operating margin |
|
(41.1)% |
|
(2.1)% |
Non-GAAP operating margin |
|
(0.5)% |
|
(0.8)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FRESHWORKS INC. |
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP
MEASURES |
(in thousands, except percentages and per share
data) |
(unaudited) |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2022 |
|
2021 |
|
|
|
|
|
Reconciliation of net (loss) income attributable to common
stockholders: |
|
|
|
|
GAAP net (loss) income attributable to common stockholders -
basic |
|
$ |
(49,059 |
) |
|
$ |
69,495 |
|
Non-GAAP adjustments: |
|
|
|
|
Undistributed earnings allocated to preferred stockholders |
|
|
— |
|
|
|
144,221 |
|
Decretion of redeemable convertible preferred stock |
|
|
— |
|
|
|
(216,131 |
) |
Stock-based compensation expense |
|
|
46,625 |
|
|
|
— |
|
Employer payroll taxes on employee stock transactions |
|
|
(692 |
) |
|
|
— |
|
Amortization of acquired intangibles |
|
|
624 |
|
|
|
1,068 |
|
Income tax adjustments |
|
|
381 |
|
|
|
— |
|
Non-GAAP net (loss) attributable to common stockholders - basic and
diluted |
|
$ |
(2,121 |
) |
|
$ |
(1,347 |
) |
|
|
|
|
|
Reconciliation of net (loss) income per share - basic and
diluted: |
|
|
|
|
GAAP net (loss) income per share attributable to common
stockholders - basic |
|
$ |
(0.18 |
) |
|
$ |
0.89 |
|
Non-GAAP adjustments: |
|
|
|
|
Undistributed earnings allocated to preferred stockholders |
|
|
— |
|
|
|
1.86 |
|
Decretion of redeemable convertible preferred stock |
|
|
— |
|
|
|
(2.78 |
) |
Stock-based compensation expense |
|
|
0.17 |
|
|
|
— |
|
Employer payroll taxes on employee stock transactions |
|
|
— |
|
|
|
— |
|
Amortization of acquired intangibles |
|
|
— |
|
|
|
0.01 |
|
Income tax adjustments |
|
|
— |
|
|
|
— |
|
Non-GAAP net (loss) per share attributable to common stockholders -
basic and diluted |
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
Weighted-average shares used in computing GAAP and non-GAAP net
(loss) per share attributable to common stockholders - basic and
diluted |
|
|
278,186 |
|
|
|
77,696 |
|
|
|
|
|
|
Computation of free cash flow: |
|
|
|
|
Net cash provided by operating activities |
|
$ |
1,355 |
|
|
$ |
7,777 |
|
Less: |
|
|
|
|
Purchases of property and equipment |
|
|
(1,397 |
) |
|
|
(1,987 |
) |
Capitalized internal-use software |
|
|
(1,344 |
) |
|
|
(956 |
) |
Free cash flow |
|
$ |
(1,386 |
) |
|
$ |
4,834 |
|
Net cash (used in) provided by investing activities |
|
$ |
(25,646 |
) |
|
$ |
15,750 |
|
Net cash (used in) financing activities |
|
$ |
(120,029 |
) |
|
$ |
(7 |
) |
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