FRSH Earnings Prediction
The chart below shows how FRSH performed 10 days before and after its earnings report, based on data from the past quarters. Typically, FRSH sees a +2.76% change in stock price 10 days leading up to the earnings, and a -2.27% change 10 days following the report. On the earnings day itself, the stock moves by -1.05%. This data can give you a slight idea of what to expect for the next quarter's release.
FRSH Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
186.57M
21.51%
7.15%
Gross Margin
84.02%
1.35%
0.24%
Operating Margin
-20.83%
-17.44%
-17.18%
Net Margin
-16.06%
-20.53%
38.57%
EPS
-0.10
-9.09%
42.86%
No Data Available
FRSH Earnings Analysis
Freshworks Inc. Class A Common Stock Corporation (FRSH.O) Earnings Conference Call
Positive
Strong Revenue and Cash Flow: Revenue grew 22% year-over-year to $186.6 million, and we generated free cash flow of $40.1 million, resulting in a free cash flow margin of 21% for the quarter.
Customer Growth Milestone: We ended the quarter with more than 69,600 total customers with a net add of more than 800 customers, representing the highest organic net adds for customers in the last four quarters.
EX Business ARR Growth: Our EX business ARR grew 40% year-over-year with approximately 10 percentage points being contributed from Device42, totaling over $390 million in ARR.
CX Business Performance: Our CX business finished with over $360 million in ARR growing nearly 10% year-over-year, with the lowest churn quarter ever for our customer support products.
Share Repurchase Program Announcement: We announced a share repurchase program of up to $400 million, reinforcing our commitment to delivering long-term shareholder returns.
Negative
Headcount Reduction Announcement: 1. Workforce Reduction: Freshworks announced a global headcount reduction of approximately 13%, which is expected to incur a charge of $11 million to $13 million in Q4 results, impacting operational efficiency and employee morale.
Net Dollar Retention Decline: 2. Challenging Net Dollar Retention: The net dollar retention rate for Q3 was 107%, but is projected to decline to approximately 106% in Q4, indicating ongoing pressures on customer expansion and retention.
Slower Billings Growth: 3. Slower Calculated Billings Growth: Calculated billings grew only 19% in Q3, and the growth estimate for Q4 is projected to slow to 16% to 17%, reflecting potential challenges in revenue generation.
Churn Rate Concerns: 4. Increased Churn Rates: Although churn rates improved in Q3, the company anticipates that the overall churn rate will remain a concern, particularly in the context of the SMB sector affected by macroeconomic conditions.
2025 Revenue Growth Outlook: 5. Lowered 2025 Revenue Growth Outlook: Freshworks provided a preliminary estimate for 2025 revenue growth in the low to mid-teens, indicating a cautious outlook amid challenging market conditions and tougher year-over-year comparisons.
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FRSH Earning Call Sentiment
Freshworks Inc. (FRSH) Q3 2024 Earnings Call Transcript
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FRSH.O
-4.47%Positive
The earnings call shows strong financial performance with 22% revenue growth and significant free cash flow improvement. The share repurchase program indicates confidence in growth. Despite workforce reductions and churn pressures, the company is optimistic about customer experience solutions and AI adoption. The Q&A reveals positive trends in SMB and CX sectors. The market cap suggests moderate sensitivity to news, leading to a positive outlook for stock price movement in the next two weeks.
