Freshworks : First Quarter 2024 Earnings Presentation

Q1 2024 Earnings Presentation

May 1, 2024

© 2024 Freshworks Inc. All rights reserved.

Disclaimer

This presentation has been prepared by Freshworks Inc. ("Freshworks") for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise, or representation by Freshworks or any officer, director, employee, agent, or advisor of Freshworks. This presentation does not purport to be all inclusive or to contain all of the information you may desire. Information provided in this presentation speaks only as of the date hereof or the date indicated in this presentation accompanying certain historical facts.

This presentation contains "forward-looking" statements within the Private Securities Litigation Reform Act of 1995 that are based on our management's current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. Other than statements of historical facts, all statements contained in this presentation, including statements regarding our annual recurring revenue, revenue, expenses and other results of operations; future financial performance, business strategy and plans; potential market and growth opportunities; addition of new customers or continuing relationship with existing customers; growth rates, competitive position; technological or market trends; and our objectives for future operations, are forward-looking statements. Historical results are not indicative of future performance and you should not rely on past performance as indicative of any future performance by Freshworks. These forward-looking statements are subject to a number of risks, uncertainties and assumptions including our ability to achieve or maintain profitability; our expectations and management of future growth; the effects of increased competition as well as innovations by new and existing competitors in our market; and our ability to retain our existing customers and to increase our number of customers. Moreover, we operate in a very competitive and rapidly changing environment in which new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results or performance to differ materially from those contained in any forward-looking statements we may make.

Factors that may cause actual results to differ materially include our ability to achieve our long-term plans and key initiatives; our ability to sustain or manage any future growth effectively; 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, foreign exchange rates, and impact of inflation; 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, as well as the other potential factors described under "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2023 and other documents of Freshworks Inc. we file with the Securities and Exchange Commission from time to time (available at www.sec.gov).

We caution 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 us at the time the statements are made and/or management's good faith belief as of that time with respect to future events. We assume 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.

© 2024 Freshworks Inc. All rights reserved.

Use of Non-GAAP Measures

In addition to the U.S. generally accepted accounting principles ("GAAP") financials, this presentation includes certain non-GAAP financial measures, including non-GAAP income (loss) from operations and free cash flow. This presentation also includes certain non-GAAP metrics, including annual recurring revenue, net dollar retention rates, revenue growth rates and related presentation thereof with adjustments for constant currency.

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, however, are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. The presentation of these non-GAAP 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. 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.

© 2024 Freshworks Inc. All rights reserved.

Working with amazing brands around the globe

Retail, Logistics,	Financial	Auto &	Media &	High	Hospitality &
& E-Commerce	Services	Manufacturing	Entertainment	Tech	Transportation

© 2024 Freshworks Inc. All rights reserved.

Welcoming more customers every quarter…

© 2024 Freshworks Inc. All rights reserved.

The Freshworks solution

IT & Employee Service	Customer Service	Sales & Marketing
Freshservice	Freshservice	Freshdesk	Freshchat	Freshsales	Freshmarketer
for Business Teams	Freshworks CS Suite

Neo Platform

Freddy AI

Data & Analytics

Unified Customer Experience

Developer & Marketplace Experience

© 2024 Freshworks Inc. All rights reserved.

Revenue by quarter

($ in millions)

$160M

$165.1

$160.1

$153.6

$140M$145.1

$137.7

$120M

$100M

	Q1-23	Q2-23	Q3-23	Q4-23	Q1-24
YoY Growth	20%	19%	19%	20%	20%
YoY Growth CC*	23%	20%	18%	19%	19%

Notes: Revenue growth rates adjusted for constant currency are based on average exchange rates in effect during the comparison period for currencies other than USD. 2024 financial data reflects unaudited results as of March 31, 2024. See Appendix for reconciliation of all GAAP to Non-GAAP financial measures. Numbers rounded for presentation purposes and may not foot.

© 2024 Freshworks Inc. All rights reserved.

Revenue by geography

3%	3%
15%	14%
38%	39%

44%

44%

3%

14%

39%

45%

3%

13%

39%

45%

3%

13%

39%

45%

Q1-23

Q2-23

Q3-23

Q4-23

Q1-24

Rest of World

Asia-Pacific

Europe, Middle East, Africa

North America

© 2024 Freshworks Inc. All rights reserved.

Note: Numbers rounded for presentation purposes and may not foot.

Total customers

(in thousands)

70K

60K

64.9

65.6

66.6

67.1

67.5

50K

40K

30K

Q1-23

Q2-23

Q3-23

Q4-23

Q1-24

YoY Growth

12%

10%

8%

6%

4%

© 2024 Freshworks Inc. All rights reserved.

Customer metrics

22,500

20,000

17,500

15,000

12,500

10,000

YoY Growth

YoY Growth CC*

Customers >$5K ARR

20,261	20,549

19,551

19,105

18,441

Q1-23

Q2-23

Q3-23

Q4-23

Q1-24

18% 18% 17% 14% 11%

19% 17% 16% 14% 12%

2,500

2,250

2,000

1,750

1,500

1,250

1,000

YoY Growth

YoY Growth CC*

Customers >$50K ARR

2,497	2,593

2,268

2,186

2,013

Q1-23Q2-23Q3-23Q4-23Q1-24

30% 33% 32% 31% 29%

33% 32% 30% 30% 29%

Note: Growth rates adjusted for constant currency are based on exchange rates in effect as of the comparison period end for currencies other than USD. © 2024 Freshworks Inc. All rights reserved.