Freshworks Inc.

Technology
Computer Software: Prepackaged Software
www.freshworks.com

Moat Score

Market Cap $4.98B
PE -49
Debt $NaN
Cash $391.20M
EV $NaN
FCF $144.96M

Earnings

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Sales & Net Margins

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Earnings	-$101.55M
EBIT	-$100.17M
ROE	-9%
ROA	-6%
FCF	$144.96M
Equity	$1.14B
Growth Stability	1
PE	-49.06
PB	4.39
P/FCF	34.37
P/S	7.26
Price/Cash	0.08
Net Margins	-14%
Gross Margins	84%
Op. Margins	-15%
Sales Growth YoY	22%
Sales Growth QoQ	7%
Sales CAGR	29%
FCF CAGR	87%
Equity CAGR	-3%
Earnings Growth YoY	-3%

Earnings Growth QoQ	48%
Sales CAGR 5Y	29%
FCF CAGR 5Y	87%
Equity CAGR 5Y	-3%
Earnings CAGR 3Y	24%
Sales CAGR 3Y	24%
FCF CAGR 3Y	663%
Equity CAGR 3Y	-1%
Market Cap	$4.98B
Revenue	$685.96M
Assets	$1.58B
Cash	$391.20M
Shares Outstanding	299.93M
Moat Score	5%
Working Capital	854.85M
Current Ratio	3.26
Gross Profit	$575.08M
Shares Growth 3y	4%
Equity Growth QoQ	2%
Equity Growth YoY	7%

Assets & ROA

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Stockholders Equity & ROE

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Freshworks Inc provides software as a service platform that enables small and medium-sized businesses to support customers through e-mail, phone, website, and social networks. It offers solutions that serve the needs of users in the CX and ITSM categories, and have also expanded its offering with Sales and Marketing automation products. These product offerings enable organizations to acquire, engage, and better serve their customers and employees. The group derives revenue from North America, Europe, the Middle East and Africa, Asia Pacific and Other regions.

SEC Filings

Direct access to Freshworks Inc. (FRSH) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2022
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Freshworks Inc. compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Freshworks Inc. compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

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Freshworks Inc. Discounted Cash Flow

Fully customizable DCF calculator online for Freshworks Inc..

Years

Calculation mode

= $361B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$145M	$271M	$506M	$946M	$1.8B	$3.3B	$6.2B	$12B	$22B	$40B	$75B	$754B
DCF		$246M	$418M	$711M	$1.2B	$2.1B	$3.5B	$5.9B	$10B	$17B	$29B	$291B
Value	$361B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Net Margins	-362%	-648%	-765%	-47%	-23%	-14%
ROA	-	-	-12%	-16%	-8%	-6%
ROE	-	-	-229%	-22%	-13%	-9%

Bad Net Margins (-13.97%)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Debt over FCF	-	-	-	-	-	-
Debt over Equity	-	-	-	-	-	-
Growth Stability	-	-	-	-	-	1

Neutral Debt/FCF ratio (-)

Net Margins are at a level that is not too high nor too low. They are not a competitive advantage but they are not a competitive disadvantage either.

Neutral Debt/Equity ratio (-)

The company has a balance between equity and debt that is not too good nor too bad.

Good Graham’s Stability (1)

The company has a good stability in its earnings, which is a sign of a good competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	12/2019	12/2020	12/2021	12/2022	12/2023	CAGR 5Y
Revenue YoY growth	-	45%	49%	34%	20%	29%
Earnings YoY growth	-	159%	75%	-92%	-41%	-
Equity YoY growth	-	140%	-146%	-15%	2%	-3%
FCF YoY growth	-	-243%	-79%	-264%	-971%	87%