Freshworks Board Approves Stock Buyback Worth $400 Mn

SUMMARY

This initiative allows Freshworks to buy back shares from the open market, through private negotiations, or other compliant methods as per the Securities Exchange Act of 1934

The SaaS company also trimmed its consolidated net loss by 3.5% year-on-year to $29.95 Mn in the third quarter of 2024 from $31.03 Mn in the year-ago period

Freshworks also announced cutting 13% of its global workforce as part of its restructuring affecting about 660 employees globally

Nasdaq-listed SaaS major Freshworks has announced that its board of directors has approved a stock buyback programme worth $400 Mn of its outstanding Class A common stock.

This initiative allows Freshworks to buy back shares from the open market, through private negotiations, or other compliant methods as per the Securities Exchange Act of 1934.

Freshworks in an exchange filing said, “Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 under the Exchange Act. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of shares of common stock under this authorisation.”

This comes on the sidelines of Freshworks announcing its financial results for the September quarter of 2024 (Q3 FY25), highlighting a 21.4% year-over-year total revenue growth at $186.6 Mn from $153.6 Mn in the corresponding quarter of FY24.

The SaaS company also trimmed its consolidated net loss by 3.5% year-on-year to $29.95 Mn in the third quarter of 2024 from $31.03 Mn in the year-ago period. Sequentially, net loss widened over 48% quarter-on-quarter from $20.1 Mn in the April to June quarter.

Besides this, the non-GAAP income from operations was $24.0 Mn, compared to $17.4 Mn in the third quarter of 2023.

While the company recorded an uptick in its revenue, Freshworks also announced cutting 13% of its global workforce as part of its restructuring affecting about 660 employees globally.

During the quarter under consideration, the number of customers contributing over $5,000 in ARR rose 14% YoY to 22,359 while the net dollar retention rate stood at 107%.

The company added over 800 customers during the quarter under review, taking the total tally to 69,600.

Republic Airways, City of Bellevue, ChampionX, University of Oxford, Sparebank 1, TechStyle Fashion Group were among the new customers added in Q3.

In September, the company appointed Murali Swaminathan as its chief technology officer (CTO) to lead Freshworks’ global engineering and architecture teams, overseeing its technology roadmap and strategy.

Founded in 2010 by Girish Mathrubootham and Shanmugam (Shan) Krishnasamy, Freshworks offers a suite of software for customer service and support, customer engagement and IT service management. The company went public in 2021.

Shares of Freshworks were trading 5.23% higher at $13.09 on NASDAQ at 1:25 PM.