Freshworks Inc. (FRSH) vs SPS Commerce, Inc. (SPSC)

Freshworks Inc. and SPS Commerce, Inc. are both Software Application companies. Freshworks Inc. is the larger, with a market value of $3.3B against $3.0B — 1.1× the size. Freshworks Inc. trades at the lower P/E: 19.3× against 39.1×. Freshworks Inc. grew revenue faster over the last twelve months: 15.6% against 9.80%. Freshworks Inc. has the higher net margin (20.5% vs 10.1%) and the higher return on invested capital (8.20% vs 8.07%). Across the 21 metrics below, Freshworks Inc. leads on 13 and SPS Commerce, Inc. on 8.

Valuation

Metric FRSH SPSC Software Application median
P/E 19.29 39.09 24.79
P/S 3.77 3.84 2.67
P/B 3.81 3.16 3.01
Price to free cash flow 15.45 14.95 16.59
EV/EBITDA 30.73 17.51 14.40
EV/Sales 3.04 3.62 2.62
Earnings yield 5.18% 2.56% 0.00%
Free cash flow yield 6.47% 6.69% 1.91%

Profitability

Metric FRSH SPSC Software Application median
Gross margin 84.96% 69.82% 67.03%
Operating margin 3.35% 12.80% 0.00%
Net margin 20.49% 10.10% 0.00%
Free cash flow margin 24.41% 25.72% 4.32%
Return on equity 19.70% 8.26% 0.00%
Return on assets 12.47% 6.94% 0.00%
Return on invested capital 8.20% 8.07% 0.00%

Growth

Metric FRSH SPSC Software Application median
Revenue growth (TTM) 15.57% 9.80% 12.40%
EPS growth (last fiscal year) 296.88% 20.59% —
Revenue growth, 5-year CAGR 27.43% 19.17% 13.72%
Net income growth, 5-year CAGR 0.00% 15.41% 0.00%

Health

Metric FRSH SPSC Software Application median
Debt to equity 0.00 0.00 0.02
Current ratio 1.69 2.26 1.55
Net debt to EBITDA (13.14) (0.86) 0.06

Dividend

Metric FRSH SPSC Software Application median
Dividend yield — — 1.25%
Payout ratio 0.00 0.00 0.00

Size

Metric FRSH SPSC Software Application median
Market cap 3.34b 3.00b 396.11m

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