Freshworks Delivers Strong Financial Performance in 2024
Freshworks Reports Fourth Quarter and Full Year 2024 Results
Freshworks Inc. (NASDAQ: FRSH), a leading provider of people-first AI service software, recently announced its financial results for the fourth quarter and full year ending December 31, 2024. The company celebrated a fruitful year, with notable global recognition for its unique approach to customer experience and operational excellence.
Highlights of Fourth Quarter Financial Results
Robust Revenue Growth
During the fourth quarter of 2024, Freshworks reported a remarkable total revenue of $194.6 million. This represents a significant growth of 22% compared to $160.1 million during the same quarter in the previous year. When adjusted for constant currency, the growth rate remained steady at 21%.
Improvements in Operational Metrics
Freshworks showed commendable operational effectiveness with an operating cash flow margin of 21%. Additionally, the adjusted free cash flow margin is also reported at 21%, reflecting strong financial health and efficient cost management.
Key Financial Metrics
- GAAP (Loss) from Operations: $(23.8) million, a positive shift from $(40.0) million in Q4 2023.
- Non-GAAP Income from Operations: $40.3 million, compared to $11.5 million in Q4 2023.
- GAAP Net (Loss) Per Share: $(0.07) per share, an improvement compared to $(0.09) in the same quarter last year.
- Non-GAAP Net Income Per Share: $0.14 per diluted share, increasing from $0.08.
- Cash Reserves: Cash, cash equivalents, and marketable securities totaled $1.07 billion as of December 31, 2024.
Full Year Performance 2024
Annual Revenue and Growth
Freshworks achieved notable milestones in 2024, with total revenue reaching $720.4 million, demonstrating a 21% increase from $596.4 million in 2023. The company's commitment to expanding its product offerings and enhancing customer service capabilities has proved effective in fostering revenue growth.
Annual Financial Highlights
- GAAP (Loss) from Operations: $(138.6) million.
- Non-GAAP Income from Operations: $99.1 million.
- GAAP Net (Loss) Per Share: $(0.32), narrowing from $(0.47) in 2023.
- Non-GAAP Net Income Per Share: $0.43 per diluted share, compared to $0.26 in the previous year.
- Operating Cash Flow: $160.6 million, reflecting robust operational performance.
- Adjusted Free Cash Flow: $153.3 million, highlighting the firm’s efficient capital management.
Key Customer Metrics and Strategic Developments
Growth in Customer Participation
During Q4, the number of customers contributing over $5,000 in ARR increased to 22,558, marking an 11% increase year-on-year. Freshworks also noted a net dollar retention rate of 103%, reflecting strong customer loyalty and value perception.
New Strategic Alliances
Freshworks has welcomed new clients to its community, including notable brands like New Balance and Mesa Airlines, further solidifying its position in the market. The appointment of new leadership, including Srinivasan Raghavan as Chief Product Officer, is expected to facilitate enhanced product strategy and innovation.
Financial Outlook for 2025
The company’s financial outlook for the first quarter and full year of 2025 reflects optimism in light of current market conditions. Freshworks projects revenue growth rates adjusted for constant currency to provide clearer insight into business trends. The estimates depict an anticipated revenue growth of 15% to 17% for the first quarter and a slightly lower range of 12% to 14% for the overall year.
Frequently Asked Questions
What were the revenue figures for Freshworks in Q4 2024?
Freshworks reported a revenue of $194.6 million in Q4 2024, a 22% increase compared to Q4 2023.
How has Freshworks improved its net loss per share?
The company’s net loss per share improved to $(0.07) from $(0.09) in the previous year.
What revenue growth is projected for Freshworks in 2025?
Freshworks anticipates a revenue growth rate of 12% to 14% for the full year of 2025.
Who are some notable clients Freshworks has recently onboarded?
Notable recent clients include New Balance, Rawlings Sporting Goods, and Mesa Airlines.
What is Freshworks’ cash position as of December 31, 2024?
Freshworks reported cash, cash equivalents, and marketable securities of $1.07 billion.
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