A Freshworks Inc. (Nasdaq: FRSH), a global AI-centered software company focused on people, announced last Tuesday (11) the financial results for the fourth quarter and full year ended on December 31, 2024.
“Freshworks once again exceeded its previous estimates in the fourth quarter across all key metrics, posting a strong quarter with a 22% revenue growth from the prior year, totaling $194.6 million, an operating cash flow margin of 21%, and an adjusted free cash flow margin of 21%,” said Dennis Woodside, CEO and President of Freshworks. “Companies are moving away from traditional vendors and migrating to Freshworks for modern, straightforward solutions for customer and employee experience.”
Summary of Financial Results for the Fourth Quarter of 2024
- Revenue: Total revenue was $194.6 million, a 22% growth from $160.1 million in the fourth quarter of 2023, and 21% adjusted for constant currency.
- (Loss) GAAP from Operations: GAAP loss from operations was $ (23.8) million, compared to $ (40.0) million in the fourth quarter of 2023.
- Non-GAAP Operating Income: Non-GAAP operating income was $40.3 million, compared to $11.5 million in the fourth quarter of 2023.
- (Loss) GAAP per Share: The basic and diluted GAAP loss per share was $ (0.07), based on 303.6 million weighted average shares, compared to $ (0.09) in the fourth quarter of 2023.
- Non-GAAP Earnings per Share: Diluted non-GAAP earnings per share were $0.14, based on 306.1 million weighted average shares, compared to $0.08 in the fourth quarter of 2023.
- Operating Cash Flow: Operating cash flow was $41.4 million, compared to $30.9 million in the fourth quarter of 2023.
- Adjusted Free Cash Flow: Adjusted free cash flow was $41.7 million, compared to $28.6 million in the fourth quarter of 2023.
- Cash and Equivalents: Cash, cash equivalents, and marketable securities totaled $1.07 billion as of December 31, 2024.
Summary of Full Year 2024 Financial Results
- Revenue: Total revenue was $720.4 million, representing a 21% growth from $596.4 million in 2023.
- (Loss) GAAP from Operations: GAAP loss from operations was $ (138.6) million, compared to $ (170.2) million in 2023.
- Non-GAAP Income from Operations: Non-GAAP income from operations was $99.1 million, compared to $44.5 million in 2023.
- (Loss) GAAP per Share: The basic and diluted GAAP loss per share was $ (0.32), compared to $ (0.47) in 2023.
- Non-GAAP Earnings per Share: Non-GAAP diluted earnings per share were $0.43, compared to $0.26 in 2023.
- Operating Cash Flow: Operating cash flow was $160.6 million, compared to $86.2 million in 2023.
- Adjusted Free Cash Flow: Adjusted free cash flow was $153.3 million, compared to $77.8 million in 2023.
Key Metrics and Recent Highlights
- The number of customers contributing over $5,000 in ARR was 22,558, an 11% increase from the previous year.
- The revenue retention rate was 103% (105% adjusted for constant currency).
- New customers include New Balance, Rawlings Sporting Goods, Sophos, Onfido, and Mesa Airlines.
- Appointment of Srinivasan Raghavan as Product Director and Venkitesh Subramanian as Senior Vice President of Product Management for Customer Experience.
- Strategic agreement announcement with Unisys.
Financial Outlook for 2025
The company expects revenue between $190.0 – $193.0 million in the first quarter of 2025 and between $809.0 – $821.0 million for the full year, with growth between 12% and 14%.
