A Freshworks Inc. (Nasdaq: FRSH), a global AI-powered people-centric software company, announced last Tuesday (11) its financial results for the fourth quarter and full year ended December 31, 2024.
“Freshworks once again exceeded its previous estimates in the fourth quarter across all key metrics, delivering a solid quarter with 22% year-over-year revenue growth totaling $194.6 million, 21% operating cash flow margin, and 21% adjusted free cash flow margin,” said Dennis Woodside, CEO and President of Freshworks. “Companies are abandoning traditional vendors and migrating to Freshworks in search of modern, uncomplicated solutions for customer and employee experience.”
Fourth Quarter 2024 Financial Results Summary
- Revenue: Total revenue was $194.6 million, a 22% increase compared to $160.1 million in the fourth quarter of 2023, and 21% adjusted for constant currency.
- GAAP Operating (Loss): GAAP operating loss 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.
- GAAP (Loss) per Share: GAAP basic and diluted 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 Income per Share: Non-GAAP diluted income per share was $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.
Full Year 2024 Financial Results Summary
- Revenue: Total revenue was $720.4 million, representing 21% growth compared to $596.4 million in 2023.
- GAAP Operating (Loss): GAAP operating loss was $(138.6) million, compared to $(170.2) million in 2023.
- Non-GAAP Operating Income: Non-GAAP operating income was $99.1 million, compared to $44.5 million in 2023.
- GAAP (Loss) per Share: GAAP basic and diluted loss per share was $(0.32), compared to $(0.47) in 2023.
- Non-GAAP Income per Share: Non-GAAP diluted income per share was $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 year-over-year.
- 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 Chief Product Officer and Venkitesh Subramanian as Senior Vice President of Product Management for Customer Experience.
- Announcement of strategic agreement 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, representing growth between 12% and 14%.
