Freshworks beats estimates with US$1,419.6 million revenue in Q4 2024

 A Freshworks Inc. (Nasdaq: FRSH), a global people-centric AI software company, announced its financial results for the fourth quarter and full year ended December 31, 2024, last Tuesday (11).

“A Freshworks again surpassed its previous fourth-quarter estimates across all key metrics, posting a solid quarter with revenue growth of 22% year-over-year, totaling US$ 194.6 million, operating cash flow margin of 21% and adjusted free cash flow margin of 21%”, said Dennis Woodside, CEO and President of Freshworks.“

Fourth Quarter 2024 Financial Results Summary

• Revenue: Total revenue was US$194.6 million, a growth of 22% over US$160.1 million in the fourth quarter of 2023, and 21% adjusted for constant currency.
• (Loss) GAAP of Operations: GAAP loss from operations was US$ (23.8) million, compared to US$ (40.0) million in the fourth quarter of 2023.
• Non-GAAP Profit from Operations: Non-GAAP profit from operations was US$ 40.3 million, compared to US$11.5 million in the fourth quarter of 2023.
• (Loss) GAAP per Action: The basic and diluted GAAP loss per share was US$ (0.07), based on 303.6 million shares on weighted average, compared to US$ (0.09) in the fourth quarter of 2023.
• Non-GAAP Profit per Share: Diluted non-GAAP earnings per share was US$0.14, based on 306.1 million shares on weighted average, compared to US$0.08 in the fourth quarter of 2023.
• Operating Cash Flow: Operating cash flow was US$41.4 million, compared to US$30.9 million in the fourth quarter of 2023.
• Adjusted Free Cash Flow: Adjusted free cash flow was US$41.7 million, compared to US$28.6 million in the fourth quarter of 2023.
• Cash and Equivalents: Cash, cash equivalents and tradable securities totaled US$1.07 billion as of December 31, 2024.

Full Year 2024 Financial Results Summary

• Revenue: Total revenue was US$720.4 million, representing a growth of 21% over US$596.4 million in 2023.
• (Loss) GAAP of Operations: GAAP loss from operations was US$ (138.6) million, compared to US$ (170.2) million in 2023.
• Non-GAAP Profit from Operations: Non-GAAP profit from operations was US$99.1 million, compared to US$44.5 million in 2023.
• (Loss) GAAP per Action: The basic and diluted GAAP loss per share was US$ (0.32), compared to US$ (0.47) in 2023.
• Non-GAAP Profit per Share: Diluted non-GAAP earnings per share was US$0.43, compared to US$0.26 in 2023.
• Operating Cash Flow: Operating cash flow was US$160.6 million, compared to US$86.2 million in 2023.
• Adjusted Free Cash Flow: Adjusted free cash flow was US$153.3 million, compared to US$77.8 million in 2023.

Main Metrics and Recent Highlights

• The number of customers contributing more than US$5,000 in ARR was 22,558, an increase of 11% over the previous 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 Director of Products and Venkitesh Subramanian as Senior Vice President of Product Management for Customer Experience.
• Announcement according to strategic agreement with Unisys.

Financial Outlook for 2025

The company expects revenue between US$190.0 and US$193.0 million in the first quarter of 2025 and between US$809.0 and US$821.0 million in the full year, with growth between 12% and 14%.