Freshworks reports 22% rise in Q4 revenue to USD $194.6m

Freshworks has reported its financial results for the fourth quarter and the full year ended December 31, 2024, showcasing a strong performance across its key metrics.

The company achieved a fourth-quarter revenue of USD $194.6 million, marking a 22% increase compared to the USD $160.1 million from the same period in 2023. This was complemented by an operating cash flow margin of 21% and an adjusted free cash flow margin of 21%. "Freshworks outperformed its previously provided estimates again in Q4 across all our key metrics," commented Dennis Woodside, Chief Executive Officer & President. "Companies are leaving legacy vendors and coming to Freshworks for our uncomplicated, modern employee and customer experience service solutions."

In a display of considerable growth, Freshworks' annual revenue increased 21% year-over-year to USD $720.4 million, up from USD $596.4 million in 2023. Notably, the non-GAAP income from operations rose to USD $99.1 million from USD $44.5 million in the previous year.

The company demonstrated resilience with its GAAP net loss from operations improving to USD $(138.6) million from USD $(170.2) million last year. Meanwhile, the non-GAAP net income per share grew to USD $0.43, reflecting a positive shift from USD $0.26 in 2023.

Freshworks also highlighted its customer expansion, adding 2,600 new customers in the fourth quarter, bringing the total to 72,000. Among these new customers are noteworthy names such as New Balance, Rawlings Sporting Goods, and Sophos.

The company's cash holdings, including cash equivalents and marketable securities, stood at USD $1.07 billion at the end of the year. The net cash provided by operating activities reached USD $160.6 million, compared to USD $86.2 million in the prior year, indicating a robust financial standing.

Freshworks' strategic hirings, notably of Srini Raghavan as Chief Product Officer and Venki Subramanian as Senior Vice President of Product Management for Customer Experience, have bolstered its leadership team. These appointments are part of a broader effort to enhance its product offerings and customer experience.

The net dollar retention rate, a critical indicator of the business's health, was reported at 103% for the fourth quarter, slightly down from 107% in both the third quarter of 2024 and the fourth quarter of 2023.

Looking ahead, Freshworks has outlined its financial expectations for 2025. The company projects first-quarter revenue to be between USD $190 million and USD $193 million, translating to a year-over-year growth of 15% to 17%. For the full year, the revenue estimate ranges from USD $809 million to USD $821 million.

The company notes these forecasts account for constant currency adjustments, which provide a clearer picture of business trends by removing the effects of currency fluctuations.

Freshworks' financial results include the integration of Device42, acquired during the year, which contributed to the figures reported for 2024. The company's focus remains on delivering quality service software that meets the evolving needs of its diverse client base.