Freshworks Q4 2024 Revenue Grows 22% to $194.6 Million

Freshworks Inc., the provider of people-first AI service software, today announced financial results for its fourth quarter and full year ended December 31, 2024. 

“Freshworks outperformed its previously provided estimates again in Q4 across all our key metrics, delivering another strong quarter with revenue growing 22% year over year to $194.6 million, operating cash flow margin of 21%, and an adjusted free cash flow margin of 21%,” said Dennis Woodside, Chief Executive Officer & President of Freshworks. “Companies are leaving legacy vendors and coming to Freshworks for our uncomplicated, modern employee and customer experience service solutions.” 

Fourth Quarter 2024 Financial Summary Results 

• Revenue: Total revenue was $194.6 million, representing growth of 22% compared to total revenue of $160.1 million in the fourth quarter of 2023, and 21% adjusting for constant currency. 

• GAAP (Loss) from Operations: GAAP (loss) from operations was $(23.8) million, compared to $(40.0) million in the fourth quarter of 2023. 

• Non-GAAP Income from Operations: Non-GAAP income from operations was $40.3 million, compared to $11.5 million in the fourth quarter of 2023. 

• GAAP Net (Loss) Per Share: GAAP basic and diluted net (loss) per share was $(0.07) based on 303.6 million weighted-average shares outstanding, compared to $(0.09) based on 296.0 million weighted-average shares outstanding in the fourth quarter of 2023. 

• Non-GAAP Net Income Per Share: Non-GAAP diluted net income per share was $0.14 based on 306.1 million weighted-average shares outstanding, compared to $0.08 based on 303.2 million weighted-average shares outstanding in the fourth quarter of 2023. 

• Net Cash Provided by Operating Activities: Net cash provided by operating activities 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, Cash Equivalents and Marketable Securities: Cash, cash equivalents, and marketable securities were $1.07 billion as of December 31, 2024. 

Full Year 2024 Financial Summary Results 

• Revenue: Total revenue was $720.4 million, representing growth of 21% compared to total revenue of $596.4 million in 2023 and 21% adjusting for constant currency. 

• GAAP (Loss) 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. 

• GAAP Net (Loss) Per Share: GAAP basic and diluted net (loss) per share was $(0.32) based on 300.8 million weighted-average shares outstanding, compared to $(0.47) based on 293.1 million weighted-average shares outstanding in 2023. 

• Non-GAAP Net Income Per Share: Non-GAAP diluted net income per share was $0.43 based on 300.8 million weighted-average shares outstanding, compared to $0.26 based on 293.1 million weighted-average shares outstanding in 2023. 

• Net Cash Provided by Operating Activities: Net cash provided by operating activities was $160.6 million, compared to net cash provided by operating activities of $86.2 million in 2023. 
• Adjusted Free Cash Flow: Adjusted free cash flow was $153.3 million, compared to $77.8 million in 2023.

All financial numbers for 2024 include the results of Device42, Inc. for the period after the closing of the acquisition. A description of non-GAAP financial measures is contained in the section titled “Explanation of Non-GAAP Financial Measures” below and a reconciliation of GAAP to non-GAAP financial measures is contained in the tables below. 

Fourth Quarter Key Metrics and Recent Business Highlights 

• Number of customers contributing more than $5,000 in ARR was 22,558, an increase of 11% year-over-year and 13% adjusting for constant currency. 

• Net dollar retention rate was 103% (105% adjusting for constant currency), compared to 107% in the third quarter of 2024 and 108% in the fourth quarter of 2023. Adjusted for constant currency, net dollar retention rate was 105% in the third quarter of 2024 and 107% in the fourth quarter of 2023. 

• Welcomed and onboarded more customers to the Freshworks community including New Balance, Rawlings Sporting Goods, Sophos, Onfido, Mesa Airlines and many more. 
• Appointed Srinivasan Raghavan as Chief Product Officer and Venkitesh Subramanian as Senior Vice President of Product Management, Customer Experience. 

Announced a new strategic agreement with Unisys, a leading global systems integrator partner. 

Financial Outlook 

We are providing estimates for the first quarter and full year 2025 based on current market conditions and expectations. The revenue growth rates are adjusted for constant currency to provide better visibility into the underlying business trends. We emphasize that these estimates are subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below. 

For the first quarter and full year 2025, we currently expect the following results: 

(1) Revenue and non-GAAP income from operations are based on exchange rates as of February 7, 2025 for currencies other than USD. 

(2) Non-GAAP net income per share was estimated assuming 307.3 million and 306.4 million weighted-average shares outstanding for the first quarter and full year 2025, respectively. 

These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements. 

We have not reconciled our estimates for non-GAAP financial measures to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future. As a result, a reconciliation is not available without unreasonable effort and we are unable to address the probable significance of the unavailable information. We have provided a reconciliation of other GAAP to non-GAAP financial measures in the financial statement tables for our fourth quarter and full year 2024 and 2023 non-GAAP results included in this press release. 

To access the full release, click here- Freshworks Reports Fourth Quarter and Full Year 2024 Results | Freshworks Inc.