Freshworks pares down loss by 31% in FY24; Q4 revenue jumps 22%
The Nasdaq-listed company saw its operating revenue rise by 20.8% to $720.4 million in FY24, up from $596.4 million in the prior fiscal year.
Software-as-a-service (SaaS) major has pared down its loss by 30.6% to $95.36 million in FY24 from a loss of $137.43 million the previous year.
The Nasdaq-listed company saw its operating revenue rise by 20.8% to $720.4 million in FY24, up from $596.4 million in the prior fiscal year.
Additionally, total income grew to $99.1 million, compared to $44.5 million in FY23, the company’s SEC filings showed on Wednesday.
For the fourth quarter ending December 31, 2024, Freshworks reported a 22% growth in revenue, reaching $194.6 million, up from $160.1 million in the same period last year. Net loss for the quarter was $22 million, down from $28 million in the previous year.
“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,” he added.
Total income from operations amounted to $40.3 million, up from $11.5 million in the fourth quarter of the previous year.
Freshworks also reported a rise in total operating expenses to $189 million in Q4, up from $173.1 million in the corresponding period last year.
The firm reported a free cash flow of $41.7 million for Q4 of FY24, up from $28.6 million a year earlier. As of December 31, 2024, cash, cash equivalents, and marketable securities totalled $1.07 billion.
The net dollar retention rate stood at 103% compared to 107% in Q4 of FY23. Net dollar retention is a key performance metric that measures how well a company retains and expands revenue from existing customers over time.
The number of customers contributing over $5,000 in ARR was 22,558, an increase of 11% year-over-year.
In addition, Freshworks onboarded several customers including New Balance, Rawlings Sporting Goods, Sophos, Onfido, and Mesa Airlines.
The company also made key leadership appointments, naming Srinivasan Raghavan as chief product officer and Venkitesh Subramanian as senior vice president of product management and customer experience.
It also announced a new strategic agreement with Unisys, a global systems integrator partner.
The firm ended the last quarter with the launch of Freddy AI Agent, an easy-to-deploy autonomous service agent designed to enhance customer experience and employee experience.
The introduction of Freddy AI Agent comes at a time when many enterprises are adopting AI agents to streamline their workflows. According to the company, Freddy AI agent can be deployed within minutes and has resolved an average of 45% of customer support requests and 40% of IT service inquiries.
“At the end of Q3 FY24, we had over 1,700 paying customers for the Freddy AI copilot, which we launched in mid-February last year. So, that's a fast grant for a new product in the market; it just shows the built-in demand for AI,” Woodside, had told YourStory in an interview earlier.
Meanwhile, Peak XV has offloaded about a 1% stake in the SaaS firm, according to a US SEC filing dated January 29, 2025.
The stake sale, executed through multiple open market transactions between December 9 and January 28, reduces Peak XV’s holding in Freshworks to 3.9%. The firm sold 2.93 million shares at prices ranging from $17 to $19.10, totalling $51.5 million.
In December, Freshworks Executive Chairman Girish Mathrubootham also divested shares worth $39 million, selling over 2.5 million Class A common stock shares at weighted average prices between $15.33 and $16.50 on December 18 and 19.
Last year, Freshworks announced that its board of directors has approved a stock repurchase programme, authorising the buyback of up to $400 million in outstanding Class A common stock. A stock repurchase programme (or buyback) is when a company buys back its own shares from the open market, increasing the value of the remaining shares by reducing their supply.
Edited by Swetha Kannan
