Freshworks Narrows Loss To $95 Mn In 2024, Revenue Up 21%

Nasdaq-listed homegrown SaaS company Freshworks managed to narrow its consolidated net loss by 22% to $21.9 Mn in the fourth quarter of the calendar year 2024 (Q4 CY24) from $28.1 Mn in the year-ago period on the back of robust growth in its revenue.

On a quarter-on-quarter basis, net loss declined 27% from $29.9 Mn.

The AI service software provider saw its total revenue jump 22% to $194.6 Mn during the quarter under review from $160.1 Mn in Q4 2023. Sequentially, total income grew 4% from $186.6 Mn.

For the full calendar year 2024, Freshworks reported a net loss of $95.4 Mn, down 31% from $137.4 Mn in the previous year. Total revenue zoomed 21% to $720.4 Mn in 2024 as compared to $596.4 Mn in 2023. 

In a post-earnings call, Freshworks CEO and president Dennis Woodside attributed the growth to the company’s investments in its employee experience (EX) business, which helped drive market momentum.

Several mid-market and enterprise customers are turning to Freshworks, moving away from larger IT players due to concerns about overcharging in the mid-market segment, Woodside said.

Freshworks added 2,600 customers in Q4 CY24 — the highest quarterly increase in the last four years — including the likes of New Balance,  New Balance, Rawlings Sporting Goods, Sophos, Onfido, and Mesa Airlines among others.

In its Q4 CY24 earnings release, the company said the number of customers contributing over $5K in annual recurring revenue (ARR) increased by 11% year-on-year to 22,558  during the quarter.

More than 60% of Freshworks’ ARR comes from mid-market and enterprise customers, which the company defines as organisations with 250 or more employees, the company said in an investor presentation.

Freshworks’ bread and butter customer experience business clocked an annual recurring revenue of $360 Mn in 2024, while its employee experience business surpassed $400 Mn in ARR.

The SaaS giant has lowered its revenue guidance for 2026, citing current market conditions. It expects the revenue growth guidance for CY25 to be in the range of 12-14%, which pegs its revenue between $809 Mn and $821 Mn.

Freshworks CEO Woodside had previously said that the company was targeting a revenue of $1 Bn by 2026. 

Founded in 2010 by Girish Mathrubootham and Shanmugam Krishnasamy, Freshworks provides a customer relationship management platform, primarily targeting small and medium businesses. 

It also offers a comprehensive suite of employee experience solutions, which includes IT service management and enterprise service management, along with customer experience solutions such as customer service, sales, and marketing products.

Freshworks has been undergoing internal restructuring and management changes over the last few months. In May 2024, Mathrubootham announced his resignation as the company’s CEO. 

During Q4 CY24, the company appointed Srinivasan Raghavan as its chief product officer and Venkitesh Subramanian as senior vice president of product management.