Freshworks (FRSH) Q4 2024 Earnings Call Transcript

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Freshworks (FRSH -2.40%)
Q4 2024 Earnings Call
Feb 11, 2025, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Hello, and welcome to Freshworks fourth quarter and full year 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your first speaker, Joon Huh, head of investor relations. Please go ahead.

Joon Huh — Vice President, Investor Relations

Thank you. Good afternoon, and welcome to Freshworks’ fourth quarter and full year 2024 earnings conference call. Joining me today are Dennis Woodside, Freshworks chief executive officer and president; and Tyler Sloat, Freshworks chief operating officer and chief financial officer. The primary purpose of today’s call is to provide you with information regarding our fourth quarter and full year 2024 performance and our financial outlook for our first quarter and full year 2025.

Some of our discussions and responses to your questions may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on Freshworks’ current expectations and estimates about its business and industry, including our financial outlook, macroeconomic uncertainties, management’s beliefs, and the timing of future repurchases of our Class A common stock, and certain other assumptions made by the company, all of which are subject to change. These statements are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected in the forward-looking statements. Such risks include, but are not limited to, our ability to sustain our growth, to innovate, to reach our long-term revenue goals, to meet customer demand, and to control costs, and to improve operating efficiency.

For a discussion of additional material risks and other important factors that could affect our results, please refer to today’s earnings release, our most recently filed Form 10-K, and other periodic filings with the SEC. Freshworks assumes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this call, except as required by law. During the course of today’s call, we will refer to certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures for historical periods are included in our earnings release, which is available on our investor relations website at ir.freshworks.com.

I encourage you to visit our investor relations site to access our earnings release, supplemental earnings slides, periodic SEC reports, a replay of today’s call or to learn more about Freshworks. And with that, let me turn it over to Dennis.

Dennis Woodside — President and Chief Executive Officer

Thanks, Joon, and thank you, everyone, for joining us today on the call. Q4 was another great quarter across the board for Freshworks. We outperformed all our key metrics and exceeded our previously provided estimates for growth and profitability, finishing the year on a high note. We ended the year with over 72,200 customers who’ve chosen Freshworks CX and EX software to transform their business.

Time and again, overpriced legacy software vendors with overcomplicated products drive customers directly into our hands. Customers choose Freshworks’ uncomplicated software to deliver powerful productivity gains for IT, customer support, and other business teams. In Q4, revenue grew 22% year over year to $194.6 million, beating our previously provided estimates. We delivered a non-GAAP operating margin of 21% and generated adjusted free cash flow of $41.7 million, resulting in an adjusted free cash flow margin of 21% for the quarter, also outperforming expectations.