Nasdaq-listed software-as-a-service major Freshworks reported its first full-year operating profit since its IPO at $44.5 million for the full year of 2023.
In 2022, the company had posted an operating loss of $22.3 million.
Freshworks posted a consolidated revenue from operations rose 20 percent year-on-year to $596.4 million for the full year 2023.
In 2022, Freshworks reported consolidated revenue from operations of $498 million for the full year 2022, up around 34 percent year-on-year.
The firm also had an annual recurring revenue (ARR) for 2022 exceeding $500 million in 2022.
During the fourth quarter ended December 2023, the company reported a revenue of $160.1 million, up 20 per cent year-on-year.
Freshworks reported a 19 percent year-on-year jump in its consolidated revenue of $153.6 million during the third and previous quarter of 2023.
Girish Mathrubootham, CEO and Founder of Freshworks, said the company delivered a strong finish to the year, outperforming its own financial estimates across the board in Q4. “We unleashed the power of the latest generative AI across our product portfolio to deliver tangible value for our customers. The refinements to our go-to-market strategy helped us win more upmarket deals and we improved our business efficiency to generate $78M in free cash flow for the year,” he was quoted as saying in a release.
During Q4 of 2023, GAAP loss from operations was at $40 million, compared to $60.6 million in the fourth quarter of 2022.
The firm’s non-GAAP profit from operations stood at $11.5 million, compared to $2.8 million loss in the fourth quarter of 2021. GAAP refers to Generally Accepted Accounting Principles.
The number of customers contributing more than $5,000 in annual recurring revenue rose by 14 percent YoY to 20,261, for the fourth quarter of 2023.
The firm had set a target of achieving $1 billion in revenue by 2026. The company also appointed Abe Smith as its chief of field operations.
The firm's operating expenses for the quarter were recorded at $173.1 million with the majority of the spending going toward sales and marketing at $92.3 million.
The company's net loss came at $28 million in the quarter under review as against a loss of $32 million in Q3 of 2023.
Freshworks' direct competitor Zoho on February 1 reported its consolidated revenue of Rs 8,703 crore in the financial year 2023 (FY23), up nearly 30 percent year-on-year despite an overall slowdown in demand for the software industry across the globe. Zoho's consolidated net profit came at Rs 2,836 crore.
The SaaS industry is facing a demand slowdown caused by the impacts of macroeconomic pressures. Several companies are adopting various strategies to wade through the slowdown.
(This is a developing story, please come back for more)
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