Nasdaq-listed Software-as-a-Service (SaaS) giant Freshworks on Wednesday reported consolidated revenue of $165.5 million, up 20 percent year-on-year (YoY), with non-GAAP operating profit zooming to $21.8 million as against $3.9 million in the first quarter of 2023.
However, on a month-on-month basis, Freshworks’ revenue remained flat, as during the fourth quarter ended December 2023, the company reported a revenue of $160.1 million.
The firm managed to bring down its net losses by around 44 percent to $24 million during the quarter under review. In Q1 of 2023, the firm reported a net loss of $43.5 million.
Freshworks reported its first full-year operating profit in 2023 since its IPO at $44.5 million for the full year of 2023.
The firm reported a free cash flow of $38.7 million, compared to $9.1 million in the first quarter of 2023, up nearly 74 percent YoY.
“I’m particularly proud of the progress we’ve made in AI innovation across our products, and its tangible impact on our customers. We remain more focused than ever on product innovation, bringing more large customers onto our platform, and expanding adoption of products across our portfolio,” said Girish Mathrubootham, founder and newly-redesignated executive chairman of Freshworks.
While announcing the results Freshworks said that it has entered into a definitive agreement to acquire Device42, an IT asset management company with more than 800 customers in over 60 countries, to help Freshworks’ IT solutions for midmarket and enterprise companies.
The firm also announced a major internal rejig wherein Girish Mathrubootham, who was the chief executive officer (CEO) of Nasdaq-listed Freshworks has now become the executive chairman of the company while Dennis Woodside, has been named his replacement and is now the chief executive effective 1st of May.
Freshworks has given a 2024 full-year guidance revenue of $695 - $705 million, up 17-18% Year-on-Year. Along with this, the company has also guided a full-year operating profitability of $58 -$64 million in 2024.
However, the guidance numbers have come down since the fourth quarter of 2023. During Q4, the firm had said that the revenue would be in the range of 703.5 - $711.5 million, with operating profit at $52 - $60 million, mainly on the back of macroeconomic pressure and rising inflation rates impacting several SaaS businesses.
The number of customers contributing more than $5,000 in ARR for Freshworks was 20,549, an increase of 11 percent YoY.
The firm’s Net dollar retention rate, an important metric that measures the rate at which a business retains its existing revenue from current customers, accounting for upgrades, downgrades, and churn, was 106% compared to 108% in the fourth quarter of 2023 and 107% in the first quarter of 2023.
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