Freshworks (FRSH) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue grew 22% year-over-year to $194.6M, with non-GAAP operating margin at 21% and strong customer growth, ending with over 72,200 customers.

• EX (Employee Experience) surpassed $400M in ARR, growing 35% year-over-year constant currency; CX (Customer Experience) reached $360M in ARR, up 7% year-over-year.

• AI adoption accelerated, with over 2,200 Freddy Copilot customers and 1,300 Freddy AI Agent customers by year-end.

• Device42 acquisition integrated from Q2-24, contributing $10.3M in Q4 revenue and expanding product offerings and customer base.

• Strategic partnerships, notably with Unisys, and leadership additions, including a new Chief Product Officer and SVP of Product Management, supported upmarket momentum.

Financial highlights

• Q4 revenue: $194.6M, up 22% year-over-year; full-year revenue: $720.4M, up 21%.

• Non-GAAP operating margin: 21% in Q4; GAAP operating margin improved to -12%.

• Adjusted free cash flow: $41.7M in Q4, $153.3M for the year, both up significantly year-over-year.

• Calculated billings grew 23% year-over-year to $222.5M in Q4.

• Cash, cash equivalents, and marketable securities: $1.07B at year-end.

Outlook and guidance

• Q1 2025 revenue expected between $190M–$193M, 15–17% year-over-year growth.

• Full-year 2025 revenue guidance: $809M–$821M, 12–14% year-over-year growth.

• Non-GAAP operating income for 2025: $131M–$139M; non-GAAP net income per share: $0.52–$0.54.

• Calculated billings growth for 2025 expected at 13% as-reported, 14% constant currency.

• Non-GAAP income from operations projected at $32.5M–$34.5M for Q1 2025.