Q4 2024 Freshworks Inc Earnings Call Transcript
Key Points
- Freshworks Inc (FRSH) reported a strong Q4 with revenue growth of 22% year-over-year, reaching $194.6 million, surpassing previous estimates.
- The company achieved a non-GAAP operating margin of 21% and generated an adjusted free cash flow of $41.7 million, reflecting a 21% margin.
- Freshworks Inc (FRSH) added over 2,600 net customers in Q4, marking the largest quarterly increase in four years.
- The EX business surpassed $400 million in ARR, growing 35% year-over-year on a constant currency basis.
- The company is seeing strong momentum in AI adoption, with over 2,200 customers using Freddy Copilot and a 50% attach rate for new deals over $30,000.
- Freshworks Inc (FRSH) faced a 3 percentage point negative impact on ARR growth due to foreign exchange fluctuations.
- Net dollar retention was reported at 103% due to FX impact, slightly below expectations.
- The company anticipates continued pressure on expansion, with net dollar retention expected to be around 104% in Q1.
- The guidance for 2025 indicates a slowdown in revenue growth, with expectations of 12% to 14% year-over-year growth.
- Freshworks Inc (FRSH) is facing challenges in the competitive landscape, particularly from large SaaS vendors like ServiceNow.
Hello, and welcome to Freshworks Fourth Quarter and Full Year 2024 Earnings Conference Call. (Operator Instructions) 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.
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
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