Freshworks Reports $720.4M Revenue for Fiscal Year 2024, Acquires D42 Parent, Inc.

Freshworks Inc. reported a total revenue of $720.4 million for the fiscal year ending December 31, 2024, marking a 21% increase from $596.4 million in 2023. The company also experienced a 20% growth in revenue from $498.0 million in 2022. Despite this revenue growth, Freshworks continued to incur significant operating losses, reporting a net loss of $95.4 million in 2024, an improvement from the $137.4 million loss in 2023 and $232.1 million in 2022. The increase in revenue was primarily driven by new customer acquisitions and expansion within existing customer accounts, although macroeconomic pressures impacted the net dollar retention rate, which fell to 103% from 108% in the previous year.

In June 2024, Freshworks completed the acquisition of D42 Parent, Inc., an IT asset management company, for approximately $238.1 million. This acquisition is expected to enhance Freshworks' product offerings and customer base. The company has also focused on expanding its product capabilities, particularly through its generative AI solutions, Freddy AI Agent and Freddy AI Copilot, which aim to improve customer and employee experiences. As of December 31, 2024, Freshworks served over 72,000 customers globally, with a significant portion of its annual recurring revenue (ARR) coming from larger organizations.

Operationally, Freshworks reported a total of 22,558 customers contributing more than $5,000 in ARR, representing 90% of total ARR. The company has also seen an increase in the number of customers contributing over $50,000 in ARR, which rose by 22% year-over-year. Geographically, 46% of revenue was derived from North America, while 38% came from Europe, the Middle East, and Africa, and 16% from the Asia Pacific region. The company continues to invest in its sales and marketing efforts to further penetrate these markets.

Freshworks' total operating expenses increased to $745.7 million in 2024, up from $663.2 million in 2023, driven by higher personnel-related costs and investments in sales and marketing. The company also initiated a restructuring plan in November 2024, resulting in $9.7 million in charges primarily related to employee severance. Despite these challenges, Freshworks reported cash and cash equivalents of $620.3 million and marketable securities of $449.8 million as of December 31, 2024, indicating a strong liquidity position.

Looking ahead, Freshworks anticipates continued growth, although it acknowledges the potential impact of macroeconomic uncertainties on its business. The company plans to maintain its focus on product-led growth and expanding its customer base while managing costs effectively. Freshworks has also initiated a share repurchase program, authorizing the repurchase of up to $400 million of its Class A common stock, which reflects its commitment to enhancing shareholder value.