SUMMARY
The company has posted a revenue of $160.1 Mn for the quarter, 20% higher than $133.2 Mn in the same period last year
Freshworks also saw 20% year-on-year revenue growth for the full year of 2023 to $596.4 Mn, as compared to $498 Mn in 2022
The company set a revenue target of reaching $1 Bn by the year 2026
NASDAQ-listed Indian SaaS unicorn Freshworks narrowed its net loss by 49% in the fourth quarter (Q4) of 2023 to $28.1 Mn from $55.5 Mn in Q4 of 2022.
The company has posted a revenue of $160.1 Mn for the quarter, 20% higher than $133.2 Mn in the same period last year.
Freshworks also saw 20% year-on-year revenue growth for the full year of 2023 to $596.4 Mn, as compared to $498 Mn in 2022.
“A year ago, we laid out our growth strategies to focus on product innovation, winning in enterprise, landing and expanding to drive revenue growth and improving our operating efficiency,” said Freshworks’ CEO and founder Girish Mathrubootham, during the company’s fourth quarter 2023 earnings conference call.
Mathrubootham added that the company launched the Freshworks customer service suite and a range of AI capabilities like Freddy Self-service, Copilot, and Insights over the last year.
He attributed the strong performance in Q4 to three key factors. Firstly, the robustness of the Neo Platform, which forms the backbone of the product portfolio, allowing for effective service to enterprise buyers and facilitating cross-selling across multiple departments.
Secondly, the implementation of AI innovations has led to tangible productivity improvements for customers. Lastly, the skilled product development team based in India has played a pivotal role in driving innovation velocity and ensuring swift delivery of products to customers.
During the quarter under review, Freshworks reported $173.1 Mn expenses, as compared to $168.6 Mn in Q2 2024.
Interestingly, the company has posted a non-GAAP (Generally Acceptable Accounting Practices) profit of $11.5 Mn during the quarter, compared to non-GAAP (loss) from operations of $2.7 Mn in the fourth quarter of 2022. For the full year of 2023, it posted a non-GAAP profit of $44.5 Mn.
“2023 was a defining year for us. 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 $78 Mn in free cash flow for the year,” Mathrubootham said in its earnings release.
Freshwork’s $1 Bn Revenue Target By 2026
Founded in 2010 by Girish Mathrubootham and Shanmugam Krishnasamy, Freshworks offers a suite of software for customer service and support, customer engagement and IT service management. The company went public in 2021.
Freshworks competes with the likes of Zoho, Hubspot, Salesforce, Microsoft and many other Indian and international tech majors.
The company earlier set a revenue target of reaching $1 Bn by the year 2026. “Our plan is to be able to get there in the current environment. That’s not based on macro coming back,” Tyler Sloat, CFO of Freshworks said in the earnings call.
The company is focussing on efficiency to reach its goal, while also identifying areas for strategic investment. In terms of Research and Development, their priority lies in nurturing innovation, which they consider a significant advantage.
“And on the sales and marketing side, we are going to continue to lean in where we see opportunities specifically in field — in hiring there where we see appropriate. So we have built in some areas of investment, but while also focusing on driving margin, we’re driving more dollars to the bottom line and driving more cash,’ Sloat added.
