Software-as-a-Service (SaaS) company Freshworks registered a 20% growth in revenue for the quarter ended December 2023, driven by generative artificial intelligence (Gen AI) in its product portfolio even as losses narrowed, outperforming estimates.
Freshworks, listed on the NASDAQ, reported a revenue of $160.1 million for the fourth quarter of 2023, a year-on-year growth of 20%. More importantly, it narrowed its losses to $28 million for the December quarter, a YoY decline of 49% from $55 million a year ago.
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Freshworks founder and CEO Girish Mathrubootham
” align=”center”> Freshworks founder and CEO Girish Mathrubootham
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Stock-based compensation expenses contributed significantly to Freshwork’s losses.
Without taking this expense into account—which in accounting is called the non-GAAP number—the company reported an operating profit of $11.5 million for the December quarter of 2023 compared with a loss of $2.8 million a year ago.
On the company’s performance, Freshworks Founder and CEO Girish Mathrubootham said, “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 million in free cash flow for the year.”
For the full year of 2023, Freshworks reported revenue of $594.4 million, which was a 20% growth compared to 2022. The loss for the year stood at $137 million, a decline of 41% from the previous year. In terms of non-GAAP, the company reported an operating profit of $44.5 million.
As for the outlook for the first quarter of 2024 and the year, the company has projected revenue growth of 18-19%.
In related news, Freshworks’ chief revenue officer Pradeep Rathinam has resigned from the firm he joined in 2020. Abe Smith will take over his role, Moneycontrol reported.
Edited by Affirunisa Kankudti
