Freshworks (FRSH) Q4 2023 Earnings
Did FRSH Beat Earnings? Q4 2023 Results
Yes. Freshworks reported Q4 2023 earnings of $0.08 a share on Feb 6, 2024, beating the $0.05 consensus estimate by 60.0%. Revenue was $160.1M against a $158.5M estimate.
Freshworks closed out 2023 on a strong note, posting Q4 revenue of $160.11 million, up 20.2% year over year, and non-GAAP earnings per share of $0.08, well ahead of the $0.05 consensus estimate by 60.00%, as a meaningful shift toward profitability took hold across the business. Revenue also edged past the $158.50 million analyst consensus, reflecting steady demand for the company's customer service and IT management software. The clearest driver of the upside was an operational efficiency push that swung non-GAAP operating income to $11.54 million from a loss of $2.77 million in the year-ago quarter, expanding non-GAAP operating margin to 7.2% from negative 2.1%. The company's upmarket momentum also held firm, with customers contributing more than $5,000 in ARR growing 14% year over year to 20,261. Looking ahead, Freshworks guided full-year 2024 revenue of $703.50 million to $711.50 million, representing 18-19% growth, with non-GAAP EPS of $0.29 to $0.31, signaling confidence that its profitability trajectory will continue.
- 20% year-over-year revenue growth in Q4 2023
- Non-GAAP operating margin improved to 7.2% from -2.1% in Q4 2022
- Free cash flow of $28.6 million in Q4, up from $4.0 million in Q4 2022
- Customers contributing more than $5,000 in ARR grew 14% year-over-year to 20,261
- Net dollar retention rate of 108%
- Improved go-to-market strategy driving more upmarket deals
“At Freshworks, we delivered a strong finish to the year, outperforming our financial estimates across the board in Q4.”
Freshworks CEO, on the earnings call
What Was Freshworks's Outlook in Q4 2023?
For Q1 2024, Freshworks expects revenue of $162.5-$164.5 million (18-19% YoY growth), non-GAAP income from operations of $12.5-$14.5 million, and non-GAAP net income per share of $0.07-$0.08. For full year 2024, the company expects revenue of $703.5-$711.5 million (18-19% YoY growth), non-GAAP income from operations of $52.0-$60.0 million, and non-GAAP net income per share of $0.29-$0.31. Revenue and non-GAAP estimates are based on exchange rates as of February 2, 2024.
FRSH YoY Financials
| Metric | Q4 2023 | Q4 2022 | Year over year |
|---|---|---|---|
| Revenue | $160.1M | $133.2M | +20.2% |
| Gross Profit | $133.1M | $108.0M | +23.2% |
| Operating Income | −$40.0M | −$29.9M | +33.9% |
| Net Income | −$28.1M | −$18.8M | +49.4% |
Figures from SEC filings and company reports. Not investment advice.