Freshworks' EPS Surpasses Expectations: A Strong Finish to 2024

As the calendar turned to 2025, Freshworks Inc. (NASDAQ: FRSH) released its full year 2024 earnings, and the news was nothing short of impressive. The company's earnings per share (EPS) not only met but surpassed analyst expectations, capping off a year marked by robust growth and improved profitability. Let's dive into the key takeaways from Freshworks' latest financial performance.

Freshworks' revenue for the full year 2024 reached $720.4 million, representing a 21% increase from the previous year. This growth rate outpaced the projected 12% growth for the Software industry in the US. The company's EPS also improved significantly, with a loss of $0.32 per share, a 31% improvement from the $0.47 loss per share in 2023.



What drove Freshworks' impressive performance in 2024? Several factors contributed to the company's success:

1. Product-led growth strategy: Freshworks' focus on delivering user-friendly, uncomplicated solutions that drive rapid value realization for customers has been a significant driver of its growth. This approach has helped the company attract and retain customers, contributing to its revenue growth.
2. AI integration: Freshworks' AI-powered platform, Freddy AI, offers autonomous resolutions and productivity boosts, setting it apart from competitors. Successful adoption and demonstration of ROI from AI features have driven customer expansion and increased revenue.
3. Expansion into mid-market and enterprise segments: Freshworks has effectively expanded its customer base by targeting mid-market and enterprise segments. This strategy has helped the company increase its average revenue per customer (ARPC) and drive overall revenue growth.
4. Strategic acquisitions: Freshworks' acquisition of Device42 expanded its IT asset management capabilities and addressed a broader market, enhancing its EX product suite and contributing to revenue growth.
5. Global expansion: With over 60% of ARR from outside North America, Freshworks' international operations have been crucial to its sustained growth. The company has successfully managed global risks, regulations, and tailored its offerings to diverse markets.

As Freshworks looks ahead to 2025, the company is well-positioned to continue its strong performance. Its revenue is forecast to grow at an average rate of 15% to 17% in the first quarter and 12% to 14% for the full year, adjusted for constant currency. Freshworks' ability to innovate, adapt to the changing market landscape, and maintain its focus on customer experience and employee experience solutions will be key to sustaining its competitive edge in the SaaS market.

In conclusion, Freshworks' EPS beating expectations in 2024 is a testament to the company's strong performance and growth trajectory. By continuing to invest in its product-led growth model, expand its customer base, and improve operational efficiency, Freshworks is poised to maintain its profitability and outperform its peers in the SaaS industry.