Freshworks appoints Dennis Woodside as CEO, Girish Mathrubootham named executive chairman
Freshworks said on April 1 said that Dennis Woodside will take over as CEO of the CRM software maker, and founder Girish Mathrubootham will be the firm’s executive chairman. Mathrubootham will now be spending more time on the long-term product vision, innovation and AI strategy.
“As I write to you today, I’m filled with many emotions. The past 14 years have been an incredible journey, one that has seen Freshworks grow from a fledgling startup in Chennai into the global SaaS company that we are today. I’m incredibly proud that we are the first Indian SaaS company listed on Nasdaq… Today, I am announcing a new chapter in our company’s story and my career. I have decided to step down as CEO of Freshworks and transition into the role of Executive Chairman. This decision was not made lightly and comes with a deep belief in our collective vision and the future of our company. I am thrilled to announce that Dennis Woodside, our President, will be our new CEO,” Mathrubootham said in an address to the employees.
Shares of the San Mateo, California-based company fell about 21 percent in extended trading.
Woodside joined Freshworks as president in 2022, with a prior professional record, including roles as president at Impossible Foods, Dropbox COO and Motorola Mobility’s CEO.
The latest rejig comes two months after the board of directors of Nasdaq-listed Software-as-a-Service firm Freshworks cancelled the CEO Performance Award of six million stock units allotted to founder and CEO Girish Mathurbootham in 2022 citing changes in performance targets due to tough macroeconomic conditions.
There have been a slew of management changes within the SaaS firm.
In Q4, the firm’s Chief Revenue Officer Pradeep Rathinam left and Abe Smith was appointed as the global field operations leader. Other recent appointments include Mika Yamamoto as its first Chief Customer and Marketing Officer (CCMO), and Johanna Jackman as the new Chief People Officer (CPO).
Q1 results
Nasdaq-listed Software-as-a-Service (SaaS) giant Freshworks on May 1 reported consolidated revenue of $165.5 million, up 20 percent year-on-year (YoY), with non-GAAP operating profit zooming to $21.8 million as against $3.9 million in the first quarter of 2023.
The firm managed to bring down its net losses by around 44 percent to $24 million during the quarter under review. In Q1 of 2023, the firm reported a net loss of $43.5 million. On a month-on-month basis, Freshworks’ revenue remained flat, as during the fourth quarter ended December 2023, the company reported a revenue of $160.1 million.
“Freshworks delivered 20% revenue growth with improving profitability and a strong free cash flow margin in Q1,” said Girish Mathrubootham, CEO and Founder of Freshworks. “I’m particularly proud of the progress we’ve made in AI innovation across our products and its tangible impact on our customers. We remain more focused than ever on product innovation, bringing more large customers onto our platform, and expanding adoption of products across our portfolio.”
Freshworks has given a 2024 full-year guidance revenue of $695-705 million, up 17-18 percent YoY, and a full-year operating profitability of $58-64 million in 2024.
However, the guidance numbers are down since the Q4FY23. During Q4, the firm said that the revenue would be in the range of $703.5-711.5 million, with operating profit at $52-60 million, mainly on the back of macroeconomic pressure and rising inflation rates impacting several SaaS businesses.
The number of customers contributing more than $5,000 in ARR for Freshworks increased 11 percent YoY to 20,549.
The IT player’s net dollar retention rate, a metric that measures the rate at which a business retains its existing revenue from current customers, stood at 106 percent compared to 108 percent in the fourth quarter of 2023 and 107 percent in the first quarter of 2023.
Separately, it also forecast second-quarter revenue between $168 million and $170 million, below market estimates of $172.1 million, according to LSEG data.
Mathrubootham founded the company in 2010 in Chennai and guided it to go public on the Nasdaq stock exchange in 2021.
(With inputs from agencies)
