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InFocus Finance

Freshworks Reports $204.7M Revenue in Q2 FY25, Up 18% YoY

Freshworks had a strong Q2, exceeding financial estimates with 18% year-over-year revenue growth to $204.7 million. This momentum shows businesses are choosing Freshworks for AI-powered, easy-to-use solutions.

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SMEStreet Edit Desk
31 Jul 2025 09:43 IST

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Dennis Woodside - CEO & President, Freshworks (1)
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Freshworks Inc. the provider of people-first AI service software, today announced financial results for its second quarter ended June 30, 2025.

“Freshworks delivered another strong quarter, exceeding our previously provided financial estimates in Q2 with 18% year-over-year revenue growth to $204.7 million, a 29% operating cash flow margin, and 27% adjusted free cash flow margin,” said Dennis Woodside, Chief Executive Officer & President of Freshworks. “We believe our strong momentum through the first half of the year reflects that businesses are increasingly turning to Freshworks to reduce complexity. They want AI-powered employee and customer service solutions that are fast to implement, easy to use, and built to deliver results.”

Second Quarter 2025 Financial Summary Results

  • Revenue: Total revenue was $204.7 million, representing growth of 18% compared to total revenue of $174.1 million in the second quarter of 2024, and 17% adjusting for constant currency.

  • GAAP (Loss) from Operations: GAAP (loss) from operations was $(8.7) million, compared to $(43.8) million in the second quarter of 2024.

  • Non-GAAP Income from Operations: Non-GAAP income from operations was $44.8 million, compared to $13.1 million in the second quarter of 2024.

  • GAAP Net (Loss) Per Share: GAAP basic and diluted net (loss) per share was $(0.01) based on 294.4 million weighted-average shares outstanding, compared to $(0.07) based on 299.8 million weighted-average shares outstanding in the second quarter of 2024.

  • Non-GAAP Net Income Per Share: Non-GAAP diluted net income per share was $0.18 based on 297.3 million weighted-average shares outstanding, compared to $0.08 based on 302.5 million weighted-average shares outstanding in the second quarter of 2024.

  • Net Cash Provided by Operating Activities: Net cash provided by operating activities was $58.6 million, compared to $36.3 million in the second quarter of 2024.

  • Adjusted Free Cash Flow: Adjusted free cash flow was $54.3 million, compared to $32.8 million in the second quarter of 2024.

  • Cash, Cash Equivalents and Marketable Securities: Cash, cash equivalents, and marketable securities were $926.2 million as of June 30, 2025.

All financial numbers for 2025 include the results of our Device42 business. All financial numbers for second quarter 2024 include the results of our Device42 business for the period after the closing of the acquisition. A description of non-GAAP financial measures is contained in the section titled “Explanation of Non-GAAP Financial Measures” below and a reconciliation of GAAP to non-GAAP financial measures is detailed in the tables below.

Second Quarter Key Metrics and Recent Business Highlights

  • Number of customers contributing more than $5,000 in ARR was 23,975, an increase of 10% year-over-year and 9% adjusting for constant currency.

  • Net dollar retention rate was 106%, compared to 105% in the first quarter of 2025 and 106% in the second quarter of 2024. Adjusted for constant currency, net dollar retention rate was 104%, compared to 105% in the first quarter of 2025 and 106% in the second quarter of 2024.

  • Welcomed and onboarded many new customers to the Freshworks community including AEP Energy, California Franchise Tax Board, Covington & Burling LLP, Manchester Metropolitan University, Reed, and Seagate Technology.

  • Appointed Ian Tickle as Chief of Global Field Operations.

  • Announced in June at Refresh Europe, the next generation of Freddy Agentic AI Platform, including the launch of Freddy AI Agent Studio—a no-code platform that simplifies the creation and deployment of autonomous AI agents, making it easier for businesses to scale customer support.

  • Freddy AI Copilot and Freddy AI Agent products crossed $20M in combined annual recurring revenue.

  • Launched Freshservice Journeys, a new AI-assisted capability within the IT and employee service management offering.

  • Announced a multi-year partnership with McLaren Racing, joining as an Official Partner of the McLaren Formula 1 Team, who has also integrated Freshworks' ITSM solution, Freshservice.

  • Freshworks will host its Investor Day 2025 on September 11, at 8:30 a.m. Pacific Time in San Francisco.

Financial Outlook

We are providing estimates for the third quarter and raising our guidance for the full year 2025 based on current market conditions and expectations. The revenue growth rates are adjusted for constant currency to provide better visibility into the underlying business trends. We emphasize that these estimates are subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below.

For the third quarter and full year 2025, we currently expect the following results:

$ in millions, except per share data)

Third Quarter 2025

Full Year 2025

Revenue(1)

$207.0 - $210.0

$822.9 - $828.9

Year-over-year growth

11% - 12%

14% - 15%

Year-over-year growth (constant currency)

11% - 12%

14% - 16%

Non-GAAP income from operations(1)

$31.2 - $33.2

$153.0 - $157.0

Non-GAAP net income per share(2)

$0.12 - $0.14

$0.56 - $0.58

 (1)  Revenue and non-GAAP income from operations are based on exchange rates as of July 25, 2025 for currencies other than USD.
(2) Non-GAAP net income per share was estimated assuming 294.2 million and 296.9 million weighted-average shares outstanding for the third quarter and full year 2025, respectively.

These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

We have not reconciled our third quarter and full year 2025 estimates for non-GAAP financial measures to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future. Accordingly, a reconciliation is not available without unreasonable effort and we are unable to address the probable significance of the unavailable information. We have provided a reconciliation of other GAAP to non-GAAP financial measures in the financial statement tables for our second quarter 2025 and 2024 non-GAAP results included in this press release.

Revenue Freshworks
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