Chennai: Freshworks Inc. (Nasdaq: FRSH) reported robust financial results for the first quarter ended March 31, 2025, exceeding guidance and reinforcing its position in the enterprise software landscape.
The company posted $196.3 million in revenue, marking a 19% year-over-year (YoY) growth, with an operating cash flow margin of 30% and adjusted free cash flow margin of 28%. This financial performance reflects a strong combination of product demand, enterprise adoption, and operational efficiency.
“Freshworks had another fantastic quarter, outperforming our expectations,” said Dennis Woodside, CEO & President of Freshworks. “Businesses continue to choose Freshworks for our simple, scalable, and cost-effective customer and employee service solutions.”
Freshworks Q1 2025 Financial and Business Highlights
- GAAP loss from operations narrowed to $10.4 million, compared to a loss of $32.2 million in Q1 2024.
- Non-GAAP operating income rose to $46.4 million, up from $21.8 million a year ago.
- Net cash from operating activities reached $58.0 million, compared to $40.6 million in Q1 2024.
- Adjusted free cash flow was $55.4 million, up from $38.7 million in Q1 2024.
- Cash reserves (cash, equivalents, and marketable securities) stood at $1.0 billion as of March 31, 2025.
Customer and Product Growth
The number of customers contributing more than $5,000 in annual recurring revenue (ARR) increased to 23,275, a 13% YoY rise. The net dollar retention rate remained strong at 105%, reflecting solid customer satisfaction and upsell success.
The company also welcomed major new clients in Q1, including All3Media, Broad River Retail, Freudenberg Group, The Christie NHS Foundation Trust, and Veracode.
AI and Partner Ecosystem Expansion
With AI at the heart of its product strategy, Freshworks has seen wide adoption of its Freddy AI Copilot, now used by 2,700+ customers nearly 1 million times daily to enhance productivity across IT and customer service workflows. Freddy AI is part of Freshworks’ broader suite of agentic AI solutions, enabling a 40% increase in agent efficiency.
The company also launched a new global partner program, expanding opportunities for resellers and service providers worldwide.
As businesses continue to seek efficient, cost-effective digital solutions, Freshworks‘ enterprise-grade software — offered at nearly half the cost of competitors — positions it for sustained momentum in the months ahead.
