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Jun 30
Freshworks Q2 2025 Earnings Report
Freshworks delivered strong Q2 2025 results with 18% revenue growth, improved profitability metrics, and strong free cash flow generation.
Key Takeaways
Freshworks exceeded expectations in Q2 2025, growing revenue to $204.7 million and achieving a $54.3 million adjusted free cash flow. The company showed improved margins and continued strength in AI-driven product adoption.
Revenue reached $204.7 million, up 18% year-over-year.
Adjusted free cash flow was $54.3 million, a 65% increase from Q2 2024.
GAAP operating loss improved significantly to $8.7 million, compared to $43.8 million in Q2 2024.
Customers paying over $5,000 in ARR grew to 23,975, up 10% year-over-year.
Freshworks
Freshworks
Forward Guidance
Freshworks expects continued momentum in Q3 and FY25, with double-digit revenue growth and healthy profitability margins driven by AI adoption.
Positive Outlook
- Revenue guidance raised to $822.9–$828.9 million for FY25.
- Freddy AI Copilot and Agent products surpassed $20M in ARR.
- Customer base expanded with notable wins including McLaren and Seagate.
- Strong improvement in non-GAAP operating margin to 21.9%.
- Launched Freddy AI Agent Studio to accelerate no-code AI deployments.
Challenges Ahead
- GAAP net loss remains, though improved from prior year.
- Operating expenses continue to be substantial despite efficiencies.
- Cash and securities declined from $1.07B to $926.2M in H1 2025.
- Restructuring charges ongoing with related severance costs.
- Headwinds from foreign exchange impact constant currency metrics.