Freshworks reports 19% jump in revenue to $196M in Q1
The company reported a rise in its total operating expenses to $176 million in Q1 of 2025, up from $171 million in the corresponding period last year.
Software-as-a-Service (SaaS) major has reported a 19% growth in revenue, climbing to $196 million for the first quarter ended March 31, 2025, up from $165.1 million in the same period last year.
The company attributed this growth to the AI-led demand and rise in larger enterprise deals, along with steady spending from small- and mid-sized businesses.
The Nasdaq-listed company reduced its GAAP operating loss to $10.4 million in the first quarter of 2025, down from $32.2 million in the same period last year.
“Freshworks had another fantastic quarter, outperforming our previously provided financial estimates in Q1 with revenue growing 19% year-over-year to $196.3 million, operating cash flow margin of 30% and adjusted free cash flow margin of 28%," said Dennis Woodside, Chief Executive Officer & President of Freshworks.
"We continue to outperform because businesses are choosing Freshworks for our uncomplicated customer and employee service solutions,” he added.
Total income from operations amounted to $46.4 million, compared to $21.8 million in the first quarter of 2024.
The company reported a rise in its total operating expenses to $176 million in Q1 of 2025, up from $171 million in the corresponding period last year.
The company continues to double down on AI, remaining central to the its growth strategy. Freshworks now counts 2,700 customers using its Freddy AI Copilot, which handles nearly one million prompts per day across help-desk and IT workflows.
“Freddy AI, in particular, is really resonating with our customers. At the end of Q3 FY24, we had over 1,700 paying customers for the AI Copilot, which we launched in mid-February last year. So, that's a fast grant for a new product in the market; it just shows the built-in demand for AI,” said Woodside, in an earlier interview with YourStory.
The firm reported free cash flow of $55.4 million, compared to $38.7 million in the first quarter of 2024. As of March 31, 2025, cash, cash equivalents, and marketable securities totaled $1.0 billion.
The net dollar retention rate stood at 105%, compared to 103% in the fourth quarter of 2024 and 106% in the first quarter of 2024.
Net Dollar Retention (NDR) is a key performance metric that measures how well a company retains and expands revenue from existing customers over time.
The number of customers contributing over $5,000 in annual recurring revenue (ARR) grew 13% year-over-year, reaching 23,275.
Freshworks expects 2025 revenue between $815.3 million and $824.3 million, implying 13–14% growth versus its earlier range of $809–$820 million.
In addition, Freshworks welcomed new customers to its community, including All3Media, Broad River Retail, Freudenberg Group, The Christie NHS Foundation Trust, Veracode, among others.
The company also launched a new global partner programme with expanded offerings for resellers and service delivery.
Edited by Affirunisa Kankudti