Freshworks Reports Q2 Revenue Up 18%, Exceeds Consensus Estimates

Freshworks reported Q2 revenue of $204.7 million, a 18% YoY increase, and non-GAAP earnings per share of $0.18, more than double the prior year. Non-GAAP operating income and free cash flow saw sharp increases. The company's focus on AI solutions and ease of deployment contributed to its growth.

Freshworks Inc. (Nasdaq: FRSH), a leading provider of AI-powered service software, reported robust financial results for the second quarter of 2025. The company's revenue grew by 18% year-over-year (YoY) to $204.7 million, driven by a 17% increase in constant currency revenue. Non-GAAP earnings per share (EPS) increased to $0.18, more than doubling the prior year's $0.08 EPS. The company also saw significant improvements in non-GAAP operating income and free cash flow margins.

Dennis Woodside, Chief Executive Officer & President of Freshworks, attributed the strong performance to the growing demand for AI-powered employee and customer service solutions. "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," he said [1].

Key highlights of the quarter include a 10% increase in the number of customers contributing more than $5,000 in annual recurring revenue (ARR) to 23,975, and a net dollar retention rate of 106%. The company also welcomed several new high-profile customers, including AEP Energy, California Franchise Tax Board, Covington & Burling LLP, Manchester Metropolitan University, Reed, and Seagate Technology. Additionally, Freshworks appointed Ian Tickle as Chief of Global Field Operations and announced the launch of the next generation of its Freddy Agentic AI Platform, including Freddy AI Agent Studio and Freddy AI Copilot products, which crossed $20M in combined annual recurring revenue.

Looking ahead, Freshworks expects continued growth in the third quarter and full year 2025, with adjusted estimates for revenue and non-GAAP income from operations based on exchange rates as of July 25, 2025. The company will host its Investor Day 2025 on September 11, 2025, at 8:00 a.m. Pacific Time in San Francisco [1].

References:
[1] https://finance.yahoo.com/news/freshworks-reports-second-quarter-2025-201000864.html