Freshworks Q2 2025: Contradictions Unveiled on AI Adoption, Macroeconomic Resilience, and Growth Prospects

AI adoption and impact on business growth, macroeconomic impacts, AI adoption and market impact, EX growth expectations are the key contradictions discussed in Freshworks' latest 2025Q2 earnings call.



Revenue and Profitability Growth:
- Freshworks, Inc. reported revenue of $204.7 million for Q2 2025, up 18% year-over-year.
- The company expanded its non-GAAP operating margin to 22% and achieved a strong adjusted free cash flow margin of 27%.
- Growth was driven by customer demand and operational efficiency.

AI Product Expansion and Adoption:
- The company's AI-powered products, including Freddy Copilot and AI Agent, saw over 5,000 paying customers, with ARR crossing $20 million in Q2.
- Freddy Copilot was included in over 55% of new large customer deals, and double-digit attach rates were observed for new SMB customers.
- This growth stemmed from customers recognizing the practical applications of AI in driving transformative results.

Customer Base and Market Momentum:
- Freshworks ended the quarter with over 74,600 customers, including leading global companies such as Seagate and Seagate.
- The company's Employee Experience (EX) business grew to over $450 million in ARR, representing 24% year-over-year growth.
- This momentum resulted from displacing legacy competitors and expanding into new areas like employee service management.

International and Partner Expansion:
- Freshworks' international revenue exceeded 50% of total revenue, with over 130 new partners onboarded in the first half of 2025.
- The company signed a deal with a global service integrator to reach more mid-sized companies and public sectors in the U.K.
- This expansion was driven by strategic partnerships and increased demand for Freshworks' solutions across international markets.