Freshworks (FRSH) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $196.3M, up 19% year-over-year, with strong margin expansion and continued double-digit growth across quarters.

• Customer base expanded to over 73,300, a 9% year-over-year increase, with significant gains in large, mid-market, and enterprise customers.

• AI-powered solutions, including Copilot and Freddie AI agents, drove measurable productivity gains and are increasingly integral to customer adoption and expansion.

• Net loss narrowed significantly to $1.3M from $23.3M in Q1 2024, reflecting improved operating leverage and cost controls.

• Employee Experience (EX) business surpassed $420M ARR, up 33% year-over-year; Customer Experience (CX) business reached $370M ARR, up 7% year-over-year.

Financial highlights

• Non-GAAP operating margin expanded to 24%, up from 13% in Q1 2024, and GAAP operating margin improved to -5% from -19% year-over-year.

• Adjusted free cash flow grew 43% year-over-year to $55.4M, with a margin of 28%, and net cash provided by operating activities was $58.0M.

• Calculated billings rose to $203.3M, up 16% year-over-year as-reported and 17% constant currency.

• Net dollar retention held steady at 105% as-reported and constant currency.

• Customers contributing >$5,000 in ARR grew 13% year-over-year to 23,275, and those >$50,000 in ARR grew 24% to 3,217.

Outlook and guidance

• Q2 2025 revenue expected between $197.3M–$200.3M, up 13%–15% year-over-year.

• Full year 2025 revenue guidance raised to $815.3M–$824.3M, up 13%–14% year-over-year.

• Full year adjusted free cash flow expected at ~$210M, with Q2 at ~$50M and higher in Q3/Q4.

• Non-GAAP operating income for 2025 projected at $139.5M–$147.5M; non-GAAP EPS at $0.56–$0.58.