Freshworks Inc., the provider of people-first AI service software, announced financial results for its first quarter ended March 31, 2025.
“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.”
First Quarter 2025 Financial Summary Results
- Revenue: Total revenue was $196.3 million, representing growth of 19% compared to total revenue of $165.1 million in the first quarter of 2024, and 19% adjusting for constant currency.
- GAAP from Operations: GAAP from operations was $ million, compared to $ million in the first quarter of 2024.
- Non-GAAP Income from Operations: Non-GAAP income from operations was $46.4 million, compared to $21.8 million in the first quarter of 2024.
- GAAP Net Per Share: GAAP basic and diluted net per share was $0.00 based on 301.3 million weighted-average shares outstanding, compared to $ based on 297.9 million weighted-average shares outstanding in the first quarter of 2024.
- Non-GAAP Net Income Per Share: Non-GAAP diluted net income per share was $0.18 based on 306.0 million weighted-average shares outstanding, compared to $0.10 based on 304.5 million weighted-average shares outstanding in the first quarter of 2024.
- Net Cash Provided by Operating Activities: Net cash provided by operating activities was $58.0 million, compared to $40.6 million in the first quarter of 2024.
- Adjusted Free Cash Flow: Adjusted free cash flow was $55.4 million, compared to $38.7 million in the first quarter of 2024.
- Cash, Cash Equivalents and Marketable Securities: Cash, cash equivalents, and marketable securities were $1.0 billion as of March 31, 2025.
All financial numbers for 2025 include the results of D42 Parent, Inc. A description of non-GAAP financial measures is contained in the section titled “Explanation of Non-GAAP Financial Measures” below and a reconciliation of GAAP to non-GAAP financial measures is detailed in the tables below.
First Quarter Key Metrics and Recent Business Highlights
- Number of customers contributing more than $5,000 in ARR was 23,275, an increase of 13% year-over-year for both as reported and adjusting for constant currency.
- Net dollar retention rate was 105%, compared to 103% in the fourth quarter of 2024 and 106% in the first quarter of 2024. Adjusted for constant currency, net dollar retention rate was 105% in both the first quarter of 2025 and the fourth quarter of 2024 and 106% in the first quarter of 2024.
- Welcomed and onboarded more customers to the Freshworks community including All3Media, Broad River Retail, Freudenberg Group, The Christie NHS Foundation Trust, Veracode, and many more.
- Launched a new global partner program with expanded offerings for resellers and service delivery.
Financial Outlook
We are providing estimates for the second quarter and full year 2025 based on current market conditions and expectations. The revenue growth rates are adjusted for constant currency to provide better visibility into the underlying business trends. We emphasize that these estimates are subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below.
For the second quarter and full year 2025, we currently expect the following results:
($ in millions, except per share data) | Second Quarter 2025 | Full Year 2025 |
| Revenue (1) | $197.3 – $200.3 | $815.3 – $824.3 |
| Year-over-year growth | 13% – 15% | 13% – 14% |
| Year-over-year growth (constant currency) | 13% – 15% | 13% – 15% |
| Non-GAAP income from operations (1) | $27.8 – $29.8 | $139.5 – $147.5 |
| Non-GAAP net income per share (2) | $0.10 – $0.12 | $0.56 – $0.58 |
(1) Revenue and non-GAAP income from operations are based on exchange rates as of April 25, 2025 for currencies other than USD.
(2) Non-GAAP net income per share was estimated assuming 299.7 million and 299.1 million weighted-average shares outstanding for the second quarter and full year 2025, respectively.
These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
We have not reconciled our estimates for non-GAAP financial measures to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future. As a result, a reconciliation is not available without unreasonable effort and we are unable to address the probable significance of the unavailable information. We have provided a reconciliation of other GAAP to non-GAAP financial measures in the financial statement tables for our first quarter 2025 and 2024 non-GAAP results included in this press release.