Freshworks Q1: Revenue jumps 19% to $196 million, 2025 revenue outlook raised on AI demand

Freshworks

Nasdaq-listed Software-as-a-Service (SaaS) firm Freshworks has slightly raised its full-year revenue forecast by up to $4.3 million or by around 0.5%, fueled by growing enterprise adoption and the integration of AI features across its product suite, the firm said in a statement while announcing its Q1 of 2025 financial results.

Freshworks now expects full-year 2025 revenue between $815.3 million and $824.3 million, up from its earlier forecast of $809–$820 million. This represents a 13–14% year-over-year growth.

The company also raised its non-GAAP operating income guidance to $139.5 million–$147.5 million, from a prior estimate of $131 million–$139 million.

For the first quarter, which ended March 31, Freshworks posted revenue of $196.3 million, marking a 19% increase from $165.1 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.

The company also made strong strides toward profitability. Its GAAP loss from operations narrowed to $10.4 million, compared to a $32.2 million loss in Q1 2024. Non-GAAP income from operations more than doubled to $46.4 million, up from $21.8 million a year ago.

The narrowing GAAP loss and the sharp rise in non-GAAP operating income indicates Freshworks’ progress toward profitability, reflecting improved cost discipline and stronger operational efficiency alongside its topline growth.

On the bottom line, Freshworks reported non-GAAP diluted net income per share of $0.18, compared to $0.10 in the same quarter last year. Its GAAP net loss per share was neutral at $0.00, versus a loss of $0.08 in Q1 2024.

Freshworks’ cash generation also improved in the Q1 of 2025. Net cash provided by operating activities was $58 million, up from $40.6 million in the year-ago quarter, while adjusted free cash flow rose to $55.4 million, compared to $38.7 million.

The company ended the quarter with a liquidity position by holding $1 billion in cash, cash equivalents, and marketable securities.

Looking ahead to the second quarter, Freshworks is forecasting revenue of $197.3 million to $200.3 million, a 13–15% increase over Q2 2024, and non-GAAP net income per share of $0.10–$0.12.