Freshworks Q2 revenue grows 18% to $204.7 million as losses narrow, AI products drive growth

Nasdaq-listed Freshworks posted an 18% year-on-year growth in revenue for the second quarter of 2025, reaching $204.7 million, as demand for its AI-based customer service tools continued to gain traction. The company also narrowed its GAAP operating loss to $8.7 million, down sharply from $43.8 million in the year-ago period.

Non-GAAP income from operations jumped to $44.8 million, up from $13.1 million a year earlier, while adjusted free cash flow rose to $54.3 million. Net cash provided by operating activities stood at $58.6 million, helping the company maintain a healthy cash reserve of $926.2 million as of June 30.

“Freshworks delivered another strong quarter, exceeding our guidance and showing that more businesses are turning to AI-driven solutions that are quick to deploy and easy to use,” CEO and President Dennis Woodside said in a statement.

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Freshworks, founded in Chennai and now headquartered in San Mateo, California, reported that the number of customers generating over $5,000 in annual recurring revenue grew to 23,975, a 10% increase year-over-year. Its net dollar retention rate remained at 106%, indicating stable customer engagement and upsell momentum.

Among its product highlights, Freshworks said its AI-powered Freddy platform—which includes the Freddy Copilot and Agent products—crossed $20 million in combined annual recurring revenue. The company also launched Freddy Agent Studio, a no-code platform to help businesses build and deploy AI agents.

Freshworks signed a multi-year deal with McLaren Racing in June, making it an official partner of the Formula 1 team, which has adopted Freshservice for IT service management.

The company forecast third-quarter revenue between $207 million and $210 million, and full-year revenue between $822.9 million and $828.9 million. Full-year non-GAAP operating income is projected between $153 million and $157 million.

Freshworks, which went public in 2021, continues to compete in a crowded SaaS (software-as-a-service) landscape with rivals like Salesforce and Zendesk. However, the company’s push into AI-driven support tools appears to be helping it differentiate and scale its global customer base.

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