Freshworks Lifts FY2025 Outlook as Q1 Revenue Soars 19% with AI
Freshworks reported a 19% year-over-year increase in its Q1 2025 revenue, reaching $196.3 million, up from $165.1 million in the same quarter last year. The strong performance has prompted the Nasdaq-listed SaaS company to raise its full-year revenue forecast to between $815.3 million and $824.3 million, compared to its previous estimate of $809 million to $820 million. Driven by increasing enterprise adoption and the continued rollout of AI features across its product portfolio, Freshworks now expects a 13–14% year-over-year revenue growth in FY2025. The company also updated its non-GAAP operating income guidance to a range of $139.5 million to $147.5 million, up from the earlier estimate of $131 million to $139 million. “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, CEO & president of Freshworks. For the second quarter, Freshworks expects revenue between $197.3 million and $200.3 million, representing a 13–15% increase over Q2 2024, and projects non-GAAP net income per share of $0.10–$0.12. This is in line with the firm’s earlier prediction of reaching $1 billion revenue by FY26. In an earlier conversation with AIM, Shelton Rego, vice president and managing director at Freshworks said that AI has had a very strong tailwind. He emphasised this shift, noting that AI fundamentally changes how businesses interact with software. “Customers don’t care about which cloud platform they are using…What they care about is value, use cases, ROI, and time to market,” Rego said, adding that the real value lies not in the infrastructure behind AI but in its applications. One of the biggest factors in Freshworks’ $1 billion roadmap is the focus on lean and scalable growth. Using AI, the company aims to streamline operations while keeping costs in check. “We want to be as operationally efficient as possible. We want to be able to be very lean when we grow.” This ensures that as Freshworks expands its global footprint, it can do so without excessive resource expansion. The firm made significant progress toward profitability in Q1. GAAP loss from operations narrowed to $10.4 million, a considerable improvement from $32.2 million in Q1 2024. Meanwhile, non-GAAP income from operations more than doubled, rising to $46.4 million from $21.8 million in the year-ago period. The company attributed this to better cost control and operational efficiency.
For the second quarter, Freshworks expects revenue between $197.3 million and $200.3 million, representing a 13–15% increase over Q2 2024.
For the second quarter, Freshworks expects revenue between $197.3 million and $200.3 million, representing a 13–15% increase over Q2 2024.
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Mohit writes about AI in simple, explainable, and often funny words. He's especially passionate about chatting with those building AI for Bharat, with the occasional detour into AGI.