Freshworks (FRSH) Q1 2025 Earnings
How Did FRSH Stock React to Q1 2025 Earnings?
S&P 500 over the same 30 days: +6.88%.
Did FRSH Beat Earnings? Q1 2025 Results
Yes. Freshworks reported Q1 2025 earnings of $0.18 a share on Apr 29, 2025, beating the $0.13 consensus estimate by 39.3%. Revenue was $196.3M against a $191.9M estimate.
Freshworks kicked off 2025 with a notably strong quarter, posting first-quarter revenue of $196.27 million, up 18.9% year over year and ahead of the $191.90 million consensus estimate, while earnings per share of $0.18 beat the $0.13 consensus by 39.32%, underscoring a meaningful profitability shift in the business. The primary driver behind the margin expansion was a dramatic improvement in operating efficiency, with non-GAAP operating income more than doubling to $46.37 million from $21.76 million a year ago, pushing non-GAAP operating margin to 23.6% from 13.2%. GAAP net loss narrowed to a near-breakeven $1.30 million, compared to a $23.32 million loss in Q1 2024, as the company also generated $57.97 million in operating cash flow. Freshworks further returned $113.61 million to shareholders through share repurchases during the quarter. The company's AI-driven service management portfolio, which recently expanded with the acquisition of FireHydrant, continued to attract enterprise customers, with ARR contributors above $5,000 growing 13% year over year to 23,275. Looking ahead, Freshworks guided Q2 revenue of $197.30 million to $200.30 million and full-year revenue of $815.30 million to $824.30 million, reflecting 13% to 14% growth, a moderation from Q1's pace that investors will likely monitor closely.
- Revenue grew 19% year-over-year to $196.3 million
- Non-GAAP operating margin expanded to 23.6% from 13.2% year-over-year
- Operating cash flow margin of 29.5% and adjusted free cash flow margin of 28.2%
- Customers contributing more than $5,000 in ARR grew 13% YoY to 23,275
- Net dollar retention rate of 105%
“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%. We continue to outperform because businesses are choosing Freshworks for our uncomplicated customer and employee service solutions.”
Freshworks CEO, on the earnings call
What Was Freshworks's Outlook in Q1 2025?
For Q2 2025, Freshworks expects revenue of $197.3 million to $200.3 million (13%-15% YoY growth, 13%-15% constant currency), non-GAAP income from operations of $27.8 million to $29.8 million, and non-GAAP net income per share of $0.10 to $0.12. For full year 2025, the company expects revenue of $815.3 million to $824.3 million (13%-14% YoY growth, 13%-15% constant currency), non-GAAP income from operations of $139.5 million to $147.5 million, and non-GAAP net income per share of $0.56 to $0.58. Revenue and non-GAAP income from operations estimates are based on exchange rates as of April 25, 2025.
FRSH YoY Financials
| Metric | Q1 2025 | Q1 2024 | Year over year |
|---|---|---|---|
| Revenue | $196.3M | $165.1M | +18.9% |
| Gross Profit | $166.4M | $139.3M | +19.5% |
| Operating Income | −$10.4M | −$6.2M | +67.6% |
| Net Income | −$1.3M | −$670,747 | +94.4% |
Figures from SEC filings and company reports. Not investment advice.