Key takeaways
- Freshworks reports a net loss of $1.73 million in Q2 2025, significantly reduced from $20.18 million last year.
- Revenue surged 17.5% to $204.7 million, indicating strong customer adoption and operational efficiency.
- CEO Dennis Woodside highlights growing demand for AI-powered solutions that simplify business processes.
- GAAP loss from operations improved to $8.7 million, down from $43.8 million in Q2 2024.
- Non-GAAP income from operations increased to $44.8 million, showcasing better financial health.
The Nasdaq-listed SaaS company Freshworks reduced its consolidated net loss by 91.4%, bringing it down to $1.73 million in the second quarter of 2025 (Q2 2025) from $20.18 million in the same quarter the previous year, driven by a steady increase in customer adoption and enhanced operational efficiency through AI.
Dennis Woodside, CEO & president of Freshworks, said, “We believe our strong momentum through the first half of the year reflects that businesses are increasingly turning to Freshworks to reduce complexity. They want AI-powered employee and customer service solutions that are fast to implement, easy to use, and built to deliver results.”
Revenue increased by 17.5% to $204.7 million in the reviewed quarter, up from $174.1 million in Q2 2024. On a quarterly basis, it rose by 4.3% to $194.6 million.
The generally accepted accounting principles (GAAP) loss from operations improved significantly to $8.7 million, down from $43.8 million in the same quarter a year ago.
Non-GAAP income from operations jumped to $44.8 million, up from $13.1 million in Q2 2024. GAAP net loss per share decreased to $0.01, based on 294.4 million shares outstanding, compared to $0.07 with 299.8 million shares last year.
“We have not reconciled our Q3 and full-year 2025 estimates for non-GAAP financial measures to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future,” the company said.
The company reported that the number of customers contributing over $5,000 in annual recurring revenue (ARR) grew by 10% year-over-year (YoY) to reach 23,975 in the second quarter.
Freshworks states that ARR is the total expected revenue from subscriptions, software licenses, and maintenance over the next year from all clients. The AI service provider offers a range of employee experience solutions, including IT and enterprise service management, as well as customer service, sales, and marketing products.
