Freddy AI momentum, IT deals, and customer service gains drive Freshworks’ solid performance
Freshworks has reported a strong second quarter for 2025, with revenue growing 18% year-over-year to $204.7 million and an operating cash flow margin of 29%, exceeding expectations.
CEO Dennis Woodside attributed the performance to rising demand for Freshworks’ AI-powered service solutions. “Businesses are turning to Freshworks to reduce complexity with fast, easy-to-use, and results-driven platforms,” he said.
A key growth driver was the company’s Freddy AI suite, now used by over 5,000 customers. Combined, Freddy AI Agent and Freddy Copilot surpassed $20 million in Annual Recurring Revenue (ARR), doubling year-over-year.
Freshworks also debuted several product innovations:
- Freddy AI Agent Studio, a no-code platform for deploying autonomous AI agents.
- Freshservice Journeys, an AI-driven tool for managing IT and employee service workflows.
The quarter also saw high-profile customer additions including Seagate Technology, AEP Energy, California Franchise Tax Board, and Covington & Burling LLP.
Other key metrics:
- Net cash from operations grew to $58.6 million.
- Adjusted free cash flow reached $54.3 million.
- Customers contributing over $5,000 in ARR increased to 23,975, up 10% YoY.
- Net dollar retention remained strong at 106%.
Freshworks also announced a multi-year partnership with McLaren Racing, integrating its Freshservice ITSM solution into the F1 team’s operations.
Looking ahead, the company raised its full-year guidance to $822.9–$828.9 million in revenue, projecting non-GAAP earnings per share of $0.56–$0.58.
