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SAN MATEO, Calif. - Freshworks Inc . (NASDAQ:FRSH) saw its stock soar 13.3% in after-hours trading Tuesday after the customer service software provider reported first quarter results that beat expectations and issued guidance above analyst estimates.
The company posted adjusted earnings per share of $0.18 for Q1, surpassing the consensus estimate of $0.13. Revenue came in at $196.3 million, up 19% year-over-year and ahead of the $192.08 million analysts were expecting.
"Freshworks had another fantastic quarter, outperforming our previously provided financial estimates in Q1 with revenue growing 19% year-over-year to $196.3 million," said Dennis Woodside (OTC:WOPEY), CEO and President of Freshworks.
For the second quarter, Freshworks expects revenue between $197.3 million and $200.3 million, above the $191.9 million consensus. The company also raised its full-year 2025 revenue outlook to $815.3-$824.3 million, topping analyst projections of $813.3 million.
The strong results were driven by continued customer growth, with the number of customers contributing over $5,000 in annual recurring revenue increasing 13% YoY to 23,275. Freshworks’ net dollar retention rate improved to 105%, up from 103% in Q4 2024.
"We continue to outperform because businesses are choosing Freshworks for our uncomplicated customer and employee service solutions," Woodside added.
The company’s adjusted free cash flow margin expanded to 28.2% in Q1, up from 23.4% a year ago, highlighting improving profitability alongside strong top-line growth.
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