Q4 2025 Freshworks Inc Earnings Call Transcript
Key Points
- Freshworks Inc (FRSH) achieved profitability for the first time in its history for the full year 2025, along with record free cash flow.
- The company reported a significant increase in annual recurring revenue (ARR), reaching $907 million, representing an 18% growth year over year.
- Freshworks Inc (FRSH) saw a strong performance in its Employee Experience (EX) business, crossing the $0.5 billion ARR milestone with 26% year-over-year growth.
- Freddy AI, a key component of Freshworks Inc (FRSH)'s strategy, ended 2025 with over $25 million in ARR and is on track to reach $100 million by 2028.
- The company experienced a surge in upmarket momentum, with enterprise cohorts outpacing overall growth and over 1,500 customers contributing more than $100,000 in ARR, a 28% increase year over year.
- The Customer Experience (CX) side of the business did not see the expected growth from AI, with growth remaining in the mid-single-digit range.
- Freshworks Inc (FRSH) faces challenges in fully integrating its product offerings, such as Device42, into a unified cloud platform.
- The company anticipates a 1-point headwind on its Q1 and fiscal year 2026 non-GAAP operating margin due to the acquisition of FireHydrant.
- There is a need for increased education and adoption of AI among customers, as some remain hesitant or require more understanding of AI benefits.
- Freshworks Inc (FRSH) is running its CX business lean to focus investments on the EX side, which may limit growth potential in the CX segment.
Hello, everyone. Thank you for joining us, and welcome to the Freshworks fourth-quarter and full year 2025 earnings conference call. (Operator Instructions)
I will now hand the call over to Kate Scolnick, VP of Investor Relations. Please go ahead.
Thank you. Good afternoon, and welcome to Freshworks fourth-quarter and full year 2025 earnings conference call. Joining me today are Dennis Woodside, Freshworks Chief Executive Officer and President; and Tyler Sloat, Freshworks Chief Operating Officer and Chief Financial Officer.
The primary purpose of today's call is to provide you with information regarding our fourth quarter and full year 2025 performance and our financial outlook for our first quarter and full year 2026.
Some of our discussion and responses to your questions may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's beliefs about our
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