Freshworks Reports 84% Narrowed Net Loss in Q3 2025, Revenue Jumps 15%

Freshworks Inc., a Nasdaq-listed software-as-a-service (SaaS) company, announced its financial results for the third quarter of fiscal year 2025, showcasing a substantial improvement in its financial health. The company reported a consolidated net loss of $4.7 million, an 84.4% reduction from the $30 million loss recorded in the third quarter of 2024. This improved profitability was supported by a robust top-line performance, with revenue climbing 15.3% year-over-year to $215.1 million. The number of customers generating over $5,000 in Annual Recurring Revenue (ARR) also saw a healthy increase of 9% to 24,377.

Despite a slight increase in quarterly expenses, Freshworks managed to control its costs relative to its revenue growth. Looking ahead, the company projects its fourth-quarter revenue to grow between 12% and 13% year-over-year, and forecasts full-year 2025 revenue to rise by 16% year-over-year. Chief executive Dennis Woodside expressed satisfaction with the company exceeding its financial estimates. The report also notes the upcoming departure of founder Girish Mathrubootham, who will be exiting the company by December 1 to focus on his venture capital fund.

Impact This news suggests strong operational execution and improved financial discipline at Freshworks. It indicates positive momentum for the company, which could lead to increased investor confidence and potentially a higher stock valuation. The growth in ARR and revenue points to successful customer acquisition and retention strategies, especially in its AI-focused initiatives. The positive outlook for the remainder of 2025 reinforces the company's growth trajectory. Rating: 7/10

Heading: Difficult Terms Explained SaaS (Software-as-a-Service): A software distribution model where a third-party provider hosts applications and makes them available to customers over the internet. Customers typically pay a subscription fee. Annual Recurring Revenue (ARR): This is a metric used by subscription-based businesses to measure the predictable revenue a company expects to receive from its customers over a 12-month period. It is calculated by summing up the value of all active subscriptions.