[Management View]
Freshworks reported strong Q2 2025 results with total revenue of $204.7 million, up 18% YoY. Key strategic priorities include investing in employee experience (EX), delivering AI capabilities, and expanding customer experience (CX).

[Outlook]
The company expects Q3 2025 revenue between $207 million and $210 million, and full-year 2025 revenue between $822.9 million and $828.9 million. Future growth levers include ESM, AI, and Device42.

[Financial Performance]
- Total revenue: $204.7 million, up 18% YoY
- Non-GAAP operating margin: 22%, up 14 percentage points YoY
- Adjusted free cash flow: $54.3 million, up 65% YoY
- EX ARR: $450 million, up 24% YoY
- CX ARR: $380 million, up 11% YoY
- Net dollar retention: 106% as reported

[Q&A Highlights]
Question 1: Did AI agent consumption meet expectations?
Answer: AI is pacing at or slightly ahead of internal expectations. The Agentic platform, introduced in June, is in early stages, with good traction for all AI products. Copilot is attached to over 55% of larger deals.

Question 2: Why does Q3 guidance imply lower EX growth?
Answer: EX growth remains strong, with moderated growth due to the anniversary of the Device42 acquisition. The company is confident in EX's potential and sees continued large customer adoption.

Question 3: Long-term contribution of the partner channel?
Answer: The partner network is expanding, with over 130 new partners added. The pipeline from larger partners tends to generate larger deals and more mature companies, with expectations for increased partner impact over time.

Question 4: Changes in the sales organization with Ian stepping in?
Answer: Ian, now permanent head of field sales, has driven strong results with all regions exceeding targets. No major changes anticipated going forward.

Question 5: Impact of macroeconomic factors on customer demand?
Answer: Strong demand across the board, with diversified revenue base and must-have software driving growth. The company remains bullish on continued momentum.

Question 6: AI Copilot and agents revenue growth expectations?
Answer: AI adoption is early, with 5,000 paying customers out of 73,000 total. The company expects significant growth as more customers adopt AI capabilities.

Question 7: AI as a growth catalyst in 2026?
Answer: Multiple growth levers including EX, ESM, Device42, and AI. AI is expected to be a significant driver, with potential for $100 million ARR businesses in each growth area.

Question 8: Billing trends and confidence in guidance?
Answer: No significant pull-ins or push-outs. Strong performance and confidence in continued growth reflected in guidance.

Question 9: NRR trends and expectations?
Answer: Net dollar retention at 104% as expected, with Device42 impacting retention. Positive expansion and churn trends continue.

Question 10: Rule of forty model and AI growth sustainability?
Answer: Continued focus on efficient growth with investments in go-to-market. AI opportunity remains significant with potential for sustained triple-digit growth.

Question 11: Device42 impact on larger deals?
Answer: Device42 contributes significantly to larger deals, with cloud version expected in Q1 2026. Integration with Freshservice drives meaningful uplift.

Question 12: AI adoption beyond experimentation?
Answer: AI adoption seen across both new and existing customers, with strong attach rates. Continued momentum expected with new Agentic capabilities.

Question 13: Cross-sell initiatives between EX and CX?
Answer: Improved rigor in sales and marketing, product changes, and AI driving growth. Ongoing programs to enhance cross-sell opportunities.

Question 14: Drivers behind Q4 growth acceleration?
Answer: Q4 is the largest quarter for EX and field sales, with strong pipeline visibility. Investments in go-to-market and brand expected to drive growth.

[Sentiment Analysis]
Analysts and management maintained a positive tone, highlighting strong performance, strategic growth initiatives, and confidence in future prospects.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | YoY Change |
|----------------------------|---------------|---------------|-------------|
| Total Revenue | $204.7 million| $173.4 million| +18% |
| Non-GAAP Operating Margin | 22% | 8% | +14 pp |
| Adjusted Free Cash Flow | $54.3 million | $32.9 million | +65% |
| EX ARR | $450 million | $362.9 million| +24% |
| CX ARR | $380 million | $342.3 million| +11% |
| Net Dollar Retention | 106% | 104% | +2 pp |

[Risks and Concerns]
Potential risks include macroeconomic uncertainties, market volatility, and integration challenges with acquisitions like Device42.

[Final Takeaway]
Freshworks delivered strong Q2 2025 results, driven by AI adoption and strategic growth in EX and CX. The company remains confident in its future prospects, with multiple growth levers and a positive outlook for the remainder of the year. Investors should monitor the integration of Device42 and the continued adoption of AI capabilities as key drivers of future performance.