A 27-year-old man drowned in rising sea waters on Tuesday just before the storm, which packed winds of around 130 kilometres per hour (80 miles per hour), made landfall.
But on Wednesday authorities put the toll at four.
The storm has affected 16,600 people, according to the country's National Risk Management Office (BNGRC).
It brought less rains than feared, but strong winds ripped roofs off buildings and flattened rice fields and fruit trees.
The storm landed north of Mananjary, a coastal town of 25,000 people that remains devastated by last year's Cyclone Batsirai, which killed more than 130 people across Madagascar.
"It's a dry cyclone compared to Batsirai, so it brought less rains, but the winds were stronger, this why infrastructure was badly affected," risk management senior official Faly Aritiana Fabien told AFP.
"The recorded damage is almost only related to the wind," said Fabien.
- 'Can't take this' -
By daybreak in Mananjary residents were out on the streets to assess the damage and salvage what they could, witnesses said.
Despite thousands of sandbags used to reinforce roofs, metal sheets were strewn onto the ground by the force of the wind.
The 27-year-old man drowned near the port of Mahanoro, to the north of Mananjary, said the BNGRC.
Fabien said Freddy was "one of the strongest cyclones" to hit the island, which is typically lashed several times during the annual November-April storm season.
Pascal Salle, from Mananjary, sobbed as he assessed the damage after hardly recovering from last year's cyclone Batsirai.
"I didn't think there was a more powerful cyclone than Batsirai," he said. "My fence is down, my 1,000-litre plastic water tank smashed against the neighbour's wall".
A window was ripped off his house and the garden transformed into "a sandy field", he said.
"I can't take this every year, it's not possible," he said.
- Mozambique next -
The UN's World Food Programme (WFP) estimates more than 2.3 million people in Madagascar could be affected by Freddy and that the cyclone will then pass through Mozambique and Zimbabwe on the African mainland.
Authorities said that Madagascar, which is accustomed to cyclones and tropical storms, had put measures in place to minimise loss of lives.
Several regions on Tuesday suspended school classes for the rest of the week, the education ministry said.
At least 8,000 people were evacuated as a precaution in the Mananjary district but were expected to return to their homes in a day or two.
Freddy is the first cyclone and the second tropical weather system to hit during the current season, the UN's Office for the Coordination of Humanitarian Affairs (OCHA) said.
Monitors have described Freddy as one of the longest lasting storms of recent times, skirting past Reunion Island and Mauritius late Monday without causing major damage.
Freddy developed during the first week of February in the northwest of Australia and south of Indonesia and is in its third week trekking across the Indian Ocean.
Mozambique is forecast to take a direct hit by Friday, according to the UN disaster coordination, where an estimated 500,000 people could be impacted.
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