Freshworks announced that revenue for the quarter ended June 30 rose 16% year‑on‑year to $237.4 million, up from $204.7 million a year earlier. Constant‑currency revenue also grew 15%, showing a steady global demand for its software.
The company reported GAAP net income of $3.2 million, a turnaround from a $1.7 million net loss a year ago. This marks Freshworks’ first quarter of GAAP profitability in 2026, after a net loss of $4.8 million in the previous quarter.
Non‑GAAP operating income climbed to $55.9 million from $44.8 million, and the non‑GAAP operating margin increased to 23.6% from 21.9%. These figures illustrate the firm’s improving core earnings.
CEO Dennis Woodside said that annual recurring revenue (ARR) grew 24% year‑on‑year. He added that the new Freddy AI Copilot feature was attached to more than 71% of new enterprise deals, indicating rapid AI adoption.
Woodside highlighted the company’s consistent performance: “Freshworks just delivered its seventh straight quarter beating revenue estimates, its eighth consecutive quarter hitting Rule of 40, and a milestone we said we'd hit – GAAP profitability, months ahead of plan. This isn’t just a moment, this has been a pattern of execution.”
At quarter‑end, Freshworks held $665.3 million in cash, cash equivalents, restricted cash and marketable securities. Operating cash flow for the quarter was $58.5 million and adjusted free cash flow was $57.7 million.
A quarter ago the firm announced a 11% workforce reduction, roughly 500 employees, as part of an AI‑driven reorganisation. The restructuring aimed to simplify operations, cut management layers and redirect investment toward high‑growth AI and employee‑experience businesses, with expected one‑time charges of $7 million to $9 million.
Customer metrics improved as well. Companies contributing more than $100,000 in ARR rose 25% year‑on‑year to 1,746, while those above $50,000 in ARR grew 18% to 4,091. Net dollar retention stood at 104%, slightly below the 106% seen a year earlier.
Freshworks raised its full‑year 2026 guidance, now expecting revenue of $963.5 million to $966.5 million, up from the previous $958 million to $964 million range. It also lifted its non‑GAAP operating income outlook to $222 million to $228 million, from $207 million to $215 million.
For the upcoming third quarter, the company projects revenue of $244.5 million to $245.5 million and non‑GAAP operating income of $59 million to $61 million. These figures reflect continued confidence in its AI‑led growth strategy and a solid financial footing.