Freshworks delivers record Q1 2026 results, surpassing revenue and profit estimates

Freshworks has released its financial results for its first quarter ended March 31, 2026. The results have exceeded estimates for revenue and non-GAAP operating income.

“Freshworks began Q1 with strong momentum, building on our 2025 successes and achieving our sixth straight quarter of exceeding expectations,” said Dennis Woodside, CEO & President of Freshworks. “High demand for our Employee Experience (EX) platform is fueling market traction, characterized by accelerating EX ARR, growing AI Copilot revenue, and strong net dollar retention.

“We are strategically investing in the EX opportunity as our approach continues to resonate with our customers. Freshworks is focused on delivering long-term value to shareholders and customers through sustainable growth and increased profitability.”

Q1 2026 financial summary results

• Revenue: Total revenue was $228.6 million, representing growth of 16% compared to total revenue of $196.3 million in the first quarter of 2025.
• GAAP (Loss) from Operations: GAAP (loss) from operations was $(8.1) million, compared to $(10.4) million in Q1 2025.
• Non-GAAP Income from Operations: Non-GAAP income from operations was $41.0 million, compared to $46.4 million in Q1 2025.
• Net Cash Provided by Operating Activities: Net cash was $62.4 million compared to $58.0 million in Q1 2025.
• Adjusted Free Cash Flow: Adjusted free cash flow was $55.8 million compared to $55.4 million in Q1 2025.
• Cash, Cash Equivalents, Restricted Cash and Marketable Securities: Cash, cash equivalents, restricted cash and marketable securities were $780.4 million as of March 31, 2026.

All financial numbers for 2026 include the results of our FireHydrant business.

Key Business Highlights

The company onboarded several customers to the Freshworks community including Eagle Materials, Everbridge, G4S, Outreach, and University of Connecticut. It also landed the two largest deals in Freshworks’ history, including the first $1 million-plus ARR deal.

The company unified its global sales organisation and appointed Ian Tickle as Chief Revenue Officer. Furthermore, introduced a new leader with Kuntal Vahalia joining as Senior Vice President of Global Channels and Alliances.

The number of customers contributing more than $100,000 in ARR was 1,646. An increase of 29% year-over-year and 26% adjusting for constant currency. The number of customers contributing more than $50,000 in ARR was 3,938. This represented an increase of 22% year-over-year and 20% adjusting for constant currency.

The number of customers contributing more than $5,000 in ARR was 25,088, an increase of 8% year-over-year and 7% adjusting for constant currency.

Net dollar retention rate was 106%, compared to 108% in the fourth quarter of 2025 and 105% in the first quarter of 2025. Adjusted for constant currency, net dollar retention rate was 105%, compared to 104% in the fourth quarter of 2025 and 105% in the first quarter of 2025.

Freshworks also integrated Device42’s infrastructure discovery and mapping capabilities natively into Freshservice. This gives teams a single AI-powered platform to manage assets, services, and operations.

Financial Outlook

In Q1 2026, Freshworks delivered robust results, propelled by the success of its EX business now serving as its main driver of growth. The company kept profitability on track with an 18% non-GAAP operating margin. This outcome highlights Freshworks’ strategic emphasis on broadening EX offerings and embedding AI technology throughout its platform.

Freshworks expects year-over-year growth in Q2 and the full year to be between 13-15% in constant currency. Q2 2026 revenues are expected to be in the range of $232 – $235 million, and full-year revenues are expected to be $958 – $964 million.

Enterprise Times: What this means for businesses

It’s another strong financial performance from Freshworks for its first quarter of 2026, surpassing market expectations for both revenue and non-GAAP operating income. Moreover, the company secured the two largest deals in its history, including its first ever $1 million-plus ARR deal.

The company continued to capitalise on robust demand for its Employee Experience (EX) platform. With year-over-year revenue growth of 16%, sustained profitability, and strategic investments in AI and new product offerings,

Freshworks is well-positioned for continued growth and value creation for shareholders and customers. The integration of significant new customers, disciplined financial management, and a focus on innovative solutions underscore Freshworks’ positive momentum heading into the remainder of 2026.

The only blot on a sunny landscape – the continued war in Iran which could throw a number of challenges. The Middle East could trigger global market uncertainty and volatility, potentially impacting Freshworks’ share price and investor sentiment.

Disruptions to supply chains, especially if oil prices surge or transport routes are affected, may indirectly increase procurement costs or delay project deliveries, even for a software business.  Customer spending could also become more cautious, leading to more cautious investment, slower sales cycles or renegotiated contracts, which might dampen revenue momentum.

Ultimately, the extent of any financial impact will depend on the scale and duration of the conflict, as well as resulting shifts in global economic conditions. All factors outside the control of Freshworks management team.

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