Freshworks Inc. (FRSH): Results of Operations and Financial Condition
Freshworks Inc. (FRSH) filed an SEC Form 8-K — Results of Operations and Financial Condition. Freshworks Reports Record Second Quarter 2026 Results Beats revenue and profitability expectations, raises full year estimates • Total revenues of $237.4 million , representing 16% year-over-year growth • Positive GAAP Net Income of $3.2 million , representing the Company’s first
How this was made
The 30-second read
Why it matters
Freshworks provides concrete Q2 performance (revenue growth, GAAP profitability, operating cash flow) and explicit Q3 and FY2026 ranges, which can drive estimate revisions and near-term positioning.
Market read
Traders can update models immediately using the disclosed Q3 and FY2026 revenue and non-GAAP EPS ranges, alongside profitability and cash flow metrics.
What to watch
The release includes FireHydrant in 2026 results, so investors may adjust for mix effects when assessing underlying growth and cash flow quality.
Freshworks Reports Record Second Quarter 2026 Results
Revenue grew 16% year-over-year, GAAP income from operations turned positive at $6.1 million, GAAP diluted net income per share was $0.01, and the company raised its full-year 2026 estimates.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $237.4 million | – | 16% |
| Revenue growth, constant currencyother | 15% | – | 15% |
| GAAP income (loss) from operationsGAAP | $6.1 million | – | – |
| GAAP operating marginGAAP | 2.6% | – | – |
| Non-GAAP income from operationsnon-GAAP | $55.9 million | – | – |
| Non-GAAP operating marginnon-GAAP | 23.6% | – | – |
| GAAP net incomeGAAP | $3.2 million | – | – |
| GAAP diluted net income (loss) per shareGAAP | $0.01 | – | – |
| GAAP weighted-average shares outstandingGAAP | 273.0 million | – | – |
| Non-GAAP diluted net income per sharenon-GAAP | $0.17 | – | – |
| Non-GAAP weighted-average shares outstandingnon-GAAP | 273.0 million | – | – |
| Net cash provided by operating activitiesGAAP | $58.5 million | – | – |
| Operating cash flow marginGAAP | 24.7% | – | – |
| Adjusted free cash flownon-GAAP | $57.7 million | – | – |
| Adjusted free cash flow marginnon-GAAP | 24.3% | – | – |
| Cash, cash equivalents, restricted cash and marketable securitiesother | $665.3 million | – | – |
| Customers contributing more than $100,000 in ARRother | 1,746 | – | 25% |
| Customers contributing more than $50,000 in ARRother | 4,091 | – | 18% |
| Customers contributing more than $5,000 in ARRother | 25,356 | – | 6% |
| Net dollar retention rateother | 104% | – | – |
| Net dollar retention rate, constant currencyother | 105% | – | – |
| EX ARR growthother | 24% | – | 24% |
| Freddy AI Copilot attachment to new enterprise dealsother | over 71% | – | – |
| Rule of 40 consecutive quartersother | 8th consecutive quarter | – | – |
Third Quarter 2026 and Full Year 2026 outlook
- RevenueThird Quarter 2026: $244.5 - $245.5; Full Year 2026: $963.5 - $966.5
- NoteThird Quarter 2026 year-over-year revenue growth: ~14%
- NoteFull Year 2026 year-over-year revenue growth: ~15%
- NoteThird Quarter 2026 year-over-year revenue growth (constant currency): 14% - 15%
- NoteFull Year 2026 year-over-year revenue growth (constant currency): 14% - 15%
- NoteThird Quarter 2026 non-GAAP income from operations: $59.0 - $61.0
- NoteFull Year 2026 non-GAAP income from operations: $222.0 - $228.0
- NoteThird Quarter 2026 non-GAAP net income per share: $0.18
- NoteFull Year 2026 non-GAAP net income per share: $0.66 - $0.68
- NoteThird Quarter 2026 non-GAAP net income per share estimated assuming 265.8 million weighted-average shares outstanding
- NoteFull Year 2026 non-GAAP net income per share estimated assuming 272.8 million weighted-average shares outstanding
What drove it
- EX ARR grew 24% year-over-year.
- Freddy AI Copilot is now attached to over 71% of new enterprise deals.
- Customers contributing more than $100,000 in ARR increased 25% year-over-year and 26% adjusting for constant currency.
- Freshworks announced AI Agent Studio and MCP Gateway for Freshservice.
- All financial numbers for 2026 include the results of the FireHydrant business.
Concerns
- Net dollar retention rate was 104%, compared to 106% in the first quarter of 2026 and 106% in the second quarter of 2025.
- Operating cash flow margin was 24.7%, compared to 28.6% in the second quarter of 2025.
- Adjusted free cash flow margin was 24.3%, compared to 26.5% in the second quarter of 2025.
- Non-GAAP diluted net income per share was $0.17, compared to $0.18 in the second quarter of 2025.
What to watch
- Third Quarter 2026 revenue guidance of $244.5 - $245.5.
- Full Year 2026 revenue guidance of $963.5 - $966.5.
- Third Quarter 2026 non-GAAP income from operations guidance of $59.0 - $61.0.
- Full Year 2026 non-GAAP income from operations guidance of $222.0 - $228.0.
- Net dollar retention rate following the reported 104% result.
- Freddy AI Copilot adoption in new enterprise deals.
Balance sheet and cash flow
- Cash, cash equivalents, restricted cash and marketable securities were $665.3 million as of June 30, 2026.
- Net cash provided by operating activities was $58.5 million, representing an operating cash flow margin of 24.7%, compared to $58.6 million, representing an operating cash flow margin of 28.6%, in the second quarter of 2025.
- Adjusted free cash flow was $57.7 million, representing an adjusted free cash flow margin of 24.3%, compared to $54.3 million, representing an adjusted free cash flow margin of 26.5%, in the second quarter of 2025.
Analysis
Freshworks reported $237.4 million of total revenue for the second quarter of 2026, up 16% from $204.7 million in the second quarter of 2025. Revenue growth was 15% adjusting for constant currency. The company stated that all 2026 financial numbers include the results of its FireHydrant business. Large-customer metrics expanded, led by a 25% year-over-year increase in customers contributing more than $100,000 in ARR to 1,746.
Profitability improved materially on a GAAP basis. GAAP income from operations was $6.1 million with a 2.6% operating margin, compared with a GAAP operating loss of $(8.7) million and a (4.2)% operating margin in the second quarter of 2025. The release also reported GAAP net income of $3.2 million and GAAP diluted net income per share of $0.01, describing the period as the company’s first quarter of GAAP profitability in 2026.
Non-GAAP income from operations rose to $55.9 million from $44.8 million, while non-GAAP operating margin increased to 23.6% from 21.9%. Cash generation remained substantial, with $58.5 million of net cash provided by operating activities and $57.7 million of adjusted free cash flow. However, operating cash flow margin declined to 24.7% from 28.6%, adjusted free cash flow margin declined to 24.3% from 26.5%, and non-GAAP diluted net income per share was $0.17 versus $0.18.
Retention bears close attention. Net dollar retention was 104%, below both the first quarter of 2026 and the second quarter of 2025 level of 106%. Constant-currency net dollar retention was 105%, equal to the first quarter of 2026 and above the 104% reported for the second quarter of 2025. Management highlighted AI adoption, stating that Freddy AI Copilot was attached to over 71% of new enterprise deals, and announced AI Agent Studio and MCP Gateway for Freshservice.
The company raised its full-year estimates and guided third-quarter revenue to $244.5 - $245.5 and full-year revenue to $963.5 - $966.5. It expects third-quarter non-GAAP income from operations of $59.0 - $61.0 and full-year non-GAAP income from operations of $222.0 - $228.0. The outlook points to continued profitability discipline alongside revenue growth, while retention, free-cash-flow margins, and execution on the AI product initiatives remain key reported indicators to follow.
Management, verbatim
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.
Dennis Woodside, CEO & President
Not in the filing
stated, not guessed- Prior-quarter total revenue and quarter-over-quarter revenue growth
- GAAP gross profit and GAAP gross margin
- Non-GAAP gross profit and non-GAAP gross margin
- GAAP operating expenses
- Non-GAAP operating expenses
- GAAP net income prior-year comparison
- Tax rate
- Debt balance
- Share repurchases
- Dividends
- Segment revenue disclosure
- Prior guidance needed to assess actual results versus prior guidance
- GAAP reconciliations for third-quarter and full-year 2026 non-GAAP guidance
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
The filing is an SEC Form 8-K (Item 2.02) containing Freshworks’ Q2 2026 results and forward guidance for Q3 and full-year 2026.
Ticker impact
Freshworks reports Q2 revenue of $237.4M (+16% YoY), GAAP profitability, and raises full-year 2026 estimates in an 8-K.
Likely positive near-term bias as traders reprice FY2026 revenue and non-GAAP EPS expectations; magnitude depends on how the guidance compares to Street consensus.
This is a primary-source earnings and guidance release with specific financial metrics (revenue, GAAP/non-GAAP margins, operating cash flow) and explicit Q3 and FY2026 ranges.
Market effects
Improving Rule of 40 execution and AI attach rates can support sentiment for mid-market SaaS and IT service management peers.
Limited direct regional spillover; primarily affects US-listed SaaS sentiment.
Moderate, as guidance and profitability trends can influence global SaaS risk appetite, but no cross-border deal or macro shock is disclosed.
Counterpoint
Non-GAAP profitability and AI attach metrics may be less durable than GAAP results; investors may focus on retention and margin sustainability.
Key entities
- companyFreshworks Inc.
Nasdaq-listed software company reporting Q2 2026 results and issuing Q3 and FY2026 estimates.
- executiveDennis Woodside
CEO and President quoted on GAAP profitability milestone, Rule of 40, and AI Copilot attach rate.
- executiveRyan Manning
Appointed Chief Product and Technology Officer, noted as a business highlight.
