Freshworks Reports Record Third Quarter 2026 Results
Freshworks Inc. (FRSH) filed an SEC Form 8-K — Results of Operations and Financial Condition. Freshworks Reports Record Third Quarter 2026 Results Beats revenue and profitability expectations • Total revenues of $245.4 million, representing 14% year-over-year growth • GAAP Net Income of $18.3 million • Record Adjusted Free Cash Flow of $73.9 million, representing 29% year
How this was made
The 30-second read
Why it matters
The earnings beat and record free cash flow provide a catalyst for short‑term price appreciation.
Market read
First‑report earnings with strong metrics; likely to move the stock and influence related SaaS peers.
What to watch
Guidance for FY2026 is modest; future growth may hinge on up‑market execution and integration of FireHydrant.
Freshworks Reports Record Third Quarter 2026 Results Beats revenue and profitability expectations
Revenue grew 14% year-over-year, GAAP income from operations turned positive at $28.2 million from a $(7.5) million loss, non-GAAP operating margin reached 29.8%, and adjusted free cash flow rose 29% year-over-year to $73.9 million.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $245.4M | – | 14% |
| Revenue adjusted for constant currency, three months ended September 30, 2026non-GAAP | $245.6M | – | 14% |
| Revenue, nine months ended September 30, 2026GAAP | $711.4M | – | – |
| Cost of revenue, three months ended September 30, 2026GAAP | $35.99M | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $209.4M | – | – |
| GAAP gross margin, three months ended September 30, 2026GAAP | 85.3% | – | – |
| Non-GAAP gross profit, three months ended September 30, 2026non-GAAP | $212.6M | – | – |
| Non-GAAP gross margin, three months ended September 30, 2026non-GAAP | 86.6% | – | – |
| Research and development expense, three months ended September 30, 2026GAAP | $44.72M | – | – |
| Sales and marketing expense, three months ended September 30, 2026GAAP | $98.53M | – | – |
| General and administrative expense, three months ended September 30, 2026GAAP | $38.19M | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | $181.2M | – | – |
| Income from operations, three months ended September 30, 2026GAAP | $28.2M | – | – |
| GAAP operating margin, three months ended September 30, 2026GAAP | 11.5% | – | – |
| Non-GAAP income from operations, three months ended September 30, 2026non-GAAP | $73.2M | – | – |
| Non-GAAP operating margin, three months ended September 30, 2026non-GAAP | 29.8% | – | – |
| Net income, three months ended September 30, 2026GAAP | $18.30M | – | – |
| Diluted net income per share, three months ended September 30, 2026GAAP | $0.07 | – | – |
| Non-GAAP net income, three months ended September 30, 2026non-GAAP | $58.88M | – | – |
| Non-GAAP diluted net income per share, three months ended September 30, 2026non-GAAP | $0.22 | – | – |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | $77.7M | – | – |
| Operating cash flow margin, three months ended September 30, 2026GAAP | 31.7% | – | – |
| Adjusted free cash flow, three months ended September 30, 2026non-GAAP | $73.9M | – | 29% |
| Adjusted free cash flow margin, three months ended September 30, 2026non-GAAP | 30.1% | – | – |
| Income from operations, nine months ended September 30, 2026GAAP | $26.22M | – | – |
| Non-GAAP income from operations, nine months ended September 30, 2026non-GAAP | $170.0M | – | – |
| Net income, nine months ended September 30, 2026GAAP | $16.73M | – | – |
| Non-GAAP net income, nine months ended September 30, 2026non-GAAP | $136.8M | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | $198.6M | – | – |
| Adjusted free cash flow, nine months ended September 30, 2026non-GAAP | $187.4M | – | – |
| Number of customers contributing more than $100,000 in ARRother | 1,821 | – | 25% |
| Number of customers contributing more than $50,000 in ARRother | 4,257 | – | 18% |
| Number of customers contributing more than $5,000 in ARRother | 25,498 | – | 5% |
| Net dollar retention rateother | 104% | – | – |
| Net dollar retention rate adjusted for constant currencyother | 105% | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fourth Quarter 2026 and Full Year 2026 outlook
- RevenueFourth Quarter 2026: $253.5 - $254.5; Full Year 2026: $965.0 - $966.0
- NoteFourth Quarter 2026 year-over-year revenue growth: ~ 14%
- NoteFull Year 2026 year-over-year revenue growth: ~ 15%
- NoteFourth Quarter 2026 year-over-year revenue growth (constant currency): 14% - 15%
- NoteFull Year 2026 year-over-year revenue growth (constant currency): 14% - 15%
- NoteFourth Quarter 2026 non-GAAP income from operations: $68.0 - $70.0
- NoteFull Year 2026 non-GAAP income from operations: $238.0 - $240.0
- NoteFourth Quarter 2026 non-GAAP net income per share: ~ $0.21
- NoteFull Year 2026 non-GAAP net income per share: ~ $0.71
- NoteFourth Quarter 2026 non-GAAP net income per share assumed weighted-average shares outstanding: 266.0 million
- NoteFull Year 2026 non-GAAP net income per share assumed weighted-average shares outstanding: 272.3 million
Capital returns
- Repurchase of common stock, three months ended September 30, 2026: $(27,212) (in thousands), compared to $(159,110) (in thousands) in the three months ended September 30, 2025.
- Repurchase of common stock, nine months ended September 30, 2026: $(234,623) (in thousands), compared to $(386,306) (in thousands) in the nine months ended September 30, 2025.
- Payment of withholding taxes on net share settlement of equity awards, three months ended September 30, 2026: $(11,671) (in thousands), compared to $(14,954) (in thousands) in the three months ended September 30, 2025.
What drove it
- Total revenue grew 14% year-over-year and 14% adjusting for constant currency.
- Management said its upmarket strategy delivered another strong quarter.
- New multi-product EX deals increased over 35%, according to Dennis Woodside.
- Partners participated in more than half of new business, according to Dennis Woodside.
- The company reached over $1 billion in annual recurring revenue following the close of the third quarter, ahead of its previously-given estimate of year end.
- All financial numbers for 2026 include the results of the FireHydrant business.
Concerns
- Net dollar retention rate was 104%, compared to 104% in the second quarter of 2026 and 105% in the third quarter of 2025.
- The company cited uncertain global economic conditions, market volatility, foreign exchange rates, and inflation among factors that could cause actual results to differ materially from its outlook.
- Non-GAAP measures exclude stock-based compensation expense, employer payroll taxes on employee stock transactions, amortization of acquired intangibles, restructuring charges, acquisition expenses, and income tax effect and adjustments.
What to watch
- Delivery against fourth-quarter revenue guidance of $253.5 - $254.5 and non-GAAP income from operations guidance of $68.0 - $70.0.
- Delivery against full-year revenue guidance of $965.0 - $966.0 and non-GAAP income from operations guidance of $238.0 - $240.0.
- Customer growth above the $100,000, $50,000, and $5,000 ARR thresholds and net dollar retention rate.
- Progress in multi-product EX deals, partner participation in new business, and the upmarket strategy.
- The development of adjusted free cash flow and the pace of common-stock repurchases.
Balance sheet and cash flow
- Cash, cash equivalents, restricted cash and marketable securities: $697.3 million as of September 30, 2026.
- Cash and cash equivalents: $466,650 (in thousands) as of September 30, 2026, compared to $569,774 (in thousands) as of December 31, 2025.
- Restricted cash: $1,141 (in thousands) as of September 30, 2026, compared to $62,374 (in thousands) as of December 31, 2025.
- Marketable securities: $229,542 (in thousands) as of September 30, 2026, compared to $211,597 (in thousands) as of December 31, 2025.
- Deferred revenue: $404,420 (in thousands) as of September 30, 2026, compared to $385,320 (in thousands) as of December 31, 2025.
- Total assets: $1,497,673 (in thousands) as of September 30, 2026, compared to $1,602,712 (in thousands) as of December 31, 2025.
- Total liabilities: $583,272 (in thousands) as of September 30, 2026, compared to $570,062 (in thousands) as of December 31, 2025.
- Total stockholders' equity: $914,401 (in thousands) as of September 30, 2026, compared to $1,032,650 (in thousands) as of December 31, 2025.
- Net cash used in financing activities, three months ended September 30, 2026: $(38,883) (in thousands), compared to $(174,052) (in thousands) in the three months ended September 30, 2025.
- Net cash used in financing activities, nine months ended September 30, 2026: $(260,217) (in thousands), compared to $(428,339) (in thousands) in the nine months ended September 30, 2025.
Analysis
Freshworks reported $245.4 million of third-quarter revenue, up 14% year-over-year, with the same 14% growth rate on a constant-currency basis. The release attributes the period to upmarket momentum, with new multi-product EX deals increasing over 35% and partners participating in more than half of new business. Customer counts expanded most rapidly at the highest reported ARR threshold, where customers contributing more than $100,000 in ARR increased 25% year-over-year to 1,821. Following quarter-end, the company reached over $1 billion in annual recurring revenue.
Profitability improved materially. GAAP income from operations was $28.2 million and an 11.5% margin, versus a $(7.5) million loss and a (3.5)% margin in the prior-year quarter. Non-GAAP income from operations was $73.2 million and the non-GAAP operating margin was 29.8%, compared with $45.2 million and 21.0%, respectively. GAAP gross margin was 85.3%, compared with 84.7%, while non-GAAP gross margin was 86.6%, compared with 86.0%. GAAP sales and marketing expense declined to $98.527 million from $101.009 million, while GAAP general and administrative expense declined to $38.188 million from $47.149 million.
Cash generation also strengthened. Net cash provided by operating activities was $77.7 million, with a 31.7% operating cash flow margin, compared with $63.5 million and 29.5%. Adjusted free cash flow was a record $73.9 million, up 29% year-over-year, and its margin was 30.1%, compared with 26.6%. Cash, cash equivalents, restricted cash and marketable securities totaled $697.3 million as of September 30, 2026. The company repurchased $27.212 million of common stock during the quarter and $234.623 million during the nine months ended September 30, 2026.
Retention was stable sequentially but modestly below the prior-year level. Net dollar retention was 104%, unchanged from the second quarter of 2026 and compared with 105% in the third quarter of 2025. Constant-currency net dollar retention was 105%, unchanged sequentially and compared with 104% a year earlier. The company notes that all 2026 financial numbers include FireHydrant results, and its non-GAAP measures exclude items including stock-based compensation, payroll taxes on employee stock transactions, acquired-intangible amortization, restructuring charges, acquisition expenses, and specified tax adjustments.
For the fourth quarter, Freshworks expects revenue of $253.5 - $254.5 and non-GAAP income from operations of $68.0 - $70.0. Full-year revenue guidance is $965.0 - $966.0, and full-year non-GAAP income from operations guidance is $238.0 - $240.0. The release projects approximately 14% fourth-quarter year-over-year revenue growth and approximately 15% full-year growth, while fourth-quarter and full-year constant-currency revenue growth are each guided to 14% - 15%.
Management, verbatim
Our upmarket strategy delivered another strong quarter.
Dennis Woodside, CEO & President of Freshworks
We delivered a 30% non-GAAP operating margin and grew adjusted free cash flow by 29%.
Dennis Woodside, CEO & President of Freshworks
Customers want a unified platform and single data model for service operations, and they are increasingly choosing Freshworks.
Dennis Woodside, CEO & President of Freshworks
Not in the filing
stated, not guessed- Prior-quarter revenue, gross profit, operating income, net income, EPS, operating cash flow, and adjusted free cash flow were not reported.
- Debt balance was not reported.
- Segment revenue disclosures were not reported.
- Dividend information was not reported.
- Prior-period outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
- Guidance for gross margin, operating expenses, and tax rate was not provided.
- A CFO commentary or CFO quote was not provided.
Written by an AI language model 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 checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. 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
Freshworks filed an 8‑K with the SEC announcing its Q3 2026 financial results.
Ticker impact
Freshworks reported record Q3 2026 results with revenue up 14% YoY to $245.4M and GAAP net income of $18.3M, beating expectations.
upward pressure as market prices in the earnings beat and strong cash flow
First‑report earnings with better‑than‑expected revenue and profitability; investors typically bid the stock higher.
Market effects
Strong SaaS earnings may lift sentiment in the broader cloud‑software sector.
Positive for US small‑cap tech indexes.
Limited to investors focused on SaaS and growth‑oriented small caps.
Counterpoint
If the market had already priced in the strong performance, the stock could see a short‑term pullback.
Key entities
- companyFreshworks Inc.
US‑listed SaaS provider (NASDAQ: FRSH).
