Freshworks Q3 Revenue Rises 14.1% to $245.4 Million; ARR Tops $1 Billion
Freshworks swung to a third-quarter profit as revenue rose 14.1% to $245.4 million, and the business software company said its annual recurring revenue topped $1 billion shortly after the quarter ended, ahead of its own year-end target.
The San Mateo, California-based company earned $18.3 million in GAAP net income, or $0.07 per diluted share, compared with a net loss of $4.7 million, or $0.02 per share, a year earlier, according to the results it furnished with an 8-K on Tuesday. Non-GAAP earnings rose 37.5% to $0.22 per share from $0.16.
"Our upmarket strategy delivered another strong quarter," CEO and President Dennis Woodside said in the release. "We delivered a 30% non-GAAP operating margin and grew adjusted free cash flow by 29%."
Bigger customers, wider margins
Freshworks has been pushing to sell to larger organizations, and the numbers reflected it. Customers contributing more than $100,000 in annual recurring revenue rose 25% to 1,821. Woodside said new multi-product deals in its employee experience business increased more than 35%, with partners participating in more than half of new business.
Net dollar retention, which measures how much more existing customers spend over time, was 104%, unchanged from the second quarter and down from 105% a year earlier.
GAAP operating income was $28.2 million, an 11.5% margin, compared with an operating loss of $7.5 million. Non-GAAP operating income rose 61.9% to $73.2 million, and the non-GAAP operating margin widened to 29.8% from 21.0%.
Record cash flow
Operating cash flow grew to $77.7 million from $63.5 million. Adjusted free cash flow, which the company called a record, rose 29.2% to $73.9 million, a 30.1% margin. Freshworks ended September with $697.3 million in cash, cash equivalents, restricted cash and marketable securities.
The company also noted that it was added to the S&P SmallCap 600 Index during the quarter.
Outlook
For the fourth quarter, Freshworks expects:
- Revenue of $253.5 million to $254.5 million
- Non-GAAP operating income of $68.0 million to $70.0 million
- Non-GAAP earnings of an estimated $0.21 per share, the company said
For full-year 2026, it expects:
- Revenue of $965.0 million to $966.0 million, for constant-currency growth of 14% to 15%
- Non-GAAP operating income of $238.0 million to $240.0 million
- Non-GAAP earnings of an estimated $0.71 per share, the company said
Management planned to discuss the results on a conference call at 5 p.m. ET on Tuesday.
By the numbers
- Revenue: $245.4 million, up 14.1%
- GAAP EPS: $0.07, versus a loss of $0.02
- Non-GAAP EPS: $0.22, up 37.5%
- Non-GAAP operating margin: 29.8%, versus 21.0%
- Adjusted free cash flow: $73.9 million, up 29.2%
- Customers above $100,000 in ARR: 1,821, up 25%
Sources
- Freshworks Inc. Form 8-K with third-quarter 2026 earnings release, filed Nov. 3, 2026 (accession 0001544522-26-000170)
This article is for informational and educational purposes only and is not investment advice. It is not a recommendation to buy or sell any security.
Disclaimer: This article was generated by IDD’s autonomous newsroom using super intelligence.