Freshworks (Nasdaq: FRSH) posts Q1 2026 growth, cuts 11% of staff
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Freshworks Inc. reported first quarter 2026 results and announced a restructuring plan. Revenue was $228.6 million, up 16% from $196.3 million a year earlier, with GAAP operating loss narrowing to $8.1 million and non-GAAP operating income of $41.0 million.
Non-GAAP diluted net income per share was $0.11, down from $0.18, while net cash provided by operating activities rose to $62.4 million and adjusted free cash flow was $55.8 million. The company highlighted strong demand for its Employee Experience platform, landing its first $1 million-plus ARR deal and growing customers above $100,000 in ARR by 29%.
Freshworks also launched a restructuring plan affecting about 500 employees, or 11% of its global workforce, and expects $7–$9 million in related charges in the second quarter of 2026. For full year 2026, it guides revenue to $958–$964 million and non-GAAP income from operations to $207–$215 million.
Positive
- Strong top-line and cash performance: Q1 2026 revenue grew 16% year over year to $228.6 million, while operating cash flow reached $62.4 million and adjusted free cash flow held at $55.8 million, supporting continued investment and resilience.
- Healthy large-customer and ARR trends: Customers contributing more than $100,000 in ARR increased 29% year over year to 1,646, and net dollar retention was 106%, reflecting ongoing expansion within the installed base despite slight quarter-to-quarter variability.
Negative
- Margin compression and restructuring risk: Non-GAAP operating margin declined to 17.9% from 23.6% year over year, and a restructuring affecting about 11% of the workforce with $7–$9 million in expected charges introduces execution risk around productivity and future growth.
Insights
Freshworks pairs solid revenue growth and cash generation with margin pressure and a sizable restructuring.
Freshworks grew Q1 2026 revenue to $228.6M, up 16% year over year, while maintaining an 84.8% GAAP gross margin. However, non-GAAP operating income declined to $41.0M from $46.4M, and non-GAAP operating margin compressed to 17.9% from 23.6%, signaling higher operating spend, particularly in sales and marketing.
Cash generation remained strong, with operating cash flow of $62.4M and adjusted free cash flow of $55.8M. Net dollar retention was 106%, slightly below 108% in Q4 2025 but in line with 105% a year ago, suggesting stable expansion within the customer base. Large-customer metrics were robust, with 1,646 customers above $100,000 in ARR, up 29% year over year.
The restructuring will remove about 11% of the global workforce and is expected to cost $7–$9M in Q2 2026. Management positions this as streamlining operations and increasing AI and automation leverage. Guidance for 2026 calls for revenue of $958–$964M (up 14–15%) and non-GAAP income from operations of $207–$215M, indicating expectations of continued growth with improved profitability over the full year.
Restructuring introduces near-term charges but targets efficiency while preserving strong liquidity.
The plan announced on May 5, 2026 affects roughly 500 employees worldwide and is expected to be substantially complete, including related cash payments, by the end of Q2 2026. Estimated charges of $7–$9M relate mainly to severance, benefits, and associated costs, which will flow through second-quarter results.
Despite a Q1 GAAP net loss of $4.8M, Freshworks ended the quarter with $780.4M in cash, cash equivalents, restricted cash, and marketable securities, providing substantial flexibility to absorb restructuring costs and pursue investment in AI and product initiatives. Operating cash flow margin of 27.3% and adjusted free cash flow margin of 24.4% indicate the core business is generating meaningful cash.
Management links the restructuring to streamlining organizational efforts and product development and increasing AI and automation leverage across the business. Investors may focus on whether these changes help stabilize or expand non-GAAP margins relative to Q1’s 17.9% level over subsequent quarters, consistent with the full-year non-GAAP income from operations outlook of $207–$215M.
8-K Event Classification
3 items: 2.02, 2.05, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 2.05
Costs Associated with Exit or Disposal Activities
Financial
The company committed to an exit plan involving layoffs, facility closures, or restructuring charges.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q1 2026 revenue: $228.6 million
Q1 2026 non-GAAP operating income: $41.0 million
Q1 2026 GAAP net loss per share: $(0.02) per share
+5 more
8 metrics
Q1 2026 revenue
$228.6 million
Up 16% year over year from $196.3 million
Q1 2026 non-GAAP operating income
$41.0 million
Non-GAAP operating margin 17.9% vs. 23.6% in Q1 2025
Q1 2026 GAAP net loss per share
$(0.02) per share
Based on 283.3 million weighted-average shares
Operating cash flow
$62.4 million
Q1 2026 net cash provided by operating activities; 27.3% margin
Adjusted free cash flow
$55.8 million
Q1 2026 adjusted free cash flow; 24.4% margin
Restructuring impact
500 employees; $7–$9 million charges
Affects ~11% of global workforce; expected in Q2 2026
2026 revenue guidance
$958–$964 million
Full year 2026 outlook; 14–15% year-over-year growth
Net dollar retention
106%
Q1 2026 net dollar retention rate; 105% on constant currency basis
Key Terms
adjusted free cash flow, net dollar retention rate, constant currency, non-GAAP operating margin, +1 more
5 terms
adjusted free cash flow financial
"Adjusted free cash flow was 55.8 million, representing an adjusted free cash flow margin of 24.4%"
Adjusted free cash flow is the amount of money a company generates from its operations after accounting for essential expenses and investments, like maintaining or upgrading equipment. It shows how much cash is truly available to grow the business, pay debts, or return to shareholders, helping investors see the company's financial health more clearly.
net dollar retention rate financial
"Net dollar retention rate was 106%, compared to 108% in the fourth quarter of 2025 and 105% in the first quarter of 2025"
Net dollar retention rate measures how much revenue a company keeps from its existing customers over a set period after accounting for additional sales to them, reduced spending, and customers who leave. It matters to investors because it shows whether a company’s customer base is growing in value or shrinking—like checking whether the same garden produces more or fewer fruits over time—which signals the health and sustainability of recurring revenue.
constant currency financial
"16% compared to total revenue of 196.3 million in the first quarter of 2025, and 14% adjusting for constant currency"
Constant currency is a way of measuring financial results that removes the effects of changes in currency exchange rates. It allows for a clearer comparison of a company's performance over time by showing what the numbers would look like if exchange rates had stayed the same. This helps investors understand whether growth comes from actual business improvements or just currency fluctuations.
non-GAAP operating margin financial
"Non-GAAP income from operations was 41.0 million, representing a non-GAAP operating margin of 17.9%"
Non-GAAP operating margin is a way companies show how much profit they make from their main business activities, excluding certain expenses or income they consider unusual or non-recurring. It helps investors see how well the company is performing in its normal operations, without the effects of one-time costs or gains that might distort the picture.
annual recurring revenue financial
"Number of customers contributing more than 100,000 in ARR was 1,646, an increase of 29% year-over-year"
Annual recurring revenue is the predictable amount of money a company expects to earn each year from ongoing customer subscriptions or contracts. It helps businesses understand how much steady income they can count on, much like a subscription service that charges customers every month or year. This figure is important because it shows the company's stability and growth potential.
Earnings Snapshot
Revenue: $228.6 million · Guidance included
Q1 2026
Revenue
$228.6 million
16% year-over-year
GAAP net loss
$4.8 million
vs. $1.3 million loss in Q1 2025
Non-GAAP diluted EPS
$0.11
vs. $0.18 in Q1 2025
Operating cash flow
$62.4 million
vs. $58.0 million in Q1 2025
Guidance
For full year 2026, Freshworks expects revenue of $958–$964 million (14–15% growth) and non-GAAP income from operations of $207–$215 million, with non-GAAP net income per share of $0.61–$0.63.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 5, 2026
(Exact name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices and Zip Code)
(650 ) 513-0514
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 5, 2026, Freshworks Inc. issued a press release announcing its financial results for the first quarter ended March 31, 2026. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The foregoing information (including Exhibit 99.1 hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filings, except as shall be expressly set forth by specific reference in such filing.
Item 2.05 Costs Associated with Exit or Disposal Activities.
On May 5, 2026, the Company announced a restructuring plan (the “Plan”) to streamline the Company’s organizational efforts and product development process, as well as increase leverage of AI and automation across the business.
The Plan is expected to affect approximately 500 employees globally, representing approximately 11% of the Company’s global workforce. In connection with the Plan, the Company currently estimates it will incur a charge of between approximately $7 million and $9 million in the second quarter of 2026, which consists primarily of cash expenditures for severance payments, employee benefits, and related costs. The Company expects that the Plan, including related cash payments, will be substantially complete by the end of the second quarter ending June 30, 2026.
The estimates of expenses that the Company expects to incur in connection with the Plan are subject to a number of assumptions and actual results may differ materially. The Company may also incur additional expenses not currently contemplated due to events that may occur as a result of, or that are associated with, the Plan.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |||||||
| 99.1 | Press Release dated May 5, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Freshworks Inc. | ||||||||
Dated: May 5, 2026 | ||||||||
| By: | /s/ Pamela Sergeeff | |||||||
| Pamela Sergeeff | ||||||||
| Chief Legal Officer and General Counsel | ||||||||
2
Freshworks Reports First Quarter 2026 Results
Exceeded estimates for revenue and non-GAAP operating income
Landed the two largest deals in company's history, including first $1 million-plus ARR deal
San Mateo, Calif. – May 5, 2026 – Freshworks Inc. (Nasdaq: FRSH), the leading provider of uncomplicated software that delivers exceptional employee and customer experiences, today announced financial results for its first quarter ended March 31, 2026.
"Freshworks began Q1 with strong momentum, building on our 2025 successes and achieving our sixth straight quarter of exceeding expectations," stated 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."
First Quarter 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, and 14% adjusting for constant currency.
•GAAP (Loss) from Operations: GAAP (loss) from operations was $(8.1) million, representing an operating margin of (3.5)%, compared to $(10.4) million in the first quarter of 2025, representing an operating margin of (5.3)%.
•Non-GAAP Income from Operations: Non-GAAP income from operations was $41.0 million, representing a non-GAAP operating margin of 17.9%, compared to $46.4 million in the first quarter of 2025, representing a non-GAAP operating margin of 23.6%.
•GAAP Net (Loss) Per Share: GAAP diluted net (loss) per share was $(0.02) based on 283.3 million weighted-average shares outstanding, compared to $0.00 based on 301.3 million weighted-average shares outstanding in the first quarter of 2025.
•Non-GAAP Net Income Per Share: Non-GAAP diluted net income per share was $0.11 based on 284.3 million weighted-average shares outstanding, compared to $0.18 based on 306.0 million weighted-average shares outstanding in the first quarter of 2025.
•Net Cash Provided by Operating Activities: Net cash provided by operating activities was $62.4 million, representing an operating cash flow margin of 27.3%, compared to $58.0 million in the first quarter of 2025, representing an operating cash flow margin of 29.5%.
•Adjusted Free Cash Flow: Adjusted free cash flow was $55.8 million, representing an adjusted free cash flow margin of 24.4%, compared to $55.4 million in the first quarter of 2025, representing an adjusted free cash flow margin of 28.2%.
•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. A description of non-GAAP financial measures is contained in the section titled “Explanation of Non-GAAP Financial Measures” below and a reconciliation of GAAP to non-GAAP financial measures is detailed in the tables below.
First Quarter Operating Metrics and Recent Business Highlights
•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.
•Number of customers contributing more than $50,000 in ARR was 3,938, an increase of 22% year-over-year and 20% adjusting for constant currency.
•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.
•Welcomed and onboarded many new customers to the Freshworks community including Eagle Materials, Everbridge, G4S, Outreach, and University of Connecticut.
•Landed the two largest deals in Freshworks' history, including the first $1 million-plus ARR deal.
•Integrated Device42’s infrastructure discovery and mapping capabilities natively into Freshservice, giving teams a single AI-powered platform to manage assets, services, and operations.
•Unified our global sales organization and appointed Ian Tickle as Chief Revenue Officer.
•Introduced a new leader with Kuntal Vahalia joining as Senior Vice President of Global Channels and Alliances.
Financial Outlook
We are providing estimates for the second quarter and for the full year 2026. We emphasize that these estimates are subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below.
For the second quarter and full year 2026, we currently expect the following results:
| ($ in millions, except per share data) | Second Quarter 2026 | Full Year 2026 | ||||||
Revenue(1) | $232.0 - $235.0 | $958.0 - $964.0 | ||||||
| Year-over-year growth | 13% - 15% | 14% - 15% | ||||||
Non-GAAP income from operations(1) | $41.0 - $43.0 | $207.0 - $215.0 | ||||||
Non-GAAP net income per share(2) | $0.13 | $0.61 - $0.63 | ||||||
(1) Revenue and non-GAAP income from operations are based on exchange rates as of May 1, 2026 for currencies other than USD.
(2) Non-GAAP net income per share was estimated assuming 280 million and 281 million weighted-average shares outstanding for the second quarter and full year 2026, respectively.
These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
We have not reconciled our second quarter and full year 2026 estimates for non-GAAP financial measures, including our estimated non-GAAP income from operations and non-GAAP net income per share, disclosed above, and our estimated non-GAAP tax rate, disclosed below, to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future. Accordingly, a reconciliation is not available without unreasonable effort and we are unable to address the probable significance of the unavailable information. We have provided a reconciliation of other GAAP to non-GAAP financial measures in the financial statement tables for our first quarter 2026 and 2025 non-GAAP results included in this press release.
Webcast and Conference Call Information
We will host a conference call for investors on May 5, 2026 at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss the Company’s financial results and business highlights. Investors are invited to listen to a live audio webcast of the conference call by visiting the investor relations website at ir.freshworks.com. A replay of the audio webcast will be available shortly after the call on the Freshworks Investor Relations website and will be available for twelve months thereafter.
Explanation of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain non-GAAP financial measures, including revenue adjusted for constant currency, non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income per share, non-GAAP net income, adjusted free cash flow, and adjusted free cash flow margin. This press release and the accompanying tables also contain certain other metrics, including annual recurring revenue, net dollar retention rates, revenue growth rates, and related presentation thereof adjusted for constant currency.
We adjust revenue and related growth rates for constant currency to provide a framework for assessing business performance excluding the effect of foreign currency rate fluctuations. To present this information, current period results for currencies other than USD are converted into USD at the average exchange rates in effect during the comparison period (for Q1 2025, the average exchange rates in effect for our major currencies were 1 EUR to 1.05 USD and 1 GBP to 1.26 USD), rather than the actual average exchange rates in effect during the current period (for Q1 2026, the average exchange rates in effect for our major currencies were 1 EUR to 1.17 USD and 1 GBP to 1.35 USD).
We use these non-GAAP measures in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. We believe these non-GAAP measures provide investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of our operating results. We believe these non-GAAP measures are useful in evaluating our operating performance compared to that of other companies in our industry, as they generally eliminate the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance.
Investors, however, are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. The non-GAAP measures we use may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures.
We exclude the following items from one or more of our non-GAAP financial measures:
•Stock-based compensation expense. We exclude stock-based compensation, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this expense provides meaningful supplemental information regarding operational performance. In particular, stock-based compensation expense is not comparable across companies given the variety of valuation methodologies and assumptions.
•Employer payroll taxes on employee stock transactions. We exclude the amount of employer payroll taxes on equity awards from certain of our non-GAAP financial measures because they are dependent on our stock price at the time of vesting or exercise and other factors that are beyond our control and do not believe these expenses have a direct correlation to the operation of our business.
•Amortization of acquired intangibles. We exclude amortization of acquired intangibles, which is a non-cash expense, from certain of our non-GAAP financial measures. Our expenses for amortization of acquired intangibles are inconsistent in amount and frequency because they are significantly affected by the timing, size of acquisitions, and the allocation of purchase price. We exclude these amortization expenses because we do not believe these expenses have a direct correlation to the operation of our business.
•Restructuring charges. We exclude restructuring charges, which primarily consists of employee severance and other employee termination benefits associated with the restructuring plan initiated in November 2024, from our non-GAAP financial measures, because we do not believe these expenses have a direct correlation to the operating performance of our business.
•Acquisition expenses. We exclude acquisition expenses, which primarily consist of legal fees and due diligence costs, from our non-GAAP financial measures because we do not believe these expenses have a direct correlation to the operating performance of our business.
•Income tax effect and adjustments. Starting 2026, we utilize a long-term projected non-GAAP tax rate to compute our non-GAAP income tax provision in order to provide better consistency across interim reporting periods. Our non-GAAP tax rate reflects our estimated long-term effective tax rate based on our anticipated geographic earnings mix and statutory tax regimes. For fiscal year 2026, we determined the projected non-GAAP tax rate to be 24%. The difference between our GAAP income tax provision and our non-GAAP income tax provision is presented as non-GAAP income tax reconciling adjustments. Prior to 2026, we excluded the income tax effect of the above adjustments, income tax effect associated with acquisitions and tax charges or benefits that are a result of a change in valuation allowance on deferred tax assets and its related impacts, from our non-GAAP financial measures. We excluded these costs because we do not believe these expenses have a direct correlation to the operating performance of our business.
We define adjusted free cash flow as net cash provided by operating activities, less purchases of property and equipment, capitalized internal-use software, plus acquisition costs and restructuring charges. We believe that adjusted free cash flow is a useful indicator of liquidity as it measures our ability to generate cash from our core operations after purchases of property and equipment. Adjusted free cash flow is a measure to determine, among other things, cash available for strategic initiatives, including further investments in our business and potential acquisitions of businesses. We define adjusted free cash flow margin as adjusted free cash flow as a percentage of revenue. We believe that adjusted free cash flow margin is a useful indicator of how efficiently we convert revenue into adjusted free cash flow.
Operating Metrics
Number of Customers Contributing More Than $5,000, $50,000 and $100,000 in ARR. We define ARR as the sum total of subscription, software license, and maintenance revenue we would contractually expect to recognize over the next 12 months from all customers at a point in time, assuming no increases, reductions or cancellations in their subscriptions, and assuming that revenues are recognized ratably over the term of subscription and maintenance contracts and upon delivery for software licenses. We define our total customers contributing more than $5,000, $50,000 and $100,000 in ARR as of a particular date as the number of business entities or individuals, represented by a unique domain or a unique email address, with one or more paid subscriptions to one or more of our products that contributed ARR above the applicable threshold.
Net Dollar Retention Rate. To calculate net dollar retention rate as of a given date, we first determine Entering ARR, which is ARR from the population of our customers as of 12 months prior to the end of the reporting period. We then calculate the Ending ARR from the same set of customers as of the end of the reporting period. We then divide the Ending ARR by the Entering ARR to arrive at our net dollar retention rate. Ending ARR includes upsells, cross-sells, renewals and expansion as a result of acquisitions during the measurement period and is net of any contraction or attrition over this period.
We also adjust the above operating metrics, growth rates of customers contributing more than $5,000, $50,000 and $100,000 in ARR and related presentation thereof for constant currency to provide a framework for assessing our business performance excluding the effects of foreign currency rates fluctuations. To present this information, the Ending ARR of the current period in currencies other than USD is converted into USD at the exchange rates in effect at the end of the comparison period (for Q1 2025, the period end exchange rates in effect for our major currencies were 1 EUR to 1.08 USD and 1 GBP to 1.29 USD), rather than the actual exchange rates in effect at the end of the current period (for Q1 2026, the period end exchange rates in effect for our major currencies were 1 EUR to 1.15 USD and 1 GBP to 1.32 USD).
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, our GAAP and non-GAAP estimates for the second quarter and full year 2026, our financial outlook, the value of our products to customers, our expectations regarding demand for and our strategy related to our EX platform, and our overall growth prospects. These forward-looking statements are based on our current expectations, estimates and projections about our business and industry, including our financial outlook and macroeconomic uncertainties, management’s beliefs and certain assumptions made by the company, all of which are subject to change. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, “future,” “believe,” “expect,” “may,” “will,” “intend,” “outlook,” “estimate,” “continue,” “anticipate,” “could,” “would,” “projects,” “plans,” “targets” or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, many of which involve factors or circumstances that are beyond our control, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include our ability to achieve our long-term plans and key initiatives; our ability to sustain or manage any future growth effectively; our ability to attract and retain customers or expand sales to existing customers; delays in product development or deployments or the success of such products; the failure to deliver competitive service offerings and lack of market acceptance of any offerings delivered; the impact to the economy, our customers and our business due to uncertain global economic conditions, including market volatility, foreign exchange rates, and impact of inflation; the timeframes for and severity of the impact of any weakened global economic conditions on our customers’ purchasing and renewal decisions, which may extend the length of our sales cycles or adversely affect our industry; our history of net losses and ability to achieve or sustain profitability, as well as the other potential factors described under “Risk Factors” included in our Annual Report on Form 10-K for the year ended December
31, 2025 as such factors may be updated from time to time in our periodic and other documents of Freshworks Inc. filed with the Securities and Exchange Commission from time to time (available at www.sec.gov).
We caution you not to place undue reliance on forward-looking statements, which speak only as of the date hereof and are based on information available to us at the time the statements are made and/or management’s good faith belief as of that time with respect to future events. We assume no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release, except as required by law.
About Freshworks Inc.
Freshworks Inc. provides service software that delivers exceptional employee and customer experiences. Its enterprise-grade solutions are powerful yet intuitive, and quick to deliver value. With a people-first approach to AI, Freshworks helps teams be more effective and organizations more productive. Companies including Bridgestone, New Balance, S&P Global, and Sony Music trust Freshworks to improve service efficiency and fuel long-term loyalty. For the latest updates, visit freshworks.com and follow Freshworks on LinkedIn, X, and Facebook.
© 2026 Freshworks Inc. All rights reserved. Freshworks and its associated logos are trademarks of Freshworks Inc. All other trademarks are property of their respective owners. Nothing in this press release should be construed to the contrary, or as an approval, endorsement or sponsorship by any third party of Freshworks Inc. or any aspect of this press release.
Investor Relations Contact:
IR@freshworks.com
Media Relations Contact:
PR@freshworks.com
FRESHWORKS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Revenue | $ | 228,633 | $ | 196,273 | |||||||
Cost of revenue(1) | 34,688 | 29,878 | |||||||||
| Gross profit | 193,945 | 166,395 | |||||||||
| Operating expense: | |||||||||||
Research and development(1) | 49,261 | 40,001 | |||||||||
Sales and marketing(1) | 112,317 | 89,158 | |||||||||
General and administrative(1) | 40,427 | 47,247 | |||||||||
Restructuring charges | — | 405 | |||||||||
| Total operating expenses | 202,005 | 176,811 | |||||||||
Loss from operations | (8,060) | (10,416) | |||||||||
Interest and other income, net | 1,426 | 12,969 | |||||||||
Income (loss) before income taxes | (6,634) | 2,553 | |||||||||
Provision for (benefit from) income taxes | (1,824) | 3,857 | |||||||||
Net loss | (4,810) | (1,304) | |||||||||
Net loss per share - basic and diluted | $ | (0.02) | $ | — | |||||||
Weighted-average shares used in computing net loss per share - basic and diluted | 283,336 | 301,280 | |||||||||
______________________
(1) Includes stock-based compensation expense as follows (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cost of revenue | $ | 1,618 | $ | 1,518 | |||||||
| Research and development | 12,301 | 9,213 | |||||||||
| Sales and marketing | 13,000 | 13,409 | |||||||||
General and administrative | 17,002 | 27,524 | |||||||||
| Total stock-based compensation expense, net of amounts capitalized | $ | 43,921 | $ | 51,664 | |||||||
FRESHWORKS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| March 31, 2026 | December 31, 2025 | ||||||||||
| (unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 548,168 | $ | 569,774 | |||||||
| Restricted cash | 1,160 | 62,374 | |||||||||
| Marketable securities | 231,069 | 211,597 | |||||||||
| Accounts receivable, net | 127,338 | 150,817 | |||||||||
| Deferred contract acquisition costs | 30,927 | 29,830 | |||||||||
| Prepaid expenses and other current assets | 68,148 | 72,774 | |||||||||
| Total current assets | 1,006,810 | 1,097,166 | |||||||||
| Property and equipment, net | 44,222 | 38,843 | |||||||||
| Operating lease right-of-use assets | 36,968 | 39,893 | |||||||||
| Deferred contract acquisition costs, noncurrent | 27,712 | 27,179 | |||||||||
| Goodwill | 199,324 | 146,676 | |||||||||
| Intangible assets, net | 96,703 | 76,986 | |||||||||
Deferred tax assets, net | 176,017 | 157,466 | |||||||||
| Other assets | 17,626 | 18,503 | |||||||||
| Total assets | $ | 1,605,382 | $ | 1,602,712 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 18,578 | $ | 11,507 | |||||||
| Accrued liabilities | 109,405 | 101,202 | |||||||||
| Deferred revenue | 392,070 | 385,320 | |||||||||
| Total current liabilities | 520,053 | 498,029 | |||||||||
| Operating lease liabilities, non-current | 29,402 | 33,282 | |||||||||
| Other liabilities | 36,726 | 38,751 | |||||||||
| Total liabilities | 586,181 | 570,062 | |||||||||
| Stockholders' equity: | |||||||||||
| Common stock | 3 | 3 | |||||||||
| Additional paid-in capital | 4,579,812 | 4,586,392 | |||||||||
Accumulated other comprehensive loss | (3,650) | (1,591) | |||||||||
| Accumulated deficit | (3,556,964) | (3,552,154) | |||||||||
| Total stockholders' equity | 1,019,201 | 1,032,650 | |||||||||
| Total liabilities and stockholders' equity | $ | 1,605,382 | $ | 1,602,712 | |||||||
FRESHWORKS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash Flows from Operating Activities: | |||||||||||
Net income (loss) | $ | (4,810) | $ | (1,304) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 7,863 | 6,360 | |||||||||
| Amortization of deferred contract acquisition costs | 8,567 | 7,583 | |||||||||
| Non-cash lease expense | 2,925 | 2,303 | |||||||||
| Stock-based compensation | 43,921 | 51,664 | |||||||||
Discount amortization on marketable securities | (947) | (1,901) | |||||||||
| Deferred income taxes | (5,865) | (459) | |||||||||
| Other | 7,808 | (17) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 24,917 | 10,594 | |||||||||
| Deferred contract acquisition costs | (10,197) | (8,704) | |||||||||
| Prepaid expenses and other assets | (12,564) | (15,317) | |||||||||
| Accounts payable | 6,894 | 526 | |||||||||
| Accrued and other liabilities | (3,442) | (496) | |||||||||
| Deferred revenue | 1,027 | 7,049 | |||||||||
| Operating lease liabilities | (3,708) | 92 | |||||||||
Net cash provided by operating activities | 62,389 | 57,973 | |||||||||
| Cash Flows from Investing Activities: | |||||||||||
| Purchases of property and equipment | (3,901) | (1,296) | |||||||||
| Proceeds from sale of property and equipment | 5 | 38 | |||||||||
| Capitalized internal-use software | (3,379) | (2,772) | |||||||||
| Purchases of marketable securities | (147,421) | (121,933) | |||||||||
| Maturities and redemptions of marketable securities | 129,351 | 172,194 | |||||||||
| Business combination, net of cash acquired | (56,913) | — | |||||||||
Net cash provided by (used in) investing activities | (82,258) | 46,231 | |||||||||
| Cash Flows from Financing Activities: | |||||||||||
| Proceeds from exercise of stock options | — | 48 | |||||||||
| Payment of withholding taxes on net share settlement of equity awards | (7,160) | (16,711) | |||||||||
Repurchase of common stock | (48,369) | (113,610) | |||||||||
| Net cash used in financing activities | (55,529) | (130,273) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (7,521) | — | |||||||||
Net decrease in cash, cash equivalents and restricted cash | (82,919) | (26,069) | |||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 632,250 | 620,405 | |||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 549,331 | $ | 594,336 | |||||||
FRESHWORKS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | Growth Rates | ||||||||||||||||||
| Revenue | ||||||||||||||||||||
| GAAP revenue | $ | 228,633 | $ | 196,273 | 16% | |||||||||||||||
| Effects of foreign currency rate fluctuations | (5,392) | |||||||||||||||||||
| Revenue adjusted for constant currency | $ | 223,241 | $ | 196,273 | 14% | |||||||||||||||
FRESHWORKS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Reconciliation of gross profit and gross margin: | |||||||||||
| GAAP gross profit | $ | 193,945 | $ | 166,395 | |||||||
| Non-GAAP adjustments: | |||||||||||
| Stock-based compensation expense | 1,618 | 1,518 | |||||||||
| Employer payroll taxes on employee stock transactions | 29 | 27 | |||||||||
| Amortization of acquired intangibles | 1,637 | 1,260 | |||||||||
| Non-GAAP gross profit | $ | 197,229 | $ | 169,200 | |||||||
| GAAP gross margin | 84.8 | % | 84.8 | % | |||||||
| Non-GAAP gross margin | 86.3 | % | 86.2 | % | |||||||
| Reconciliation of operating expenses: | |||||||||||
| GAAP research and development | $ | 49,261 | $ | 40,001 | |||||||
| Non-GAAP adjustments: | |||||||||||
| Stock-based compensation expense | (12,301) | (9,213) | |||||||||
| Employer payroll taxes on employee stock transactions | (113) | (152) | |||||||||
| Non-GAAP research and development | $ | 36,847 | $ | 30,636 | |||||||
| GAAP research and development as percentage of revenue | 21.5 | % | 20.4 | % | |||||||
| Non-GAAP research and development as percentage of revenue | 16.1 | % | 15.6 | % | |||||||
| GAAP sales and marketing | $ | 112,317 | $ | 89,158 | |||||||
| Non-GAAP adjustments: | |||||||||||
| Stock-based compensation expense | (13,000) | (13,409) | |||||||||
| Employer payroll taxes on employee stock transactions | (390) | (562) | |||||||||
| Amortization of acquired intangibles | (2,546) | (2,254) | |||||||||
| Non-GAAP sales and marketing | $ | 96,381 | $ | 72,933 | |||||||
| GAAP sales and marketing as percentage of revenue | 49.1 | % | 45.4 | % | |||||||
| Non-GAAP sales and marketing as percentage of revenue | 42.2 | % | 37.2 | % | |||||||
| GAAP general and administrative | $ | 40,427 | $ | 47,247 | |||||||
| Non-GAAP adjustments: | |||||||||||
| Stock-based compensation expense | (17,002) | (27,524) | |||||||||
| Employer payroll taxes on employee stock transactions | (225) | (458) | |||||||||
| Acquisition expense | (155) | — | |||||||||
| Non-GAAP general and administrative | $ | 23,045 | $ | 19,265 | |||||||
| GAAP general and administrative as percentage of revenue | 17.7 | % | 24.1 | % | |||||||
| Non-GAAP general and administrative as percentage of revenue | 10.1 | % | 9.8 | % | |||||||
FRESHWORKS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Reconciliation of operating loss and operating margin: | |||||||||||
| GAAP income (loss) from operations | $ | (8,060) | $ | (10,416) | |||||||
| Non-GAAP adjustments: | |||||||||||
| Stock-based compensation expense | 43,921 | 51,664 | |||||||||
| Employer payroll taxes on employee stock transactions | 757 | 1,199 | |||||||||
| Amortization of acquired intangibles | 4,183 | 3,514 | |||||||||
Restructuring charges | — | 405 | |||||||||
| Acquisition expense | 155 | — | |||||||||
Non-GAAP income from operations | 40,956 | 46,366 | |||||||||
| GAAP operating margin | (3.5) | % | (5.3) | % | |||||||
| Non-GAAP operating margin | 17.9 | % | 23.6 | % | |||||||
Reconciliation of net loss: | |||||||||||
GAAP net (loss) | $ | (4,810) | $ | (1,304) | |||||||
| Non-GAAP adjustments: | |||||||||||
| Stock-based compensation expense | 43,921 | 51,664 | |||||||||
| Employer payroll taxes on employee stock transactions | 757 | 1,199 | |||||||||
| Amortization of acquired intangibles | 4,183 | 3,514 | |||||||||
Restructuring charges | — | 405 | |||||||||
| Acquisition expense | 155 | — | |||||||||
Income tax adjustments | (11,996) | 410 | |||||||||
Non-GAAP net income | $ | 32,210 | $ | 55,888 | |||||||
Reconciliation of net loss per share - diluted: | |||||||||||
GAAP net loss per share - diluted | $ | (0.02) | $ | — | |||||||
| Non-GAAP adjustments: | |||||||||||
| Stock-based compensation expense | 0.16 | 0.17 | |||||||||
| Amortization of acquired intangibles | 0.01 | 0.01 | |||||||||
Income tax adjustments | (0.04) | — | |||||||||
Non-GAAP net income per share - diluted | $ | 0.11 | $ | 0.18 | |||||||
Weighted-average shares used in computing GAAP net (loss) per share - diluted | 283,336 | 301,280 | |||||||||
Weighted-average shares used in computing non-GAAP net income per share - diluted (1) | 284,337 | 305,963 | |||||||||
FRESHWORKS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Computation of adjusted free cash flow: | |||||||||||
Net cash provided by operating activities | $ | 62,389 | $ | 57,973 | |||||||
| Less: | |||||||||||
| Purchases of property and equipment | (3,901) | (1,296) | |||||||||
| Capitalized internal-use software | (3,379) | (2,772) | |||||||||
Add: | |||||||||||
Acquisition costs paid | 719 | — | |||||||||
Restructuring costs paid | — | 1,493 | |||||||||
Adjusted free cash flow | $ | 55,828 | $ | 55,398 | |||||||
Operating cash flow margin | 27.3 | % | 29.5 | % | |||||||
Adjusted free cash flow margin | 24.4 | % | 28.2 | % | |||||||
Net cash provided by (used in) investing activities | $ | (82,258) | $ | 46,231 | |||||||
| Net cash used in financing activities | $ | (55,529) | $ | (130,273) | |||||||
(1) Diluted net income (loss) per share attributable to common stockholders is determined by giving effect to all potential common equivalents during the reporting period, unless including them yields an antidilutive result. The company considers its stock options and RSUs as potential common stock equivalents but excluded them from the computation of GAAP diluted net loss per share attributable to common stockholders, as their effect was antidilutive. For the three months ended March 31, 2026 and 2025, potentially dilutive shares of 1.0 million and 4.7 million shares, respectively, were included in the weighted average shares used in computing non-GAAP diluted net income per share.
FAQ
How did Freshworks (FRSH) perform financially in Q1 2026?
Freshworks reported Q1 2026 revenue of $228.6 million, up 16% year over year, with GAAP operating loss of $8.1 million. Non-GAAP income from operations was $41.0 million and non-GAAP diluted net income per share was $0.11, reflecting solid growth but lower margins.
What restructuring did Freshworks (FRSH) announce in May 2026?
Freshworks announced a restructuring plan affecting about 500 employees, or roughly 11% of its global workforce. The company expects $7–$9 million in charges in Q2 2026, mainly for severance and related benefits, and aims to substantially complete the plan by June 30, 2026.
What guidance did Freshworks (FRSH) give for full year 2026?
For full year 2026, Freshworks expects revenue between $958 million and $964 million, implying 14–15% year-over-year growth. It also forecasts non-GAAP income from operations of $207–$215 million and non-GAAP net income per share between $0.61 and $0.63.
How strong is Freshworks’ (FRSH) cash position after Q1 2026?
At March 31, 2026, Freshworks held $780.4 million in cash, cash equivalents, restricted cash and marketable securities. Q1 net cash provided by operating activities was $62.4 million, and adjusted free cash flow was $55.8 million, indicating robust liquidity to fund operations and restructuring.
What do Freshworks’ (FRSH) customer and ARR metrics show for Q1 2026?
Freshworks had 1,646 customers contributing more than $100,000 in ARR, up 29% year over year, and 3,938 customers above $50,000 in ARR. Net dollar retention was 106%, indicating ongoing expansion from existing customers, even as the metric fluctuated modestly versus recent quarters.
How did Freshworks’ (FRSH) profitability metrics change in Q1 2026?
GAAP operating margin improved to (3.5)% from (5.3)% a year earlier, while non-GAAP operating margin declined to 17.9% from 23.6%. GAAP diluted net loss per share was $(0.02), and non-GAAP diluted net income per share decreased to $0.11 from $0.18.