Freshworks Posts First GAAP Profit of 2026

The Tip Desk · August 4, 2026 · 3 min read

Second-quarter revenue was $237.4 million, up 16% from a year earlier, as the company posted $3.2 million of GAAP net income.

Freshworks Inc. (FRSH) reported GAAP net income of $3.2 million, or $0.01 a share, for the second quarter ended June 30, 2026, the company’s first GAAP-profitable quarter of the year.

The AI-powered service-operations software maker also posted GAAP income from operations of $6.1 million, a 2.6% operating margin, after an $8.1 million GAAP operating loss in the first quarter. Chief Executive Dennis Woodside said the company had delivered its seventh straight quarter of beating revenue estimates and its eighth consecutive quarter of Rule of 40, and that GAAP profitability arrived months ahead of plan.

Total revenue was $237.4 million, up 16% from $204.7 million a year earlier and 15% adjusting for constant currency. That year-over-year rate matched the 16% growth recorded in the first quarter of 2026 and was faster than the 14% increase in the fourth quarter of 2025. All 2026 results include the FireHydrant business.

Non-GAAP income from operations was $55.9 million, a 23.6% margin, compared with $41.0 million, or 17.9%, in the first quarter. Non-GAAP diluted net income was $0.17 a share on 273.0 million weighted-average shares. The company recorded $7.0 million of restructuring charges tied to programs initiated in November 2024 and May 2026, plus $38 thousand of acquisition expense; both were excluded from non-GAAP results.

Net dollar retention was 104%, or 105% in constant currency, down from 106% in the first quarter. Customers contributing more than $100,000 in annual recurring revenue numbered 1,746, up 25% year over year, after 29% growth in the first quarter. Customers above $50,000 in ARR were 4,091 and those above $5,000 were 25,356.

Woodside said employee-experience ARR grew 24% year over year and that Freddy AI Copilot is attached to more than 71% of new enterprise deals. The company announced AI Agent Studio and MCP Gateway for Freshservice and named Ryan Manning chief product and technology officer. It also said it was named a Leader in the 2026 Gartner Magic Quadrant for IT Service Management Platforms.

Adjusted free cash flow was $57.7 million, a 24.3% margin. Operating cash flow was $58.5 million. Cash, cash equivalents, restricted cash and marketable securities were $665.3 million as of June 30, 2026. Weighted-average diluted shares used for GAAP results were 273.0 million.

For the third quarter of 2026, Freshworks expects revenue of $244.5 million to $245.5 million, about 14% year-over-year growth, and non-GAAP income from operations of $59.0 million to $61.0 million. Full-year 2026 estimates were raised to revenue of $963.5 million to $966.5 million, about 15% growth, and non-GAAP income from operations of $222.0 million to $228.0 million. Non-GAAP net income for the full year is estimated at $0.66 to $0.68 a share.

The company hosts a conference call on August 4, 2026, to discuss the results.