Freshworks posts third-quarter revenue of $245.4 million
Key Facts
Freshworks reported results on November 3 for the third quarter ended September 30, posting revenue of $245.4 million, up 14% from the same period in 2025, according to the company’s statement published via GlobeNewswire. Growth was also 14% after adjusting for the impact of foreign exchange. GAAP net income was $18.3 million, while diluted earnings per share reached $0.07. Non-GAAP operating income was $73.2 million, with an operating margin of 29.8%. The company’s previous guidance had put quarterly revenue between $244.5 million and $245.5 million, and non-GAAP operating income between $59 million and $61 million.
Compared with the second quarter, revenue growth slowed, as the company had then reported $237.4 million, up 16% year over year, according to its results published for that quarter. Second-quarter net income was $3.2 million, marking the first quarter in which the company recorded GAAP profitability during 2026. In the third quarter, revenue rose from $215.1 million in the same period a year earlier. Reported year-over-year growth was 14%, as was growth after adjusting for foreign exchange. Revenue exceeded the midpoint of the company’s previous quarterly guidance range, while non-GAAP operating income came in above its prior range.
On liquidity, adjusted free cash flow was $73.9 million in the third quarter, compared with $57.2 million in the same period of 2025. Its margin rose to 30.1% from 26.6% a year earlier. Chief Executive Dennis Woodside said the company achieved a 30% non-GAAP operating margin and that adjusted free cash flow grew 29%. Woodside explained that the results reflected its strategy of expanding toward larger customers. The cash flow figures show year-over-year improvement in both value and margin, alongside the operating profitability the company recorded during the quarter.
Net dollar retention remained at 104%, matching its level in the second quarter of 2026 but below the 105% recorded in the third quarter of 2025. The rate adjusted for foreign exchange was 105% during the quarter. Meanwhile, the number of customers with more than $100,000 in annual recurring revenue reached 1,821, up 25% year over year. The company said new multi-product employee experience deals increased by more than 35%. It added that partners were involved in more than half of new business, signaling that its large-customer base and sales channels were expanding in parallel with a stable retention rate.
Freshworks said it surpassed $1 billion in annual recurring revenue after the end of the third quarter, ahead of its previous estimate of reaching that level by year-end. In its new guidance, it put fourth-quarter revenue between $252 million and $256 million, and fiscal 2026 revenue between $970.5 million and $974.5 million. Its guidance published with second-quarter results had put full-year revenue between $963.5 million and $966.5 million. Its previous third-quarter range was $244.5 million to $245.5 million, and the company reported revenue within that range. On October 12, it announced a definitive agreement to acquire Tori to expand Freshservice into software management and AI financial governance, with the deal expected to close in the fourth fiscal quarter of 2026, subject to customary closing conditions.
In trading before the results announcement, Freshworks shares closed at $14.21 on November 2, according to EL7 data. EL7 data showed a close of $15.38 on October 28. The cited close was in the session before the company announced its results after the market closed on November 3. The company scheduled a live webcast to discuss the results for 5 p.m. Eastern Time on the day of the announcement. The previous close provides a time frame for the stock ahead of the figures and does not represent trading after the results were published.