Freshworks reported a consolidated net profit of $18.3 Mn in Q3 2026 against a $4.7 Mn loss a year earlier, while revenue increased 14% to $245.4 Mn
Higher revenue and lower operating expenses helped Freshworks sustain GAAP profitability, while its push towards larger customers gained traction
Freshworks crossed $1 Bn in annual recurring revenue after the quarter ended, ahead of its year-end target
Nasdaq-listed SaaS company Freshworks
swung to a consolidated net profit of $18.3 Mn in the third quarter of 2026 (Q3 2026) from a $4.7 Mn loss a year earlier, helped by higher revenue and lower operating expenses.
Revenue rose 14% to $245.4 Mn from $215.1 Mn in the corresponding quarter last year.
Sequentially, revenue increased 3.4% from $237.4 Mn, while net profit rose from $3.2 Mn.
The company’s operating expenses declined 4.4% to $181.2 Mn from $189.6 Mn. General and administrative expenses fell to $38.2 Mn from $47.1 Mn, while stock-based compensation dropped to $38.8 Mn from $48.5 Mn.
CEO Dennis Woodside said Freshworks’ strategy of targeting larger customers supported its quarterly performance. New deals involving multiple employee experience products increased more than 35%, while partners participated in more than half of its new business, he said.
The number of customers contributing over $100,000 in annual recurring revenue (ARR) increased 25% to 1,821. Customers generating more than $50,000 in ARR grew 18% to 4,257.
Freshworks also crossed $1 Bn in ARR after the quarter ended, ahead of its earlier year-end target.
However, its net dollar retention (NDR) rate remained unchanged sequentially at 104%, down from 105% a year earlier. NDR measures changes in revenue from existing customers, accounting for upgrades, cross-sells, renewals, and customer churn.
New customers during the quarter included Tata Technologies, Texas Christian University, Unilabs (UK), and Jose Cuervo.
Freshworks has been increasingly positioning itself as an AI-powered service operations platform spanning customer experience, employee experience, and IT service management.
For the fourth quarter of 2026, Freshworks expects revenue of $253.5 Mn and $254.5 Mn, representing approximately 14% growth.
It forecast full-year revenue of $965 Mn-$966 Mn implying about 15% growth. This narrows its earlier guidance of $963.5 Mn-$966.5 Mn.
Founded in 2010 by Girish Mathrubootham and Shan Krishnasamy, Freshworks offers cloud-based software for customer support, sales automation, and IT service management. It became the first Indian SaaS company to list on Nasdaq in September 2021.
Under Woodside, who succeeded Mathrubootham as CEO in 2024, the company has sharpened its focus on AI-led enterprise software.
In May 2026, Freshworks announced plans to cut approximately 500 jobs, or 11% of its workforce, to realign operations around its growth priorities and accelerate its AI push.
It has also expanded through acquisitions, buying IT incident management platform FireHydrant for $88.7 Mn in cash in January to strengthen its IT service and operations portfolio.
More recently, Freshworks acquired Israel-based AI startup Robusta Dev for an undisclosed amount. It plans to integrate Robusta’s AI-powered outage investigation and corrective recommendations into Freshservice, complementing FireHydrant’s incident response tools.
Source: Inc42
