Freshworks Reports 16% Revenue Growth to $237.4 Million in Q2 2026

Freshworks Inc. reported its financial results for the second quarter of 2026, revealing a revenue of $237.4 million, a 16% increase from $204.7 million in the same period last year. For the first half of 2026, the company generated $466.0 million in revenue, up from $401.0 million in the first half of 2025. The growth in revenue was attributed to both existing customers and new customer acquisitions, with approximately $16.0 million coming from existing customers and $16.7 million from new customers in the second quarter alone. The company also achieved a net income of $3.2 million for the quarter, a significant turnaround from a net loss of $1.7 million in the prior year.

In terms of operational metrics, Freshworks reported a net dollar retention rate of 104% as of June 30, 2026, down from 106% a year earlier. The number of customers contributing more than $5,000 in annual recurring revenue (ARR) increased by 6% to 25,356. The company’s total ARR from these customers represented 92% of its total ARR, indicating a strong reliance on larger clients. The company’s employee headcount was impacted by a restructuring plan initiated in May 2026, which resulted in a reduction of personnel-related costs.

Freshworks also made strategic moves during the quarter, including the acquisition of FireHydrant, Inc. for $88.7 million, aimed at enhancing its IT service and operations portfolio. This acquisition is expected to contribute positively to the company’s offerings in incident management software. The company incurred restructuring charges of $7.0 million during the quarter, primarily related to employee severance and benefits, as part of its efforts to streamline operations and leverage AI technologies.

The company’s cash and cash equivalents stood at $494.7 million as of June 30, 2026, down from $569.8 million at the end of 2025. Freshworks reported net cash provided by operating activities of $120.9 million for the first half of 2026, reflecting a slight increase from $116.6 million in the same period last year. However, net cash used in financing activities was $221.3 million, primarily due to share repurchases under its ongoing buyback program, which has a remaining authorization of $195.5 million.

Looking ahead, Freshworks anticipates continued growth despite macroeconomic uncertainties, including inflation and foreign currency fluctuations. The company remains focused on expanding its customer base and enhancing product offerings, while managing costs effectively. The outlook for the remainder of 2026 suggests that Freshworks will continue to invest in its growth initiatives, including research and development, to maintain its competitive position in the market.