Freshworks Reports $228.6 Million Revenue in Q1 2026, Net Loss Increases to $4.8 Million

Freshworks Inc. reported a revenue of $228.6 million for the first quarter of 2026, marking a 16% increase from $196.3 million in the same period last year. The company experienced a net loss of $4.8 million, compared to a loss of $1.3 million in the prior year. The increase in revenue was attributed to both existing customers and new customer acquisitions, with approximately $14.2 million coming from existing customers and $18.2 million from new customers. The gross profit for the quarter was $193.9 million, maintaining a gross margin of 85%.

Operating expenses rose to $202 million, up from $176.8 million in the previous year, driven primarily by increased personnel costs in research and development, sales and marketing, and general administrative expenses. Research and development expenses increased by 23% to $49.3 million, while sales and marketing expenses grew by 26% to $112.3 million. General and administrative expenses decreased by 14% to $40.4 million, largely due to a reduction in stock-based compensation following the departure of the former Executive Chairman.

In January 2026, Freshworks completed the acquisition of FireHydrant, Inc. for $88.7 million, which is expected to enhance its IT service and operations portfolio. The acquisition has been integrated into Freshworks' financial results since the acquisition date. As of March 31, 2026, the company reported a total of 25,088 customers contributing more than $5,000 in annual recurring revenue (ARR), an 8% increase from the previous year. The net dollar retention rate improved to 106%, up from 105% in the prior year.

Freshworks' cash and cash equivalents stood at $548.2 million, with marketable securities totaling $231.1 million. The company generated $62.4 million in cash from operating activities during the quarter. However, it reported a net cash outflow of $82.3 million from investing activities, primarily due to the acquisition of FireHydrant and purchases of marketable securities. The company also initiated a share repurchase program in February 2026, authorizing the repurchase of up to $400 million of its Class A common stock, with $45.4 million spent on repurchases in the first quarter.

Looking ahead, Freshworks anticipates continued growth despite macroeconomic uncertainties, including inflation and foreign currency fluctuations. The company plans to focus on expanding its customer base and enhancing product offerings, while also managing costs effectively. The outlook remains cautious, with expectations that the current economic conditions may impact future revenue growth and operational performance.