Results · Enterprise Software & IT
Freshworks posts Q2 profit, lifts guidance
By Startup Enthusiast ·
- Date
- Company
- Freshworks
- What it does
- Cloud software for customer engagement
- Kind
- Results
- Founded
- 2010
- Sector
- Enterprise Software & IT
What they do
Freshworks provides cloud-based software for customer engagement, sales, IT service management, and marketing
What happened
The company posted a net profit of $3.2 million in Q2 CY26 with revenue growing 16% year-over-year
Why it matters
Management raised full-year revenue guidance to $963.5-$966.5 million following strong expansion ARR growth
The details
- Freshworks reported a net profit of $3.2 million for the second quarter of calendar year 2026.
- This result marks a significant turnaround from a $1.7 million loss in the same period last year.
- Revenue reached $237.4 million, representing a 16% increase compared to the prior year.
- Operating expenses remained relatively flat year-over-year at $204.6 million during the quarter.
- Non-GAAP operating income rose 25% to $55.9 million with margins improving to 23.6%.
- CEO Dennis Woodside noted the seventh consecutive quarter of beating revenue expectations.
- The company achieved its eighth straight quarter meeting the Rule of 40 benchmark.
- Full-year revenue guidance was raised to $963.5 million - $966.5 million from previous estimates.
The bigger picture
- Profitability returned after a period of losses driven by operational restructuring efforts.
- Strong enterprise adoption of AI tools is driving higher expansion revenue.
- Recent layoffs aimed to simplify operations and reallocate resources toward artificial intelligence.
About the business
- Freshworks offers cloud-based software solutions for customer engagement and support.
- The platform includes tools for sales automation and IT service management.
- Marketing capabilities are integrated into the suite for broader customer outreach.
- North America accounts for 47% of total revenue generation.
- EMEA contributes 39% while Asia-Pacific makes up 11% of the mix.
- Expansion ARR grew 24% year-over-year indicating strong upselling success.
- Freddy AI Copilot is attached to over 71% of new enterprise deals.
- Clients with over $100k ARR increased by 25% to 1,746 customers.
- Net dollar retention stood at 104% despite a slight decline from previous quarters.
What happens next
- Expect Q3 CY26 revenue between $244.5 million and $245.5 million.
- Target non-GAAP operating income of $59 million to $61 million for Q3.
- Continue reallocating investment toward AI and employee experience initiatives.
- Focus on simplifying operations and reducing management layers globally.
Founders
- Girish Mathrubootham, Co-founder
- Shanmugam Krishnasamy, Co-founder
Other articles talking about it
More on Freshworks
- Freshworks appoints Ryan Manning as CPTO29 July 2026 · People
- Freshworks lays off 500 staff citing AI productivity20 May 2026 · Analysis · around 500 employees
- Freshworks cuts 500 staff and posts Q1 results6 May 2026 · Layoffs · $8 Mn
- Freshworks reports Q4 revenue of $223M, up 15%11 February 2026 · Results
- Freshworks raises full year revenue guidance to $836 million16 January 2026 · Results
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