Freshworks Stock Earnings Reports

Freshworks reported a strong start to FY2026 with revenue of $228.6M, up 16% year-over-year (14% constant currency), and exceeded internal expectations on revenue, operating margin and free cash flow. Key growth drivers were Employee Experience (EX) and AI: EX ARR grew 27% YoY to over $540M (25% cc), with the company signing its two largest-ever deals in the quarter (including its first 7-figure EX ARR deal). CX ARR grew 6% YoY to ~$395M as Freshdesk Omni migrations progress (new Omni customers show ~2.5x higher ARPA). Freddy AI Copilot is scaling rapidly (customer growth >80% YoY and >65% attach rate on new deals >$30k ARR); EX AI penetration surpassed 20% and ~1/3 of new EX customers had Copilot attached. Financial / capital highlights: non-GAAP operating margin was ~18% (beat), non-GAAP gross margin ~86.3%, Q1 free cash flow $55.8M (24% margin), adjusted free cash flow per share $0.20 (+8% YoY). Net dollar retention was 106% overall and 111% for EX. Management announced an ~11% workforce reduction with ~$8M one-time restructuring charges (mostly in Q2) to reallocate resources toward EX and embed AI/automation. The Board authorized a $400M share repurchase program; Q1 buybacks reduced shares outstanding by ~2%. FY2026 guidance: revenue $958M–$964M (+14%–15% YoY), non-GAAP operating income $207M–$215M, and adjusted free cash flow per share of $0.94 (up ~24% YoY). Management reiterated a long-term goal to compound adjusted free cash flow per share by at least 20% annually over the next three years and emphasized the strategy to grow mid‑market/enterprise EX while operating CX more profitably.