Freshworks (FRSH) investor relations material

Executive summary

• Q2 2026 revenue reached $237.4 million, up 16% year-over-year, with GAAP net income of $3.2 million, marking the first GAAP profitable quarter and eighth consecutive quarter meeting the Rule of 40.

• Non-GAAP operating margin was 24%, and non-GAAP operating income was $55.9 million.

• EX (Employee Experience) ARR grew 24% to $567 million, now 59% of total ARR; CX (Customer Experience) ARR grew 4% to $400 million.

• AI monetization advanced, with over 7,000 customers paying for AI SKUs and Copilot attach rates above 70% on large deals.

• Large customer momentum: $100K+ ARR customers up 25% year-over-year to 1,746, now 40% of total ARR.

Financial highlights

• Total revenue: $237.4 million in Q2 2026, up 16% year-over-year; non-GAAP gross margin 86%, GAAP gross margin 85%.

• Non-GAAP operating income $55.9 million; GAAP operating income $6.1 million (2.6% margin).

• GAAP net income $3.2 million; GAAP EPS $0.01, non-GAAP EPS $0.17.

• Adjusted free cash flow $57.7 million (24% margin); net cash from operating activities $58.5 million.

• Cash, cash equivalents, and marketable securities totaled $665.3 million as of June 30, 2026.

Outlook and guidance

• Q3 2026 revenue expected at $244.5–$245.5 million (~14% YoY growth); full-year 2026 revenue guidance: $963.5–$966.5 million (~15% YoY growth).

• Non-GAAP operating income for 2026: $222–$228 million; non-GAAP EPS $0.66–$0.68.

• Adjusted free cash flow target for 2026: $265 million, margin 27.5%, per share $0.94.

• EX ARR expected to grow in the mid-20s percent and exceed $600 million by year-end 2026.

• Management expects macroeconomic pressures, including inflation and FX volatility, to persist.