Freshworks (FRSH) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $237.4 million, up 16% year-over-year, with net income of $3.2 million, marking the first GAAP profitable quarter and reversing a prior year loss.

• Non-GAAP operating margin was 24%, and GAAP operating margin improved to 3%.

• EX (Employee Experience) ARR grew 24% constant currency to $567 million, now 59% of total ARR, with strong large deal traction.

• Over 60% of total ARR now comes from mid-market and enterprise customers, with 25,356 customers generating over $5K ARR and 1,746 customers over $100K ARR.

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

Financial highlights

• Total revenue: $237.4 million in Q2 2026, up 16% year-over-year as reported, 15% constant currency.

• Non-GAAP operating income: $55.9 million; GAAP net income: $3.2 million; GAAP EPS: $0.01; non-GAAP EPS: $0.17.

• Adjusted free cash flow: $57.7 million, margin 24%, per share $0.21.

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

• Repurchased up to 24.0 million shares for $204.5 million under the 2026 share repurchase program.

Outlook and guidance

• Q3 2026 revenue expected at $244.5–$245.5 million, up ~14% year-over-year.

• Full-year 2026 revenue guidance: $963.5–$966.5 million, up ~15% year-over-year.

• Non-GAAP income from operations 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.

• Management expects macroeconomic pressures, including inflation and FX volatility, to persist and potentially impact future results.