Freshworks (FRSH) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered 16% year-over-year revenue growth to $228.6 million, exceeding expectations in revenue, profitability, and free cash flow, with strong momentum from 2025 and record large deals, including the first $1 million-plus ARR deal.

• Achieved Rule of 40, with EX (Employee Experience) business as the primary growth engine, EX ARR up 27% year-over-year, and AI adoption accelerating, including Freddy AI Copilot customer growth exceeding 80% year-over-year.

• Over 60% of total ARR now comes from mid-market and enterprise customers, with strong brand trust and global reach in over 170 countries.

• Announced workforce restructuring in Q2 to consolidate go-to-market efforts, streamline product development, and leverage AI and automation, reducing global headcount by 11%.

• Completed acquisition of FireHydrant, expanding the AI-enabled IT service portfolio.

Financial highlights

• Q1 2026 revenue reached $228.6 million, up 16% year-over-year as reported, or 14% on a constant currency basis.

• Non-GAAP operating income was $41 million (18% margin), while GAAP operating loss narrowed to $8.1 million from $10.4 million a year ago.

• Free cash flow was $55.8 million (24% margin), with adjusted free cash flow per share at $0.20, up 8% year-over-year.

• Calculated billings were $235 million, up 16% year-over-year; ended Q1 with $780 million in cash and investments.

• Net loss was $4.8 million, compared to $1.3 million in Q1 2025.

Outlook and guidance

• Q2 2026 revenue expected between $232 million and $235 million, up 13%-15% year-over-year.

• Full year 2026 revenue guidance is $958 million-$964 million, up 14%-15% year-over-year.

• Non-GAAP income from operations for 2026 projected at $207 million-$215 million; adjusted free cash flow for 2026 expected to be $265 million, with a margin of 27.5%.

• Adjusted free cash flow per share outlook for 2026 is $0.94, up 24% from 2025; non-GAAP net income per share guidance: $0.13 for Q2 2026 and $0.61–$0.63 for 2026.

• Management expects existing liquidity to cover working capital and capital expenditures for at least the next 12 months.