Freshworks (FRSH) Q1 2026 earnings summary

Executive summary

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

• EX (Employee Experience) business was the primary growth engine, with ARR up 27% year-over-year, and AI integration, especially Freddy AI Copilot, accelerated customer adoption and expansion.

• Over 60% of total ARR now comes from mid-market and enterprise customers, with continued expansion in these segments and strong brand trust across 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 the acquisition of FireHydrant to advance the AI-enabled service operations platform and expand the 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; net cash from operating activities was $62.4 million.

• Ended Q1 with $780 million in cash and investments; cash, cash equivalents, and restricted cash totaled $549.3 million.

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; Q2 guidance is $41 million–$43 million.

• Adjusted free cash flow for 2026 expected to be $265 million, with a margin of 27.5%; per share projected to grow at least 20% annually over the next three years.

• Non-GAAP net income per share guidance: $0.13 for Q2 2026 and $0.61–$0.63 for 2026.