Freshworks Reports Impressive Revenue Growth in Q3 CY26
Freshworks has showcased significant revenue growth, achieving a solid 14% increase, reaching $245.4 million in Q3 CY26, compared to $215.1 million in the same quarter last year. This Nasdaq-listed SaaS entity has also become profitable, declaring a net profit of $18.3 million, an impressive turnaround from a net loss of $4.7 million in Q3 CY25.
The company’s gross profit saw a rise of 15%, amounting to $209.4 million during the quarter, up from $182.2 million in the preceding year. Additionally, its gross margin improved to 85.3%, a rise from 84.7%.
Operational Performance of Freshworks
On the operational side, Freshworks reported an operating profit of $28.2 million, reversing an operating loss of $7.5 million from Q3 CY25. The operational margin stood at 11.5%, a notable recovery from a negative margin of 3.5% recorded in the same quarter last year. Furthermore, the company’s non-GAAP operating income soared by 62%, reaching $73.2 million, while its non-GAAP operating margin expanded to 29.8%, up from 21%.
Expenditure Analysis
In terms of expenses, Freshworks observed a decline in sales and marketing expenses, which decreased by 2.5% to $98.5 million. Meanwhile, research and development expenses rose by 7.8% to $44.7 million, while general and administrative expenses saw a significant drop of 19%, culminating at $38.2 million. As a result, total operating expenses experienced a reduction of 4.4%, dropping to $181.2 million from $189.6 million in Q3 CY25.
Cash Flow and Financial Position
During the quarter, Freshworks generated $77.7 million in cash from operating activities, a substantial increase from $63.5 million in the year-ago period. Adjusted free cash flow rose by 29% to $73.9 million, with the margin improving to 30.1% from 26.6%. The company reported that it held cash, cash equivalents, restricted cash, and marketable securities valued at $697.3 million as of September 30, 2026.
Moreover, Freshworks has surpassed the milestone of $1 billion in annual recurring revenue (ARR) following the close of the third quarter, achieving this ahead of its projected year-end estimates. The number of customers contributing more than $100,000 in ARR increased by 25% year-on-year, reaching 1,821, while the net dollar retention rate stood at an impressive 104%.
Future Projections for Freshworks
Looking towards Q4 CY26, Freshworks anticipates revenue in the range of $253.5 million to $254.5 million. For the complete calendar year of 2026, the company estimates revenues between $965 million and $966 million, indicating an approximate annual growth rate of 15%.