Nasdaq-listed SaaS company Freshworks has reported strong financial performance for the 3rd quarter ended September 30, 2026, supported by growing demand for its employee experience (EX) platform and AI-powered offerings. Revenue increased 14% year-on-year (YoY) to $245.4 million, compared with $215.1 million in the corresponding quarter last year.
The company also crossed $1 billion in annual recurring revenue (ARR) after the end of Q3, achieving the milestone earlier than its previous target of December 2026.
Freshworks reported GAAP net income of $18.3 million for the quarter, compared with a net loss of $4.7 million in Q3 2025. In the previous quarter, the company had recorded GAAP net income of $3.2 million, marking its first quarter of GAAP profitability in 2026.
Non-GAAP operating income increased to $73.2 million from $45.2 million in the year-ago quarter. The non-GAAP operating margin also expanded to 29.8%, compared with 21% in Q3 2025.
GAAP (Generally Accepted Accounting Principles) measures profit using standard accounting rules and includes all operating and non-operating expenses. Non-GAAP is an adjusted measure that excludes certain one-time or non-cash expenses to provide a clearer view of underlying business performance.
“Our upmarket strategy delivered another strong quarter,” said Dennis Woodside, CEO and President of Freshworks. “Our momentum upmarket accelerated, with new multi-product EX deals increasing over 35 percent and partners participating in more than half of our new business”
The company’s focus on larger enterprise customers continued to deliver results. Customers contributing more than $100,000 in ARR increased 25% YoY to 1,821, while customers generating over $50,000 in ARR rose 18% to 4,257.
Net dollar retention remained at 104%, matching Q2 2026 and compared with 105% in Q3 2025. New customers added during the quarter included Tata Technologies, Texas Christian University, Unilabs (UK) and Jose Cuervo.
Freshworks ended the quarter with $697.3 million in cash, cash equivalents, restricted cash and marketable securities. Operating cash flow increased 22% YoY to $77.7 million, while adjusted free cash flow grew 29% to $73.9 million.
For the full year 2026, the company expects revenue between $965 million and $966 million. It also raised its non-GAAP operating income forecast to 238million-240 million, up from its earlier estimate of 222million-228 million.
For Q4 2026, Freshworks expects revenue of 253.5million-254.5 million and non-GAAP operating income of 68million-70 million.
The company has also expanded its portfolio through strategic acquisitions. Last month, it acquired SaaS management and AI spend governance platform Torii and AI-powered IT troubleshooting company Robusta Dev for a combined $102.5 million, paid primarily in cash.
Earlier, in January 2026, Freshworks acquired AI-powered incident management software provider FireHydrant for approximately $88.7 million in cash. These acquisitions are part of its broader efforts to strengthen its employee experience and IT service management offerings.
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