What Management Said

Read the full Q1 2026 transcript ↗

The primary purpose of today's call is to provide you with information regarding our first quarter 2026 performance and our financial outlook for our second quarter and full year 2026. Such risks include, but are not limited to, our ability to sustain our growth, to innovate, to reach our long-term revenue goals, to meet customer demand, and to control costs and improve operating efficiency. Reconciliations between GAAP and non-GAAP financial measures for historical periods are included in our earnings release, which is available on our investor relations website at ir.freshworks.com. I encourage you to visit our investor relations site to access our earnings release, supplemental earnings slides, periodic SEC reports, and a replay of today's call to learn more about Freshworks.

Freshworks delivered a strong start to 2026, exceeding expectations across revenue, profitability, and free cash flow. Our Q1 revenue grew 16% year-over-year, above the high end of our estimates. Non-GAAP operating margin was 18%, nearly 3 points above our estimate, and adjusted free cash flow margin was 24%. Customers with more than $100,000 in ARR grew 29% year-over-year, and customers with more than $50,000 in ARR grew 22% year-over-year.

Freshworks is the AI-enabled unified service operations platform that is fast to deploy, intuitive to use, and enables every employee to be more productive. As we grow Freshworks to a $1 billion ARR company and beyond, our EX business represents the primary and largest growth opportunity. In Q1, EX ARR grew 27% year-over-year, with both new and expansion business coming in ahead of our expectations. We also completed the acquisition of FireHydrant, which advances our vision for an AI-enabled service ops platform that unifies service, asset, and operational data.

What went well
  • Q1 revenue reached $228.6 million, up 16% year-over-year as reported and 14% on a constant currency basis, above the high end of estimates.
  • EX ARR ended at over $540 million, growing 27% year-over-year as reported and 25% on a constant currency basis.
  • Signed the two largest deals in Freshworks' history, including the first seven-figure EX ARR deal, with the largest new customer deal being a global leader in nutrition replacing the largest competitor.
  • Non-GAAP operating margin reached approximately 18%, nearly 3 points above estimate; non-GAAP operating income was $41 million.
  • Adjusted free cash flow was $55.8 million, a 24% margin and slightly better than expectations; Rule of 40 achieved again.
  • Customers with more than $100,000 in ARR grew 29% year-over-year as reported; customers with more than $50,000 grew 22% as reported.
  • Net dollar retention was 106% as reported and 105% constant currency, a 1-point acceleration from the prior quarter; EX NDR was 111% as reported and 109% constant currency.
  • Freddy AI Copilot customer growth exceeded 80% year-over-year; attach rate growth in new deals over $30,000 ARR was above 65%; EX AI customer penetration surpassed 20%, nearly doubling year-over-year.
  • Over 80% of the CX customer base migrated to the new Freshdesk Omni platform, with ARPA 2.5x higher for new Freshdesk Omni customers versus the prior platform.
  • Board authorized a new $400 million share repurchase program in February; shares outstanding reduced by approximately 2% in Q1.
What went wrong
  • Announced a reduction of global headcount by approximately 11% in Q2 to consolidate overlapping go-to-market efforts and streamline product development.
  • Anticipating one-time restructuring charges of approximately $8 million, with the vast majority in Q2.
  • CX ARR grew only 6% year-over-year as reported and 4% on a constant currency basis, with management adopting a prudent outlook of low single-digit CX growth for 2026.
  • Continued headwind from Device42 legacy churn affecting net dollar retention, as those are multi-year contracts.
  • Calculated billings constant currency growth of 13.5% trailed the as-reported figure due to currency effects.

Guidance Changes

MetricPeriodCurrent guidance
———
———
———
———
———
———

Performance Breakdown

MetricYoYNote
— — —
— — —
— — —
— — —
— — —
— — —
— — —
— — —
— — —

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
————
————
————
————
————
————
————
————

Q&A Summary

More on Freshworks Inc.

Company

Freshworks Inc. overview
Facet

Financials
Transcript

Q1 2026 call
Reported 2026-05-05 · figures from the Freshworks Inc. Q1 2026 earnings call.

See how VectorShift works for your firm

Request Demo