Freshworks turns profitable in Q2, revenue up 16%

Freshworks reported a 16% year-over-year growth in revenue for the second quarter, marking its second consecutive profitable quarter. The company's revenue reached $237.4 million for the quarter ending June 30, up from $204.7 million in the same period last year. Operating income improved to $6.1 million, compared to a loss of $8.7 million in the previous quarter. This resulted in a positive operating margin of 2.6% in Q2, a significant improvement from the negative 4.2% margin in the year-ago quarter.

Encouraged by these strong results, surpassing its own Q2 outlook, Freshworks has raised its full-year guidance for revenue and net income. For 2026, the company now anticipates revenue to fall between $963.5 million and $966.5 million, an increase from the previous forecast of $958-$964 million. Chief Executive Dennis Woodside highlighted the company's GAAP profitability milestone months ahead of schedule, praising the company's ability to grow fast, stay disciplined, and remain profitable.

He also noted that the company's flagship product EX saw a 24% year-over-year growth in annual recurring revenue (ARR), while its AI assistant, Freddy AI Copilot, was integrated into over 71% of new enterprise deals, signaling robust customer adoption of its AI platform.

Freshworks continued to demonstrate strong traction among larger customers, with more than 60% of its total annual recurring revenue (ARR) coming from mid-market and enterprise customers. The number of customers contributing over $100,000 in ARR increased by 25% year-over-year to 1,746, while the number of customers contributing over $50,000 in ARR rose by 18% to 4,091.

The company's customer base also grew, with customers generating more than $5,000 in ARR increasing by 6% to 25,356. North America remains the company's largest market, accounting for 47% of revenue, followed by Europe, the Middle East, and Africa at 38%.