Freshworks turns profitable as revenue hits $237.4M

Freshworks posted a GAAP net profit of $3.2 million in the June quarter of CY26, against a loss of $1.7 million a year earlier and a loss of $4.8 million in the March quarter. Revenue rose 16% year on year to $237.4 million from $204.7 million, and 3.8% sequentially from $228.6 million. In constant currency, growth was 15%.

Cost discipline did most of the work. Operating expenses were $204.6 million, flat year on year and up 1.3% sequentially. General and administrative spend fell 11%, while sales and marketing rose 19% to $113 million. Non-GAAP operating income was $55.9 million, up 25% from $44.8 million, lifting non-GAAP operating margin to 23.6% from 21.9%. The GAAP profit follows a workforce reduction of roughly 500 employees, about 11% of the global headcount.

The top of the customer base improved. Freshworks now has 1,746 customers paying over $100,000 in annual recurring revenue, up 25%, and 4,091 paying over $50,000, up 18%. Expansion ARR grew 24%. Net dollar retention slipped to 104% from 106%. Freddy AI Copilot was attached to 71% of new enterprise deals. North America accounts for 47% of revenue, EMEA 39%, Asia-Pacific 11% and the rest of world 3%.

CEO Dennis Woodside said the company delivered its seventh consecutive quarter of beating revenue expectations and its eighth straight quarter of meeting the Rule of 40. Full year CY26 revenue guidance was raised to between $963.5 million and $966.5 million, with non-GAAP operating income guided to between $222 million and $228 million.

The figure an Indian operator should sit with is that 104% net dollar retention. Freshworks is landing bigger logos while existing accounts expand a little less than before. Read alongside sales and marketing up 19% against flat total opex, that is a business buying growth at the top of the funnel rather than compounding inside its base. Useful pattern to recognise in your own numbers.

If you sell software or subscriptions to Indian SMBs, the 500-person cut is the market’s verdict: capital now pays for margin discipline, not seat count. But the 71% Freddy attach rate is the sharper signal. AI has stopped being a separate module you upsell later. It is becoming the reason the core deal closes. Price it into the base plan before a competitor gives it away.