Freshworks hits $1 billion ARR ahead of 2026 target, reports $18 million Q3

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The Nasdaq-listed SaaS company also reported stronger operating margins, growth in high-value customers and improved momentum in its Employee Experience business

By BL Chennai Bureau

Updated - November 04, 2026 at 11:40 AM.

Freshworks CEO Dennis Woodside said the company’s Employee Experience business continued to be its primary growth engine.

Software-as-a-Service firm Freshworks on Tuesday said it reached $1 billion in annual recurring revenue in October, ahead of its initial year-end 2026 target.

Nasdaq-listed Freshworks reported a GAAP net profit of $18 million for the third quarter ended September 2026, as against a loss of $4.6 million in the same quarter last year.

Revenue stood at $245 million ($215 million), representing constant currency growth of 14 per cent, in line with the company’s estimates for the quarter.

The company follows calendar year accounting.

The SaaS firm maintained its full-year 2026 guidance of 14-15 per cent constant currency growth. For the fourth quarter ending December 2026, it expects 14-15 per cent constant currency growth.

Employee Experience business drives ARR growth

At an investor call after the results, CEO Dennis Woodside said the company’s Employee Experience vertical saw 22% constant currency growth in ARR to $588 million, while Customer Experience ARR was $404 million, up 4% on a constant currency basis.

“EX continues to be our primary growth engine. We believe EX will continue to be a mid-20s grower as we scale the multiproduct platform,” Tyler Sloat, CFO & COO of Freshworks, said. We now expect EX ARR to exceed $625 million exiting 2026, he added.

Torii and Robusta acquisitions to strengthen EX offerings

During the quarter, the company also acquired Torii and Robusta- two new additions which will be folded into its EX offerings.

Woodside said it expects to get between $8 million and $10 million of ARR from the two acquisitions by the end of the December quarter.

Operating margin improves to 11.5 per cent

The company reported a GAAP operating margin of 11.5 per cent compared to -3.5 per cent in the third quarter of 2025. Sloat said the company’s restructuring on the go-to-market front earlier in the year, especially around the CX vertical, has helped improve margins.

High-value customer base expands 25 per cent

As for its customer mix, the company reported 1,821 customers contributing more than $100,000 in ARR, up 25 per cent year-on-year (y-o-y). The number of customers contributing more than $50,000 in ARR was 4,257, up 18 per cent y-o-y, while the number of customers contributing more than $5,000 in ARR was 25,498, up 6 per cent y-o-y.

Net dollar retention rate was 104 per cent, compared with 105 per cent in the third quarter of 2025.

“There are plenty of opportunities out there for teams that are doing interesting work that want to have access to a go-to-market operation that we offer. So I think you’ll see us continue to be prudent in the M&A market, but we’ve also built up the muscle where we are able to do these transactions smartly,” Woodside added.

Freshworks shares fell marginally to close at $14.15 on Nasdaq.

Published on November 4, 2026

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