Freshworks, the Nasdaq-listed software-as-a-service (SaaS) provider, reported a consolidated net profit of $18.3 million for the third quarter of 2026, marking a turnaround from a $4.7 million loss during the same period last year. The company attributed the financial improvement to a 14% year-over-year revenue increase and a reduction in operating costs.
Key Financial and Operational Highlights
- Profit turnaround: The company shifted from a $4.7 million loss in Q3 2025 to a $18.3 million profit in Q3 2026.
- Revenue growth: Total revenue reached $245.4 million, a 14% increase from $215.1 million in the previous year.
- Expense reduction: Operating expenses fell by 4.4% to $181.2 million, driven by lower administrative costs and stock-based compensation.
- Enterprise expansion: The number of customers contributing over $100,000 in annual recurring revenue grew by 25% to 1,821.
- Full-year guidance: Freshworks updated its full-year revenue forecast to a range of $965 million to $966 million.
Strategic Focus on Enterprise and AI
CEO Dennis Woodside stated that the company’s focus on targeting larger enterprise customers contributed significantly to the quarterly results. The company reported that deals involving multiple employee experience products rose by more than 35%. Following the close of the quarter, Freshworks surpassed $1 billion in annual recurring revenue, reaching the milestone ahead of its projected year-end target.
The company continues to emphasize its transition toward an AI-powered service operations platform. This strategy has included operational restructuring, such as the announcement in May 2026 of a workforce reduction affecting approximately 11% of staff. Furthermore, Freshworks has pursued growth through acquisitions, including the purchase of the IT incident management platform FireHydrant and the Israel-based AI startup Robusta Dev.