Freshworks (NASDAQ:FRSH) Posts Quarterly Earnings Results

Freshworks (NASDAQ:FRSH) posted its quarterly earnings results on Tuesday. The company reported $0.14 EPS for the quarter, beating the consensus estimate of $0.11 by $0.03, FiscalAI reports. Freshworks had a net margin of 21.90% and a return on equity of 4.77%. The business had revenue of $222.74 million during the quarter, compared to analyst estimates of $218.76 million. During the same quarter in the previous year, the business posted $0.14 EPS. The company’s quarterly revenue was up 14.5% compared to the same quarter last year. Freshworks updated its Q1 2026 guidance to 0.100-0.120 EPS and its FY 2026 guidance to 0.550-0.570 EPS.

Here are the key takeaways from Freshworks’ conference call:

• GAAP profitability and strong cash generation: Freshworks reported GAAP profitability for full-year 2025 (first time in company history) and record adjusted free cash flow of about $223M for the year, with Q4 free cash flow of $56.2M (25% margin) and non‑GAAP operating margin near 19%.
• Employee Experience (EX) and upmarket momentum: EX crossed $510M ARR (26% YoY) with >1,500 customers >$100k ARR, Device42 >$40M ARR and a ~30% attach rate on top EX deals, and the FireHydrant acquisition expands the ITOM TAM and strengthens the unified Freshservice platform.
• Freddy AI monetization and engagement: Freddy AI is in >8,000 customers with >$25M ARR, driving high attach rates, >50% ticket deflection in some cases, Copilot NDR of 116%, and management is targeting $100M AI ARR by 2028.
• CX/Freshdesk stabilization but slower growth: Freshdesk ended 2025 at $395M ARR (9% YoY) with improved retention and a new Freshdesk Omni platform rollout, but CX growth remains mid-single-digit and management is managing expectations while migrating customers to the new code base.
• 2026 financial outlook: Guidance calls for revenue of $952M–$960M (~13.5%–14.5% YoY), Q1 revenue $222M–$225M, about $250M free cash flow for 2026 (~26% margin), and the company expects to be sustainably GAAP profitable exiting Q4 2026.

Freshworks Stock Performance

FRSH stock traded down $0.14 during midday trading on Thursday, reaching $7.16. The stock had a trading volume of 1,358,325 shares, compared to its average volume of 5,730,099. The firm has a fifty day simple moving average of $11.57 and a two-hundred day simple moving average of $12.02. The stock has a market cap of $2.02 billion, a PE ratio of 11.35 and a beta of 0.89. Freshworks has a 52-week low of $7.00 and a 52-week high of $18.17.

Insiders Place Their Bets

In related news, CAO Philippa Lawrence sold 5,846 shares of Freshworks stock in a transaction that occurred on Tuesday, December 2nd. The stock was sold at an average price of $12.06, for a total transaction of $70,502.76. Following the completion of the transaction, the chief accounting officer directly owned 392,711 shares in the company, valued at approximately $4,736,094.66. This trade represents a 1.47% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider Mika Yamamoto sold 15,012 shares of the stock in a transaction on Friday, December 5th. The stock was sold at an average price of $13.00, for a total transaction of $195,156.00. Following the sale, the insider directly owned 490,350 shares in the company, valued at $6,374,550. This trade represents a 2.97% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 22,267 shares of company stock worth $282,301 in the last quarter. Company insiders own 11.17% of the company’s stock.

Institutional Trading of Freshworks

Institutional investors have recently modified their holdings of the stock. EverSource Wealth Advisors LLC raised its holdings in Freshworks by 427.6% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 4,479 shares of the company’s stock valued at $67,000 after acquiring an additional 3,630 shares during the last quarter. Shay Capital LLC purchased a new stake in shares of Freshworks in the third quarter valued at approximately $118,000. One68 Global Capital LLC acquired a new stake in shares of Freshworks in the third quarter valued at approximately $118,000. Mercer Global Advisors Inc. ADV purchased a new position in Freshworks during the third quarter worth approximately $122,000. Finally, Numerai GP LLC purchased a new position in Freshworks during the third quarter worth approximately $135,000. Institutional investors and hedge funds own 75.58% of the company’s stock.

More Freshworks News

Here are the key news stories impacting Freshworks this week:

• Positive Sentiment: Q4 results beat consensus: Freshworks reported $0.14 GAAP/non‑GAAP EPS, revenue $222.7M (+14% YoY), improved operating margins, record cash generation and ARR momentum — evidence of product/AI adoption that supports longer‑term growth. Freshworks Reports Fourth Quarter and Full Year 2025 Results
• Positive Sentiment: Revenue outlook modestly beat or sits above some estimates: FY2026 revenue guide of $952M–$960M implies ~13.5%–14.5% growth, and management flagged strong AI-driven demand (Freddy AI, EX/CX expansion). Freshworks forecasts annual revenue above estimates
• Neutral Sentiment: Company reiterated strategic targets (management aims for higher ARR, AI/EX platform expansion and recent FireHydrant acquisition) that support the long‑term story but need execution. Freshworks targets $1.3B ARR by 2028
• Neutral Sentiment: Unusual options and trading flows: elevated call volume was reported intra‑day, suggesting some speculative or hedged bullish positioning even as price moved lower. (internal trading note)
• Negative Sentiment: FY2026 EPS guide below Street expectations: management guided non‑GAAP EPS $0.55–$0.57 vs. consensus ~$0.69 — investors focused on the EPS shortfall despite revenue guidance, which appears to be the main driver of the selloff. Freshworks Valuation Check After Earnings
• Negative Sentiment: Analyst price‑target reductions and mixed ratings: several firms trimmed targets (JMP/Citizens/Wells Fargo/Cantor) after the guide, increasing near‑term downside pressure even where ratings remain constructive. (internal items)
• Negative Sentiment: Market commentary highlights investor disappointment: multiple outlets note the stock is under pressure due to the guidance/valuation rework despite the operational beat. Why Freshworks stock is nosediving

Analyst Upgrades and Downgrades

A number of brokerages recently weighed in on FRSH. Wall Street Zen downgraded Freshworks from a “strong-buy” rating to a “buy” rating in a research report on Saturday, December 20th. UBS Group set a $11.00 price target on shares of Freshworks in a report on Wednesday. Oppenheimer set a $15.00 price objective on shares of Freshworks in a research note on Wednesday. Robert W. Baird set a $10.00 target price on shares of Freshworks in a research report on Wednesday. Finally, Needham & Company LLC reaffirmed a “buy” rating and issued a $15.00 price target on shares of Freshworks in a report on Wednesday. Eight equities research analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the company presently has an average rating of “Hold” and a consensus target price of $14.92.

Freshworks Company Profile

Freshworks, Inc is a global provider of cloud-based customer engagement software designed to help businesses streamline customer support, sales, marketing, and IT service operations. The company’s integrated suite of solutions enables organizations of all sizes to deliver seamless experiences across multiple channels, including email, chat, phone, and social media. Freshworks’ platform is built on modern, user-friendly interfaces and offers native automation, AI-powered insights, and analytics to improve efficiency and customer satisfaction.

The company’s flagship product, Freshdesk, serves as a helpdesk solution for customer support teams, while Freshservice addresses IT service management needs.