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Freshworks (FRSH)
NASDAQ:FRSH
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Freshworks
(NASDAQ:FRSH)
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Rating:64Neutral
Price Target:
$12.00
▲(10.60% Upside)
Freshworks' overall stock score is driven by strong financial performance and positive earnings call results, highlighting robust revenue growth and strategic expansion. However, the stock's bearish technical indicators and negative valuation metrics weigh down the score.
Positive Factors
Revenue Growth
The consistent revenue growth indicates strong market demand and product adoption, which supports long-term business expansion and stability.
AI Product Expansion
Growth in AI product sales demonstrates innovation and competitive edge, positioning Freshworks well in the evolving tech landscape.
Cash Flow Improvement
Improved cash flow enhances financial flexibility, enabling strategic investments and operational resilience over the long term.
Negative Factors
Profitability Challenges
Persistent profitability issues can limit reinvestment capabilities and shareholder returns, posing a risk to long-term financial health.
Increased Spending
Higher expenses could pressure margins, potentially affecting profitability and operational efficiency in the coming months.
Net Dollar Retention Pressure
Retention challenges may indicate customer satisfaction issues, impacting long-term revenue stability and growth potential.
Freshworks (FRSH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.22B
Dividend YieldN/A
Average Volume (3M)3.40M
Price to Earnings (P/E)―
Beta (1Y)1.75
Revenue Growth18.18%
EPS Growth70.94%
CountryUS
Employees4,400
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.16
Shares Outstanding237,933,260
10 Day Avg. Volume3,519,654
30 Day Avg. Volume3,398,355
Financial Highlights & Ratios
PEG Ratio1.60
Price to Book (P/B)4.28
Price to Sales (P/S)6.75
P/FCF Ratio32.12
Enterprise Value/Market Cap0.80
Enterprise Value/Revenue3.20
Enterprise Value/Gross Profit3.78
Enterprise Value/Ebitda-92.62
Forecast
1Y Price Target
$19.09Price Target Upside75.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Freshworks Business Overview & Revenue Model
Company DescriptionFreshworks Inc. is a global software company that provides customer engagement solutions designed to enhance the customer experience. Established in 2010, the company operates across multiple sectors, including customer support, sales, marketing, and IT service management. Freshworks offers a suite of products, including Freshdesk, Freshsales, Freshmarketing, and Freshservice, which are designed to streamline communication and improve operational efficiency for businesses of all sizes.
How the Company Makes MoneyFreshworks generates revenue primarily through a subscription-based model, where customers pay for access to its cloud-based software solutions. The company offers various pricing tiers and packages tailored to the needs of different businesses, encouraging scalability and flexibility. Key revenue streams include monthly or annual subscriptions for its core products, along with additional fees for premium features and services. Freshworks also benefits from partnerships with other technology firms, integrations with popular platforms, and a growing global customer base, which collectively contribute to its earnings.
Freshworks Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 10, 2026
Earnings Call Sentiment Positive
Freshworks delivered robust results in Q3 2025 with strong revenue growth, significant AI adoption, and expansion in the Employee Experience segment. Despite moderate growth in the Customer Experience segment and challenges related to Device42, the company maintains a positive outlook with strategic investments and product launches.Q3-2025 Updates
Positive Updates
Strong Revenue Growth
Freshworks reported a 15% year-over-year increase in Q3 revenue, reaching $215.1 million, surpassing the high end of previous estimates by approximately 3 points.
Expansion in Customer Base
The company ended the quarter with nearly 75,000 customers, adding significant new clients such as Stellantis, Societe Generale, and Travis Perkins plc.
AI-Driven Growth
Freddy AI continues to be a strong growth driver with AI ARR doubling year-over-year. Freddy Copilot's ARR grew 160% year-over-year, highlighting substantial adoption of AI capabilities.
Employee Experience Segment Growth
The Employee Experience segment achieved over $480 million in ARR, representing a 24% year-over-year growth, with significant contributions from ESM and IT asset management.
Increased Operating Margin
Non-GAAP operating margin expanded to 21%, surpassing estimates by 5 points, and free cash flow margin reached 27%.
Strategic Product Launches
Freshworks announced expansion of Enterprise Service Management access and an upcoming unified CX product experience to drive further adoption.
Negative Updates
Moderate CX Segment Growth
The Customer Experience segment grew by 8% year-over-year, which is slower compared to the Employee Experience segment.
Impact of Device42 on NRR
Device42 represented a small drag of 60 basis points to net dollar retention, highlighting challenges in scaling the business post-acquisition.
Q4 One-Time Investment Impact
A one-time increase in spending during Q4 for pipeline expansion and customer acquisition is expected to have a modest impact on operating margins.
Company Guidance
In the third quarter of 2025, Freshworks achieved notable success by surpassing growth and profitability estimates for the third consecutive quarter. Revenue grew 15% year-over-year to $215.1 million, exceeding the high end of their estimates by about 3 points, with a non-GAAP operating margin of 21%, 5 points above expectations. Free cash flow margin reached 27%, and they maintained a Rule of 40-plus for the fifth straight quarter. Freshworks ended Q3 with nearly 75,000 customers, adding new clients like Stellantis and Societe Generale, and achieving over a 40% increase in deals exceeding $50,000 in ARR. Their Employee Experience (EX) segment grew 24% year-over-year, reaching over $480 million in ARR, driven by expansion outside of IT, upmarket growth, and IT asset management initiatives. AI products showed strong momentum, with Freddy AI's ARR doubling year-over-year and Copilot's ARR growing 160%. Freshworks' net dollar retention remained stable at 105%, with calculated billings of $224 million, growing 14% year-over-year. For Q4, Freshworks forecasts revenue between $217 million and $220 million, with a focus on reinvesting earnings to drive growth, particularly in EX.Freshworks Financial Statement Overview
Summary
Freshworks shows strong revenue growth and efficient cash flow management, with a solid equity position and low leverage. However, persistent net losses and negative profit margins remain challenges.Income Statement
Freshworks has demonstrated consistent revenue growth with a TTM revenue of $782.1M, marking a 8.56% increase from the previous year and a 23.61% increase from 2023. Gross Profit Margin remains strong at 84.62% TTM, although persistent losses keep net profit margins negative. EBIT and EBITDA margins continue to improve, reflecting progress towards profitability.65
Positive
Balance Sheet
Freshworks maintains a robust equity position with a Debt-to-Equity ratio of 0.03 TTM, indicative of low leverage. The Equity Ratio stands at 66.48%, showing a strong capital structure. However, the company has yet to achieve positive ROE due to consistent net losses.70
Positive
Cash Flow
The company has shown a solid improvement in cash flow generation, with a significant increase in free cash flow by 27.10% TTM. Operating cash flow has increased significantly, resulting in a favorable Operating Cash Flow to Net Income ratio of -3.65, indicating strong cash generation relative to accounting losses.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 810.64M | 720.42M | 596.43M | 498.00M | 371.02M | 249.66M |
| Gross Profit | 687.21M | 607.09M | 493.06M | 402.23M | 292.99M | 197.17M |
| EBITDA | -28.01M | -109.53M | -158.03M | -225.06M | -191.49M | -44.94M |
| Net Income | -29.62M | -95.37M | -137.44M | -232.13M | -192.00M | -57.29M |
Balance Sheet | ||||||
| Total Assets | 1.37B | 1.61B | 1.46B | 1.38B | 1.48B | 367.42M |
| Cash, Cash Equivalents and Short-Term Investments | 813.24M | 1.07B | 1.19B | 1.15B | 1.32B | 238.12M |
| Total Debt | 31.42M | 38.29M | 29.49M | 34.95M | 0.00 | 0.00 |
| Total Liabilities | 520.47M | 473.96M | 384.51M | 328.40M | 244.77M | 3.06B |
| Stockholders Equity | 851.49M | 1.14B | 1.07B | 1.05B | 1.24B | -2.70B |
Cash Flow | ||||||
| Free Cash Flow | 212.86M | 151.47M | 77.84M | -14.77M | 2.34M | 21.77M |
| Operating Cash Flow | 221.40M | 160.65M | 86.18M | -2.52M | 11.46M | 32.53M |
| Investing Cash Flow | 258.08M | 38.80M | 158.50M | -284.83M | -420.30M | -11.43M |
| Financing Cash Flow | -449.64M | -67.26M | -60.62M | -156.35M | 1.06B | -1.91M |
Freshworks Technical Analysis
Negative
10.85
Price Trends
11.96
Negative
12.98
Negative
14.24
Negative
Market Momentum
-0.25
Negative
37.36
Neutral
26.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRSH, the sentiment is Negative. The current price of 10.85 is below the 20-day moving average (MA) of 11.15, below the 50-day MA of 11.96, and below the 200-day MA of 14.24, indicating a bearish trend. The MACD of -0.25 indicates Negative momentum. The RSI at 37.36 is Neutral, neither overbought nor oversold. The STOCH value of 26.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FRSH.
Freshworks Risk Analysis
Freshworks disclosed 65 risk factors in its most recent earnings report. Freshworks reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Freshworks Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $3.42B | 146.83 | 8.74% | ― | 17.77% | -76.05% | |
64 Neutral | $3.22B | ― | -2.98% | ― | 18.18% | 70.94% | |
63 Neutral | $3.22B | ― | -6.04% | ― | 17.11% | -19.12% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $2.94B | ― | -3.15% | ― | 13.24% | -12.97% | |
60 Neutral | $3.12B | ― | -20.67% | ― | 22.16% | 11.65% | |
52 Neutral | $3.11B | -14.65 | -80.55% | ― | 9.74% | 22.36% |
* Technology Sector Average
FRSH
Freshworks
10.85
-5.59
-34.00%
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126.19
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6.21%
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25.49
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-40.07%
ASAN
Asana
13.10
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-6.36%
INTA
Intapp
38.60
-20.79
-35.01%
BRZE
Braze
27.24
-7.35
-21.25%
Freshworks Corporate Events
Freshworks Inc. Reports Strong Q3 2025 Performance
Nov 6, 2025
Freshworks Inc., a leading provider of user-friendly software solutions, specializes in enhancing customer and employee experiences through its innovative platform. Operating in the technology sector, the company is known for integrating AI to streamline business processes.
Business Operations and StrategyFinancial Disclosures
Freshworks Hosts Investor Day 2025 to Showcase Growth
Positive
Sep 11, 2025
Freshworks Inc. announced its Investor Day 2025, scheduled for September 11, 2025, where it will present its strategic vision and financial performance. The company has demonstrated significant growth, with a 20% two-year compound annual growth rate and a notable expansion in its annual recurring revenue, surpassing $840 million. Freshworks attributes its durable growth to AI-driven innovations and strategic market positioning, particularly in mid-market and enterprise segments, highlighting its competitive edge against larger competitors.
The most recent analyst rating on (FRSH) stock is a Hold with a $14.50 price target. To see the full list of analyst forecasts on Freshworks stock, see the FRSH Stock Forecast page.
Executive/Board Changes
Freshworks Announces Chairman Retirement
Neutral
Sep 7, 2025
On September 3, 2025, Rathna Girish Mathrubootham announced his retirement from Freshworks Inc., effective December 1, 2025, to focus on Together Fund. Roxanne Austin, who has been a board member since May 2021, will take over as Chairperson of the Board. The board size will be reduced to nine members, and the number of Class III directors will decrease to two.
The most recent analyst rating on (FRSH) stock is a Hold with a $14.50 price target. To see the full list of analyst forecasts on Freshworks stock, see the FRSH Stock Forecast page.
Executive/Board Changes
Freshworks Announces Chairman Retirement
Neutral
Sep 4, 2025
On September 3, 2025, Rathna Girish Mathrubootham announced his retirement from Freshworks Inc., effective December 1, 2025, to focus on Together Fund. Roxanne Austin, who has been a board member since May 2021, will take over as Chairperson of the Board. The board size will be reduced to nine members, and the number of Class III directors will decrease to two.
The most recent analyst rating on (FRSH) stock is a Hold with a $14.50 price target. To see the full list of analyst forecasts on Freshworks stock, see the FRSH Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.