Freshworks (FRSH)
NASDAQ:FRSH
Want to see FRSH full AI Analyst Report?
Top Page
Freshworks
(NASDAQ:FRSH)
Select Model
Select Model
Rating:78Outperform
Price Target:
$10.00
▲(17.10% Upside)
Action:ReiteratedDate:05/06/26
The score is driven primarily by strong financial quality (robust and improving free cash flow, strong margins, low leverage) and a constructive earnings outlook with continued margin/FCF focus. Valuation also looks favorable due to the low P/E. The main offset is only moderate technical positioning, with shares still below longer-term moving averages and near-term business headwinds in CX and legacy churn.
Positive Factors
Strong free cash flow
Freshworks has moved to consistently positive and expanding free cash flow, delivering $55.8M in Q1 (24% margin) and guiding to a ~27.5% full‑year adjusted FCF margin. Durable FCF supports reinvestment, product R&D (AI), disciplined buybacks and lowers dependency on external financing.
Negative Factors
CX underperformance
Customer Experience (CX) growth is materially lagging EX and company guidance implies low single‑digit CX ARR expansion. Given CX's share of total ARR, weak monetization and slow growth here represent a lasting drag on aggregate ARR growth and cross-sell economics over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow
Freshworks has moved to consistently positive and expanding free cash flow, delivering $55.8M in Q1 (24% margin) and guiding to a ~27.5% full‑year adjusted FCF margin. Durable FCF supports reinvestment, product R&D (AI), disciplined buybacks and lowers dependency on external financing.
Read all positive factors
Freshworks (FRSH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.51B
Dividend YieldN/A
Average Volume (3M)6.26M
Price to Earnings (P/E)4.5
Beta (1Y)1.59
Revenue Growth16.43%
EPS GrowthN/A
CountryUS
Employees4,400
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.65
Shares Outstanding243,907,230
10 Day Avg. Volume8,448,255
30 Day Avg. Volume6,257,487
Financial Highlights & Ratios
PEG Ratio-0.07
Price to Book (P/B)3.45
Price to Sales (P/S)4.25
P/FCF Ratio14.54
Enterprise Value/Market Cap0.86
Enterprise Value/Revenue2.57
Enterprise Value/Gross Profit3.03
Enterprise Value/Ebitda35.79
Forecast
1Y Price Target
$12.80Price Target Upside49.88% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)0.57
Revenue Forecast (FY)$956.33M
Freshworks Business Overview & Revenue Model
Company Description
Freshworks Inc., a software development company, provides modern software-as-a-service products worldwide. Freshworks Inc. was formerly known as Freshdesk Inc. and changed its name to Freshworks Inc. in June 2017. The company was incorporated in 2...
How the Company Makes Money
Freshworks primarily makes money by selling subscription access to its cloud software products. Revenue is largely recurring and generated through tiered plans (often priced per user/agent/seat or by feature bundle) across its main product familie...
Freshworks Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum driven by EX growth, AI adoption, margin expansion, free cash flow generation, and large enterprise wins, while acknowledging near‑term headwinds from CX replatforming, Device42 legacy churn, and a one‑time restructuring (11% headcount reduction and ~$8M charges). Management emphasized disciplined capital allocation (share repurchase) and a longer‑term focus on compounding adjusted free cash flow per share.Positive Updates
Revenue Beat and Growth
Q1 revenue of $228.6M, up 16% year-over-year as reported (14% constant currency), exceeding the high end of the company's estimates; Q2 revenue guide $232M–$235M (~13%–15% y/y).
Negative Updates
Workforce Reduction and Restructuring Charges
Announced ~11% global headcount reduction to consolidate GTM, streamline product development and apply AI/automation; expect ~ $8M of one‑time restructuring charges, majority in Q2.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Beat and Growth
Q1 revenue of $228.6M, up 16% year-over-year as reported (14% constant currency), exceeding the high end of the company's estimates; Q2 revenue guide $232M–$235M (~13%–15% y/y).
Read all positive updates
Company Guidance
Freshworks guided Q2 revenue of $232–$235 million (≈13–15% YoY growth) with non‑GAAP operating income of $41–$43 million and non‑GAAP net income per share of about $0.13 assuming ~280 million weighted shares; they forecast Q2 billings growth of ≈14.5% and expect Q2 adjusted free cash flow margin of ~24% (full‑year adjusted FCF margin ~27.5%), with full‑year revenue at least $958 million (upper bound inaudible) and full‑year adjusted FCF per share of $0.94 (up ~24% vs FY25); assumptions include a 24% non‑GAAP tax rate, ~105% constant‑currency net dollar retention for Q2, ~11% headcount reduction with ~$8 million of one‑time restructuring charges (mostly in Q2), and ongoing capital return via a $400 million share repurchase program (Q1 repurchases: 5.7M shares for $45.4M), with $780M of cash and investments on hand.Freshworks Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
80
Positive
Cash Flow
86
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 838.81M | 720.42M | 596.43M | 498.00M | 371.02M |
| Gross Profit | 712.66M | 607.09M | 493.06M | 402.23M | 292.99M |
| EBITDA | 110.84M | -109.53M | -158.03M | -225.06M | -191.49M |
| Net Income | 183.72M | -95.37M | -137.44M | -232.13M | -192.00M |
Balance Sheet | |||||
| Total Assets | 1.60B | 1.61B | 1.46B | 1.38B | 1.48B |
| Cash, Cash Equivalents and Short-Term Investments | 843.75M | 1.07B | 1.19B | 1.15B | 1.32B |
| Total Debt | 66.56M | 38.29M | 29.49M | 34.95M | 0.00 |
| Total Liabilities | 570.06M | 473.96M | 384.51M | 328.40M | 244.77M |
| Stockholders Equity | 1.03B | 1.14B | 1.07B | 1.05B | 1.24B |
Cash Flow | |||||
| Free Cash Flow | 245.22M | 145.98M | 77.84M | -14.77M | 2.34M |
| Operating Cash Flow | 250.92M | 160.65M | 86.18M | -2.52M | 11.46M |
| Investing Cash Flow | 206.13M | 38.80M | 158.50M | -284.83M | -420.30M |
| Financing Cash Flow | -445.20M | -67.26M | -60.62M | -156.35M | 1.06B |
Freshworks Technical Analysis
Neutral
8.54
Price Trends
7.99
Positive
9.97
Negative
11.32
Negative
Market Momentum
>-0.01
Negative
58.40
Neutral
82.65
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRSH, the sentiment is Neutral. The current price of 8.54 is above the 20-day moving average (MA) of 8.06, above the 50-day MA of 7.99, and below the 200-day MA of 11.32, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 58.40 is Neutral, neither overbought nor oversold. The STOCH value of 82.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FRSH.
Freshworks Risk Analysis
Freshworks disclosed 63 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.51B | 4.52 | 18.70% | ― | 16.43% | ― | |
73 Outperform | $1.96B | 83.96 | 10.50% | ― | 17.86% | 33.43% | |
68 Neutral | $2.06B | 72.83 | 0.49% | ― | 10.01% | ― | |
66 Neutral | $1.90B | -156.46 | -5.49% | ― | 16.84% | 0.51% | |
63 Neutral | $2.74B | -17.88 | -22.84% | ― | 24.40% | -20.43% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $1.72B | -18.96 | -94.12% | ― | 9.25% | 28.34% |
* Technology Sector Average
FRSH
Freshworks
8.98
-5.30
-37.11%
AGYS
Agilysys
69.66
-6.33
-8.33%
NCNO
nCino
17.99
-4.16
-18.78%
ASAN
Asana
7.22
-9.19
-56.00%
INTA
Intapp
23.67
-33.52
-58.61%
BRZE
Braze
24.17
-7.26
-23.10%
Freshworks Corporate Events
Business Operations and StrategyFinancial Disclosures
Freshworks Restructures Workforce to Drive AI-Led Growth
Neutral
May 5, 2026
On May 5, 2026, Freshworks unveiled a restructuring plan aimed at streamlining its organization and product development while increasing the use of AI and automation, a move that will cut about 500 roles, or 11% of its global workforce, and is exp...
Business Operations and StrategyExecutive/Board Changes
Freshworks Announces Leadership Changes and Revenue Organization Realignment
Neutral
Mar 5, 2026
Freshworks Inc. announced on March 5, 2026, that Chief Integrated Customer Growth Officer Mika Yamamoto left her role effective March 2, 2026, and will stay on in an advisory capacity until April 2, 2026 to support the transition of her responsibi...
Business Operations and StrategyStock BuybackFinancial Disclosures
Freshworks Authorizes $400 Million Stock Repurchase Program
Positive
Feb 26, 2026
Freshworks Inc., a Nasdaq-listed provider of enterprise-grade but user-friendly employee and customer experience software, focuses on AI-powered tools that simplify service operations for about 75,000 business customers worldwide. Its EX and CX pr...
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.