Download PDF

1. Company Snapshot

1.a. 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 2010 and is headquartered in San Mateo, California.

Show Full description

1.b. Last Insights on FRSH

The recent 3-month performance of Freshworks Inc. was negatively impacted by analyst downgrades and a decline in investor sentiment. Citizens Jmp lowered its price target on the stock from $27.00 to $16.00, contributing to a gap down in share price. Additionally, the company's Q4 earnings beat was overshadowed by a substantial decline in adjusted earnings per share guidance for the year. Furthermore, investors have been selling shares, with Gagnon Advisors reducing its stake by 564,879 shares in the fourth quarter.

1.c. Company Highlights

2. Freshworks' Q4 2025 Earnings: A Historic Inflection Point

Freshworks delivered an outstanding Q4, with total revenue increasing to $222.7 million, growing 14% year over year on an as-reported basis. Non-GAAP gross margin was 86.8%, and non-GAAP operating margin expanded to 19%. GAAP net income for Q4 was $191.4 million, favorably impacted by a one-time reduction for fiscal year 2025 stock-based compensation and a one-time income tax benefit. Earnings per share (EPS) came in at $0.14, beating estimates of $0.11.

Publication Date: Feb -14

📋 Highlights

Segment Performance

The company's employee experience (EX) business was a significant contributor, crossing the $500 million ARR mark in Q4, representing 26% year-over-year growth. The customer experience (CX) business is at $395 million in ARR, reflecting 9% year-over-year growth. Freshworks' AI business, Freddie AI, continued to advance, with over 8,000 customers using the technology and generating $25 million in ARR.

Guidance and Outlook

Freshworks remains on track to hit sustainable GAAP profitability in 2026 and expects net dollar retention to improve to approximately 105% on a constant currency basis in Q1 2026. The company estimates calculated billings growth of approximately 13% year over year on an as-reported and constant currency basis for Q1 and 14% year over year on an as-reported and constant currency basis for the full year 2026.

Valuation and Growth Prospects

With a P/S Ratio of 2.52 and an expected revenue growth rate of 14.3% next year, Freshworks appears to be reasonably valued. The company's focus on the mid-market segment, with over 50k customers, is expected to drive continued growth. Analysts' estimates suggest that the company's AI agent and Copilot products can reach $100 million each in the next three years, providing a significant growth opportunity.

Operational Highlights

As Dennis Woodside mentioned, the company is seeing a large segment of customers turning to Freshworks due to its cost-effectiveness, efficiency, and ease of implementation. The company's growth is coming from the mid-market, with a significant percentage of revenue from this segment, and is expected to continue growing with a strong position in EX.

3. NewsRoom

Card image cap

Fieldview Capital Management LLC Cuts Stock Position in Freshworks Inc. $FRSH

Mar -11

Source: defenseworld.net

Card image cap

A Freshworks Executive Sold Over 32,000 Company Shares. Is the Stock a Buy or Sell?

Mar -10

Source: fool.com

Card image cap

Kaltura (NASDAQ:KLTR) & Freshworks (NASDAQ:FRSH) Head-To-Head Survey

Mar -09

Source: defenseworld.net

Card image cap

Freshworks Unifies Global Sales Organization to Accelerate Growth

Mar -05

Source: globenewswire.com

Card image cap

Freshworks Inc. (FRSH) Presents at Morgan Stanley Technology, Media & Telecom Conference 2026 Transcript

Mar -04

Source: seekingalpha.com

Card image cap

Why Freshworks Stock Is Sinking Today

Feb -23

Source: fool.com

Card image cap

CenterBook Partners LP Takes $1.10 Million Position in Freshworks Inc. $FRSH

Feb -21

Source: defenseworld.net

Card image cap

Freshworks: Why The SaaSpocalypse Selloff Has Gone Too Far

Feb -18

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (21.88%)

6. Segments

Subscription

Expected Growth: 22.1%

Freshworks' subscription growth of 22.1% is driven by increasing adoption of its customer engagement and productivity software, expansion into new markets, and strategic partnerships. The company's cloud-based offerings, such as Freshdesk and Freshsales, are attracting more customers seeking scalable and cost-effective solutions. Additionally, Freshworks' focus on AI-powered automation and customer experience is resonating with businesses seeking to enhance their customer relationships.

Professional

Expected Growth: 12.53%

Freshworks Inc.'s 12.53% growth is driven by increasing adoption of its customer engagement and SaaS-based solutions, expansion into new markets, strategic partnerships, and innovative product offerings. Additionally, the company's focus on customer success, efficient sales and marketing strategies, and effective cost management contribute to its rapid growth.

7. Detailed Products

Freshdesk

A cloud-based customer support software that helps businesses manage customer inquiries and issues across multiple channels.

Freshsales

A CRM software that helps businesses manage sales pipelines, track leads, and analyze sales performance.

Freshmarketer

A marketing automation software that helps businesses automate and personalize customer engagement across multiple channels.

Freshservice

A cloud-based IT service management software that helps businesses manage IT services, assets, and incidents.

Freshchat

A modern messaging software that helps businesses provide real-time customer support and engagement.

Freshcaller

A cloud-based call center software that helps businesses manage customer calls, track conversations, and analyze call metrics.

Freshrelease

A product management software that helps businesses plan, develop, and launch products efficiently.

Freshsuccess

A customer success platform that helps businesses manage customer relationships, track health scores, and reduce churn.

8. Freshworks Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Freshworks Inc. operates in a niche market with a unique product offering, reducing the threat of substitutes. However, the company still faces competition from other customer engagement and support software providers.

Bargaining Power Of Customers

Freshworks Inc. has a large customer base, which reduces the bargaining power of individual customers. The company's subscription-based model also helps to mitigate the impact of customer bargaining power.

Bargaining Power Of Suppliers

Freshworks Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position also gives it negotiating power with suppliers.

Threat Of New Entrants

The customer engagement and support software market is highly competitive, and new entrants can easily enter the market. Freshworks Inc. needs to continuously innovate and improve its products to stay ahead of new entrants.

Intensity Of Rivalry

The customer engagement and support software market is highly competitive, with many established players. Freshworks Inc. faces intense competition from companies like Zendesk, Salesforce, and Microsoft.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 2.68%
Debt Cost 3.95%
Equity Weight 97.32%
Equity Cost 8.32%
WACC 8.20%
Leverage 2.75%

11. Quality Control: Freshworks Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Calix

A-Score: 4.6/10

Value: 3.3

Growth: 4.6

Quality: 4.4

Yield: 0.0

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
Unity Software

A-Score: 4.3/10

Value: 4.2

Growth: 6.0

Quality: 4.4

Yield: 0.0

Momentum: 9.5

Volatility: 2.0

1-Year Total Return ->

View Full Report
Stock-Card
DoubleVerify Holdings

A-Score: 4.2/10

Value: 4.3

Growth: 8.9

Quality: 7.1

Yield: 0.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

View Full Report
Stock-Card
Intapp

A-Score: 3.8/10

Value: 4.7

Growth: 7.8

Quality: 4.1

Yield: 0.0

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

View Full Report
Stock-Card
Freshworks

A-Score: 3.8/10

Value: 5.7

Growth: 5.1

Quality: 4.5

Yield: 0.0

Momentum: 2.5

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
GBTG

A-Score: 3.1/10

Value: 3.6

Growth: 2.2

Quality: 5.4

Yield: 0.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.13$

Current Price

8.13$

Potential

-0.00%

Expected Cash-Flows