Freshworks (NASDAQ:FRSH) Posts Earnings Results, Beats Expectations By $0.04 EPS

Freshworks (NASDAQ:FRSH) issued its quarterly earnings data on Tuesday. The company reported $0.22 earnings per share for the quarter, beating analysts’ consensus estimates of $0.18 by $0.04, FiscalAI reports. Freshworks had a return on equity of 7.88% and a net margin of 22.28%. The company had revenue of $245.43 million for the quarter, compared to the consensus estimate of $245.06 million. During the same quarter last year, the company earned $0.16 earnings per share. The firm’s revenue for the quarter was up 14.1% compared to the same quarter last year.

Here are the key takeaways from Freshworks’ conference call:

• Strong Q3 execution: Revenue reached $245.4 million, up 14% year over year, while non-GAAP operating margin expanded to 30% and adjusted free cash flow reached $73.9 million, also a 30% margin. Freshworks posted its second consecutive quarter of GAAP net income.
• EX remains the primary growth engine and is moving upmarket. EX ARR grew 22% to $588 million, customers with more than $100,000 in ARR grew 26%, and new EX customer ARPA increased 35%; management expects EX ARR to exceed $625 million at year-end.
• AI and the broader platform are supporting expansion. Freddy Copilot usage doubled year over year, customers purchasing CX AI Agent session packs rose more than 50% sequentially, and EX customers using AI have net dollar retention above 115%; the Torii and Robusta acquisitions add AI, IT asset management, and IT operations capabilities.
• Growth remains uneven and the cloud transition creates a near-term revenue headwind. CX ARR grew only 4% as Freshworks prioritizes profitability, while the shift from Device42 on-premise term licenses to cloud ITAM is expected to reduce upfront revenue, including an approximately $2 million impact built into the fourth-quarter outlook.
• Full-year profitability and cash-flow expectations improved. Freshworks raised its outlook to $965 million-$966 million of revenue, approximately $265 million of adjusted free cash flow, and more than $0.94 of adjusted free cash flow per share, while repurchasing $232 million of stock year to date.

Freshworks Stock Down 1.7%

Shares of FRSH stock traded down $0.22 during mid-day trading on Thursday, hitting $13.04. 3,967,977 shares of the stock were exchanged, compared to its average volume of 9,735,017. Freshworks has a 52-week low of $6.79 and a 52-week high of $15.51. The company has a market cap of $3.40 billion, a PE ratio of 17.86, a price-to-earnings-growth ratio of 9.43 and a beta of 0.80. The firm has a fifty day moving average of $13.48 and a 200 day moving average of $10.49.

Insider Buying and Selling at Freshworks

In related news, CAO Philippa Lawrence sold 52,767 shares of the company’s stock in a transaction dated Wednesday, September 2nd. The stock was sold at an average price of $13.25, for a total value of $699,162.75. Following the completion of the transaction, the chief accounting officer owned 389,296 shares of the company’s stock, valued at approximately $5,158,172. This represents a 11.94% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. 8.54% of the stock is currently owned by corporate insiders.

Key Headlines Impacting Freshworks

Here are the key news stories impacting Freshworks this week:

• Positive Sentiment: Freshworks beat third-quarter expectations, reporting adjusted EPS of $0.22 versus $0.18 expected and revenue of $245.4 million versus $245.1 million expected. Revenue grew 14% year over year; the company also posted $18.3 million in GAAP net income and record adjusted free cash flow of $73.9 million. Freshworks Reports Record Third Quarter 2026 Results
• Positive Sentiment: Several analysts raised price targets after the results: Cantor Fitzgerald lifted its target to $20, while UBS and Canaccord raised theirs to $17 and maintained buy-oriented ratings. Cantor Fitzgerald analyst recommendations
• Positive Sentiment: Freshworks’ enterprise push, AI adoption and margin gains are highlighted as potential growth drivers. Its 2026 targets include $965 million–$966 million in revenue and more than $0.94 in adjusted free cash flow per share. Freshworks: Compelling Enterprise Push And Margin Leaps
• Neutral Sentiment: Analyst sentiment remains mixed: Piper Sandler raised its target to $15 but kept a neutral rating, while Wolfe Research cut its rating from outperform to peer perform. Freshworks rating cut at Wolfe Research
• Negative Sentiment: The earnings beat was modest on revenue, and coverage of the results noted a cautious outlook. That could temper enthusiasm about growth despite the stronger cash generation and profitability. Q3 2026 deep dive

Wall Street Analysts Forecast Growth

Several analysts have weighed in on the company. UBS Group boosted their price target on Freshworks from $14.00 to $17.00 and gave the company a “buy” rating in a research note on Wednesday. Guggenheim started coverage on shares of Freshworks in a report on Wednesday, July 22nd. They issued a “buy” rating and a $25.00 price target on the stock. Wall Street Zen upgraded shares of Freshworks from a “hold” rating to a “buy” rating in a research note on Saturday, August 8th. Cantor Fitzgerald upped their price objective on shares of Freshworks from $15.00 to $20.00 and gave the company an “overweight” rating in a report on Wednesday. Finally, Piper Sandler boosted their target price on shares of Freshworks from $12.00 to $15.00 and gave the company a “neutral” rating in a research report on Wednesday. One research analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating and eight have assigned a Hold rating to the stock. According to data from MarketBeat, Freshworks has a consensus rating of “Moderate Buy” and a consensus target price of $15.92.

Freshworks Company Profile

Freshworks Inc (NASDAQ:FRSH) develops cloud-based customer and employee engagement software for businesses of various sizes. Its products are designed to help organizations manage customer support, IT service operations, sales activities, and marketing workflows through user-friendly, artificial intelligence-enabled applications.

The company’s product portfolio includes Freshdesk for customer service and support, Freshservice for IT and enterprise service management, Freshsales for customer relationship management, and Freshmarketer for marketing automation and customer engagement.