Freshworks (NASDAQ:FRSH) Issues Earnings Results

Freshworks (NASDAQ:FRSH) posted its quarterly earnings results on Tuesday. The company reported $0.17 earnings per share for the quarter, beating the consensus estimate of $0.13 by $0.04, FiscalAI reports. The business had revenue of $237.38 million for the quarter, compared to the consensus estimate of $233.62 million. Freshworks had a return on equity of 4.27% and a net margin of 20.69%.The company’s quarterly revenue was up 16.0% compared to the same quarter last year. During the same quarter in the previous year, the business earned $0.18 EPS. Freshworks updated its FY 2026 guidance to 0.660-0.680 EPS and its Q3 2026 guidance to 0.180-0.180 EPS.

Here are the key takeaways from Freshworks’ conference call:

• GAAP profitability arrived ahead of schedule: Freshworks reported $3.2 million in Q2 GAAP net income, alongside 16% year-over-year revenue growth to $237.4 million and a 24% non-GAAP operating margin. Management expects to sustain GAAP profitability while continuing to invest in employee experience (EX) and AI.
• EX remains the primary growth engine: EX ARR increased 24% on a constant-currency basis to $567 million, or roughly 59% of total ARR, supported by larger enterprise deals and cross-selling of ITAM, ESM, ITOM and AI. The company reiterated expectations for mid-20s EX ARR growth and more than $600 million in EX ARR exiting 2026.
• AI monetization and adoption are gaining traction: More than 7,000 customers now pay for an AI SKU, Copilot attach rates exceeded 70% on new deals above $30,000, and AI Agent Studio had more than 1,000 early-access customers. Freshworks plans to introduce usage-based pricing for Agent Studio in the fall.
• Capital efficiency strengthened: Q2 adjusted free cash flow was $57.7 million, and the company repurchased approximately $159 million of stock during the quarter, reducing shares outstanding by 7% year to date. Freshworks ended Q2 with $665 million in cash and investments and no debt.
• CX growth remains subdued: CX ARR grew only 4% on a constant-currency basis to $400 million, with full-year growth expected in the low single digits. Management is restructuring the CX organization and focusing on profitability, retention and higher-quality customer acquisition rather than rapid expansion.

Freshworks Trading Up 2.3%

Shares of NASDAQ FRSH traded up $0.27 during trading on Tuesday, reaching $12.04. 8,356,077 shares of the company traded hands, compared to its average volume of 11,424,372. The stock has a market cap of $3.33 billion, a P/E ratio of 19.42 and a beta of 0.86. The firm’s fifty day simple moving average is $10.03 and its 200 day simple moving average is $9.18. Freshworks has a 12-month low of $6.79 and a 12-month high of $14.06.

Wall Street Analyst Weigh In

Several research analysts have recently issued reports on the company. Citigroup reaffirmed a “market outperform” rating on shares of Freshworks in a report on Tuesday, June 2nd. Wall Street Zen downgraded shares of Freshworks from a “buy” rating to a “hold” rating in a report on Saturday, May 9th. Morgan Stanley reduced their price target on shares of Freshworks from $15.00 to $13.00 and set an “equal weight” rating for the company in a research report on Monday, May 11th. Weiss Ratings lowered shares of Freshworks from a “sell (d+)” rating to a “sell (d)” rating in a research report on Thursday, May 7th. Finally, Zacks Research cut shares of Freshworks from a “strong-buy” rating to a “hold” rating in a research note on Friday, July 10th. One research analyst has rated the stock with a Strong Buy rating, six have assigned a Buy rating, eight have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the stock currently has a consensus rating of “Hold” and a consensus price target of $13.25.

Insider Transactions at Freshworks

In related news, CAO Philippa Lawrence sold 3,470 shares of the firm’s stock in a transaction dated Monday, July 6th. The stock was sold at an average price of $10.13, for a total transaction of $35,151.10. Following the sale, the chief accounting officer directly owned 456,144 shares of the company’s stock, valued at $4,620,738.72. This trade represents a 0.75% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at 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. Also, Director Jennifer H. Taylor sold 6,618 shares of Freshworks stock in a transaction that occurred on Thursday, July 2nd. The shares were sold at an average price of $10.44, for a total value of $69,091.92. Following the transaction, the director owned 62,673 shares of the company’s stock, valued at approximately $654,306.12. This represents a 9.55% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 27,236 shares of company stock worth $270,331 over the last quarter. 8.54% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Freshworks

Several large investors have recently made changes to their positions in FRSH. Wellington Management Group LLP boosted its stake in shares of Freshworks by 9.2% during the 4th quarter. Wellington Management Group LLP now owns 5,359,784 shares of the company’s stock worth $65,657,000 after acquiring an additional 453,627 shares in the last quarter. Geode Capital Management LLC lifted its holdings in Freshworks by 1.9% in the 4th quarter. Geode Capital Management LLC now owns 5,126,112 shares of the company’s stock valued at $62,805,000 after purchasing an additional 95,720 shares in the last quarter. State Street Corp boosted its stake in Freshworks by 1.2% during the 4th quarter. State Street Corp now owns 4,904,684 shares of the company’s stock worth $60,082,000 after purchasing an additional 56,935 shares during the last quarter. Fuller & Thaler Asset Management Inc. grew its holdings in shares of Freshworks by 11.2% during the fourth quarter. Fuller & Thaler Asset Management Inc. now owns 4,748,985 shares of the company’s stock worth $58,175,000 after buying an additional 478,473 shares in the last quarter. Finally, Dimensional Fund Advisors LP raised its position in shares of Freshworks by 8.5% in the third quarter. Dimensional Fund Advisors LP now owns 3,316,920 shares of the company’s stock valued at $39,052,000 after buying an additional 260,078 shares during the last quarter. 75.58% of the stock is currently owned by institutional investors and hedge funds.

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.