Freshworks (NASDAQ:FRSH) Releases Quarterly Earnings Results, Beats Estimates By $0.04 EPS

Freshworks (NASDAQ:FRSH) announced 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 firm had revenue of $237.38 million for the quarter, compared to analysts’ expectations of $233.62 million. Freshworks had a net margin of 20.69% and a return on equity of 4.27%. The company’s revenue was up 16.0% compared to the same quarter last year. During the same quarter in the previous year, the company posted $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 Stock Performance

Shares of FRSH traded up $0.27 during mid-day trading on Tuesday, hitting $12.04. 8,356,077 shares of the company’s stock were exchanged, compared to its average volume of 11,424,372. The stock’s 50-day moving average is $10.03 and its 200-day moving average is $9.18. Freshworks has a fifty-two week low of $6.79 and a fifty-two week high of $14.06. The company has a market cap of $3.33 billion, a price-to-earnings ratio of 19.42 and a beta of 0.86.

Analyst Upgrades and Downgrades

Several research analysts have weighed in on FRSH shares. Zacks Research lowered shares of Freshworks from a “strong-buy” rating to a “hold” rating in a research note on Friday, July 10th. Weiss Ratings downgraded shares of Freshworks from a “sell (d+)” rating to a “sell (d)” rating in a research note on Thursday, May 7th. Morgan Stanley decreased their price objective on shares of Freshworks from $15.00 to $13.00 and set an “equal weight” rating on the stock in a report on Monday, May 11th. Guggenheim initiated coverage on shares of Freshworks in a research report on Wednesday, July 22nd. They set a “buy” rating and a $25.00 price objective for the company. Finally, Wall Street Zen downgraded shares of Freshworks from a “buy” rating to a “hold” rating in a report on Saturday, May 9th. One analyst has rated the stock with a Strong Buy rating, six have assigned a Buy rating, eight have given a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, the company currently has a consensus rating of “Hold” and a consensus target price of $13.25.

Insider Activity at Freshworks

In related news, Director Jennifer H. Taylor sold 6,618 shares of the company’s stock in a transaction that occurred on Thursday, July 2nd. The shares were sold at an average price of $10.44, for a total transaction of $69,091.92. Following the sale, the director directly owned 62,673 shares of the company’s stock, valued at $654,306.12. This represents a 9.55% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Barry L. Padgett sold 6,618 shares of the stock in a transaction that occurred on Wednesday, July 1st. The stock was sold at an average price of $10.49, for a total transaction of $69,422.82. Following the sale, the director owned 47,270 shares in the company, valued at approximately $495,862.30. This trade represents a 12.28% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 27,236 shares of company stock worth $270,331. Corporate insiders own 8.54% of the company’s stock.

Institutional Trading of Freshworks

Several hedge funds have recently modified their holdings of FRSH. Balyasny Asset Management L.P. purchased a new stake in shares of Freshworks during the fourth quarter worth approximately $31,967,000. Qube Research & Technologies Ltd lifted its stake in Freshworks by 132.6% in the third quarter. Qube Research & Technologies Ltd now owns 2,790,166 shares of the company’s stock worth $32,840,000 after acquiring an additional 1,590,384 shares during the last quarter. Squarepoint Ops LLC lifted its stake in Freshworks by 345.1% in the second quarter. Squarepoint Ops LLC now owns 1,835,798 shares of the company’s stock worth $27,372,000 after acquiring an additional 1,423,391 shares during the last quarter. Voloridge Investment Management LLC acquired a new position in Freshworks during the 3rd quarter worth approximately $15,656,000. Finally, AQR Capital Management LLC grew its holdings in Freshworks by 213.8% during the 4th quarter. AQR Capital Management LLC now owns 1,895,737 shares of the company’s stock worth $23,223,000 after acquiring an additional 1,291,662 shares in 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.