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

Freshworks (NASDAQ:FRSH) released its quarterly earnings data on Tuesday. The company reported $0.22 earnings per share for the quarter, beating the consensus estimate of $0.18 by $0.04, FiscalAI reports. Freshworks had a return on equity of 5.52% and a net margin of 20.49%. 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 business posted $0.16 EPS. Freshworks’s revenue for the quarter was up 14.1% on a year-over-year basis.

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 4.2%

NASDAQ:FRSH traded down $0.59 on Wednesday, hitting $13.56. The stock had a trading volume of 1,794,983 shares, compared to its average volume of 9,714,628. Freshworks has a 52 week low of $6.79 and a 52 week high of $15.51. The business’s fifty day moving average is $13.47 and its 200 day moving average is $10.48. The company has a market cap of $3.54 billion, a PE ratio of 21.26, a P/E/G ratio of 9.47 and a beta of 0.80.

Insider Activity

In other news, CAO Philippa Lawrence sold 52,767 shares of Freshworks stock in a transaction dated Wednesday, September 2nd. The shares were sold at an average price of $13.25, for a total transaction of $699,162.75. Following the completion of the transaction, the chief accounting officer directly owned 389,296 shares in the company, valued at $5,158,172. This trade represents a 11.94% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available 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 owned by corporate insiders.

More Freshworks News

Here are the key news stories impacting Freshworks this week:

• Positive Sentiment: Q3 earnings and cash flow beat expectations. Freshworks earned $0.22 per share versus the $0.18 consensus estimate. Revenue rose 14% year over year to $245.4 million, narrowly topping estimates, while the company posted $18.3 million in GAAP net income and record adjusted free cash flow of $73.9 million, up 29%. It also marked its ninth consecutive quarter meeting the Rule of 40 benchmark. Read More.
• Positive Sentiment: Analysts raised their price targets. Cantor Fitzgerald lifted its target from $15 to $20 and kept an Overweight rating. Piper Sandler raised its target from $12 to $15, while maintaining a Neutral rating. Read More. and Read More.
• Positive Sentiment: 2026 outlook points to continued growth and cash generation. Freshworks expects full-year revenue of $965 million–$966 million and is targeting more than $0.94 in adjusted free cash flow per share. Read More.
• Negative Sentiment: The market reaction was weak despite the earnings beat. Q3 revenue was only slightly above estimates, and reports noted that the stock dropped after results. That response suggests investors may have wanted a more meaningful sales beat or stronger signals about growth. Read More.

Wall Street Analysts Forecast Growth

Several research analysts recently issued reports on FRSH shares. Piper Sandler raised their target price on Freshworks from $12.00 to $15.00 and gave the stock a “neutral” rating in a research report on Wednesday. Wall Street Zen raised shares of Freshworks from a “hold” rating to a “buy” rating in a research report on Saturday, August 8th. Needham & Company LLC reiterated a “buy” rating and issued a $15.00 price objective on shares of Freshworks in a research note on Wednesday. Weiss Ratings upgraded shares of Freshworks from a “hold (c-)” rating to a “hold (c)” rating in a research report on Tuesday, September 29th. Finally, Zacks Research downgraded shares of Freshworks from a “strong-buy” rating to a “hold” rating in a research report on Friday, July 10th. One equities research analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and eight have assigned a Hold rating to the company. According to MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average price target of $15.46.

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.