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

Freshworks (NASDAQ:FRSH) posted its quarterly earnings results on Tuesday. The company reported $0.17 earnings per share for the quarter, topping the consensus estimate of $0.13 by $0.04, FiscalAI reports. Freshworks had a net margin of 20.69% and a return on equity of 4.27%. The business had revenue of $237.38 million during the quarter, compared to the consensus estimate of $233.62 million. During the same period in the previous year, the firm posted $0.18 earnings per share. The firm’s revenue for the quarter was up 16.0% on a year-over-year basis. 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 Price Performance

NASDAQ:FRSH traded down $0.22 during mid-day trading on Wednesday, reaching $11.82. 2,538,572 shares of the company’s stock traded hands, compared to its average volume of 11,363,376. The company has a 50 day moving average price of $10.09 and a 200-day moving average price of $9.18. The firm has a market capitalization of $3.27 billion, a price-to-earnings ratio of 19.06 and a beta of 0.86. Freshworks has a 12-month low of $6.79 and a 12-month high of $14.06.

Trending Headlines about Freshworks

Here are the key news stories impacting Freshworks this week:

• Positive Sentiment: Q2 results exceeded expectations: Freshworks reported adjusted earnings of $0.17 per share versus the $0.13 consensus estimate and revenue of $237.4 million, above expectations of $233.6 million. Revenue increased 16% year over year, while GAAP net income reached $3.2 million. Freshworks Reports Record Second Quarter 2026 Results
• Positive Sentiment: Raised full-year guidance: Freshworks expects 2026 revenue of $963.5 million to $966.5 million, above the $961.2 million analyst consensus, and adjusted EPS of $0.66 to $0.68 versus the prior consensus of $0.50. Third-quarter EPS guidance of $0.18 also exceeded the $0.15 estimate. Freshworks 2026 Revenue and Profitability Outlook
• Positive Sentiment: AI and employee-experience growth are key themes: Management highlighted increasing adoption of artificial-intelligence products and continued expansion in employee-experience software. Profitability improvements and potential share buybacks further support the investment case. FRSH Q2 Earnings Call Highlights
• Positive Sentiment: Analyst support improved: Cantor Fitzgerald raised its price target from $12 to $15 and assigned an “overweight” rating, implying meaningful upside from recent trading levels. Cantor Fitzgerald Price Target Update
• Neutral Sentiment: Piper Sandler increased its price target from $10 to $12 but maintained a “neutral” rating, indicating that valuation and execution concerns may limit enthusiasm despite the improved outlook. Piper Sandler Price Target Update

Analysts Set New Price Targets

FRSH has been the topic of several analyst reports. Morgan Stanley decreased their price objective on Freshworks from $15.00 to $13.00 and set an “equal weight” rating on the stock in a report on Monday, May 11th. Robert W. Baird set a $13.00 price target on Freshworks in a research report on Wednesday. Wall Street Zen cut Freshworks from a “buy” rating to a “hold” rating in a research note on Saturday, May 9th. Weiss Ratings downgraded Freshworks from a “sell (d+)” rating to a “sell (d)” rating in a research report on Thursday, May 7th. Finally, Zacks Research lowered Freshworks from a “strong-buy” rating to a “hold” rating in a research note on Friday, July 10th. One equities research analyst has rated the stock with a Strong Buy rating, six have issued a Buy rating, eight have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, the stock presently has an average rating of “Hold” and a consensus target price of $13.92.

Insiders Place Their Bets

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 stock was sold at an average price of $10.44, for a total transaction of $69,091.92. Following the completion of the transaction, the director owned 62,673 shares in the company, valued at $654,306.12. This represents a 9.55% decrease in their ownership of the stock. The sale was disclosed in a legal 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. Also, CAO Philippa Lawrence sold 3,470 shares of the firm’s stock in a transaction on Monday, July 6th. The stock was sold at an average price of $10.13, for a total value of $35,151.10. Following the completion of the sale, the chief accounting officer directly owned 456,144 shares of the company’s stock, valued at $4,620,738.72. The trade was a 0.75% decrease in their position. 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. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders sold 27,236 shares of company stock worth $270,331. 8.54% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Freshworks

Several institutional investors and hedge funds have recently modified their holdings of FRSH. Summit Securities Group LLC purchased a new position in shares of Freshworks during the fourth quarter valued at about $26,000. EverSource Wealth Advisors LLC boosted its position in Freshworks by 427.6% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 4,479 shares of the company’s stock valued at $67,000 after acquiring an additional 3,630 shares in the last quarter. Shay Capital LLC purchased a new position in shares of Freshworks during the 3rd quarter worth approximately $118,000. One68 Global Capital LLC bought a new position in shares of Freshworks in the 3rd quarter worth approximately $118,000. Finally, Heron Bay Capital Management purchased a new position in shares of Freshworks in the 4th quarter valued at approximately $126,000. 75.58% of the stock is owned by hedge funds and other institutional investors.

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.