Core Insights - Freshworks, a U.S. software company, is actively exploring acquisitions, particularly in the AI sector, supported by over $800 million in cash to enhance revenue growth in the upcoming years [1] Group 1 - Freshworks is focusing on acquiring AI firms as part of its strategy to increase revenue [1] - The company has a substantial cash reserve of more than $800 million to facilitate these acquisitions [1] - CEO Dennis Woodside emphasized the importance of these acquisitions for the company's future growth [1]

Freshworks to Deepen its IT Service and Operations Portfolio with Acquisition of FireHydrant Freshworks has signed a definitive agreement to acquire FireHydrant, a provider of AI-powered Incident Management software. The combination will bring together Freshservice’s IT Service Management (ITSM) and FireHydrant’s core IT Operations Management (ITOM) as a unified AI-native ServiceOps solution designed to simplify operations, proactively prevent disruptions, and ensure exceptional IT service reliability. ...

Core Insights - Whetstone Capital Advisors, LLC has fully liquidated its position in Freshworks, selling all 492,234 shares valued at approximately $7.3 million as of the end of June [2][6]. Company Overview - Freshworks Inc. provides cloud-based software-as-a-service (SaaS) solutions for customer engagement, IT service management, and sales automation, catering to a diverse customer base from small businesses to large enterprises globally [5]. - As of the latest financial data, Freshworks reported a total revenue of $810.64 million and a net income of -$29.62 million, with a market capitalization of $3.59 billion [4]. Recent Performance - Freshworks experienced a 15% year-over-year revenue growth in the third quarter, reaching $215.1 million, although it reported an operating loss of $7.5 million, which is an improvement from a loss of $38.9 million in the previous year [6]. - The company also reported a non-GAAP operating income of $45.2 million, nearly double the previous year's figure of $24 million, although this includes adjustments for stock-based compensation [7]. Market Sentiment - Following its IPO in 2021 at $36, Freshworks' stock price has significantly declined, currently trading at $12.11, which is less than one-third of the IPO price. The stock has underperformed the S&P 500 by 40.5 percentage points over the past year, indicating market skepticism regarding its future prospects despite efforts to push AI products [8][9].

Freshworks Inc. ( FRSH ) is a company that has found a position in my portfolio. Since I last covered it, the stock saw a pretty good decrease, dropping from near $12.5 a share down to a 52-week lowAnalyst’s Disclosure:I/we have a beneficial long position in the shares of FRSH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with ...

Core Insights - Freshworks Inc. has introduced new capabilities in its Freshservice platform aimed at simplifying enterprise service delivery, modernizing IT, and enhancing employee trust [1][4] Group 1: Product Enhancements - The launch includes enhancements to Freshservice and Freddy AI, improving employee experience (EX) and service delivery through effortless self-service and real-time device health insights [2] - AI-powered Intelligent Routing in Freshservice ensures tickets are directed to the appropriate team instantly, enhancing resolution speed and employee experience [2] - Freddy AI Insights now provides IT leaders with conversational insights to visualize complex service patterns and quickly identify root causes [2][7] Group 2: Addressing Complexity in IT - Freshworks' Cost of Complexity Report indicates that nearly 20% of IT leaders have faced burnout or attrition due to complex software, with 29% of employees reporting productivity loss from bloated tools [3] - The report identifies business software as the primary driver of organizational complexity [3] Group 3: Proactive Issue Resolution - DEX integrations with Riverbed Aternity and ControlUp allow for the detection and resolution of endpoint issues before employees notice them, providing immediate visibility into system health [5] - AI-powered Intelligent Routing helps assign tickets based on team availability, skill, and workload, improving issue resolution efficiency [5] Group 4: Enhanced Employee Support - Enhanced Freddy AI Agents can now search Google Drive and process images within tickets, integrating seamlessly with popular applications like Microsoft 365 Copilot [6] - Freshservice's multilingual knowledge base allows users to access helpful articles in their preferred language, improving self-service capabilities [6] Group 5: Performance Recognition - Freshservice has been recognized as a Strong Performer in The Forrester Wave™: Enterprise Service Management Platforms, Q4 2025, receiving high scores in various criteria [8] - Customers have praised Freshworks for its ease of use, intuitive design, and robust API capabilities, contributing to improved incident management and resolution times [8]

Core Insights - Freshworks Inc. has introduced new capabilities in Freshdesk aimed at enhancing customer experience (CX) by reducing response times, improving resolution rates, and providing clearer insights into operational issues [1][2] Product Innovations - The update includes three main features: Freshdesk Command Center for centralized multi-channel customer interactions, Vertical AI Agents with prebuilt workflows for various industries, and Freddy AI Insights for real-time operational visibility [2][4] - Freshdesk Command Center integrates multiple communication channels and AI capabilities into a single workspace, streamlining customer service operations and reducing manual data retrieval [5][6] - Freddy AI Insights offers leaders real-time visibility into performance trends and anomalies, enabling proactive management of support operations [8] Industry Challenges - A report by Freshworks highlights common challenges faced by customer service agents, including uncustomizable workflows (42%) and excessive tools (36%), which hinder productivity [3] - The need for organizations to quickly design and deploy AI agents is emphasized, as current processes are often time-consuming and inefficient [10] Customer Success Stories - Companies like Gail's Bakery and Upayments have reported significant improvements in efficiency and customer service quality through the use of Freshworks' AI capabilities, with some achieving up to 80% resolution of service issues by AI agents [9][13]

New research identifies the "growth tax" on companies due to enterprise software-induced complexity, which drains millions of dollars and costs employees nearly a full workday each week in lost productivitySAN MATEO, Calif., Nov. 10, 2025 (GLOBE NEWSWIRE) -- As businesses expand their technology stacks and operational processes, they face a hidden but pervasive challenge: complexity. A new report from Freshworks Inc. (NASDAQ: FRSH) has calculated exactly what that complexity costs. The Cost of Complexity Re ...

Core Insights - Freshworks Inc. reported quarterly earnings of $0.16 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, and showing an increase from $0.11 per share a year ago, resulting in an earnings surprise of +23.08% [1] - The company achieved revenues of $215.12 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.12% and increasing from $186.57 million year-over-year [2] - Freshworks has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Earnings Performance - The earnings surprise for the previous quarter was +50%, with actual earnings of $0.18 per share compared to an expected $0.12 per share [1] - The current consensus EPS estimate for the upcoming quarter is $0.09, with projected revenues of $216.01 million, and for the current fiscal year, the EPS estimate is $0.57 on revenues of $825.59 million [7] Stock Performance and Outlook - Freshworks shares have declined approximately 32.5% since the beginning of the year, contrasting with the S&P 500's gain of 15.1% [3] - The company's Zacks Rank is currently 1 (Strong Buy), indicating expectations for the stock to outperform the market in the near future [6] Industry Context - The Internet - Software industry, to which Freshworks belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Freshworks reported Q3 2025 revenue of $215.1 million, a 15% year-over-year increase on both an as-reported and constant currency basis, exceeding previous estimates by approximately three points [5][20] - Non-GAAP operating margin expanded to 21%, five points above estimates, with a free cash flow margin of 27% [5][22] - Adjusted free cash flow for Q3 was $57.2 million, resulting in a 27% margin, an improvement of over 5 percentage points year-over-year [26] Business Line Data and Key Metrics Changes - Employee Experience (EX) business grew to over $480 million in ARR, representing 24% year-over-year growth [7][21] - Customer Experience (CX) business increased to over $390 million in ARR, reflecting 8% growth year-over-year [16][21] - The number of customers contributing more than $50,000 in ARR grew 20% year-over-year to 3,612 customers, representing over 50% of total ARR [23] Market Data and Key Metrics Changes - The number of new and expansion deals exceeding $50,000 in ARR increased by over 40% year-over-year [6] - The company added nearly 75,000 customers by the end of Q3, with over 260 net new customers added in the quarter [23] Company Strategy and Development Direction - Freshworks aims to reach $1.3 billion in ARR in the next three years, focusing on Employee Service Management (ESM), AI, and IT Asset Management (ITAM), each targeting over $100 million in ARR [6][12] - The company is expanding its ESM solution, FreshService for Business Teams, as a standalone product to target non-IT functions, which has already doubled its ARR to exceed $35 million [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformative AI opportunity, highlighting over 50 AI-driven applications currently in use by customers [6][12] - The company anticipates a one-time increase in spending during Q4 to expand its pipeline and drive customer acquisition, which may modestly impact operating margins [30] Other Important Information - Freshworks completed its inaugural $400 million share repurchase program, buying back approximately 27.9 million shares at an average price of $14.35 [26][27] - The company plans to discontinue reporting total customer count quarterly, shifting focus to larger customer measures that better reflect business trajectory [24] Q&A Session Summary Question: Discussion on selling ESM as a standalone solution - Management confirmed that FreshService for Business Teams has seen significant demand outside core IT departments, with a strong value proposition and no new Salesforce required for sales [34][36] Question: Insights on the buy-back program - Management completed the inaugural buy-back program and is open to discussing future capital allocation strategies, including potential M&A opportunities [37] Question: Balancing monetization versus adoption of Freddy AI tools - Management explained the different monetization models for Freddy AI products, indicating a shift towards higher pricing aligned with industry standards [39][41] Question: Government exposure and impact from the government shutdown - Management reported no impact from the government shutdown, noting continued success in landing government and university contracts [45] Question: Details on one-time investment in Q4 - Management clarified that the one-time investment is primarily for marketing and demand generation efforts to capitalize on strong demand for EX products [46] Question: Key differentiators in ITSM win rates - Management highlighted the enterprise-grade solution and flexibility of their offerings as key differentiators in winning larger deals against competitors [56][58]

Core Viewpoint - Freshworks forecasts fourth-quarter revenue exceeding Wall Street estimates, driven by increasing demand for its AI-powered software tools [1] Group 1 - Freshworks is betting on the growing demand for its artificial intelligence-powered software tools [1]