Freshworks(FRSH) - 2025 Q2 - Quarterly Report

Registrant Information Filing Details Freshworks Inc., an accelerated filer, filed its Form 10-Q for the quarter ended June 30, 2025, having submitted all required electronic reports - Freshworks Inc. is classified as an accelerated filer[4] - The registrant has filed all required reports and submitted Interactive Data Files electronically during the preceding 12 months[3] Securities Information As of July 24, 2025, Freshworks Inc. had 237.9 million Class A and 53.5 million Class B common stock shares outstanding | Metric | Value | | :----- | :---- | | Class A common stock outstanding (July 24, 2025) | 237,933,261 shares | | Class B common stock outstanding (July 24, 2025) | 53,495,414 shares | Special Note Regarding Forward-Looking Statements Nature of Forward-Looking Statements This section clarifies that the report contains forward-looking statements subject to substantial risks and uncertainties - All statements other than historical facts in this report are forward-looking statements, involving substantial risks and uncertainties[9] - Investors should not rely on forward-looking statements as predictions of future events, as actual results could differ materially[10][12] Key Areas of Forward-Looking Statements Forward-looking statements cover various aspects of the business, including ARR, revenue, expenses, profitability, and market opportunity - Forward-looking statements include expectations regarding ARR, revenue, expenses, profitability, customer acquisition and retention, usage of existing products, and the ability to manage growth[11] - Other key areas include future investments, capital requirements, sales and marketing efforts, addressable market opportunity, reliance on key personnel, international expansion, integration of acquired businesses (like D42 Parent, Inc.), and the effects of macroeconomic uncertainties[11] Limitations and Disclaimers The company's beliefs are based on available information, and Freshworks undertakes no obligation to update forward-looking statements - Statements reflecting beliefs and opinions are based on information available as of the report date, which may be limited or incomplete[13] - The company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the report date, except as required by law[14] Where You Can Find More Information Freshworks disseminates material information through SEC filings, press releases, its website, and social media channels - Material information is disseminated through SEC filings, press releases, public conference calls, the company website, investor relations section, LinkedIn, and X (formerly Twitter)[15] Part I. Financial Information Item 1. Financial Statements (Unaudited) This section presents Freshworks Inc.'s unaudited condensed consolidated financial statements and explanatory notes Condensed Consolidated Balance Sheets Total assets and stockholders' equity decreased from December 31, 2024, to June 30, 2025, primarily due to reduced cash | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Assets | $1,480,826 | $1,611,884 | $(131,058) | | Total Liabilities | $496,184 | $473,963 | $22,221 | | Total Stockholders' Equity | $984,642 | $1,137,921 | $(153,279) | | Cash and cash equivalents | $485,970 | $620,315 | $(134,345) | Condensed Consolidated Statements of Operations Freshworks Inc. reported a significant reduction in net loss for Q2 and H1 2025, driven by revenue growth and lower operating losses | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Revenue | $204,678 | $174,131 | 17.5% | $400,951 | $339,274 | 18.2% | | Gross profit | $173,536 | $145,956 | 18.9% | $339,931 | $285,209 | 19.2% | | Loss from operations | $(8,656) | $(43,787) | 80.2% | $(19,072) | $(75,954) | 74.9% | | Net loss | $(1,739) | $(20,184) | 91.4% | $(3,043) | $(43,509) | 93.0% | | Net loss per share - basic and diluted | $(0.01) | $(0.07) | 85.7% | $(0.01) | $(0.15) | 93.3% | Condensed Consolidated Statements of Comprehensive Loss Comprehensive loss significantly decreased for Q2 and H1 2025, primarily due to reduced net loss | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Net loss | $(1,739) | $(20,184) | 91.4% | $(3,043) | $(43,509) | 93.0% | | Total other comprehensive income (loss) | $(506) | $245 | -306.5% | $440 | $(275) | 260.0% | | Comprehensive loss | $(2,245) | $(19,939) | 88.7% | $(2,603) | $(43,784) | 94.1% | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased from December 2024 to June 2025, mainly due to $226.7 million in common stock repurchases | Metric (in thousands) | As of Dec 31, 2024 | As of Jun 30, 2025 | Change | | :-------------------- | :----------------- | :----------------- | :----- | | Total Stockholders' Equity | $1,137,921 | $984,642 | $(153,279) | | Repurchase and retirement of common stock, including excise tax (6 months) | — | $(226,660) | $(226,660) | | Stock-based compensation (6 months) | — | $103,007 | $103,007 | Condensed Consolidated Statements of Cash Flows Operating cash flow increased, financing cash flow rose due to repurchases, and investing activities shifted to a net inflow | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | | Net cash provided by operating activities | $116,564 | $76,955 | 51.5% | | Net cash provided by (used in) investing activities | $3,389 | $(220,495) | 101.5% | | Net cash used in financing activities | $(254,287) | $(34,318) | -640.9% | | Net decrease in cash, cash equivalents and restricted cash | $(134,334) | $(177,858) | 24.4% | - Cash used in financing activities for H1 2025 was significantly impacted by $227.2 million in common stock repurchases[31] - Investing activities in H1 2024 included a $213.9 million business combination, which was absent in H1 2025[31] Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations for the financial statements, covering policies, assets, liabilities, and events 1. Basis of Presentation and Summary of Significant Accounting Policies Financial statements are unaudited, GAAP-compliant, and reflect normal adjustments, with no single customer exceeding 10% of revenue - The condensed consolidated financial statements are unaudited, prepared in accordance with GAAP, and include only normal recurring adjustments[36] - No single customer accounted for more than 10% of revenue for the three and six months ended June 30, 2025 and 2024[41] - Recent accounting pronouncements (ASU 2023-09 and ASU 2024-03/2025-01) are disclosure-related and are not expected to have a significant impact on the condensed consolidated financial statements[43][44] 2. Cash Equivalents and Marketable Securities Cash equivalents and marketable securities decreased from December 2024 to June 2025, with minimal unrealized losses | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total cash equivalents | $418,928 | $507,655 | $(88,727) | | Total debt securities | $440,226 | $449,750 | $(9,524) | | Total cash equivalents and debt securities | $859,154 | $957,405 | $(98,251) | | Unrealized Losses (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | U.S. treasury securities | $(47) | $(17) | | U.S. government agency securities | $(28) | $(12) | | Corporate debt securities | $(24) | $(21) | | Total | $(99) | $(50) | 3. Fair Value Measurements Financial assets are measured at fair value using a hierarchy, with most classified as Level 1 or Level 2 - Money market funds and U.S. treasury securities are classified within Level 1, while other debt securities and investments are classified within Level 2, based on observable inputs[48][51] | Financial Assets (in thousands) | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Total (June 30, 2025) | | :------------------------------ | :---------------------- | :---------------------- | :-------------------- | | Cash equivalents | $354,211 | $64,717 | $418,928 | | Marketable securities | $192,299 | $247,927 | $440,226 | | Total financial assets | $546,510 | $312,644 | $859,154 | 4. Balance Sheet Components Property and equipment, net, and accrued liabilities increased, driven by capitalized internal-use software and commissions | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Property and equipment, net | $30,894 | $25,893 | $5,001 | | Capitalized internal-use software (net carrying value) | $20,400 | $14,500 | $5,900 | | Accrued liabilities | $86,714 | $81,933 | $4,781 | - Capitalization of internal-use software costs increased significantly to $9.16 million for the six months ended June 30, 2025, from $3.16 million in the prior year period[52] 5. Business Combinations Freshworks acquired D42 Parent, Inc. in June 2024 for $238.1 million, adding goodwill and intangible assets - Freshworks acquired D42 Parent, Inc. in June 2024 for $238.1 million to offer a more comprehensive IT solution for customers[54] | Acquired Assets (in millions) | Value | | :---------------------------- | :---- | | Goodwill | $140.8 | | Intangible assets | $99.0 | | Pro Forma Financials (in thousands) | 6 Months Ended June 30, 2024 | 6 Months Ended June 30, 2023 | | :---------------------------------- | :--------------------------- | :--------------------------- | | Revenue | $354,445 | $300,038 | | Net loss | $(47,195) | $(86,699) | 6. Intangible Assets, Net Net intangible assets decreased to $83.8 million by June 2025, with amortization expense significantly increasing due to the D42 acquisition | Acquired Intangible Assets (in thousands) | June 30, 2025 Net Carrying Value | December 31, 2024 Net Carrying Value | | :---------------------------------------- | :------------------------------- | :------------------------------- | | Developed technology | $25,238 | $27,773 | | Customer relationships | $58,580 | $62,767 | | Trademarks | $0 | $300 | | Total | $83,818 | $90,840 | | Amortization Expense (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :---------------------------------- | :--------------------------- | :--------------------------- | :--------- | | Total amortization expense | $7,022 | $976 | 619.5% | - Expected future amortization expense related to acquired intangible assets totals $83.8 million, with $6.8 million remaining for the rest of 2025[57] 7. Leases Freshworks primarily holds operating leases for office space, with a 3.9-year remaining term and $9.1 million in H1 2025 costs | Lease Metric | June 30, 2025 | June 30, 2024 | | :----------- | :------------ | :------------ | | Weighted-average remaining lease term | 3.9 years | 4.7 years | | Weighted-average discount rate | 8.9% | 9.0% | | Lease Costs (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------- | :--------------------------- | :--------------------------- | | Total lease cost | $9,103 | $8,141 | 8. Commitments and Contingencies Freshworks has $284.0 million in commitments and is involved in legal proceedings, with no material adverse impact anticipated - Other contractual commitments total $284.0 million through 2028, primarily for third-party cloud infrastructure, service subscriptions, and sponsorship arrangements[60] - A motion for summary judgment was granted in the company's favor on April 10, 2025, in a securities class action, with the plaintiff filing a notice of appeal[61][62] - No currently pending legal proceedings are believed to have a material adverse impact on the business or condensed consolidated financial statements[64] 9. Revenue From Contracts with Customers Revenue is primarily from subscription services, totaling $401.0 million for H1 2025, with $568.9 million in remaining performance obligations - Revenue is primarily derived from subscription fees, software licenses, and maintenance, with professional services making up less than 5% of total revenue[66][70] | Revenue Type (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------- | :--------------------------- | :--------------------------- | :--------- | | Subscription services, software licenses and maintenance | $396,175 | $334,173 | 18.5% | | Professional services | $4,776 | $5,101 | -6.5% | | Total revenue | $400,951 | $339,274 | 18.2% | - Remaining performance obligations as of June 30, 2025, were $568.9 million, with $414.3 million expected to be recognized as revenue in the next 12 months[74] 10. Segment and Geographic Information Freshworks operates as a single segment, with North America contributing the largest share of revenue (42% for H1 2025) - Freshworks operates in a single operating segment, with the Chief Executive Officer as the chief operating decision maker[76] | Geographic Revenue (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | | North America | $186,611 | $152,937 | 22.0% | | Europe, Middle East and Africa | $155,089 | $131,373 | 18.1% | | Asia Pacific | $48,058 | $44,844 | 7.2% | | Other | $11,193 | $10,120 | 10.6% | | Total revenue | $400,951 | $339,274 | 18.2% | - Revenue generated from the United States was approximately 42% of total consolidated revenue for the six months ended June 30, 2025[77] 11. Stockholders' Equity and Stock-Based Compensation Freshworks repurchased $225.4 million in stock, while stock-based compensation decreased to $102.7 million for H1 2025 | Share Repurchase Activity (6 months ended June 30, 2025) | Value | | :------------------------------------------------------- | :---- | | Shares repurchased | 14,912,789 | | Aggregate purchase price | $225.4 million | | Remaining available for repurchase | $159.1 million | | Stock-Based Compensation (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------- | | Total stock-based compensation expense | $102,657 | $108,337 | -5.2% | - Unrecognized stock-based compensation expense related to unvested awards totaled $386.7 million as of June 30, 2025, with a weighted-average recognition period of 2.9 years for RSUs and PRSUs[98] 12. Restructuring Charges Freshworks incurred $0.4 million in restructuring charges for H1 2025, with the plan now complete and no remaining liability - Restructuring charges of $0.4 million were incurred during the six months ended June 30, 2025, as part of a plan to improve operating efficiency[99] - The restructuring plan is complete, with no remaining liability as of June 30, 2025[99][100] 13. Income Taxes Freshworks recorded a $9.5 million income tax provision for H1 2025, primarily due to the Device42 acquisition and foreign profits | Income Tax (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | | Provision for (benefit from) income taxes | $9,487 | $(6,403) | 248.2% | - The change in income taxes is primarily due to a $14.3 million tax benefit from the Device42 acquisition in the prior year and higher foreign profits in 2025[101] - A full valuation allowance is maintained against U.S. federal and state deferred tax assets[102] 14. Net Loss Per Share Basic and diluted net loss per share significantly improved to $(0.01) for H1 2025 from $(0.15) in the prior year | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :----- | :--------------------------- | :--------------------------- | :--------- | | Net loss per share - basic and diluted | $(0.01) | $(0.15) | 93.3% | - Potential common equivalents (RSUs, PRSUs, stock options, ESPP) totaling 27.8 million shares were excluded from diluted net loss per share computation due to their antidilutive effect[106] 15. Subsequent Events The OBBBA was signed into law, and Freshworks entered new lease agreements for its San Mateo headquarters - The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, allows immediate expensing of domestic U.S. research and development costs and certain capital expenditures, with an immaterial impact expected for Q3/Q4 2025[107] - New lease agreements for the San Mateo headquarters were entered in July 2025, extending the lease term to July 2031 and expanding office space, with an estimated total commitment of $18.0 million[108] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Freshworks' financial condition, results, key metrics, non-GAAP measures, liquidity, and macroeconomic impacts Overview Freshworks provides AI-powered CX and EX software, reporting 18% YoY revenue growth and significantly reduced operating losses - Freshworks offers people-first, AI service software for Customer Experience (CX) and Employee Experience (EX), including generative AI solutions like Freddy AI Agent and Freddy AI Copilot[110] | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Growth | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Growth | | :------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Total revenue | $204.7 | $174.1 | 18% | $401.0 | $339.3 | 18% | | Operating losses | $(8.7) | $(43.8) | 80.2% | $(19.1) | $(76.0) | 74.9% | Macroeconomic and Other Factors Macroeconomic uncertainties impact business spending and net dollar retention, with 27% of revenue exposed to foreign currency risk - Macroeconomic uncertainties, including inflationary pressures and global market volatility, have impacted business spending and adversely affected the net dollar retention rate due to lower expansion within existing customers[113] - Approximately 27% of revenue is exposed to foreign currency exchange rate fluctuations, particularly the euro and British Pound[113] Key Business Metrics Customers contributing over $5,000 in ARR increased by 10%, while the net dollar retention rate remained flat at 106% | Metric | As of June 30, 2025 | As of June 30, 2024 | % Growth | | :------------------------------------------------ | :------------------ | :------------------ | :------- | | Number of customers contributing > $5,000 in ARR | 23,975 | 21,744 | 10% | | ARR from customers contributing > $5,000 in ARR as % of total ARR | 91% | 90% | 1% pt | | Net dollar retention rate | 106% | 106% | 0% | - The net dollar retention rate remained flat at 106% due to lower expansion within existing customers driven by macroeconomic pressures, offset by favorable foreign currency impact and a slight improvement in overall churn rate[120] - Monthly subscriptions represented 13% of ARR as of June 30, 2025, and generally have a lower net dollar retention rate than the overall rate[119] Non-GAAP Financial Measures Non-GAAP income from operations ($91.2 million), net income ($108.4 million), and free cash flow ($109.7 million) all significantly increased for H1 2025 - Non-GAAP financial measures exclude stock-based compensation, employer payroll taxes on employee stock transactions, amortization of acquired intangibles, restructuring charges, and income tax adjustments[124][125] | Non-GAAP Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :----------------------------- | :--------------------------- | :--------------------------- | :--------- | | Non-GAAP income from operations | $91,200 | $34,869 | 161.5% | | Non-GAAP net income | $108,421 | $53,934 | 100.9% | | Free cash flow | $109,661 | $71,495 | 53.4% | Components of Our Results of Operations This section details revenue sources, cost of revenue, and operating expenses, including R&D, sales & marketing, and G&A - Revenue is primarily derived from subscriptions for cloud-based software products, with software licenses, maintenance, and professional services (less than 5% of total revenue) also contributing[130][131] - Cost of revenue consists primarily of personnel-related expenses, cloud-based infrastructure costs, payment gateway fees, product support, professional services, third-party license fees, and amortization of acquired technology and capitalized internal-use software[133] - Operating expenses (Research and Development, Sales and Marketing, General and Administrative) are expected to increase in dollar amount but may decline as a percentage of revenue over the longer term[137][139][141] Results of Operations Freshworks achieved 18% revenue growth for Q2 and H1 2025, with improved gross margin and significantly reduced net loss Comparison of the Three Months Ended June 30, 2025 and 2024 Q2 2025 revenue grew 18% to $204.7 million, gross margin improved to 85%, and net loss significantly decreased | Metric (in thousands) | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Total revenue | $204,678 | $174,131 | $30,547 | 18% | | Gross Margin | 85% | 84% | 1% pt | | | Total operating expenses | $182,192 | $189,743 | $(7,551) | (4)% | | Net loss | $(1,739) | $(20,184) | $18,445 | 91.4% | - The increase in revenue was attributable to approximately $19.1 million from new customers and $11.4 million from existing customers[149] - The decrease in operating expenses was primarily driven by lower stock-based compensation ($1.8 million in R&D, $6.6 million in Sales and Marketing) and personnel-related costs due to employee terminations following restructuring[152][153][154] Comparison of the Six Months Ended June 30, 2025 and 2024 H1 2025 revenue grew 18% to $401.0 million, gross margin improved to 85%, and net loss significantly decreased | Metric (in thousands) | H1 2025 | H1 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Total revenue | $400,951 | $339,274 | $61,677 | 18% | | Gross Margin | 85% | 84% | 1% pt | | | Total operating expenses | $359,003 | $361,163 | $(2,160) | (1)% | | Net loss | $(3,043) | $(43,509) | $40,466 | 93.0% | - The increase in revenue was attributable to approximately $32.6 million from new customers and $29.1 million from existing customers[161] - The decrease in operating expenses was primarily driven by lower stock-based compensation ($10.5 million in Sales and Marketing) and personnel-related costs from lower headcount due to restructuring, partially offset by increased amortization of acquired intangible assets from the D42 Parent, Inc. acquisition ($3.6 million)[163][165] Liquidity and Capital Resources Freshworks holds $486.0 million in cash and $440.2 million in marketable securities, with $116.6 million from H1 2025 operating activities | Liquidity (in millions) | June 30, 2025 | | :---------------------- | :------------ | | Cash and cash equivalents | $486.0 | | Marketable securities | $440.2 | - Net cash provided by operating activities was $116.6 million for the six months ended June 30, 2025[177] - The company repurchased $225.4 million of Class A common stock during H1 2025, with $159.1 million remaining available under the program[174] - Existing liquidity is expected to be sufficient to meet working capital and capital expenditure needs for at least the next 12 months[176] Critical Accounting Policies and Estimates No changes to critical accounting policies and estimates were reported for Q2 and H1 2025 - No changes to critical accounting policies and estimates were reported for the three and six months ended June 30, 2025[185] Recent Accounting Pronouncements Recent accounting pronouncements are disclosure-related and not expected to materially impact financial statements - Information on recent accounting pronouncements is provided in Note 1, with the guidance primarily related to disclosures and not expected to have a significant impact on the financial statements[186][43][44] Item 3. Quantitative and Qualitative Disclosures about Market Risk Freshworks is exposed to foreign currency and interest rate risks, mitigated by hedging and investment classification Foreign Currency Exchange Risk Freshworks is exposed to foreign currency risk, hedging Indian Rupee expenses with $63.6 million in forward contracts - Freshworks is exposed to foreign currency exchange risk, particularly from changes in the Indian Rupee, British Pound, and euro, due to operating expenses denominated in local currencies[188] - Foreign exchange forward contracts are used to hedge a portion of forecasted Indian Rupee expenses, with a total notional amount of $63.6 million outstanding as of June 30, 2025[189] - A hypothetical 10% adverse foreign currency exchange rate change would result in an approximate $12.1 million gain or loss on total monetary assets and liabilities[188] Interest Rate Risk Cash, cash equivalents, and marketable securities are subject to interest rate risk, but a 100 basis point movement is immaterial - The company's cash, cash equivalents, and marketable securities are subject to market risk due to changes in interest rates[191] - A hypothetical 100 basis points favorable or adverse movement in interest rates would not have a material effect on the combined market value of cash, cash equivalents, and marketable securities[193] - Marketable securities are classified as 'available for sale,' so unrealized gains or losses from interest rate changes are not recognized unless securities are sold or declines are determined to be other-than-temporary[192] Item 4. Controls and Procedures Management concluded that disclosure controls were effective, with no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025 - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[194] Changes in Internal Control over Financial Reporting No material changes in internal control over financial reporting were identified during the most recent fiscal quarter - No material changes in internal control over financial reporting were identified during the most recent fiscal quarter[195] Inherent Limitations on Effectiveness of Controls Any system of controls provides only reasonable assurance, subject to inherent limitations and future event assumptions - Any system of controls provides only reasonable, not absolute, assurance, and its effectiveness is subject to inherent limitations and assumptions about future events[196] Part II. Other Information Item 1. Legal Proceedings Information on legal proceedings is incorporated by reference from Note 8, Commitments and Contingencies - Information on legal proceedings is incorporated by reference from Note 8. Commitments and Contingencies in the financial statements[198] Item 1A. Risk Factors No material changes to risk factors were reported from those previously disclosed in the Annual Report on Form 10-K - No material changes from the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, were reported[199] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales or specific use of proceeds were reported, but 8.18 million shares were repurchased for $113.6 million Unregistered Sales of Equity Securities No unregistered sales of equity securities occurred during the reporting period - No unregistered sales of equity securities occurred during the reporting period[200] Use of Proceeds No specific use of proceeds was reported - No specific use of proceeds was reported[201] Issuer Purchases of Equity Securities Freshworks repurchased 8.18 million Class A common shares for $113.6 million in Q2 2025, with $159.1 million remaining | Period (3 months ended June 30, 2025) | Total Shares Repurchased | Average Price Paid Per Share | Approximate Dollar Value Remaining | | :------------------------------------ | :----------------------- | :--------------------------- | :--------------------------------- | | April 1 - April 30, 2025 | 4,226,826 | $12.81 | $218,557,000 | | May 1 - May 31, 2025 | 2,462,769 | $14.88 | $181,902,000 | | June 1 - June 30, 2025 | 1,490,804 | $15.29 | $159,110,000 | | Total | 8,180,399 | | | - The share repurchase program, approved in November 2024, authorized the repurchase of up to $400 million of outstanding Class A common stock[204] Item 3. Defaults Upon Senior Securities This item is not applicable to Freshworks Inc. for the reporting period - This item is not applicable[205] Item 4. Mine Safety Disclosures This item is not applicable to Freshworks Inc. for the reporting period - This item is not applicable[206] Item 5. Other Information This section discloses Rule 10b5-1 trading plans adopted or terminated by officers and directors Rule 10b5-1 Trading Plans Officers and directors adopted Rule 10b5-1 trading plans for Class A common stock sales during Q2 2025 | Name | Title | Action | Adoption Date | Expiration Date | Total Shares to be Sold | | :--------------- | :------------------------------------ | :----- | :------------ | :-------------- | :---------------------- | | Philippa Lawrence | Chief Accounting Officer | Adoption | June 16, 2025 | March 27, 2026 | Up to 34,178 shares | | Tyler Sloat | Chief Operating Officer and Chief Financial Officer | Adoption | May 27, 2025 | August 31, 2026 | Up to 500,000 shares | Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including corporate documents and certifications - Exhibits include corporate documents (Amended and Restated Certificate of Incorporation, Bylaws), CEO/CFO certifications (302 and 906), and Inline XBRL Instance Document and Taxonomy Extensions[211] Signatures Report Signatures The Quarterly Report on Form 10-Q was signed on July 29, 2025, by the CEO, COO/CFO, and CAO - The report was signed on July 29, 2025, by the Chief Executive Officer and President, Chief Operating Officer and Chief Financial Officer, and Chief Accounting Officer[216]