Baird Lowers Freshworks (FRSH) PT to $16, Maintains Neutral Rating

Core Insights - Freshworks Inc. is recognized as one of the top enterprise software stocks to consider for investment according to analysts [1] - Baird has reduced the price target for Freshworks from $18 to $16 while maintaining a Neutral rating ahead of the company's Q3 2025 earnings report [1] Financial Performance - Freshworks reported revenue of $204.7 million in Q2 2025, marking an 18% year-over-year increase [2] - The non-GAAP operating margin improved to 22%, and the adjusted free cash flow margin reached 27% [2] - The company ended the quarter with approximately $926 million in cash, cash equivalents, and marketable securities [2] Segment Growth - The Employee Experience (EX) segment achieved over $450 million in Annual Recurring Revenue (ARR), reflecting a 24% year-over-year increase [3] - The Customer Experience (CX) segment's ARR exceeded $380 million, growing by 11% [3] - The customer base expanded to over 74.6K, with significant new clients such as Seagate and AEP Energy [3] - Customers contributing over $5,000 in ARR increased by 10%, totaling 23,975 [3] Company Overview - Freshworks Inc. is a software development company that offers SaaS products across various regions including North America, Europe, the Middle East, Africa, and Asia Pacific [4]