Freshworks to Deepen its IT Service and Operations Portfolio with Acquisition of FireHydrant’s AI-Native Incident Management and Reliability Platform

Rhea-AI Summary

Freshworks (NASDAQ: FRSH) signed a definitive agreement to acquire FireHydrant, an AI-powered incident management and reliability platform, to deepen its IT service and operations portfolio.

The combination will unify Freshservice ITSM with FireHydrant ITOM into an AI-native ServiceOps solution designed for unified visibility, faster incident response, and proactive IT resilience. FireHydrant serves customers including Palo Alto Networks, BP, and Qlik. The acquisition is expected to close in Freshworks' first fiscal quarter of 2026, subject to customary closing conditions.

Positive

• Unifies Freshservice and FireHydrant into AI-native ServiceOps
• Improves response with AI-guided incident workflows
• Expected close in Freshworks' first fiscal quarter 2026

Negative

• Transaction is subject to customary closing conditions
• Transaction financial terms not disclosed

News Market Reaction

-5.17%

1 alert

-5.17% News Effect

On the day this news was published, FRSH declined 5.17%, reflecting a notable negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Founding year: 2018 Expected close: Q1 2026

2 metrics

Founding year 2018 FireHydrant founding year

Expected close Q1 2026 Acquisition expected to close in Freshworks’ first fiscal quarter of 2026

Market Reality Check

Price: $10.78 Vol: Volume 3,442,748 is sligh...

normal vol

$10.78 Last Close

Volume Volume 3,442,748 is slightly below the 20-day average of 3,836,687 (relative volume 0.9x). normal

Technical Shares at $13.15 are trading below the 200-day MA of $13.52 and about 33.49% under the 52-week high of $19.77.

Peers on Argus

Sector peers like INTA (-0.44%), VERX (-0.05%), BRZE (-4.05%), NCNO (-2.08%) and...

1 Up

Sector peers like INTA (-0.44%), VERX (-0.05%), BRZE (-4.05%), NCNO (-2.08%) and SPSC (-0.06%) showed mostly mild to moderate declines, while momentum scans only flagged ASAN up 4.39%, suggesting moves were more stock-specific than broad sector-driven.

Historical Context

5 past events · Latest: Nov 13 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Nov 13	AI product update	Positive	+2.3%	Launched AI updates to Freshservice and Freddy AI to enhance IT service.
Nov 13	AI CX launch	Positive	+2.3%	Introduced Freshdesk Command Center and Vertical AI Agents for support.
Nov 10	Research report	Neutral	+1.3%	Published Cost of Complexity survey quantifying software and revenue drag.
Nov 05	Product expansion	Positive	+1.3%	Made Freshservice for Business Teams standalone with strong ARR growth.
Nov 05	Q3 2025 earnings	Positive	+1.3%	Reported revenue growth, improved margins, and positive cash flow metrics.

Pattern Detected

Recent AI, product, and earnings announcements all saw modestly positive 24-hour price reactions, indicating generally constructive responses to company news.

Recent Company History

Over the last six weeks, Freshworks has focused on AI-driven enhancements and enterprise expansion. On Nov 5, 2025, Q3 results showed growing revenue and improved profitability metrics, alongside expansion of Freshservice for Business Teams, which exceeded $35M in ARR. Subsequent AI announcements on Nov 10 and Nov 13 highlighted customer-impact metrics like high resolution rates and reduced incident volume. This acquisition news extends that trajectory by adding AI-native incident management and reliability capabilities to the IT operations stack.

Market Pulse Summary

The stock moved -5.2% in the session following this news. A negative reaction despite an expansion o...

Analysis

The stock moved -5.2% in the session following this news. A negative reaction despite an expansion of the AI-native ServiceOps stack would differ from recent history, where prior AI and product updates saw modest positive moves of around 1–2%. With the stock about 33.49% under its 52-week high and trading below the $13.52 200-day MA, weakness could reflect concerns about integration, execution, or capital allocation. Past constructive responses suggest that sustained downside would likely hinge on how the acquisition performs post-close.

Key Terms

incident management, it service management (itsm), it operations management (itom), serviceops, +4 more

8 terms

incident management technical

"a provider of AI-powered Incident Management software"

Incident management is the organized process a company uses to detect, respond to and resolve unexpected events that disrupt operations—such as safety problems, product quality issues, cybersecurity breaches or regulatory violations. It matters to investors because the speed and effectiveness of that response can limit financial losses, protect reputation and reduce regulatory penalties; think of it like a company’s emergency response team that minimizes damage and helps business recover faster.

it service management (itsm) technical

"Freshservice’s IT Service Management (ITSM) and FireHydrant’s core IT Operations"

IT service management (ITSM) is the organized set of practices, processes and tools a company uses to design, deliver, maintain and improve its technology services so they reliably support business needs. Think of it as the operations playbook and control center that coordinates IT work like a kitchen fulfills orders: it keeps systems running, speeds problem resolution, controls costs, and reduces downtime or security lapses—factors that directly affect revenue, expenses and investor confidence.

it operations management (itom) technical

"FireHydrant’s core IT Operations Management (ITOM) as a unified AI-native"

IT operations management (ITOM) is the set of tools and processes that keep a company’s computing systems, networks, and applications running smoothly—like the maintenance crew that inspects, repairs, and coordinates a building’s utilities. It matters to investors because reliable IT operations reduce downtime, control costs, protect customer data, and enable faster delivery of products and services, all of which directly affect revenue stability and risk exposure.

serviceops technical

"as a unified AI-native ServiceOps solution designed to simplify operations"

ServiceOps, short for service operations, is the set of teams, processes and tools that keep a company’s customer-facing services running reliably and efficiently — from fixing outages to managing routine maintenance and service requests. For investors it matters because strong ServiceOps reduce downtime, lower operating costs and protect customer satisfaction, much like a well-run maintenance crew that keeps a delivery fleet on schedule and prevents costly breakdowns.

devops technical

"FireHydrant has deep expertise in IT and DevOps with customers across"

DevOps is a way of working that combines software development and IT operations to improve how technology systems are built, tested, and maintained. It emphasizes collaboration, automation, and continuous improvement to deliver updates quickly and reliably. For investors, understanding DevOps can signal a company’s ability to innovate faster and respond more effectively to market changes.

software-as-a-service technical

"The company’s software-as-a-service provides advanced on-call management"

Software-as-a-service is software that users access online through a web browser or app while the provider hosts and maintains the program and data, typically for a recurring fee. Investors care because it creates steady, predictable revenue and often high customer retention — like renting a utility rather than buying a machine — which helps forecast cash flow and values a company more consistently over time.

on-call management technical

"software-as-a-service provides advanced on-call management, structured major-incident"

On-call management is the system by which a company assigns senior staff or managers to be available outside normal hours to handle urgent operational, safety, or compliance issues—like having a firefighter or mechanic on standby. Investors care because reliable on-call coverage reduces the chance that a sudden problem will escalate into costly downtime, regulatory penalties, or reputational damage, and it can also affect labor costs and the company’s ability to maintain steady revenue and customer trust.

post-mortem analysis technical

"disparate tools for monitoring, alerting, on-call scheduling, and post-mortem analysis"

A post-mortem analysis is a structured review conducted after a significant event — such as a project failure, unexpected loss, product launch, or market shock — to identify what went wrong, what went right, and what can be changed to avoid repeat problems. For investors, it matters because it reveals the root causes of performance swings and management responses, like a mechanic inspecting a car after a breakdown to prevent future breakdowns and protect value.

AI-generated analysis. Not financial advice.

SAN MATEO, Calif., Dec. 15, 2025 (GLOBE NEWSWIRE) -- Freshworks Inc. (NASDAQ: FRSH) 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.

Co-founded by Robert Ross and Dylan Nielsen in 2018, FireHydrant has deep expertise in IT and DevOps with customers across consumer and business industries including Palo Alto Networks, BP, and Qlik. The company’s software-as-a-service provides advanced on-call management, structured major-incident response, and integrated retrospective analysis embedded with AI.

“We believe the FireHydrant technology will contribute to our vision of unifying IT and employee experiences where service, asset, and operations management converge with AI to drive business continuity and efficiency," said Dennis Woodside, CEO and President of Freshworks. "Our Employee Experience (EX) business continues to demonstrate durable growth, powered by our expansion upmarket, into more departments and into adjacent markets and this acquisition will further accelerate our Freshservice momentum by unifying critical IT capabilities for our customers.”

In today's digital-first economy, every minute of downtime is a threat to brand reputation and financial stability. IT teams face the immense challenge of managing incident chaos using disparate tools for monitoring, alerting, on-call scheduling, and post-mortem analysis. This complexity leads to slow, manual incident response and a failure to learn from past disruptions, trapping teams in a never-ending cycle of reactive firefighting.

Together, FireHydrant and Freshservice seek to eliminate the critical pain points caused by the long-standing problem of siloed Service Management and IT Operations. The unified experience of an AI-native ServiceOps solution is designed to enable:

• Unified Visibility. Freshservice and FireHydrant create a seamless path from recognizing a problem to fixing it. Together IT service, operations management (Freshservice) and incident management (FireHydrant) create a unified view of all technology and service dependencies. That means fewer frustrating handoffs and quicker, higher-quality service.
  
  
• Faster Response. FireHydrant utilizes AI to summarize incident context and guide structured, step-by-step response workflows to help teams reduce alert noise and surface what truly requires action. That means stronger collaboration across IT and engineering teams and faster incident resolution.
  
  
• Proactive IT. Combining service and asset information (Freshservice) with detailed post-incident insights (FireHydrant) enables teams to spot recurring patterns and prevent them from ever happening again. This AI-powered, data-driven approach shifts the entire organization from constantly putting out fires to building a genuinely resilient and proactive service model.
  

Robert Ross, Founder and CEO of FireHydrant said, “Freshworks shares the core philosophy that has guided FireHydrant since day one: software should make life less complicated for the people using it. We built FireHydrant to eliminate the chaos and pain of incident response and now, with Freshworks, we are creating what we've always believed should exist: a unified, end-to-end operational and reliability platform.”

The acquisition is expected to close in Freshworks’ first fiscal quarter of 2026, subject to customary closing conditions.

About Freshworks

Freshworks Inc. builds uncomplicated service software that delivers exceptional customer and employee experiences. Its enterprise-grade solutions are powerful yet intuitive, and quick to deliver value. With a people-first approach to AI, Freshworks helps teams be more effective and organizations more productive. Nearly 75,000 companies — including Bridgestone, New Balance, S&P Global, and Sony Music — trust Freshworks to improve service efficiency and fuel long-term loyalty. For the latest updates, visit freshworks.com and follow Freshworks on LinkedIn, X, and Facebook.

About FireHydrant

FireHydrant is a sophisticated end-to-end incident management platform that empowers businesses to seamlessly declare, automate, and resolve incidents at any scale. Founded by engineers with real-world experience and trusted by global innovators across all industries, FireHydrant’s goal is to provide a platform where reliability is center stage. For more information, visit us at firehydrant.com. 

© 2025 Freshworks Inc. All Rights Reserved. Freshworks, Freshservice and any associated logo are trademarks of Freshworks Inc. All other company, brand and product names may be trademarks or registered trademarks of their respective companies. Nothing in this press release should be construed to the contrary, or as an approval, endorsement or sponsorship by any third parties of Freshworks Inc. or any aspect of this press release.

Contact:
PR@freshworks.com

IR@freshworks.com

press@firehydrant.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/a4929097-219e-448d-8e75-f7e4c1b79549

FAQ

What did Freshworks (FRSH) announce on December 15, 2025?

Freshworks announced a definitive agreement to acquire FireHydrant, an AI-powered incident management platform.

When is the Freshworks (FRSH) acquisition of FireHydrant expected to close?

The acquisition is expected to close in Freshworks' first fiscal quarter of 2026, subject to customary closing conditions.

How will the FireHydrant acquisition affect Freshworks' Freshservice (FRSH) product?

Freshservice will be combined with FireHydrant to create an AI-native ServiceOps solution for unified visibility and faster incident resolution.

Which customers or industries use FireHydrant mentioned in the Freshworks (FRSH) announcement?

The release cites customers across consumer and business industries, including Palo Alto Networks, BP, and Qlik.

Does the Freshworks (FRSH) announcement disclose the purchase price for FireHydrant?

No; the announcement does not disclose any financial terms or purchase price.