Freshworks (NASDAQ: FRSH) delivers 2025 profit with 16% revenue growth and strong cash flow
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Freshworks Inc. reported strong fourth quarter and full year 2025 results, with revenue of $222.7 million in Q4, up 14% year-over-year, and full year revenue of $838.8 million, up 16%. Q4 GAAP operating income reached $39.7 million (17.8% margin), a sharp improvement from a loss a year earlier, while full year GAAP operating income was $13.2 million versus a sizable prior-year loss. GAAP diluted net income per share was $0.67 in Q4 and $0.63 for 2025, compared with losses in 2024, supported by a large tax benefit from releasing a valuation allowance on U.S. deferred tax assets. Cash generation was solid, with 2025 operating cash flow of $242.4 million and adjusted free cash flow of $223.1 million, both with margins above 26%. Key metrics remained healthy: customers contributing more than $5,000 in annual recurring revenue rose 10% to 24,762, and net dollar retention improved to 108% in Q4. The company highlighted growing AI-powered products and noted that Enterprise Service Management, Device42, and Freddy AI each surpassed meaningful recurring revenue milestones. For 2026, Freshworks guides to revenue of $952.0–$960.0 million and non-GAAP operating income of $181.0–$189.0 million, implying continued double-digit growth and strong profitability.
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Insights
Freshworks combines mid‑teens growth with a major profitability and cash-flow step-up.
Freshworks delivered 2025 revenue of
Profitability metrics strengthened meaningfully. Non-GAAP operating income rose to
Customer and expansion indicators also improved. Customers contributing more than
Results benefit from a large tax valuation allowance release, but underlying non-GAAP performance is also strong.
GAAP net income of
Non-GAAP net income rose to
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 10, 2026
(Exact name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices and Zip Code)
(650 ) 513-0514
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 10, 2026, Freshworks Inc. issued a press release announcing its financial results for the fourth quarter and full year ended December 31, 2025. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The foregoing information (including Exhibit 99.1 hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filings, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |||||||
| 99.1 | Press Release dated February 10, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Freshworks Inc. | ||||||||
Dated: February 10, 2026 | ||||||||
| By: | /s/ Tyler Sloat | |||||||
| Tyler Sloat | ||||||||
| Chief Operating Officer and Chief Financial Officer | ||||||||
2
Freshworks Reports Fourth Quarter and Full Year 2025 Results
Exceeded high end of guidance for revenue and non-GAAP operating margin
Delivered 2025 revenue growth of 16% year-over-year
EX business crossed half a billion dollars in annual recurring revenue
San Mateo, Calif. – February 10, 2026 – Freshworks Inc. (Nasdaq: FRSH), the leading provider of uncomplicated software that delivers exceptional employee and customer experiences, today announced financial results for its fourth quarter and year ended December 31, 2025.
“Freshworks had an outstanding Q4 and fiscal 2025, outperforming our estimates across growth and profitability metrics for the fifth consecutive quarter,” said Dennis Woodside, Chief Executive Officer & President of Freshworks. “We ended the year with strong momentum, fueled by products that tackle complex service problems in an uncomplicated way. Our AI-powered software continues to be an important growth driver and path for customer expansion and it shows in the product adoption results.”
Fourth Quarter 2025 Financial Summary Results
•Revenue: Total revenue was $222.7 million, representing growth of 14% compared to total revenue of $194.6 million in the fourth quarter of 2024, and 13% adjusting for constant currency.
•GAAP Income (Loss) from Operations: GAAP income (loss) from operations was $39.7 million, representing an operating margin of 17.8%, compared to $(23.8) million, representing an operating margin of (12.2)%, in the fourth quarter of 2024.
•Non-GAAP Income from Operations: Non-GAAP income from operations was $41.6 million, representing a non-GAAP operating margin of 18.7%, compared to $40.3 million, representing a non-GAAP operating margin of 20.7%, in the fourth quarter of 2024.
•GAAP Net Income (Loss) Per Share: GAAP diluted net income (loss) per share was $0.67 based on 283.9 million weighted-average shares outstanding, compared to $(0.07) based on 303.6 million weighted-average shares outstanding in the fourth quarter of 2024.
•Non-GAAP Net Income Per Share: Non-GAAP diluted net income per share was $0.14 based on 283.9 million weighted-average shares outstanding, compared to $0.14 based on 306.1 million weighted-average shares outstanding in the fourth quarter of 2024.
•Net Cash Provided by Operating Activities: Net cash provided by operating activities was $62.3 million, representing an operating cash flow margin of 28.0%, compared to $41.4 million, representing an operating cash flow margin of 21.3%, in the fourth quarter of 2024.
•Adjusted Free Cash Flow: Adjusted free cash flow was $56.2 million, representing an adjusted free cash flow margin of 25.2%, compared to $41.7 million, representing an adjusted free cash flow margin of 21.4%, in the fourth quarter of 2024.
•Cash, Cash Equivalents, Restricted Cash and Marketable Securities: Cash, cash equivalents, restricted cash and marketable securities were $843.7 million as of December 31, 2025.
Full Year 2025 Financial Summary Results
•Revenue: Total revenue was $838.8 million, representing growth of 16% compared to total revenue of $720.4 million in 2024, and 16% adjusting for constant currency.
•GAAP Income (Loss) from Operations: GAAP income (loss) from operations was $13.2 million, representing an operating margin of 1.6%, compared to $(138.6) million, representing an operating margin of (19.2)% in 2024.
•Non-GAAP Income from Operations: Non-GAAP income from operations was $178.0 million, representing a non-GAAP operating margin of 21.2%, compared to $99.1 million, representing a non-GAAP operating margin of 13.8%, in 2024.
•GAAP Net Income (Loss) Per Share: GAAP diluted net income (loss) per share was $0.63 based on 293.8 million weighted-average shares outstanding, compared to $(0.32) based on 300.8 million weighted-average shares outstanding in 2024.
•Non-GAAP Net Income Per Share: Non-GAAP diluted net income per share was $0.66 based on 293.8 million weighted-average shares outstanding, compared to $0.43 based on 305.1 million weighted-average shares outstanding in 2024.
•Net Cash Provided by Operating Activities: Net cash provided by operating activities was $242.4 million, representing an operating cash flow margin of 28.9%, compared to net cash provided by operating activities of $160.6 million, representing an operating cash flow margin of 22.3%, in 2024.
•Adjusted Free Cash Flow: Adjusted free cash flow was $223.1 million, representing an adjusted free cash flow margin of 26.6% compared to $153.3 million, representing an adjusted free cash flow margin of 21.3% in 2024.
All financial numbers for 2025 include the results of our Device42 business. All financial numbers for the second, third and fourth quarters of 2024 include the results of our Device42 business for the period after the closing of the acquisition. A description of non-GAAP financial measures is contained in the section titled “Explanation of Non-GAAP Financial Measures” below and a reconciliation of GAAP to non-GAAP financial measures is detailed in the tables below.
Fourth Quarter Key Metrics and Recent Business Highlights
•Number of customers contributing more than $5,000 in ARR was 24,762, an increase of 10% year-over-year and 8% adjusting for constant currency.
•Net dollar retention rate was 108%, compared to 105% in the third quarter of 2025 and 103% in the fourth quarter of 2024. Adjusted for constant currency, net dollar retention rate was 104%, compared to 104% in the third quarter of 2025 and 105% in the fourth quarter of 2024.
•Welcomed and onboarded many new customers to the Freshworks community including Armanino, British Film Institute, ENGIE Impact, EquipmentShare, Kidde, and NBT Bancorp, Inc.
•Announced the acquisition of FireHydrant, reinforcing Freshworks’ IT Service Management offerings with a unified AI-native ServiceOps solution designed to simplify operations, proactively prevent disruptions, and ensure exceptional IT service reliability.
•Unveiled new capabilities on Freshservice to make it easier for IT teams to resolve issues faster, prevent problems earlier, and identify performance drivers proactively.
•Launched new capabilities including Freshdesk Command Center, Vertical AI Agents, and Freddy AI Insights to help CX teams reduce response times, enhance resolution rates, and gain clearer insights into issues and escalations that impact efficiency and growth.
•Appointed Kady Srinivasan as Chief Marketing Officer.
•Enterprise Service Management (ESM) and Device42 both surpassed $40 million and Freddy AI surpassed $25 million in annual recurring revenue in the fourth quarter of 2025.
Financial Outlook
We are providing estimates for the first quarter and for the full year 2026. We emphasize that these estimates are subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below.
For the first quarter and full year 2026, we currently expect the following results:
| ($ in millions, except per share data) | First Quarter 2026 | Full Year 2026 | ||||||
Revenue(1) | $222.0 - $225.0 | $952.0 - $960.0 | ||||||
| Year-over-year growth | 13% - 15% | 13.5% - 14.5% | ||||||
Non-GAAP income from operations(1) | $33.0 - $35.0 | $181.0 - $189.0 | ||||||
Non-GAAP net income per share(2) | $0.10 - $0.12 | $0.55 - $0.57 | ||||||
(1) Revenue and non-GAAP income from operations are based on exchange rates as of February 6, 2026 for currencies other than USD.
(2) Non-GAAP net income per share was estimated assuming 287.4 million and 291.5 million weighted-average shares outstanding for the first quarter and full year 2026, respectively.
These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
We have not reconciled our first quarter and full year 2026 estimates for non-GAAP financial measures to GAAP due to the uncertainty and potential variability of expenses that may be incurred in the future. Accordingly, a reconciliation is not available without unreasonable effort and we are unable to address the probable significance of the unavailable information. We have provided a reconciliation of other GAAP to non-GAAP financial measures in the financial statement tables for our fourth quarter and full year 2025 and 2024 non-GAAP results included in this press release.
Webcast and Conference Call Information
We will host a conference call for investors on February 10, 2026 at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss the Company’s financial results and business highlights. Investors are invited to listen to a live audio webcast of the conference call by visiting the investor relations website at ir.freshworks.com. A replay of the audio webcast will be available shortly after the call on the Freshworks Investor Relations website and will be available for twelve months thereafter.
Explanation of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain non-GAAP financial measures, including revenue adjusted for constant currency, non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income per share, non-GAAP net income, adjusted free cash flow, and adjusted free cash flow margin. This press release and the accompanying tables also contain certain other metrics, including annual recurring revenue, net dollar retention rates, revenue growth rates, and related presentation thereof adjusted for constant currency.
We adjust revenue and related growth rates for constant currency to provide a framework for assessing business performance excluding the effect of foreign currency rate fluctuations. To present this information, current period results for currencies other than USD are converted into USD at the average exchange rates in effect during the comparison period (for Q4 2024, the average exchange rates in effect for our major currencies were 1 EUR to 1.07 USD and 1 GBP to 1.28 USD), rather than the actual average exchange rates in effect during the current period (for Q4 2025, the average exchange rates in effect for our major currencies were 1 EUR to 1.16 USD and 1 GBP to 1.33 USD). To present constant currency for full year results, we combine the quarterly constant currency results for the year that were converted into USD at the average exchange rates in effect during the relevant comparison periods (for example, for Q1 2025 results, we use the average exchange rates in effect for Q1 2024).
We use these non-GAAP measures in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. We believe these non-GAAP measures provide investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of our operating results. We believe these non-GAAP measures are useful in evaluating our operating performance compared to that of other companies in our industry, as they generally eliminate the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance.
Investors, however, are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. The non-GAAP measures we use may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures.
We exclude the following items from one or more of our non-GAAP financial measures:
•Stock-based compensation expense. We exclude stock-based compensation, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this expense provides meaningful supplemental information regarding operational performance. In particular, stock-based compensation expense is not comparable across companies given the variety of valuation methodologies and assumptions.
•Employer payroll taxes on employee stock transactions. We exclude the amount of employer payroll taxes on equity awards from certain of our non-GAAP financial measures because they are dependent on our stock price at the time of vesting or exercise and other factors that are beyond our control and do not believe these expenses have a direct correlation to the operation of our business.
•Amortization of acquired intangibles. We exclude amortization of acquired intangibles, which is a non-cash expense, from certain of our non-GAAP financial measures. Our expenses for amortization of acquired intangibles are inconsistent in amount and frequency because they are significantly affected by the timing, size of acquisitions, and the allocation of purchase price. We exclude these amortization expenses because we do not believe these expenses have a direct correlation to the operation of our business.
•Restructuring charges. We exclude restructuring charges, which primarily consists of employee severance and other employee termination benefits associated with the restructuring plan initiated in November 2024, from our non-GAAP financial measures, because we do not believe these expenses have a direct correlation to the operating performance of our business.
•Gain on sale of non-marketable equity investments. We exclude gains on sale of non-marketable equity investments from certain of our non-GAAP financial measures because we believe they are unrelated to our ongoing operating performance and are not expected to recur in our continuing operating results.
•Acquisition expenses. We exclude acquisition expenses, which primarily consist of legal fees and due diligence costs, from our non-GAAP financial measures because we do not believe these expenses have a direct correlation to the operating performance of our business.
•Income tax effect and adjustments. We exclude the income tax effect of the above adjustments, income tax effect associated with acquisitions and tax charges or benefits that are a result of a change in valuation allowance on deferred tax assets and its related impacts, from our non-GAAP financial measures. We exclude these costs because we do not believe these expenses have a direct correlation to the operating performance of our business.
We define adjusted free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized internal-use software, plus restructuring charges. We believe that adjusted free cash flow is a useful indicator of liquidity as it measures our ability to generate cash from our core operations after purchases of property and equipment. Adjusted free cash flow is a measure to determine, among other things, cash available for strategic initiatives, including further investments in our business and potential acquisitions of businesses. We define adjusted free cash flow margin as adjusted free cash flow as a percentage of revenue. We believe that adjusted free cash flow margin is a useful indicator of how efficiently we convert revenue into adjusted free cash flow.
Operating Metrics
Number of Customers Contributing More Than $5,000 in ARR. We define ARR as the sum total of subscription, software license, and maintenance revenue we would contractually expect to recognize over the next 12 months from all customers at a point in time, assuming no increases, reductions or cancellations in their subscriptions, and assuming that revenues are recognized ratably over the term of subscription and maintenance contracts and upon delivery for software licenses. We define our total customers contributing more than $5,000 in ARR as of a particular date as the number of business entities or individuals, represented by a unique domain or a unique email address, with one or more paid subscriptions to one or more of our products that contributed more than $5,000 in ARR.
Net Dollar Retention Rate. To calculate net dollar retention rate as of a given date, we first determine Entering ARR, which is ARR from the population of our customers as of 12 months prior to the end of the reporting period. We then calculate the Ending ARR from the same set of customers as of the end of the reporting period. We then divide the Ending ARR by the Entering ARR to arrive at our net dollar retention rate. Ending ARR includes upsells, cross-sells, renewals and expansion as a result of acquisitions during the measurement period and is net of any contraction or attrition over this period.
We also adjust the above operating metrics, growth rates of customers contributing more than $5,000 in ARR and related presentation thereof for constant currency to provide a framework for assessing our business performance excluding the effects of foreign currency rates fluctuations. To present this information, the Ending ARR of the current period in currencies other than USD is converted into USD at the exchange rates in effect at the end of the comparison period (for Q4 2024, the period end exchange rates in effect for our major currencies were 1 EUR to 1.04 USD and 1 GBP to 1.26 USD), rather than the actual exchange rates in effect at the end of the current period (for Q4 2025, the period end exchange rates in effect for our major currencies were 1 EUR to 1.17 USD and 1 GBP to 1.34 USD).
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, our GAAP and non-GAAP estimates for the first quarter and full year 2026, our financial outlook, the value of our products to customers, our expectations regarding impact of new product capabilities and our AI-powered software, and potential benefits related to acquisitions. These forward-looking statements are based on our current expectations, estimates and projections about our business and industry, including our financial outlook and macroeconomic uncertainties, management’s beliefs and certain assumptions made by the company, all of which are subject to change. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, “future,” “believe,” “expect,” “may,” “will,” “intend,” “outlook,” “estimate,” “continue,” “anticipate,” “could,” “would,” “projects,” “plans,” “targets” or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, many of which involve factors or circumstances that are beyond our control, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include our ability to achieve our long-term plans and key initiatives; our ability to sustain or manage any future growth effectively; our ability to attract and retain customers or expand sales to existing customers; delays in product development or deployments or the success of such products; the failure to deliver competitive service offerings and lack of market acceptance of any offerings delivered; the impact to the economy, our customers and our business due to uncertain global economic conditions, including market volatility, foreign exchange rates, and impact of inflation; the timeframes for and severity of the impact of any weakened global economic conditions on our customers’ purchasing and renewal decisions, which may extend the length of our sales cycles or adversely affect our industry; our history of net losses and ability to achieve or sustain profitability, as well as the other potential factors described under “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024 as such factors may be updated from time to time in our periodic and other documents of Freshworks Inc. filed with the Securities and Exchange Commission from time to time (available at www.sec.gov), including our Annual Report on Form 10-K that will be filed for the year ended December 31, 2025.
We caution you not to place undue reliance on forward-looking statements, which speak only as of the date hereof and are based on information available to us at the time the statements are made and/or management’s good faith belief as of that time with respect to future events. We assume no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release, except as required by law.
About Freshworks Inc.
Freshworks Inc. (NASDAQ: FRSH) builds uncomplicated service software that delivers exceptional employee and customer experiences. Our enterprise-grade solutions are powerful, yet easy to use, and quick to deliver results. Our people-first approach to AI eliminates friction, making employees more effective and organizations more efficient. Nearly 75,000 companies, including Bridgestone, New Balance, Nucor, S&P Global, and Sony Music, trust Freshworks’ Employee Experience (EX) and Customer Experience (CX) software to eliminate complexity and increase productivity, loyalty and growth. For the latest company news and customer stories, visit www.freshworks.com and follow us on Facebook, LinkedIn, and X.
© 2026 Freshworks Inc. All rights reserved. Freshworks and its associated logos are trademarks of Freshworks Inc. All other trademarks are property of their respective owners. Nothing in this press release should be construed to the contrary, or as an approval, endorsement or sponsorship by any third party of Freshworks Inc. or any aspect of this press release.
Investor Relations Contact:
Kate Scolnick
IR@freshworks.com
Media Relations Contact:
Jayne Gonzalez
PR@freshworks.com
FRESHWORKS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue | $ | 222,740 | $ | 194,571 | $ | 838,809 | $ | 720,420 | |||||||||||||||
Cost of revenue(1) | 32,170 | 29,459 | 126,145 | 113,330 | |||||||||||||||||||
| Gross profit | 190,570 | 165,112 | 712,664 | 607,090 | |||||||||||||||||||
| Operating expense: | |||||||||||||||||||||||
Research and development(1) | 41,802 | 41,028 | 163,208 | 164,590 | |||||||||||||||||||
Sales and marketing(1) | 109,363 | 90,674 | 394,753 | 390,817 | |||||||||||||||||||
General and administrative(1, 2) | (329) | 47,538 | 141,093 | 180,629 | |||||||||||||||||||
Restructuring charges | — | 9,664 | 405 | 9,664 | |||||||||||||||||||
| Total operating expenses | 150,836 | 188,904 | 699,459 | 745,700 | |||||||||||||||||||
| Income (loss) from operations | 39,734 | (23,792) | 13,205 | (138,610) | |||||||||||||||||||
Interest and other income, net | 7,156 | 7,802 | 40,077 | 47,773 | |||||||||||||||||||
Income (loss) before income taxes | 46,890 | (15,990) | 53,282 | (90,837) | |||||||||||||||||||
Provision for (benefit from) income taxes | (144,556) | 5,910 | (130,441) | 4,531 | |||||||||||||||||||
| Net income (loss) | 191,446 | (21,900) | 183,723 | (95,368) | |||||||||||||||||||
Net income (loss) per share - basic | $ | 0.68 | $ | (0.07) | $ | 0.63 | $ | (0.32) | |||||||||||||||
| Net income (loss) per share - diluted | $ | 0.67 | $ | (0.07) | $ | 0.63 | $ | (0.32) | |||||||||||||||
Weighted-average shares used in computing net income (loss) per share: | |||||||||||||||||||||||
Basic | 282,760 | 303,560 | 291,079 | 300,843 | |||||||||||||||||||
Diluted | 283,911 | 303,560 | 293,769 | 300,843 | |||||||||||||||||||
______________________
(1) Includes stock-based compensation expense as follows (in thousands):
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Cost of revenue | $ | 1,411 | $ | 1,532 | $ | 5,833 | $ | 6,565 | |||||||||||||||
| Research and development | 8,075 | 9,037 | 34,864 | 41,512 | |||||||||||||||||||
| Sales and marketing | 11,360 | 12,239 | 48,384 | 63,219 | |||||||||||||||||||
General and administrative (2) | (23,500) | 27,608 | 57,738 | 105,410 | |||||||||||||||||||
| Total stock-based compensation expense, net of amounts capitalized | $ | (2,654) | $ | 50,416 | $ | 146,819 | $ | 216,706 | |||||||||||||||
(2) Includes approximately $41 million reversal of stock-based compensation expense during the quarter and year ended December 31, 2025 resulting from the departure of our Executive Chairman.
FRESHWORKS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| December 31, 2025 | December 31, 2024 | ||||||||||
| (unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 569,774 | $ | 620,315 | |||||||
| Restricted cash | 62,374 | 3 | |||||||||
| Marketable securities | 211,597 | 449,750 | |||||||||
| Accounts receivable, net | 150,817 | 122,910 | |||||||||
| Deferred contract acquisition costs | 29,830 | 26,106 | |||||||||
| Prepaid expenses and other current assets | 72,774 | 46,343 | |||||||||
| Total current assets | 1,097,166 | 1,265,427 | |||||||||
| Property and equipment, net | 38,843 | 25,893 | |||||||||
| Operating lease right-of-use assets | 39,893 | 36,891 | |||||||||
| Deferred contract acquisition costs, noncurrent | 27,179 | 22,534 | |||||||||
| Goodwill | 146,676 | 147,014 | |||||||||
| Intangible assets, net | 76,986 | 90,840 | |||||||||
Deferred tax assets, net | 157,466 | 8,499 | |||||||||
| Other assets | 18,503 | 14,786 | |||||||||
| Total assets | $ | 1,602,712 | $ | 1,611,884 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 11,507 | $ | 1,619 | |||||||
| Accrued liabilities | 97,631 | 81,933 | |||||||||
| Deferred revenue | 385,320 | 323,435 | |||||||||
| Income tax payable | 3,571 | 728 | |||||||||
| Total current liabilities | 498,029 | 407,715 | |||||||||
| Operating lease liabilities, non-current | 33,282 | 30,221 | |||||||||
| Other liabilities | 38,751 | 36,027 | |||||||||
| Total liabilities | 570,062 | 473,963 | |||||||||
| Stockholders' equity: | |||||||||||
| Common stock | 3 | 3 | |||||||||
| Additional paid-in capital | 4,586,392 | 4,874,133 | |||||||||
Accumulated other comprehensive loss | (1,591) | (338) | |||||||||
| Accumulated deficit | (3,552,154) | (3,735,877) | |||||||||
| Total stockholders' equity | 1,032,650 | 1,137,921 | |||||||||
| Total liabilities and stockholders' equity | $ | 1,602,712 | $ | 1,611,884 | |||||||
FRESHWORKS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Cash Flows from Operating Activities: | |||||||||||||||||||||||
Net income (loss) | $ | 191,446 | $ | (21,900) | $ | 183,723 | $ | (95,368) | |||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||||||||
| Depreciation and amortization | 6,612 | 6,363 | 25,857 | 19,415 | |||||||||||||||||||
| Amortization of deferred contract acquisition costs | 8,284 | 7,889 | 31,702 | 28,556 | |||||||||||||||||||
| Non-cash lease expense | 2,685 | 2,235 | 9,700 | 8,842 | |||||||||||||||||||
| Stock-based compensation | (2,654) | 50,416 | 146,819 | 216,706 | |||||||||||||||||||
Discount amortization on marketable securities | (1,041) | (3,020) | (6,557) | (15,992) | |||||||||||||||||||
| Gain on sale of non-marketable equity investments | — | — | (1,837) | — | |||||||||||||||||||
| Release of valuation allowance | (151,738) | — | (151,738) | — | |||||||||||||||||||
| Deferred income taxes | 3,096 | 1,159 | 2,637 | (12,642) | |||||||||||||||||||
| Other | 62 | 1,076 | 779 | 1,397 | |||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||
| Accounts receivable | (31,086) | (23,747) | (28,059) | (17,145) | |||||||||||||||||||
| Deferred contract acquisition costs | (10,710) | (9,819) | (40,071) | (34,524) | |||||||||||||||||||
| Prepaid expenses and other assets | 3,505 | 6,340 | (11,868) | (1,393) | |||||||||||||||||||
| Accounts payable | 3,976 | (5,326) | 9,573 | (2,204) | |||||||||||||||||||
| Accrued and other liabilities | 5,862 | 4,266 | 19,078 | 14,454 | |||||||||||||||||||
| Deferred revenue | 36,870 | 27,849 | 61,179 | 54,808 | |||||||||||||||||||
| Operating lease liabilities | (2,835) | (2,419) | (8,547) | (4,264) | |||||||||||||||||||
Net cash provided by operating activities | 62,334 | 41,362 | 242,370 | 160,646 | |||||||||||||||||||
| Cash Flows from Investing Activities: | |||||||||||||||||||||||
| Purchases of property and equipment | (2,232) | (5,067) | (5,700) | (9,177) | |||||||||||||||||||
| Proceeds from sale of property and equipment | 55 | 193 | 149 | 279 | |||||||||||||||||||
| Capitalized internal-use software | (3,872) | (1,911) | (15,791) | (5,485) | |||||||||||||||||||
| Sale of non-marketable equity investments | — | — | 1,984 | — | |||||||||||||||||||
| Purchases of marketable securities | (95,841) | (53,935) | (586,833) | (620,573) | |||||||||||||||||||
| Maturities and redemptions of marketable securities | 277,522 | 269,868 | 830,756 | 887,664 | |||||||||||||||||||
| Advances paid for business combination | (18,432) | — | (18,432) | — | |||||||||||||||||||
| Business combination, net of cash acquired | — | — | — | (213,905) | |||||||||||||||||||
Net cash provided by investing activities | 157,200 | 209,148 | 206,133 | 38,803 | |||||||||||||||||||
| Cash Flows from Financing Activities: | |||||||||||||||||||||||
| Proceeds from issuance of common stock under employee stock purchase plan, net | 2,921 | 3,013 | 6,228 | 6,643 | |||||||||||||||||||
| Proceeds from exercise of stock options | — | 50 | 74 | 89 | |||||||||||||||||||
| Payment of withholding taxes on net share settlement of equity awards | (11,240) | (10,672) | (56,654) | (60,299) | |||||||||||||||||||
FRESHWORKS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
Repurchase of common stock | — | (13,693) | (386,306) | (13,693) | |||||||||||||||||||
| Net cash used in financing activities | (8,319) | (21,302) | (436,658) | (67,260) | |||||||||||||||||||
Net decrease in cash, cash equivalents and restricted cash | 211,215 | 229,208 | 11,845 | 132,189 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 421,035 | 391,197 | 620,405 | 488,216 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 632,250 | $ | 620,405 | $ | 632,250 | $ | 620,405 | |||||||||||||||
FRESHWORKS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)
| Three Months Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | Growth Rates | ||||||||||||||||||
| Revenue | ||||||||||||||||||||
| GAAP revenue | $ | 222,740 | $ | 194,571 | 14% | |||||||||||||||
| Effects of foreign currency rate fluctuations | (2,462) | |||||||||||||||||||
| Revenue adjusted for constant currency | $ | 220,278 | $ | 194,571 | 13% | |||||||||||||||
| Twelve Months Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | Growth Rates | ||||||||||||||||||
| Revenue | ||||||||||||||||||||
| GAAP revenue | $ | 838,809 | $ | 720,420 | 16% | |||||||||||||||
| Effects of foreign currency rate fluctuations | (2,636) | |||||||||||||||||||
| Revenue adjusted for constant currency | $ | 836,173 | $ | 720,420 | 16% | |||||||||||||||
FRESHWORKS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Reconciliation of gross profit and gross margin: | |||||||||||||||||||||||
| GAAP gross profit | $ | 190,570 | $ | 165,112 | $ | 712,664 | $ | 607,090 | |||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||
| Stock-based compensation expense | 1,411 | 1,532 | 5,833 | 6,565 | |||||||||||||||||||
| Employer payroll taxes on employee stock transactions | 13 | 13 | 95 | 123 | |||||||||||||||||||
| Amortization of acquired intangibles | 1,289 | 1,288 | 5,113 | 2,927 | |||||||||||||||||||
| Non-GAAP gross profit | $ | 193,283 | $ | 167,945 | $ | 723,705 | $ | 616,705 | |||||||||||||||
| GAAP gross margin | 85.6 | % | 84.9 | % | 85.0 | % | 84.3 | % | |||||||||||||||
| Non-GAAP gross margin | 86.8 | % | 86.3 | % | 86.3 | % | 85.6 | % | |||||||||||||||
| Reconciliation of operating expenses: | |||||||||||||||||||||||
| GAAP research and development | $ | 41,802 | $ | 41,028 | $ | 163,208 | $ | 164,590 | |||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||
| Stock-based compensation expense | (8,075) | (9,037) | (34,864) | (41,512) | |||||||||||||||||||
| Employer payroll taxes on employee stock transactions | (65) | (30) | (334) | (290) | |||||||||||||||||||
| Non-GAAP research and development | $ | 33,662 | $ | 31,961 | $ | 128,010 | $ | 122,788 | |||||||||||||||
| GAAP research and development as percentage of revenue | 18.8 | % | 21.1 | % | 19.5 | % | 22.8 | % | |||||||||||||||
| Non-GAAP research and development as percentage of revenue | 15.1 | % | 16.4 | % | 15.3 | % | 17.0 | % | |||||||||||||||
| GAAP sales and marketing | $ | 109,363 | $ | 90,674 | $ | 394,753 | $ | 390,817 | |||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||
| Stock-based compensation expense | (11,360) | (12,239) | (48,384) | (63,219) | |||||||||||||||||||
| Employer payroll taxes on employee stock transactions | (203) | (241) | (1,528) | (1,880) | |||||||||||||||||||
| Amortization of acquired intangibles | (2,127) | (2,304) | (8,741) | (5,233) | |||||||||||||||||||
| Non-GAAP sales and marketing | $ | 95,673 | $ | 75,890 | $ | 336,100 | $ | 320,485 | |||||||||||||||
| GAAP sales and marketing as percentage of revenue | 49.1 | % | 46.6 | % | 47.1 | % | 54.2 | % | |||||||||||||||
| Non-GAAP sales and marketing as percentage of revenue | 43.0 | % | 39.0 | % | 40.1 | % | 44.5 | % | |||||||||||||||
| GAAP general and administrative | $ | (329) | $ | 47,538 | $ | 141,093 | $ | 180,629 | |||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||
| Stock-based compensation expense | 23,500 | (27,608) | (57,738) | (105,410) | |||||||||||||||||||
| Employer payroll taxes on employee stock transactions | (154) | (150) | (1,069) | (930) | |||||||||||||||||||
| Acquisition expense | (684) | — | (684) | — | |||||||||||||||||||
| Non-GAAP general and administrative | $ | 22,333 | $ | 19,780 | $ | 81,602 | $ | 74,289 | |||||||||||||||
| GAAP general and administrative as percentage of revenue | (0.1 | %) | 24.4 | % | 16.8 | % | 25.1 | % | |||||||||||||||
FRESHWORKS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Non-GAAP general and administrative as percentage of revenue | 10.0 | % | 10.2 | % | 9.7 | % | 10.3 | % | |||||||||||||||
| Reconciliation of operating loss and operating margin: | |||||||||||||||||||||||
| GAAP income (loss) from operations | $ | 39,734 | $ | (23,792) | $ | 13,205 | $ | (138,610) | |||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||
| Stock-based compensation expense | (2,654) | 50,416 | 146,819 | 216,706 | |||||||||||||||||||
| Employer payroll taxes on employee stock transactions | 435 | 434 | 3,026 | 3,223 | |||||||||||||||||||
| Amortization of acquired intangibles | 3,416 | 3,592 | 13,854 | 8,160 | |||||||||||||||||||
Restructuring charges | — | 9,664 | 405 | 9,664 | |||||||||||||||||||
| Acquisition expense | 684 | — | 684 | — | |||||||||||||||||||
Non-GAAP income from operations | 41,615 | 40,314 | 177,993 | 99,143 | |||||||||||||||||||
| GAAP operating margin | 17.8 | % | (12.2) | % | 1.6 | % | (19.2) | % | |||||||||||||||
| Non-GAAP operating margin | 18.7 | % | 20.7 | % | 21.2 | % | 13.8 | % | |||||||||||||||
Reconciliation of net loss: | |||||||||||||||||||||||
| GAAP net income (loss) | $ | 191,446 | $ | (21,900) | $ | 183,723 | $ | (95,368) | |||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||
| Stock-based compensation expense | (2,654) | 50,416 | 146,819 | 216,706 | |||||||||||||||||||
| Employer payroll taxes on employee stock transactions | 435 | 434 | 3,026 | 3,223 | |||||||||||||||||||
| Amortization of acquired intangibles | 3,416 | 3,592 | 13,854 | 8,160 | |||||||||||||||||||
| Gain on sale of non-marketable equity investments | — | — | (1,837) | — | |||||||||||||||||||
Restructuring charges | — | 9,664 | 405 | 9,664 | |||||||||||||||||||
| Acquisition expense | 684 | — | 684 | — | |||||||||||||||||||
Income tax adjustments (2, 3) | (153,750) | 655 | (151,900) | (12,017) | |||||||||||||||||||
Non-GAAP net income | $ | 39,577 | $ | 42,861 | $ | 194,774 | $ | 130,368 | |||||||||||||||
Reconciliation of net loss per share - diluted: | |||||||||||||||||||||||
GAAP net loss per share - diluted | $ | 0.67 | $ | (0.07) | $ | 0.63 | $ | (0.32) | |||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||
| Stock-based compensation expense | (0.01) | 0.17 | 0.50 | 0.72 | |||||||||||||||||||
| Employer payroll taxes on employee stock transactions | — | — | 0.01 | 0.01 | |||||||||||||||||||
| Amortization of acquired intangibles | 0.01 | 0.01 | 0.05 | 0.03 | |||||||||||||||||||
Restructuring charges | — | 0.03 | — | 0.03 | |||||||||||||||||||
| Gain on sale of non-marketable equity investments | — | — | (0.01) | — | |||||||||||||||||||
| Acquisition expense | — | — | — | — | |||||||||||||||||||
Income tax adjustments (2, 3) | (0.53) | — | (0.52) | (0.04) | |||||||||||||||||||
FRESHWORKS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
Non-GAAP net income per share - diluted | $ | 0.14 | $ | 0.14 | $ | 0.66 | $ | 0.43 | |||||||||||||||
Weighted-average shares used in computing GAAP net income (loss) per share - diluted | 283,911 | 303,560 | 293,769 | 300,843 | |||||||||||||||||||
Weighted-average shares used in computing non-GAAP net income per share - diluted (1) | 283,911 | 306,109 | 293,769 | 305,085 | |||||||||||||||||||
Computation of adjusted free cash flow: | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 62,334 | $ | 41,362 | $ | 242,370 | $ | 160,646 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Purchases of property and equipment | (2,232) | (5,067) | (5,700) | (9,177) | |||||||||||||||||||
| Capitalized internal-use software | (3,872) | (1,911) | (15,791) | (5,485) | |||||||||||||||||||
Add: | |||||||||||||||||||||||
Restructuring costs paid | — | 7,314 | 2,221 | 7,314 | |||||||||||||||||||
Adjusted free cash flow | $ | 56,230 | $ | 41,698 | $ | 223,100 | $ | 153,298 | |||||||||||||||
Operating cash flow margin | 28.0 | % | 21.3 | % | 28.9 | % | 22.3 | % | |||||||||||||||
Adjusted free cash flow margin | 25.2 | % | 21.4 | % | 26.6 | % | 21.3 | % | |||||||||||||||
Net cash provided by investing activities | $ | 157,200 | $ | 209,148 | $ | 206,133 | $ | 38,803 | |||||||||||||||
| Net cash used in financing activities | $ | (8,319) | $ | (21,302) | $ | (436,658) | $ | (67,260) | |||||||||||||||
(1) Diluted net income (loss) per share is determined by giving effect to all potential common equivalents during the reporting period, unless including them yields an antidilutive result. The company considers its stock options and RSUs as potential common stock equivalents but excludes them from the computation of GAAP diluted net loss per share if their effect was antidilutive.
(2) During the quarter ended December 31, 2025, income tax adjustments primarily included approximately $151.7 million or $0.53 per share of tax benefit from a release of our valuation allowance on U.S. deferred tax assets and $37.3 million or $0.13 per share of income tax effect of non-GAAP adjustments, partially offset by $35.2 million or $0.13 per share of transition impact of releasing our valuation allowance. During the year ended December 31, 2025, income tax adjustments primarily included approximately $151.7 million or $0.52 per share of tax benefit from a release of our valuation allowance on U.S. deferred tax assets and $39.1 million or $0.13 per share of income tax effect of non-GAAP adjustments, partially offset by $38.9 million or $0.13 per share of transition impact as a result of releasing our valuation allowance.
(3) During the year ended December 31, 2024, income tax adjustments included $14.3 million or $0.05 per share of income tax benefit associated with acquisitions.
FAQ
How did Freshworks (FRSH) perform financially in Q4 2025?
Freshworks posted Q4 2025 revenue of $222.7 million, up 14% year-over-year, with GAAP operating income of $39.7 million and a 17.8% operating margin. Non-GAAP operating income was $41.6 million, reflecting continued profitable growth and improved efficiency versus the prior year.
What were Freshworks’ full year 2025 results?
For 2025, Freshworks generated $838.8 million in revenue, growing 16% from 2024. GAAP operating income was $13.2 million, and non-GAAP operating income reached $178.0 million with a 21.2% margin, marking a strong turnaround from the prior year’s operating loss.
How profitable and cash-generative was Freshworks in 2025?
Freshworks achieved GAAP diluted EPS of $0.63 and non-GAAP diluted EPS of $0.66 in 2025. Net cash provided by operating activities was $242.4 million, while adjusted free cash flow reached $223.1 million, for an adjusted free cash flow margin of 26.6%.
What customer and retention metrics did Freshworks report for Q4 2025?
In Q4 2025, Freshworks had 24,762 customers contributing more than $5,000 in ARR, up 10% year-over-year. Net dollar retention rate improved to 108%, compared with 103% in the fourth quarter of 2024, indicating healthy expansion within the existing customer base.
What guidance did Freshworks give for 2026 revenue and earnings?
For 2026, Freshworks expects revenue of $952.0–$960.0 million, implying 13.5%–14.5% year-over-year growth. Non-GAAP income from operations is projected at $181.0–$189.0 million, and non-GAAP net income per share is estimated between $0.55 and $0.57.
How did tax items affect Freshworks’ 2025 GAAP net income?
2025 GAAP net income of $183.7 million includes about $151.7 million of tax benefit from the release of a valuation allowance on U.S. deferred tax assets. This significantly boosted GAAP earnings and is removed in non-GAAP net income adjustments for analytical clarity.
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Freshworks Inc.
NASDAQ:FRSH
FRSH Rankings
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FRSH Stock Data
2.06B
228.80M
6.86%
87.5%
4.28%
Software - Application
Services-prepackaged Software
United States
SAN MATEO