Revenue growth has decelerated to 16.5% as of 2026Q1, while the company continues to face structural challenges in achieving positive operating margins, which stood at -3.5% in the most recent quarter.
| Sales/Revenue | 871.17M | 838.81M | 720.42M | 596.43M | 498M | 371.02M | 249.66M | 172.38M | 126.43M | 118.66M | 126.88M | 120.21M | 97.4M |
| Revenue Growth % | 15.92% | 16.43% | 20.79% | 19.77% | 34.22% | 48.61% | 44.83% | 36.34% | 6.55% | -6.48% | 5.55% | 23.42% | - |
| Cost of Goods Sold | 130.96M | 126.14M | 113.33M | 103.37M | 95.77M | 78.03M | 52.49M | 36.46M | 20.41M | 25.96M | 28.35M | 26.6M | 19.69M |
| COGS % of Revenue | - | 15.04% | 15.73% | 17.33% | 19.23% | 21.03% | 21.03% | 21.15% | 16.15% | 21.88% | 22.34% | 22.13% | 20.21% |
| Gross Profit | 740.21M | 712.66M | 607.09M | 493.06M | 402.23M | 292.99M | 197.17M | 135.91M | 106.01M | 92.7M | 98.54M | 93.61M | 77.71M |
| Gross Margin % | 84.97% | 84.96% | 84.27% | 82.67% | 80.77% | 78.97% | 78.97% | 78.85% | 83.85% | 78.12% | 77.66% | 77.87% | 79.79% |
| Gross Profit Growth % | - | 17.39% | 23.13% | 22.58% | 37.28% | 48.6% | 45.07% | 28.2% | 14.36% | -5.92% | 5.27% | 20.45% | - |
| Operating Expenses | 725.31M | 699.05M | 745.7M | 663.24M | 635.6M | 497.77M | 253.28M | 165.59M | 65.97M | 37.01M | 31.44M | 31.57M | 34.3M |
| OpEx % of Revenue | - | 83.34% | 103.51% | 111.2% | 127.63% | 134.16% | 101.45% | 96.06% | 52.18% | 31.19% | 24.78% | 26.26% | 35.22% |
| Selling, General & Admin | 552.84M | 535.85M | 571.45M | 525.48M | 500.06M | 377.37M | 184.07M | 127.03M | 49.73M | 33.87M | 28.11M | 28.21M | 29.26M |
| SG&A % of Revenue | - | 63.88% | 79.32% | 88.1% | 100.41% | 101.71% | 73.73% | 73.69% | 39.34% | 28.54% | 22.15% | 23.46% | 30.04% |
| Research & Development | 172.47M | 163.21M | 164.59M | 137.76M | 135.54M | 120.41M | 69.21M | 38.56M | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | 19.46% | 22.85% | 23.1% | 27.22% | 32.45% | 27.72% | 22.37% | - | - | - | - | - |
| Other Operating Expenses | 0 | 0 | 9.66M | 0 | 0 | 0 | 0 | 0 | 16.23M | 3.14M | 3.33M | 3.37M | 5.04M |
| Operating Income | 15.56M | 13.61M | -138.61M | -170.17M | -233.37M | -204.78M | -56.11M | -29.67M | 11.27M | -14.27M | 9.65M | 15.63M | 15.3M |
| Operating Margin % | 1.79% | 1.62% | -19.24% | -28.53% | -46.86% | -55.19% | -22.48% | -17.21% | 8.91% | -12.02% | 7.6% | 13.01% | 15.71% |
| Operating Income Growth % | - | 109.82% | 18.55% | 27.08% | -13.96% | -264.95% | -89.12% | -363.29% | 178.98% | -247.89% | -38.29% | 2.16% | - |
| EBITDA | 41.27M | 71.17M | -119.19M | -158.03M | -225.06M | -191.49M | -44.94M | -23.41M | 18.51M | -3.82M | 21.88M | 25.64M | 23.92M |
| EBITDA Margin % | 4.74% | 8.48% | -16.55% | -26.5% | -45.19% | -51.61% | -18% | -13.58% | 14.64% | -3.22% | 17.25% | 21.33% | 24.56% |
| EBITDA Growth % | 143.88% | 159.71% | 24.57% | 29.78% | -17.53% | -326.07% | -91.98% | -226.47% | 585.06% | -117.44% | -14.64% | 7.18% | - |
| D&A (Non-Cash Add-back) | 25.71M | 57.56M | 19.41M | 12.14M | 8.31M | 13.29M | 11.17M | 6.26M | 7.24M | 10.45M | 12.24M | 10M | 8.62M |
| EBIT | 30.12M | 53.28M | -128.95M | -170.17M | -233.37M | -204.78M | -56.11M | -29.67M | 11.02M | -14.47M | 0 | 0 | 10.58M |
| Net Interest Income | 26.09M | 40.08M | 51.7M | 45.9M | 14.77M | 2.45M | 4.21M | 1.28M | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 26.09M | 40.08M | 51.7M | 45.9M | 14.77M | 2.45M | 4.21M | 1.28M | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 5.21M | 5.08M | 0 | 0 | 8.1M |
| Other Income/Expense | 28.53M | 39.67M | 47.77M | 46.4M | 12.58M | 23.3M | 2.83M | 2.18M | -5.46M | -5.28M | -5.06M | -9.16M | -12.82M |
| Pretax Income | 44.09M | 53.28M | -90.84M | -123.77M | -220.79M | -181.48M | -53.28M | -27.49M | 5.81M | -19.55M | 4.59M | 6.48M | 2.48M |
| Pretax Margin % | 5.06% | 6.35% | -12.61% | -20.75% | -44.34% | -48.91% | -21.34% | -15.95% | 4.59% | -16.48% | 3.62% | 5.39% | 2.55% |
| Income Tax | -136.12M | -130.44M | 4.53M | 13.67M | 11.34M | 10.52M | 4.01M | 3.63M | 1.48M | -19.54M | 1.94M | 2.07M | 1.24M |
| Effective Tax Rate % | -308.7% | -244.81% | -4.99% | -11.04% | -5.14% | -5.79% | -7.54% | -13.22% | 25.54% | 99.96% | 42.31% | 31.92% | 49.74% |
| Net Income | 180.22M | 183.72M | -95.37M | -137.44M | -232.13M | -192M | -57.29M | -31.13M | 4.32M | -7K | 2.65M | 4.91M | 1.25M |
| Net Margin % | 20.69% | 21.9% | -13.24% | -23.04% | -46.61% | -51.75% | -22.95% | -18.06% | 3.42% | -0.01% | 2.09% | 4.09% | 1.28% |
| Net Income Growth % | 345.7% | 292.65% | 30.61% | 40.79% | -20.91% | -235.1% | -84.08% | -819.82% | 61871.43% | -100.26% | -46.06% | 293.51% | - |
| Net Income (Continuing) | 180.22M | 183.72M | -95.37M | -137.44M | -232.13M | -192M | -57.29M | -31.13M | 4.32M | -7K | 2.65M | 4.91M | 1.25M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.64 | 0.63 | -0.32 | -0.47 | -0.82 | -10.39 | -6.40 | -0.66 | 0.25 | -0.00 | 0.16 | 0.29 | 0.10 |
| EPS Growth % | 358.42% | 296.88% | 31.91% | 42.68% | 92.11% | -62.34% | -869.7% | -364% | - | -100.25% | -44.83% | 190% | - |
| EPS (Basic) | - | 0.63 | -0.32 | -0.47 | -0.82 | -10.39 | -6.40 | -0.66 | 0.25 | -0.00 | 0.16 | 0.29 | 0.10 |
| Diluted Shares Outstanding | 283.34M | 293.77M | 300.84M | 293.09M | 284.59M | 275.47M | 252.9M | 46.91M | 17M | 16.87M | 16.77M | 16.87M | 12.1M |
| Basic Shares Outstanding | 283.34M | 291.08M | 300.84M | 293.09M | 284.59M | 275.47M | 252.9M | 46.89M | 17M | 16.87M | 16.74M | 16.65M | 12.1M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - |
AI-driven seat pricing erosion
As reported in recent financial filings, Freshworks' year-over-year revenue growth has decelerated from 21.5% in late 2024 to 16.5% by 2026Q1, suggesting that the company's initial high-growth phase is moderating as it attempts to scale its mid-market platform against more entrenched enterprise incumbents.
The consistent decline in top-line expansion rates indicates that the company may be struggling to maintain its historical momentum in a more competitive SaaS environment. Investors should monitor whether this deceleration reflects a saturation of the core helpdesk market or a longer-than-expected transition period for its up-market enterprise strategy.
Based on the company's income statement data, Freshworks maintains a robust gross margin profile consistently hovering near 85%, which underscores the inherent scalability of its cloud-native delivery model despite the broader challenges in achieving sustained operating profitability across its diverse product suite.
This high gross margin suggests significant pricing power and an efficient infrastructure cost structure, likely bolstered by offshore engineering talent. However, the stability of these margins does not necessarily translate to bottom-line strength, as the company continues to grapple with high operating expenses required to support its growth.
According to the provided quarterly data, Freshworks has struggled to demonstrate consistent operating leverage, with operating margins frequently dipping into negative territory, most recently at -3.5% in 2026Q1, despite the company's ability to maintain high gross margins throughout the observed ten-quarter period.
The persistent gap between gross profit and operating income highlights a heavy reliance on SG&A spending to drive customer acquisition. Until the company can decouple its revenue growth from aggressive sales and marketing investment, operating profitability will likely remain volatile and dependent on non-operating tailwinds.
Financial statements reveal a significant divergence between operating and net margins, exemplified by the 2025Q4 period where net margin reached 86% while operating margin was only 17.8%, indicating that reported profitability is heavily influenced by non-operating income rather than core operational performance.
The reliance on interest income from cash reserves masks the underlying cash-burn profile of the business. Analysts should adjust for these non-operating items and the substantial stock-based compensation expenses to gain a clearer view of the company's true economic profitability and long-term sustainability.
Based on reported figures, the market's current valuation of Freshworks may be misaligned, as the company's recent net income spikes appear largely driven by interest rate environments rather than fundamental operational improvements, creating a potential valuation trap if interest income declines in future periods.
Short-term investors should be wary of the discrepancy between GAAP net income and core operating cash flow. If the company fails to achieve sustainable operating margins as interest income normalizes, the current valuation multiples may face significant downward pressure, regardless of the company's competitive positioning in the mid-market.
Quick answers to the most common questions about buying FRSH stock.
For fiscal year 2025, Freshworks Inc. (FRSH) reported total revenue of $838.8M. This represents a 761.2% increase compared to $97.4M in 2014.
Freshworks Inc. (FRSH) is profitable, generating $183.7M in net income for the fiscal year ending 2025 with a net profit margin of 21.9%.
Freshworks Inc. (FRSH) reported an operating income of $13.6M, resulting in an operating profit margin of 1.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Freshworks Inc. (FRSH) generated $712.7M in gross profit for the year, representing a gross profit margin of 85.0%. This demonstrates the company's core pricing power and production efficiency.