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Leading UK specialist bank selects Freshservice to simplify operations, improve colleague experience and support its digital-first transformation June 30, 2026 03:00 ET  | Source: Freshworks Inc

LONDON, June 30, 2026 (GLOBE NEWSWIRE) -- Freshworks (NASDAQ: FRSH) today announced that Vanquis, a leading UK specialist bank, has selected Freshservice as its AI-powered service operations platform to support the next phase of its digital transformation.

The selection is a key milestone in Vanquis’ broader Gateway programme, the bank’s flagship technology modernization initiative designed to create a simpler, more scalable and digital-first organization.

As Gateway nears completion, Vanquis is strengthening the operational foundations needed to scale efficiently, improve governance and deliver faster, more consistent service experiences across the organization. Freshservice will help Vanquis bring service management, asset visibility and workflow automation onto a single platform, reducing legacy complexity and enabling greater agility.

Freshservice was selected for its ease of use, rapid time to value and AI-powered capabilities. The platform is designed to give Vanquis greater flexibility to automate workflows, streamline service delivery and continuously adapt to evolving business needs without the constraints of legacy systems.

“As part of our Gateway transformation, we are simplifying the technology and processes that support colleagues across the bank,” said Jem Walters, CTO at Vanquis. “Freshservice gives us a more intuitive and flexible platform to manage service delivery, automate critical workflows and improve the colleague experience as we continue building a more agile, digital-first organization.”

Freshservice will enable Vanquis to manage service operations through a single platform, supporting faster incident resolution, more efficient request fulfillment and improved employee self-service. Built-in AI capabilities will help automate repetitive tasks, accelerate issue triage and provide insights to improve service performance.

“Financial institutions are under increasing pressure to modernize service delivery while maintaining resilience, governance, and operational efficiency,” said Musidora Jorgensen, UKI Country Lead for Freshworks. “Vanquis’ selection of Freshservice demonstrates how organizations can advance service transformation through a unified, AI-powered platform that enables faster service delivery, greater efficiency and measurable business outcomes.”

Vanquis joins a growing number of enterprises choosing Freshworks to modernize service management with solutions designed to deliver simplicity at scale, helping organizations reduce operational friction and unlock faster business outcomes.

To learn more about Freshservice, visit freshworks.com/freshservice.

About Freshservice

Freshservice by Freshworks is an AI-powered ServiceOps platform that unifies IT Service (ITSM), Asset (ITAM), Operations (ITOM) and Enterprise Service Management (ESM) on a single platform with a shared data layer. It gives IT, HR, finance, and facilities teams full visibility across services and infrastructure without the complexity of stitched-together tools. Freshservice comes with a natively embedded AI layer called Freddy AI that helps agents resolve issues faster, automates employee service requests, and gives leaders the insights they need to make better decisions. The result is resilient, proactive service delivery that scales across the entire organization.

About Freshworks Inc.

Freshworks Inc. provides service software that delivers exceptional employee and customer 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. 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.

© 2026 Freshworks Inc. All rights reserved. Freshworks, Freshservice, and Freddy AI and their 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.

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Exceeded estimates for revenue and non-GAAP operating income
Landed the two largest deals in company's history, including first $1 million-plus ARR deal

SAN MATEO, Calif., May 05, 2026 (GLOBE NEWSWIRE) -- Freshworks Inc. (Nasdaq: FRSH), the leading provider of uncomplicated software that delivers exceptional employee and customer experiences, today announced financial results for its first quarter ended March 31, 2026.

"Freshworks began Q1 with strong momentum, building on our 2025 successes and achieving our sixth straight quarter of exceeding expectations," stated Dennis Woodside, CEO & President of Freshworks. "High demand for our Employee Experience (EX) platform is fueling market traction, characterized by accelerating EX ARR, growing AI Copilot revenue, and strong net dollar retention. We are strategically investing in the EX opportunity as our approach continues to resonate with our customers. Freshworks is focused on delivering long-term value to shareholders and customers through sustainable growth and increased profitability."

First Quarter 2026 Financial Summary Results

Revenue: Total revenue was $228.6 million, representing growth of 16% compared to total revenue of $196.3 million in the first quarter of 2025, and 14% adjusting for constant currency. GAAP (Loss) from Operations: GAAP (loss) from operations was $(8.1) million, representing an operating margin of (3.5)%, compared to $(10.4) million in the first quarter of 2025, representing an operating margin of (5.3)%. Non-GAAP Income from Operations: Non-GAAP income from operations was $41.0 million, representing a non-GAAP operating margin of 17.9%, compared to $46.4 million in the first quarter of 2025, representing a non-GAAP operating margin of 23.6%. GAAP Net (Loss) Per Share: GAAP diluted net (loss) per share was $(0.02) based on 283.3 million weighted-average shares outstanding, compared to $0.00 based on 301.3 million weighted-average shares outstanding in the first quarter of 2025. Non-GAAP Net Income Per Share: Non-GAAP diluted net income per share was $0.11 based on 284.3 million weighted-average shares outstanding, compared to $0.18 based on 306.0 million weighted-average shares outstanding in the first quarter of 2025. Net Cash Provided by Operating Activities: Net cash provided by operating activities was $62.4 million, representing an operating cash flow margin of 27.3%, compared to $58.0 million in the first quarter of 2025, representing an operating cash flow margin of 29.5%. Adjusted Free Cash Flow: Adjusted free cash flow was $55.8 million, representing an adjusted free cash flow margin of 24.4%, compared to $55.4 million in the first quarter of 2025, representing an adjusted free cash flow margin of 28.2%. Cash, Cash Equivalents, Restricted Cash and Marketable Securities: Cash, cash equivalents, restricted cash and marketable securities were $780.4 million as of March 31, 2026. All financial numbers for 2026 include the results of our FireHydrant business. 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.

First Quarter Operating Metrics and Recent Business Highlights

Number of customers contributing more than $100,000 in ARR was 1,646, an increase of 29% year-over-year and 26% adjusting for constant currency.Number of customers contributing more than $50,000 in ARR was 3,938, an increase of 22% year-over-year and 20% adjusting for constant currency.Number of customers contributing more than $5,000 in ARR was 25,088, an increase of 8% year-over-year and 7% adjusting for constant currency.Net dollar retention rate was 106%, compared to 108% in the fourth quarter of 2025 and 105% in the first quarter of 2025. Adjusted for constant currency, net dollar retention rate was 105%, compared to 104% in the fourth quarter of 2025 and 105% in the first quarter of 2025.Welcomed and onboarded many new customers to the Freshworks community including Eagle Materials, Everbridge, G4S, Outreach, and University of Connecticut.Landed the two largest deals in Freshworks' history, including the first $1 million-plus ARR deal.Integrated Device42’s infrastructure discovery and mapping capabilities natively into Freshservice, giving teams a single AI-powered platform to manage assets, services, and operations.Unified our global sales organization and appointed Ian Tickle as Chief Revenue Officer.Introduced a new leader with Kuntal Vahalia joining as Senior Vice President of Global Channels and Alliances. Financial Outlook

We are providing estimates for the second 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 second quarter and full year 2026, we currently expect the following results:

($ in millions, except per share data)Second Quarter 2026Full Year 2026Revenue(1)        $232.0 - $235.0$958.0 - $964.0Year-over-year growth        13% - 15%14% - 15%   Non-GAAP income from operations(1)        $41.0 - $43.0$207.0 - $215.0   Non-GAAP net income per share(2)        $0.13
$0.61 - $0.63    (1) Revenue and non-GAAP income from operations are based on exchange rates as of May 1, 2026 for currencies other than USD.
(2) Non-GAAP net income per share was estimated assuming 280 million and 281 million weighted-average shares outstanding for the second 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 second quarter and full year 2026 estimates for non-GAAP financial measures, including our estimated non-GAAP income from operations and non-GAAP net income per share, disclosed above, and our estimated non-GAAP tax rate, disclosed below, 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 first quarter 2026 and 2025 non-GAAP results included in this press release.

Webcast and Conference Call Information

We will host a conference call for investors on May 5, 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 Q1 2025, the average exchange rates in effect for our major currencies were 1 EUR to 1.05 USD and 1 GBP to 1.26 USD), rather than the actual average exchange rates in effect during the current period (for Q1 2026, the average exchange rates in effect for our major currencies were 1 EUR to 1.17 USD and 1 GBP to 1.35 USD).

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. 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. Starting 2026, we utilize a long-term projected non-GAAP tax rate to compute our non-GAAP income tax provision in order to provide better consistency across interim reporting periods. Our non-GAAP tax rate reflects our estimated long-term effective tax rate based on our anticipated geographic earnings mix and statutory tax regimes. For fiscal year 2026, we determined the projected non-GAAP tax rate to be 24%. The difference between our GAAP income tax provision and our non-GAAP income tax provision is presented as non-GAAP income tax reconciling adjustments. Prior to 2026, we excluded 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 excluded 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, capitalized internal-use software, plus acquisition costs and 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, $50,000 and $100,000 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, $50,000 and $100,000 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 ARR above the applicable threshold.

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, $50,000 and $100,000 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 Q1 2025, the period end exchange rates in effect for our major currencies were 1 EUR to 1.08 USD and 1 GBP to 1.29 USD), rather than the actual exchange rates in effect at the end of the current period (for Q1 2026, the period end exchange rates in effect for our major currencies were 1 EUR to 1.15 USD and 1 GBP to 1.32 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 second quarter and full year 2026, our financial outlook, the value of our products to customers, our expectations regarding demand for and our strategy related to our EX platform, and our overall growth prospects. 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, 2025 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).

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. provides service software that delivers exceptional employee and customer 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. 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.

© 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:
[email protected] 

Media Relations Contact:
[email protected] 

FRESHWORKS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)   Three Months Ended
March 31,  2026   2025 Revenue        $228,633  $196,273 Cost of revenue(1)         34,688   29,878 Gross profit         193,945   166,395 Operating expense:   Research and development(1)         49,261   40,001 Sales and marketing(1)         112,317   89,158 General and administrative(1)         40,427   47,247 Restructuring charges         —   405 Total operating expenses         202,005   176,811 Loss from operations         (8,060)  (10,416)Interest and other income, net         1,426   12,969 Income (loss) before income taxes         (6,634)  2,553 Provision for (benefit from) income taxes         (1,824)  3,857 Net loss         (4,810)  (1,304)Net loss per share - basic and diluted        $(0.02) $— Weighted-average shares used in computing net loss per share - basic and diluted         283,336   301,280  ______________________
(1) Includes stock-based compensation expense as follows (in thousands):

 Three Months Ended
March 31,  2026  2025Cost of revenue        $1,618 $1,518Research and development         12,301  9,213Sales and marketing         13,000  13,409General and administrative         17,002  27,524Total stock-based compensation expense, net of amounts capitalized        $43,921 $51,664       FRESHWORKS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)     March 31, 2026 December 31, 2025 (unaudited)  Assets   Current assets:   Cash and cash equivalents        $548,168  $569,774 Restricted cash         1,160   62,374 Marketable securities         231,069   211,597 Accounts receivable, net         127,338   150,817 Deferred contract acquisition costs         30,927   29,830 Prepaid expenses and other current assets         68,148   72,774 Total current assets         1,006,810   1,097,166 Property and equipment, net         44,222   38,843 Operating lease right-of-use assets         36,968   39,893 Deferred contract acquisition costs, noncurrent         27,712   27,179 Goodwill         199,324   146,676 Intangible assets, net         96,703   76,986 Deferred tax assets, net         176,017   157,466 Other assets         17,626   18,503 Total assets        $1,605,382  $1,602,712 Liabilities and Stockholders' Equity   Current liabilities:   Accounts payable        $18,578  $11,507 Accrued liabilities         109,405   101,202 Deferred revenue         392,070   385,320 Total current liabilities         520,053   498,029 Operating lease liabilities, non-current         29,402   33,282 Other liabilities         36,726   38,751 Total liabilities         586,181   570,062 Stockholders' equity:   Common stock         3   3 Additional paid-in capital         4,579,812   4,586,392 Accumulated other comprehensive loss         (3,650)  (1,591)Accumulated deficit         (3,556,964)  (3,552,154)Total stockholders' equity         1,019,201   1,032,650 Total liabilities and stockholders' equity        $1,605,382  $1,602,712          FRESHWORKS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

   Three Months Ended
March 31,  2026   2025 Cash Flows from Operating Activities:   Net income (loss)        $(4,810) $(1,304)Adjustments to reconcile net income (loss) to net cash provided by operating activities:   Depreciation and amortization         7,863   6,360 Amortization of deferred contract acquisition costs         8,567   7,583 Non-cash lease expense         2,925   2,303 Stock-based compensation         43,921   51,664 Discount amortization on marketable securities         (947)  (1,901)Deferred income taxes         (5,865)  (459)Other         7,808   (17)Changes in operating assets and liabilities:   Accounts receivable         24,917   10,594 Deferred contract acquisition costs         (10,197)  (8,704)Prepaid expenses and other assets         (12,564)  (15,317)Accounts payable         6,894   526 Accrued and other liabilities         (3,442)  (496)Deferred revenue         1,027   7,049 Operating lease liabilities         (3,708)  92 Net cash provided by operating activities         62,389   57,973 Cash Flows from Investing Activities:   Purchases of property and equipment         (3,901)  (1,296)Proceeds from sale of property and equipment         5   38 Capitalized internal-use software         (3,379)  (2,772)Purchases of marketable securities         (147,421)  (121,933)Maturities and redemptions of marketable securities         129,351   172,194 Business combination, net of cash acquired         (56,913)  — Net cash provided by (used in) investing activities         (82,258)  46,231 Cash Flows from Financing Activities:   Proceeds from exercise of stock options         —   48 Payment of withholding taxes on net share settlement of equity awards         (7,160)  (16,711)Repurchase of common stock         (48,369)  (113,610)Net cash used in financing activities         (55,529)  (130,273)    Effect of exchange rate changes on cash, cash equivalents and restricted cash         (7,521)  —     Net decrease in cash, cash equivalents and restricted cash         (82,919)  (26,069)Cash, cash equivalents and restricted cash, beginning of period         632,250   620,405 Cash, cash equivalents and restricted cash, end of period        $549,331  $594,336          FRESHWORKS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)       Three Months Ended
March 31,     2026   2025 Growth RatesRevenue      GAAP revenue         $228,633  $196,273 16%Effects of foreign currency rate fluctuations          (5,392)    Revenue adjusted for constant currency         $223,241  $196,273 14%            FRESHWORKS INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)   Three Months Ended
March 31,  2026   2025 Reconciliation of gross profit and gross margin:   GAAP gross profit        $193,945  $166,395 Non-GAAP adjustments:           Stock-based compensation expense         1,618   1,518 Employer payroll taxes on employee stock transactions         29   27 Amortization of acquired intangibles         1,637   1,260 Non-GAAP gross profit        $197,229  $169,200 GAAP gross margin         84.8%  84.8%Non-GAAP gross margin         86.3%  86.2%    Reconciliation of operating expenses:   GAAP research and development        $49,261  $40,001 Non-GAAP adjustments:           Stock-based compensation expense         (12,301)  (9,213)Employer payroll taxes on employee stock transactions         (113)  (152)Non-GAAP research and development        $36,847  $30,636 GAAP research and development as percentage of revenue         21.5%  20.4%Non-GAAP research and development as percentage of revenue         16.1%  15.6%    GAAP sales and marketing        $112,317  $89,158 Non-GAAP adjustments:           Stock-based compensation expense         (13,000)  (13,409)Employer payroll taxes on employee stock transactions         (390)  (562)Amortization of acquired intangibles         (2,546)  (2,254)Non-GAAP sales and marketing        $96,381  $72,933 GAAP sales and marketing as percentage of revenue         49.1%  45.4%Non-GAAP sales and marketing as percentage of revenue         42.2%  37.2%    GAAP general and administrative        $40,427  $47,247 Non-GAAP adjustments:   Stock-based compensation expense          (17,002)  (27,524)Employer payroll taxes on employee stock transactions         (225)  (458)Acquisition expense         (155)  — Non-GAAP general and administrative        $23,045  $19,265     GAAP general and administrative as percentage of revenue         17.7%  24.1%Non-GAAP general and administrative as percentage of revenue         10.1%  9.8%Reconciliation of operating loss and operating margin:   GAAP income (loss) from operations        $(8,060) $(10,416)Non-GAAP adjustments:   Stock-based compensation expense         43,921   51,664 Employer payroll taxes on employee stock transactions         757   1,199 Amortization of acquired intangibles         4,183   3,514 Restructuring charges         —   405 Acquisition expense         155   — Non-GAAP income from operations         40,956   46,366 GAAP operating margin        (3.5)        % (5.3)        %Non-GAAP operating margin         17.9%  23.6%    Reconciliation of net loss:   GAAP net (loss)        $(4,810) $(1,304)Non-GAAP adjustments:   Stock-based compensation expense         43,921   51,664 Employer payroll taxes on employee stock transactions         757   1,199 Amortization of acquired intangibles         4,183   3,514 Restructuring charges         —   405 Acquisition expense         155   — Income tax adjustments         (11,996)  410 Non-GAAP net income        $32,210  $55,888     Reconciliation of net loss per share - diluted:   GAAP net loss per share - diluted        $(0.02) $— Non-GAAP adjustments:   Stock-based compensation expense         0.16   0.17 Amortization of acquired intangibles         0.01   0.01 Income tax adjustments         (0.04)  — Non-GAAP net income per share - diluted        $0.11  $0.18 Weighted-average shares used in computing GAAP net (loss) per share - diluted         283,336   301,280 Weighted-average shares used in computing non-GAAP net income per share - diluted (1)         284,337   305,963 Computation of adjusted free cash flow:   Net cash provided by operating activities        $62,389  $57,973 Less:   Purchases of property and equipment          (3,901)  (1,296)Capitalized internal-use software         (3,379)  (2,772)Add:           Acquisition costs paid         719   — Restructuring costs paid         —   1,493 Adjusted free cash flow        $55,828  $55,398 Operating cash flow margin         27.3%  29.5%Adjusted free cash flow margin         24.4%  28.2%Net cash provided by (used in) investing activities        $(82,258) $46,231 Net cash used in financing activities        $(55,529) $(130,273) (1) Diluted net income (loss) per share attributable to common stockholders 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 excluded them from the computation of GAAP diluted net loss per share attributable to common stockholders, as their effect was antidilutive. For the three months ended March 31, 2026 and 2025, potentially dilutive shares of 1.0 million and 4.7 million shares, respectively, were included in the weighted average shares used in computing non-GAAP diluted net income per share.

Freshworks Inc. (FRSH - Free Report) came out with quarterly earnings of $0.11 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.18 per share a year ago. These figures are adjusted for non-recurring items.

A quarter ago, it was expected that this company would post earnings of $0.11 per share when it actually produced earnings of $0.14, delivering a surprise of +27.27%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Freshworks, which belongs to the Zacks Internet - Software industry, posted revenues of $228.63 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 2.28%. This compares to year-ago revenues of $196.27 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Freshworks shares have lost about 26.7% since the beginning of the year versus the S&P 500's gain of 5.2%.

What's Next for Freshworks?While Freshworks has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Freshworks was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.12 on $232.92 million in revenues for the coming quarter and $0.57 on $956.25 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, DocuSign (DOCU - Free Report) , is yet to report results for the quarter ended April 2026.

This provider of electronic signature technology is expected to post quarterly earnings of $1.00 per share in its upcoming report, which represents a year-over-year change of +11.1%. The consensus EPS estimate for the quarter has been revised 1.5% higher over the last 30 days to the current level.

DocuSign's revenues are expected to be $824.75 million, up 8% from the year-ago quarter.

May 06, 2026 08:00 ET  | Source: Freshworks Inc

SAN MATEO, Calif., May 06, 2026 (GLOBE NEWSWIRE) -- Freshworks Inc. (NASDAQ: FRSH) will host a Financial Analyst Session at Refresh 2026 on Thursday, May 14 at 4:30 p.m. Eastern Time in New York City. Dennis Woodside, Chief Executive Officer and President, and Tyler Sloat, Chief Operating Officer and Chief Financial Officer, will speak about Freshworks’ vision, product innovation, and financial outlook.

A livestream will be accessible the day of the event at https://ir.freshworks.com  

About Freshworks Inc.
Freshworks Inc. provides service software that delivers exceptional employee and customer 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. 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.

© 2026 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.

Investor Relations Contact:
[email protected]

Media Relations Contact:
[email protected]

Freshworks Inc. (FRSH - Free Report) closed the last trading session at $9.03, gaining 13.7% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $12.5 indicates a 38.4% upside potential.

The average comprises 12 short-term price targets ranging from a low of $8.00 to a high of $18.00, with a standard deviation of $3.03. While the lowest estimate indicates a decline of 11.4% from the current price level, the most optimistic estimate points to a 99.3% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.

While the consensus price target is a much-coveted metric for investors, solely banking on this metric to make an investment decision may not be wise at all. That's because the ability and unbiasedness of analysts in setting price targets have long been questionable.

However, an impressive consensus price target is not the only factor that indicates a potential upside in FRSH. This view is strengthened by the agreement among analysts that the company will report better earnings than what they estimated earlier. Though a positive trend in earnings estimate revisions doesn't give any idea as to how much the stock could surge, it has proven effective in predicting an upside.

Price, Consensus and EPS Surprise

Here's What You Should Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.

While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?

They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.

However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.

That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.

Here's Why There Could be Plenty of Upside Left in FRSHThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

The Zacks Consensus Estimate for the current year has increased 13.5% over the past month, as one estimate has gone higher compared to no negative revision.

Moreover, FRSH currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Therefore, while the consensus price target may not be a reliable indicator of how much FRSH could gain, the direction of price movement it implies does appear to be a good guide.

Freshworks Inc. (FRSH - Free Report) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Freshworks Inc., there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate RevisionsThe earnings estimate of $0.13 per share for the current quarter represents a change of -27.8% from the number reported a year ago.

Over the last 30 days, two estimates have moved higher for Freshworks compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 22.22%.

Current-Year Estimate RevisionsFor the full year, the company is expected to earn $0.61 per share, representing a year-over-year change of -7.6%.

The revisions trend for the current year also appears quite promising for Freshworks, with four estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 73.08%.

Favorable Zacks RankOur research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom LineInvestors have been betting on Freshworks because of its solid estimate revisions, as evident from the stock's 8.7% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.

CRM Stocks Are Hot in 2024 — Should You Hold for 2025 Gains?Freshworks NASDAQ: FRSH told investors at its Refresh event that it is repositioning the company around its employee experience, or EX, business, with executives saying the company’s growth story is increasingly tied to Freshservice rather than its legacy customer experience products.

CEO and President Dennis Woodside said Freshworks is now an “EX-first company,” adding that some investors and analysts still view the company as centered on customer experience and small businesses. “That’s just not accurate anymore,” Woodside said.

Get Freshworks alerts:

Freshworks Stock Soars 50% – Is This the Perfect Entry Point?Woodside said EX represented 37% of Freshworks’ business when the company went public, but is expected to be 60% of annual recurring revenue by the end of this year and 70% by the end of 2028. He said Freshservice is on a path to $1 billion in ARR in about two and a half years, with the company expecting to end 2026 at $600 million in ARR for the product.

Freshworks Highlights Enterprise and Mid-Market Momentum Woodside said Freshworks is seeing traction with larger customers, particularly in what the company calls “agile enterprises,” which it defines as organizations with up to 20,000 employees. He said 80% of EX ARR comes from mid-market and enterprise customers, with mid-market defined as companies with 251 or more employees and enterprise defined as 5,000 or more employees.

Top 2 CRM Stocks Positioned to Surge Higher With AI in 2025The company said its EX business has grown fivefold over the past five years and now serves 20,000 customers globally. Woodside cited customers including Seagate, New Balance, Databricks, Smartsheet, RingCentral, Nucor Steel, Steel Dynamics and Vermeer, and said Freshservice is used by one-third of Major League Baseball teams and one-third of Formula One teams.

Freshworks said customers spending more than $100,000 annually account for more than 40% of the Freshservice business, and that this customer group grew 40% year over year in the first quarter. The company also said average revenue per account for EX grew 18% year over year.

AI Positioned as Growth Driver Woodside said artificial intelligence is acting as both a direct and indirect tailwind for the business. Freshworks announced several AI-related updates at the event, including AI Agent Studio for EX, an MCP gateway, cloud-native IT asset management, IT operations management integration following the FireHydrant acquisition, and new experience-level agreement and executive overview capabilities.

The company said Freddy Copilot is priced as a $29-per-month add-on to Pro and Enterprise plans. Freshworks also said AI Agent Studio and the MCP gateway will be available to customers at no charge for a promotional period, with monetization expected to begin in October. Woodside said AI Agent sessions are expected to be priced at $0.49 per session beginning in October, while MCP gateway pricing will be determined after the company observes customer usage.

Woodside said agents using Freddy Copilot can address 50% more tickets than those who do not. He also said Freshworks saw an average 50% deflection rate with Freddy AI Agent in the first quarter, with some customers reaching as high as 80%. Freshworks said EX customers using AI had net dollar retention of 118% last quarter.

Updated 2028 Targets CFO Tyler Sloat said Freshworks is raising its 2028 outlook based on stronger confidence in EX growth, a more focused go-to-market strategy and additional opportunities from IT asset management, IT operations management and enterprise service management.

Sloat said Freshworks now expects 2028 revenue of more than $1.3 billion, up from the prior target of more than $1.2 billion. The company also raised its operating margin and free cash flow margin targets by 400 basis points from the targets provided at its September investor day.

Sloat said Freshworks is targeting a “rule of 50” profile by 2028, with roughly 34% free cash flow margins. He also said the company expects adjusted free cash flow per share of $1.35 by 2028 and plans to grow free cash flow per share by 20% annually going forward.

The company reiterated that its guidance for the current year remains unchanged from the update provided the prior week, when it raised revenue guidance by $5 million, operating profit guidance by $26 million and free cash flow guidance by $15 million after the first quarter.

Capital Efficiency and CX Strategy Sloat said Freshworks has reduced fully diluted shares by almost 10% from 2024 to 2026 and currently has $700 million in cash with no debt. He said the company is actively using its second buyback authorization and has been net settling restricted stock units since going public.

Freshworks also lowered its stock-based compensation target, saying it now expects SBC to be 13% to 14% of revenue by 2028, compared with a prior long-term model of 18% to 20%. Sloat said SBC is expected to decline from 30% of revenue in 2024 to an estimated 16% this year.

While Freshworks emphasized EX as its primary growth engine, executives said the company remains committed to its customer experience business. Woodside said many large customers use both CX and EX products, and that shared infrastructure provides leverage across the company. Sloat said CX will be focused on inbound demand and is expected to grow in the low single digits while producing cash.

Analyst Questions Focus on Growth, AI and Market Position During the question-and-answer session, Sloat said the company’s EX growth targets do not assume future acquisitions. He said AI will become a larger factor in why customers choose Freshworks, but the company is focused on overall ARR and margins rather than separately emphasizing AI ARR.

Woodside said Freshworks is not relying on an overall increase in IT spending to support growth. Instead, he said the company is taking share from incumbent providers, particularly among organizations that need enterprise-grade capabilities without what he described as enterprise complexity.

“It’s not that we need overall IT spend to go up,” Woodside said. “We’re taking share from others that are not serving that space well.”

About Freshworks NASDAQ: FRSHFreshworks, Inc is a global provider of cloud-based customer engagement software designed to help businesses streamline customer support, sales, marketing, and IT service operations. The company's integrated suite of solutions enables organizations of all sizes to deliver seamless experiences across multiple channels, including email, chat, phone, and social media. Freshworks' platform is built on modern, user-friendly interfaces and offers native automation, AI-powered insights, and analytics to improve efficiency and customer satisfaction.

The company's flagship product, Freshdesk, serves as a helpdesk solution for customer support teams, while Freshservice addresses IT service management needs.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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SAN MATEO, Calif., May 20, 2026 (GLOBE NEWSWIRE) -- Freshworks (NASDAQ: FRSH) today announced the winners of its inaugural 2026 Global Customer Awards, recognizing customers whose commitment to innovation, transformation, and advocacy is setting a new standard for what service transformation can achieve.

Seven categories across Freshworks’ products recognize customers driving transformation at scale — from global law firms unifying ITSM across 90 countries, to retailers cutting customer resolution times with AI, to security companies building enterprise-wide service ecosystems from a single deployment. Together, these honorees show what’s possible with Freshworks.

“Tech leaders deserve to see real transformation, not just the promise of it on slides,” said Kady Srinivasan, Chief Marketing Officer of Freshworks. “Our 2026 Global Customer Award winners did exactly that. They use Freshworks to deliver real, measurable impact for the people they serve, and we're proud to celebrate what they've built."

Experience Transformation Leader Award for Freshdesk - Panasonic

Michelle Esgar, Director of Marketing and Experience at Panasonic, consolidated North America’s post-purchase customer support onto a single AI-enabled Freshdesk Omnichannel platform — replacing siloed, fragmented structures across markets, languages, and channels. The result: more than 90,000 annual conversations managed through one unified system, with custom bot workflows driving a 70% deflection rate and live chat first response times averaging just 20 seconds.

“Freshdesk supports Panasonic's global transformation goal — reducing customer effort and improving satisfaction in post-purchase support,” said Esgar.

AI Innovation Award for Freshservice - Shopify

Nikki McGrath, Senior Security Engineer of Technology Experience at Shopify, led the implementation of Freshservice across Shopify's global IT function, replacing a fragmented array of tools with a unified, intelligent service delivery platform. Intelligent workflows, self-service capabilities, and integrated asset and incident management now power IT support at scale, delivering a 30–45% reduction in average ticket resolution time and a 40%+ increase in self-service adoption.

“Freshservice streamlined IT service delivery across regions, replacing fragmented tools with a unified, automated service experience. This has significantly reduced response times and improved issue resolution at scale,” said McGrath.

AI Innovation Award for Freshdesk - Cineworld

Rajab Khalid, director of customer experience at Cineworld, led a wholesale customer experience transformation — replacing email threads, spreadsheets, and disconnected local tools with Freshworks' unified platform, AI-driven automation, and real-time analytics. More than 700 lost-item tickets are now resolved automatically every month, first-time response rates have improved by over 100%, and resolution times have dropped to under two hours. Cineworld now has full visibility into customer contact trends for the first time.

“Freshworks enabled real-time communication, automated workflows, and advanced analytics — allowing us to streamline operations and gain actionable insights into customer behavior,” said Khalid.

Customer Advocate of the Year for Freshservice - New Balance

Markus Gaulke, senior ITSM platform manager at New Balance, led the global rollout of Freshservice for more than 10,000 New Balance associates. He architected a unified service catalog from scratch, integrating Device42 for Configuration Management Database (CMDB) and asset management, and establishing change control at scale. Since go-live, New Balance has processed more than 70,000 tickets, doubled logged changes, and increased Customer Satisfaction Score (CSAT) by 25%.

“We were able to deliver a clear and easy way for global associates at New Balance to interact with IT through a service catalog, change control, inventory management, and Device42 CMDB, using all of Freshservice's functionality,” said Gaulke.

Customer Advocate of the Year for Freshdesk - iPostal1

Justin Levitz, head of process technology at iPostal1, used Freshworks to transform the operations of iPostal1, building a deeply customized, AI-enabled platform spanning customer service, IT, HR, legal, and operations when off-the-shelf software couldn't keep pace with the company's compliance requirements and growth. Four AI agents now resolve 56% of all chats — handling more than 85,000 conversations — while chat wait times dropped from 45 minutes to 7 minutes and 125 dashboards provide enterprise-wide transparency. Justin has shaped Freshworks' product roadmap directly through his Customer Advisory Board participation.

“Freshworks is the backbone of how the company runs day to day. It's a fully embedded, AI-enabled operating system that drives efficiency, compliance, and sustainable growth,” said Levitz.

Dream Team Award for Freshdesk and Freshservice - Allied Universal

Under the stewardship of Zwee Nelson, the applications manager at Allied Universal, what began as a single-team Freshservice deployment has grown into a connected, enterprise-wide ecosystem powering 24/7 support across Freshservice and Freshdesk for one of the world's largest security services companies. The most impactful project automated an emergency termination workflow that previously took up to 24 hours, reducing it to under one minute through API, connector, and a SailPoint integration.

For more information on our 2026 winners and the solutions they use, join us at our Refresh Virtual Summit on June 4, 2026. To register visit https://www.freshworks.com/events/refresh-virtual-summit-2026/.

About Freshworks
Freshworks Inc. provides service software that delivers exceptional employee and customer 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. 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.

© 2026 Freshworks Inc. All Rights Reserved. Freshworks, Freshservice, Freddy AI, Device42 and FireHydrant 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 Freshworks.

Press Contact
[email protected]

Freshworks turned in an impressive Q1 beat-and-raise, boosting its full-year growth expectations by 50bps. FRSH stock remains a deep value play in the software sector, trading at

A global Freshworks research report of over 9,000 IT decision makers finds 86% say AI complexity has increased their team’s workload80% of mid-market IT leaders report AI outputs introduce noise, errors, or rework, a phenomenon the report terms "AI slop"An estimated $16.29 billion in US mid-market AI spend is wasted every year on making AI functional
SAN MATEO, Calif., May 27, 2026 (GLOBE NEWSWIRE) -- Freshworks Inc. (NASDAQ: FRSH) today released The Global Cost of Complexity Report: The Mid-Market AI Complexity Trap, a survey of 12,021 IT professionals, including more than 9,000 in mid-market organizations. The research puts a dollar figure on how complexity is consuming mid-market AI budgets before real business outcomes are delivered, finding an average 25% of mid-market AI spend is lost to complexity overhead, an estimated $16.29 billion annually in the US alone.

With tighter margins than larger enterprises, mid-market companies feel this “complexity tax” harder and faster. Nearly 9 in 10 (89%) plan to increase AI investment over the next 12 to 24 months, yet only 15% have AI integrated across core business operations and 36% remain stuck in pilots.

"Mid-market IT leaders don't have time for AI that takes months to deliver value. They need AI that works inside the business they already run and shows value fast," said Srinivasan Raghavan, Chief Product Officer at Freshworks. "The companies that move from purchase to performance fastest will turn AI from a complexity tax into a competitive advantage.”

The ROI Reality Gap: IT is Being Judged on Timelines Shorter Than Deployment

Mid-market AI programs are stalling in the gap between executive expectation and deployment reality. While 72% of mid-market executives expect AI investments to show ROI within 8 months, 55% of organizations say deployment alone takes between 6 and 12 months before meaningful ROI can even begin.

The barriers are structural. System integration complexity (27%), skilled talent shortages (26%), and excessive configuration requirements (26%) are the top reasons pilots fail to become full programs. With deployment timelines running longer than the windows executives are watching, programs risk being cut before they can deliver value.

The Productivity Paradox: AI Was Supposed to Create Headroom, But For Most Mid-Market Teams It Has Done the Opposite

Managing AI is now adding to the workload it was meant to reduce, with teams fixing flawed outputs and governing tool sprawl across a growing stack of AI products.

More than 8 in 10 (86%) of mid-market IT leaders say managing AI complexity has actually increased their team’s workload, and 80% report that AI outputs are introducing noise, errors, or rework, a phenomenon the report terms “AI slop.” AI is generating work faster than it is eliminating it, and IT teams are absorbing the difference.

Sprawl is compounding the problem. Mid-market organizations use an average of 4.2 AI tools, with 10% running seven or more, yet only 33% have a formal, consistently applied AI governance framework. Separate Freshworks research found 71% of US mid-market IT leaders say unapproved “shadow AI” use is common inside their organization.

The Execution Pivot: Mid-market IT leaders Are Buying Differently

Mid-market organizations are responding to the AI complexity trap by changing how they buy. The new priority is AI that delivers value early, plugs into existing systems, and does not require a major build-out to work.

"Middle market businesses tend not to be early innovators and often lag in realizing full-scale implementation benefits until they are confident of ROI. Until then, smaller pilots and tests are often used to prove feasibility," said Doug Farren, Executive Director, National Center for the Middle Market.

Mid-market buying behavior is shifting decisively toward AI that works out of the box. A third (34%) of mid-market IT leaders name workflow integration as their top priority for the next two to three years, 90% favor built-in workflows over heavy configuration, and 54% are buying AI capabilities rather than building in-house.

To download the full report, visit https://www.freshworks.com/cost-complexity-mid-market-report-2026/.

Methodology
Freshworks surveyed 12,021 IT decision makers at director level and above across the US, UK, Germany, France, Singapore and India, within organizations of 250 or more employees, including over 9,000 mid-market organizations (up to 5,000 employees). Fieldwork took place in March 2026.

About Freshworks
Freshworks Inc. provides service software that delivers exceptional employee and customer 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. 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.

© 2026 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.

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Shares of Freshworks Inc. (FRSH - Free Report) have gained 10.4% over the past four weeks to close the last trading session at $9.38, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $11.82 indicates a potential upside of 26%.

The mean estimate comprises 11 short-term price targets with a standard deviation of $2.44. While the lowest estimate of $8.00 indicates a 14.7% decline from the current price level, the most optimistic analyst expects the stock to surge 70.6% to reach $16.00. It's very important to note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.

While the consensus price target is a much-coveted metric for investors, solely banking on this metric to make an investment decision may not be wise at all. That's because the ability and unbiasedness of analysts in setting price targets have long been questionable.

But, for FRSH, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.

Price, Consensus and EPS Surprise

Here's What You May Not Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.

While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?

They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.

However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.

That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.

Why FRSH Could Witness a Solid UpsideAnalysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason to expect an upside in the stock. That's because empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

The Zacks Consensus Estimate for the current year has increased 35.7% over the past month, as one estimate has gone higher compared to no negative revision.

Moreover, FRSH currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Therefore, while the consensus price target may not be a reliable indicator of how much FRSH could gain, the direction of price movement it implies does appear to be a good guide.