Freshworks Set to Announce Q4 Earnings on February 10th
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy FRSH?
Source: seekingalpha
- Earnings Announcement: Freshworks (FRSH) is set to release its Q4 earnings on February 10th after market close, with consensus EPS estimate at $0.11, reflecting a 21.4% year-over-year decline, while revenue is expected to reach $218.76 million, indicating a 12.4% year-over-year growth, showcasing resilience in revenue generation.
- Strong Historical Performance: Over the past two years, Freshworks has consistently beaten both EPS and revenue estimates 100% of the time, highlighting the company's reliability in financial forecasting and bolstering market confidence.
- Upward Revision Trends: In the last three months, EPS estimates have seen three upward revisions with no downward adjustments, and revenue estimates have also experienced three upward revisions, reflecting analysts' optimistic outlook on the company's future performance, which could positively impact stock prices.
- Market Sentiment: Despite Freshworks being perceived as undervalued, concerns over slowing growth have intensified, leading Piper Sandler to downgrade its rating, indicating a cautious sentiment among investors regarding the company's future growth potential.
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Analyst Views on FRSH
Wall Street analysts forecast FRSH stock price to rise
9 Analyst Rating
6 Buy
3 Hold
0 Sell
Moderate Buy
Current: 7.040
Low
13.00
Averages
18.88
High
25.00
Current: 7.040
Low
13.00
Averages
18.88
High
25.00
About FRSH
Freshworks Inc. is a software company. Its software-as-a-service (SaaS) solutions fall into two product families: Customer Experience (CX) and Employee Experience (EX). CX products include Freshdesk, Freshchat, Freshsales, and Freshmarketer. EX products include Freshservice, Freshservice for Business Teams, and Device42. The Company's generative artificial intelligence (AI) solutions, Freddy AI Agent and Freddy AI Copilot, further enhance the customer and employee experience.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Freshworks Rated as One of the Best Mid-Cap AI Stocks
- Strong Performance: Freshworks Inc. reported Q4 revenue of $222.7 million, reflecting a 14% year-over-year increase that surpassed market expectations, thereby boosting investor confidence in its SaaS offerings.
- Annual Recurring Revenue Growth: The company achieved an 18% year-over-year increase in annual recurring revenue (ARR), reaching $907 million, indicating a robust customer base expansion and revenue stability that lays a foundation for future growth.
- Analyst Rating Adjustment: Cantor Fitzgerald lowered its price target for Freshworks from $19 to $14 while maintaining an Outperform rating, suggesting that despite challenges of slowing growth, analysts remain optimistic about its long-term potential.
- Strong Customer Growth: The company added over 1,500 customers generating more than $100,000 in ARR during the quarter, demonstrating the attractiveness of its products in the market and customer loyalty, despite management's concerns over growth deceleration.
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Source of Reports: The reports are excerpts from various investment and research firms, recently issued and edited by Barron’s.
Analysts' Perspectives: They represent a sampling of analysts' thoughts and should not be interpreted as Barron’s official views or recommendations.
Investment Services Disclosure: Some firms that issued the reports may have provided or intend to provide investment-banking or other services to the companies analyzed.
Caution on Interpretation: Readers are advised to consider the reports as insights rather than definitive investment advice.
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Freshworks Stock Plummets 14.8% Despite Q4 Earnings Beat
- Earnings Beat: Freshworks reported Q4 adjusted earnings per share of $0.14 on revenue of $222.7 million, surpassing Wall Street expectations by $0.03 and $3.9 million respectively; however, the stock plummeted 14.8%, indicating market dissatisfaction with future guidance.
- Weak Revenue Growth: The 14.4% year-over-year revenue growth in Q4 is overshadowed by management's guidance for Q1 2026, targeting revenue between $222 million and $225 million, reflecting a modest year-over-year growth of only 13.9%, failing to inspire investor confidence and leading to a significant stock drop.
- Annual Outlook: Freshworks anticipates full-year revenue between $952 million and $960 million, representing approximately 14% growth, but adjusted earnings per share are projected to decline to between $0.55 and $0.57, down from $0.66 last year, indicating a notable drop in profitability that affects market valuation perceptions.
- Market Reaction: Despite raising its full-year sales target, the overall market response has been tepid as investors are assigning lower valuation multiples to software stocks, compounded by the company's insufficiently strong forward guidance, resulting in a significant post-earnings stock decline.
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- Acadia Healthcare Stock Surge: Acadia Healthcare's stock rose 10% after investor David Einhorn announced his purchases, reflecting market optimism about the new management's ability to enhance performance, which could improve future profitability.
- Vertiv's Upbeat Guidance: Vertiv's stock jumped nearly 20% due to its optimistic guidance for 2026, with orders accelerating significantly in Q4, surpassing Wall Street expectations and indicating strong demand in the data center market.
- Unity Software's Downgrade: Unity Software's shares fell nearly 30% after issuing a first-quarter revenue outlook between $480 million and $490 million, below analysts' expectations of $492.1 million, raising concerns about its future growth prospects.
- Smurfit WestRock Order Improvement: Smurfit WestRock's stock soared over 10% after revealing improved product orders in late December, with expectations of reaching $7 billion in profits by 2030, highlighting its long-term growth potential.
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Freshworks (FRSH) Q4 2025 Earnings Call Transcript
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Freshworks Stock Plummets 18.4% Following Company’s Annual Profit Forecast Below Expectations
Company Performance: Freshworks shares have tumbled by 18.4% following disappointing annual profit forecasts.
Profit Estimates: The company's projected profits fell below market expectations, leading to a significant drop in share value.
See More
Freshworks Rated as One of the Best Mid-Cap AI Stocks
- Strong Performance: Freshworks Inc. reported Q4 revenue of $222.7 million, reflecting a 14% year-over-year increase that surpassed market expectations, thereby boosting investor confidence in its SaaS offerings.
- Annual Recurring Revenue Growth: The company achieved an 18% year-over-year increase in annual recurring revenue (ARR), reaching $907 million, indicating a robust customer base expansion and revenue stability that lays a foundation for future growth.
- Analyst Rating Adjustment: Cantor Fitzgerald lowered its price target for Freshworks from $19 to $14 while maintaining an Outperform rating, suggesting that despite challenges of slowing growth, analysts remain optimistic about its long-term potential.
- Strong Customer Growth: The company added over 1,500 customers generating more than $100,000 in ARR during the quarter, demonstrating the attractiveness of its products in the market and customer loyalty, despite management's concerns over growth deceleration.
See More
Analyst Predicts GM Stock Could Rise Following a Strong Year; Also Featuring Cloudflare, Vertiv, and Others.
Source of Reports: The reports are excerpts from various investment and research firms, recently issued and edited by Barron’s.
Analysts' Perspectives: They represent a sampling of analysts' thoughts and should not be interpreted as Barron’s official views or recommendations.
Investment Services Disclosure: Some firms that issued the reports may have provided or intend to provide investment-banking or other services to the companies analyzed.
Caution on Interpretation: Readers are advised to consider the reports as insights rather than definitive investment advice.
See More
Freshworks Stock Plummets 14.8% Despite Q4 Earnings Beat
- Earnings Beat: Freshworks reported Q4 adjusted earnings per share of $0.14 on revenue of $222.7 million, surpassing Wall Street expectations by $0.03 and $3.9 million respectively; however, the stock plummeted 14.8%, indicating market dissatisfaction with future guidance.
- Weak Revenue Growth: The 14.4% year-over-year revenue growth in Q4 is overshadowed by management's guidance for Q1 2026, targeting revenue between $222 million and $225 million, reflecting a modest year-over-year growth of only 13.9%, failing to inspire investor confidence and leading to a significant stock drop.
- Annual Outlook: Freshworks anticipates full-year revenue between $952 million and $960 million, representing approximately 14% growth, but adjusted earnings per share are projected to decline to between $0.55 and $0.57, down from $0.66 last year, indicating a notable drop in profitability that affects market valuation perceptions.
- Market Reaction: Despite raising its full-year sales target, the overall market response has been tepid as investors are assigning lower valuation multiples to software stocks, compounded by the company's insufficiently strong forward guidance, resulting in a significant post-earnings stock decline.
See More
Stock Price Movements of Various Companies
- Acadia Healthcare Stock Surge: Acadia Healthcare's stock rose 10% after investor David Einhorn announced his purchases, reflecting market optimism about the new management's ability to enhance performance, which could improve future profitability.
- Vertiv's Upbeat Guidance: Vertiv's stock jumped nearly 20% due to its optimistic guidance for 2026, with orders accelerating significantly in Q4, surpassing Wall Street expectations and indicating strong demand in the data center market.
- Unity Software's Downgrade: Unity Software's shares fell nearly 30% after issuing a first-quarter revenue outlook between $480 million and $490 million, below analysts' expectations of $492.1 million, raising concerns about its future growth prospects.
- Smurfit WestRock Order Improvement: Smurfit WestRock's stock soared over 10% after revealing improved product orders in late December, with expectations of reaching $7 billion in profits by 2030, highlighting its long-term growth potential.
See More
Freshworks (FRSH) Q4 2025 Earnings Call Transcript
See More
Freshworks Stock Plummets 18.4% Following Company’s Annual Profit Forecast Below Expectations
Company Performance: Freshworks shares have tumbled by 18.4% following disappointing annual profit forecasts.
Profit Estimates: The company's projected profits fell below market expectations, leading to a significant drop in share value.
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