Freshworks Inc. (FRSH) Earnings History

Freshworks Inc. - Q4 2025 EarningsBeat

Filed at: Feb 10, 2026, 4:15 PM EST|Read from source

EXECUTIVE SUMMARY

Freshworks reported a strong finish to fiscal year 2025, exceeding guidance for revenue and profitability, driven by continued product adoption and AI-powered solutions. The company demonstrated significant improvements in operating income and cash flow generation compared to the prior year.

POSITIVE HIGHLIGHTS

  • •

    Revenue grew 14% year-over-year to $222.7 million in Q4 2025, exceeding the high end of guidance.

    positive
  • •

    Full year 2025 revenue grew 16% year-over-year to $838.8 million, with constant currency growth also at 16%.

    positive
  • •

    GAAP operating margin improved significantly to 17.8% in Q4 2025 from -12.2% in Q4 2024.

    positive
  • •

    Non-GAAP operating margin improved to 21.2% for full year 2025 from 13.8% in 2024.

    positive
  • •

    Net cash provided by operating activities increased to $62.3 million in Q4 2025 from $41.4 million in Q4 2024.

    positive
  • •

    Adjusted free cash flow increased to $56.2 million in Q4 2025 from $41.7 million in Q4 2024.

    positive
  • •

    Number of customers contributing more than $5,000 in ARR increased by 10% year-over-year.

    positive
  • •

    Net dollar retention rate was 108% in Q4 2025, up from 103% in Q4 2024.

    positive

CONCERNS & RISKS

  • •

    Non-GAAP operating margin decreased to 18.7% in Q4 2025 from 20.7% in Q4 2024, despite revenue growth.

    attention
  • •

    GAAP net income per share was $0.67 in Q4 2025, while GAAP net loss per share was $(0.07) in Q4 2024. The significant positive swing is partly due to a $151.7 million tax benefit from releasing a valuation allowance.

    attention
  • •

    Weighted-average shares outstanding for diluted EPS decreased from 303.6 million in Q4 2024 to 283.9 million in Q4 2025, impacting per-share metrics.

    attention

FINANCIAL METRICS

Revenue
Quarterly
$222.74M
+14.0%
Prior year: $194.57M
Annual (YTD)
$838.81M
N/A
Prior year: $720.42M
Net Income
Quarterly
$191.45M
N/A
EPS (Diluted)
Quarterly
$0.67
N/A
Prior year: $-0.07
Operating Income
Quarterly
$39.73M
N/A
Prior year: $-23.79M
Annual (YTD)
$13.21M
N/A
Prior year: $-138.61M
EPS (Basic)
Quarterly
$0.68
N/A
Prior year: $-0.07

MARGIN ANALYSIS

Gross Margin
Current Quarter
85.6%
Prior Year
84.9%
YoY Change
+70 bps
Operating Margin
Current Quarter
17.8%
Prior Year
-12.2%
YoY Change
+3000 bps
Net Margin
Current Quarter
85.9%
Prior Year
-11.3%
YoY Change
+9720 bps

Margin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.

MANAGEMENT GUIDANCE

FY2026

revenue
$952000.0B—$960000.0B
Mid-point: $956000.0B
"13.5% - 14.5% year-over-year growth"
non-GAAP income from operations
181,000,000—189,000,000
Mid-point: 185,000,000
non-GAAP net income per share
$0.55—$0.57
Mid-point: $0.56

Q1 2026

revenue
$222000.0B—$225000.0B
Mid-point: $223500.0B
"13% - 15% year-over-year growth"
non-GAAP income from operations
33,000,000—35,000,000
Mid-point: 34,000,000
non-GAAP net income per share
$0.10—$0.12
Mid-point: $0.11

Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.

SPECIAL ITEMS & ADJUSTMENTS

Q4 2025
Release of valuation allowance on U.S. deferred tax assets
This resulted in a significant tax benefit to GAAP net income.
+$151.7M
$0.53 per share
Q4 2025
Reversal of stock-based compensation expense due to departure of Executive Chairman
This contributed to the GAAP net income.
+$41M
Total Impact
+$192.7M$0.53 per share

Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.

MANAGEMENT COMMENTARY

Freshworks had an outstanding Q4 and fiscal 2025, outperforming our estimates across growth and profitability metrics for the fifth consecutive quarter.

— Freshworks Inc., Q4 2025 2025 Earnings Call

We ended the year with strong momentum, fueled by products that tackle complex service problems in an uncomplicated way.

— Freshworks Inc., Q4 2025 2025 Earnings Call

Our AI-powered software continues to be an important growth driver and path for customer expansion and it shows in the product adoption results.

— Freshworks Inc., Q4 2025 2025 Earnings Call

Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.

OPERATIONAL METRICS

Customers Over 5k Arr
24.8K
+10.0% YoY
customers
Net Dollar Retention Rate
108
Prior year: 103
%

Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.