Freshworks stock price drops as profit guidance disappoints investors

LootboxPhobia · 2026-02-13T22:28:50+00:00

Freshworks Inc. released its Q4 earnings, with adjusted EPS and revenue beating expectations, but the stock fell 5.5% due to FY2026 profit guidance below market expectations. The company's annual recurring revenue customers grew by 10%, and it also announced the acquisition of FireHydrant to enhance its IT service management products.

LootboxPhobia

2026-02-13 22:28:50

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San Mateo, California — Freshworks Inc. (NASDAQ: FRSH) reported better-than-expected fourth-quarter results on Monday, but the stock fell 5.5% after the company issued a lower-than-anticipated profit guidance for the upcoming year.

The software provider posted an adjusted quarterly earnings of $0.14 per share, surpassing analysts’ estimates of $0.11. Revenue was $222.7 million, above the consensus estimate of $218.76 million, representing a 14% year-over-year increase. The company noted that its EX business’s annual recurring revenue has exceeded $500 million.

Despite the quarterly results beating expectations, investors reacted negatively to Freshworks’ fiscal 2026 earnings per share guidance of $0.55 to $0.57, which is below the consensus estimate of $0.69. The company’s revenue outlook for fiscal 2026 is between $952 million and $960 million, above analysts’ expectations of $945.3 million, indicating a more optimistic outlook.

“We ended the year on a strong note, thanks to our products that solve complex service issues in a simple way,” said Dennis Woodside, CEO and President of Freshworks. “Our AI-driven software continues to be a key growth driver and a way to expand our customer base, as reflected in the adoption results.”

For the first quarter of 2026, Freshworks expects revenue between $222 million and $225 million, above the consensus estimate of $220.9 million, but its earnings per share guidance is $0.10 to $0.12, below analysts’ expectations of $0.14.

The company’s customer base with annual recurring revenue exceeding $5,000 increased 10% year-over-year to 24,762, while net dollar retention rose from 103% in Q4 2024 to 108%.

Freshworks also announced the acquisition of FireHydrant, aiming to strengthen its IT service management products with a unified AI-native ServiceOps solution designed to streamline operations.

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