| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 46 | 18.9x | 17.8x | Around median | |
Growth | 92 | 15.6% | 7.1% | Top tier | |
Quality | 93 | 16.9% | 4.5% | Top tier | |
Safety | 73 | — | 2.6x | Top tier | |
Capital Return | 82 | — | 2.12% | Top tier | |
Momentum | 70 | -12.7% | 2.9% | Top tier | |
Sentiment | 46 | 10 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Freshworks Inc. is a unified AI-powered service operations platform that generates revenue from employee experience EX and customer experience CX solutions. Its EX business includes Freshservice products for IT service management ITSM, asset management ITAM, operations management ITOM, and enterprise service management ESM, along with Freddy AI and FireHydrant, while its CX business focuses on Freshdesk Omni and omnichannel customer service. In fiscal 2026 Q2, annual recurring revenue for the EX business was about $567 million, or approximately 59% of the total, compared with $400 million for CX.
In fiscal 2026 Q2, revenue was $237.4 million, up 16% year over year, including about $3 million from professional services. Gross profit according to EDGAR was about $201.3 million, equivalent to a gross margin of approximately 84.8%, while the company reported a non-GAAP gross margin of 86% and a non-GAAP operating margin of 24%. Freshworks recorded GAAP net income of $3.2 million and earnings per share of $0.01, compared with a net loss of $4.8 million in fiscal 2026 Q1.
Revenue for the twelve months ended in 2026 was about $903.9 million, gross profit was $768.0 million, and net income was $185.2 million. The growth mix was uneven in fiscal 2026 Q2: EX annual recurring revenue grew 24% in constant currency, compared with only 4% for CX, while adjusted free cash flow reached $57.7 million at a margin of approximately 24%. The company ended the quarter with $665 million in cash and investments and no debt.
Automated analysis for informational purposes only — not investment advice.
The average analyst price target is $13.75, within a relatively narrow range of $13 to $15, and the stock has a consensus Buy rating. The average target is only about 1.7% below the 52-week range high of $13.99, while the highest target exceeds that high by about 7.2%; no published price-to-earnings ratio is available in the data despite earnings per share of approximately $0.6784 during the twelve months ended in 2026. The available valuation therefore rests primarily on continued EX growth and improving profitability, weighed against slow CX growth and the decline in expected fiscal 2026 Q3 revenue growth to about 14%.
Figures in the text are as of 2026-08-31; the live price is shown at the top of the page.
The employee experience EX business is the primary driver, with annual recurring revenue of $567 million in fiscal 2026 Q2 and growth of 24% in constant currency. EX accounted for approximately 59% of total annual recurring revenue, and management expects it to exceed $600 million by the end of fiscal 2026. The expansion comes from Freshservice, ITAM, ITOM, ESM, and FireHydrant, along with sales of Freddy AI within new deals and the existing customer base.
The company recorded GAAP net income of $3.2 million in fiscal 2026 Q2 and earnings per share of $0.01, after a net loss of $4.8 million in fiscal 2026 Q1. Management said on the August 4, 2026 call that it achieved profitability ahead of its previous expectations and expects it to be sustainable. Non-GAAP operating income was about $55.9 million, with an operating margin of 24%.
More than 7,000 customers were paying for one of the AI packages in fiscal 2026 Q2, and the Copilot attach rate on new deals above $30,000 surpassed 70%. Some capabilities are sold through add-ons such as Copilot, while others, such as AI Agent, are priced based on usage, and some features are included in higher-tier plans. Freddy AI Agent Studio, which launched in May 2026, was being used by more than 1,000 customers in early access and had not been priced as of the August 4, 2026 call, with a plan for session-based pricing during fall 2026.
EX annual recurring revenue reached $567 million in fiscal 2026 Q2, growing 24% in constant currency, compared with $400 million for CX and growth of 4%. Management is targeting growth in the mid-twenties for EX but expects low-single-digit growth for CX during fiscal 2026. In CX, the share of Freshdesk customers that migrated to Freshdesk Omni surpassed 90%, while AI agent sessions and conversations on the platform rose 60% from the previous quarter and more than fivefold year over year.
The company expects revenue of between $963.5 million and $966.5 million in fiscal 2026, growing approximately 15% as reported and 14% to 15% in constant currency. It is also targeting non-GAAP operating income of between $222 million and $228 million, non-GAAP earnings per share of between $0.66 and $0.68, and adjusted free cash flow of about $265 million. For fiscal 2026 Q3, it expects revenue of between $244.5 million and $245.5 million and non-GAAP operating income of between $59 million and $61 million.
The number of customers contributing more than $100,000 in annual recurring revenue grew 25% as reported in fiscal 2026 Q2, and they now represent about 40% of the total. The number of customers above $50,000 also grew 18% and now represents more than 55% of annual recurring revenue. Examples of this trend include Seagate, which has 30,000 employees, moving to Freshservice and deploying the system within three months, along with the company's first $1 million deal in fiscal 2026 Q1.
