Quality Investor

Freshworks Inc.

Rank #91Capital ReturnWatchlistCompare with other stocks

FRSH · Nasdaq · Technology

Freshworks Inc. (FRSH) — Rank #91 by gross profitability (GP/assets 0.48) · ROE 20.5% · Piotroski F-Score 7 / 9.

As-of 2026-10-30 · CIK 0001544522 · all metrics point-in-time as of the filing date.

About

Freshworks Inc., a software development company, provides software-as-a-service products in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally.

Show more

The company's software-as-a-service solutions includes Customer Experience (CX) and Employee Experience (EX). Its Customer Experience products include Freshdesk Omni, an AI-powered omnichannel customer service solution that unifies customer interactions, support operations, and empowers agents to deliver exceptional experiences; Freshdesk, a ticketing and case management solution; Freshchat that provides agents with a modern conversational experience to proactively engage customers across digital messaging channels; Freshcaller, a cloud-based contact center solution for scalable voice operations; Freshsales, a sales CRM for pipeline management and deal closure solution; and Freshmarketer, a marketing automation platform designed to help businesses to attract, nurture, convert, and retain customers. The company's Employee Experience products include Freshservice, an IT and enterprise service management platform to AI agents to help employees resolve issues, make requests, and access information through conversational interfaces without requiring direct interaction with the service desk; Freshservice for Business Teams, which provides a unified employee service experience while ensuring the secure separation of departmental data; Device42 which provides IT discovery and dependency mapping solutions; and FireHydrant, a modern incident management platform that enables engineering and operations teams to manage the full incident lifecycle. In addition, it provides Freshworks platform, an AI-powered, enterprise-grade foundation that unifies customer experience and employee experience product lines. The company was formerly known as Freshdesk Inc. and changed its name to Freshworks Inc. in June 2017. Freshworks Inc.

was incorporated in 2010 and is headquartered in San Mateo, California.

Industry
Software - Application
Sector
Technology
State
DE
Filer Category
Large accelerated filer
Fiscal Year End
December 31

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

4,500

Industry

Software - Application

Exchange

Nasdaq

12/12

Flags passed

FRSH passes 12/12 quality flags

  • PASS
    Gross margin holding
  • PASS
    Dilution within 2%
  • PASS
    FCF not negative from investment
  • PASS
    Disclosure consistent
  • PASS
    Revenue not declining
  • PASS
    Operating margin holding
  • PASS
    Free cash flow intact
  • PASS
    Passes safety gate
  • PASS
    Balance sheet stable
  • PASS
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Deferred revenue growing · RPO outpacing revenue · Sequential beat (rev + EPS)

A count of the 12 warning flags that could be evaluated. Unweighted: colour follows the worst flag.

Quality Profile

Profitability

1/1 pass
GP / assets
0.48
Return on equity
20.5%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.66
Current ratio
1.69×
Net cash
$664.11M

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
17.5%

Growth

2/2 pass
Revenue growth
16.4%
Piotroski F-Score
7 / 9
Share dilution
-2.4%

FCF yield, shareholder yield, and buyback activity are the primary reads at this stage.

Profitability

Does it make money well?

No warning flags · GP/assets 74th percentile of 36 SIC 7372 peers

Gross profitability (GP / assets)

0.48

Primary signal (Novy-Marx).

74th pctl of 36 SIC 7372 peers

Return on equity

20.5%

Gross margin

85.0%

100th pctl of 36 SIC 7372 peers

Revenue growth (YoY)

16.4%

RPO growth (YoY)

22.7%

Remaining performance obligations growth — RPO > revenue = forward demand building.

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2022202320242025
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

19.0%

Revenue CAGR (5Y)

27.4%

Earnings CAGR (3Y)

—

FCF CAGR (3Y)

—

Cash Flow Health

Is the cash real?

No warning flags · FCF 29% above net income

Free cash flow

$236.67M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

28.8%

(FCF − net income) ÷ |net income|. Positive: cash above earnings. Negative: below.

FCF not below net income

Fails when free cash flow is below net income (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

17.5%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net cash $664.11M, F-Score 7/9

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.66

48th pctl of 32 SIC 7372 peers (best = lowest)

Current ratio

1.69×

40th pctl of 36 SIC 7372 peers

Quick ratio

1.51×

Net cash

$664.11M

Cash & equivalents minus total debt.

Piotroski F-Score

7 / 9

Fundamental-strength score (0-9).

Valuation

Is the price reasonable?

No warning flags

Capital allocation quality

Composite score

2.3 / 5

Fair
Share count trend(net buybacks)
-2.4%4/5 Strong
Buyback timing
N/AN/A
Dividend growth consistency(non-payer or broken streak)
0 yr3/5 Good
Net debt trajectory
-18.0%0/5 Weak

Lifecycle Phase History

20202025
Hypergrowth
Startup
Capital Return

Price History

FRSH-74.2% · -23.8% CAGRSPY+86.0% · +13.2% CAGR