Detailed financial statements for Freshworks Inc. (FRSH): income statement, balance sheet and cash-flow summary. Track margins, debt, liquidity and profitability trends year over year with up to 20 years of history.
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. The company’s software-as-a-service solutions includes Customer Experience (CX) and Employee Experience (EX).
Analysis Summary
Freshworks Inc. reported revenue of $838.8M in the most recent fiscal year, growing at a 5-year CAGR of 27.4%.
Trailing-twelve-month margins: gross margin 85.0%, operating margin 3.3%, net margin 20.5%. Free cash flow grew at 59.8% CAGR over 5 years.
At the current price of $12.73, FRSH trades at a P/E of 20.61 and an ROE of 19.50%. Market capitalisation stands at $3.5B.
Balance sheet quality for FRSH: current ratio of 2.2, net cash position of $738.9M. A debt-to-equity below 1.0 typically signals conservative capital structure, while a current ratio above 1.5 indicates comfortable short-term liquidity.
Cash flow quality is strong: free cash flow of $245.2M represents 133% conversion of reported net income. High conversion (above 90%) suggests earnings translate cleanly into cash; lower conversion may indicate working capital tightness or accounting timing differences.
Income Statement (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $126.9M | $118.7M | $126.4M | $172.4M | $249.7M | $371.0M | $498.0M | $596.4M | $720.4M | $838.8M |
| Cost of Revenue | $28.3M | $26.0M | $20.4M | $36.5M | $52.5M | $78.0M | $95.8M | $103.4M | $113.3M | $126.1M |
| Gross Profit | $98.5M | $92.7M | $106.0M | $135.9M | $197.2M | $293.0M | $402.2M | $493.1M | $607.1M | $712.7M |
| Research & Development | 0 | 0 | 0 | $38.6M | $69.2M | $120.4M | $135.5M | $137.8M | $164.6M | $163.2M |
| Selling, General & Admin | $28.1M | $33.9M | $49.7M | $127.0M | $184.1M | $377.4M | $500.1M | $525.5M | $571.4M | $535.8M |
| Operating Expenses | $31.4M | $37.0M | $66.0M | $165.6M | $253.3M | $497.8M | $635.6M | $663.2M | $745.7M | $699.1M |
| Operating Income | $9.6M | -$14.3M | $11.3M | -$29.7M | -$56.1M | -$204.8M | -$233.4M | -$170.2M | -$138.6M | $13.6M |
| EBITDA | $16.8M | -$4.0M | $18.3M | -$23.4M | -$44.9M | -$168.2M | -$212.5M | -$111.6M | -$109.5M | $110.8M |
| Interest Expense | 0 | $5.1M | $5.2M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Pre-tax Income | $4.6M | -$19.6M | $5.8M | -$27.5M | -$53.3M | -$181.5M | -$220.8M | -$123.8M | -$90.8M | $53.3M |
| Income Tax | $1.9M | -$19.5M | $1.5M | $3.6M | $4.0M | $10.5M | $11.3M | $13.7M | $4.5M | -$130.4M |
| Net Income | $2.6M | -$7000 | $4.3M | -$31.1M | -$57.3M | -$192.0M | -$232.1M | -$137.4M | -$95.4M | $183.7M |
| EPS | $0.16 | $-0.00 | $0.25 | $-0.66 | $-6.40 | $-10.39 | $-0.82 | $-0.47 | $-0.32 | $0.63 |
| EPS (Diluted) | $0.16 | $-0.00 | $0.25 | $-0.66 | $-6.40 | $-10.39 | $-0.82 | $-0.47 | $-0.32 | $0.63 |
| Shares Outstanding (Diluted) | $16.8M | $16.9M | $17.0M | $46.9M | $252.9M | $275.5M | $284.6M | $293.1M | $300.8M | $293.8M |
Income Statement (Quarterly)
| Year | 2025-Q3 | 2025-Q4 | 2026-Q1 | 2026-Q2 |
|---|---|---|---|---|
| Revenue | $215.1M | $222.7M | $228.6M | $237.4M |
| Gross Profit | $182.2M | $190.6M | $193.9M | $201.3M |
| Operating Income | -$7.5M | $39.7M | -$8.1M | $6.1M |
| EBITDA | $4.5M | $61.8M | $1.2M | $10.1M |
| Net Income | -$4.7M | $191.4M | -$4.8M | $3.2M |
| EPS | $-0.02 | $0.68 | $-0.02 | $0.01 |
| EPS (Diluted) | $-0.02 | $0.67 | $-0.02 | $0.01 |
Balance Sheet (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Cash & Equivalents | $2.1M | $2.2M | $5.8M | $75.0M | $95.4M | $747.9M | $304.1M | $488.1M | $620.3M | $569.8M |
| Short-term Investments | 0 | 0 | 0 | $147.9M | $142.7M | $575.7M | $843.4M | $699.5M | $449.8M | $211.6M |
| Receivables | $5.3M | $3.8M | $3.6M | $24.3M | $34.3M | $51.8M | $73.3M | $97.2M | $122.9M | $150.8M |
| Inventory | $917000 | $719000 | $549000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Current Assets | $13.1M | $9.4M | $12.1M | $276.5M | $312.4M | $1.42B | $1.26B | $1.36B | $1.27B | $1.10B |
| Property, Plant & Equipment | $28.5M | $10.1M | $4.9M | $20.0M | $20.8M | $21.5M | $57.2M | $55.5M | $62.8M | $78.7M |
| Goodwill | $108.5M | $107.8M | $101.8M | $4.5M | $6.2M | $6.2M | $6.2M | $6.2M | $147.0M | $146.7M |
| Intangible Assets | $87.0M | $87.0M | $87.0M | $4.4M | $6.2M | $1.9M | $303000 | 0 | $90.8M | $77.0M |
| Total Assets | $273.9M | $246.2M | $246.7M | $321.8M | $367.4M | $1.48B | $1.38B | $1.46B | $1.61B | $1.60B |
| Accounts Payable | $6.2M | $5.4M | $4.8M | $3.7M | $3.7M | $6.3M | $5.9M | $3.5M | $1.6M | $11.5M |
| Short-term Debt | $7.9M | $8.4M | $11.4M | 0 | 0 | 0 | $6.8M | 0 | 0 | 0 |
| Total Current Liabilities | $22.9M | $27.8M | $32.8M | $98.4M | $152.2M | $223.3M | $271.7M | $327.2M | $407.7M | $498.0M |
| Long-term Debt | $101.0M | $87.0M | $70.6M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Liabilities | $172.4M | $144.0M | $147.7M | $1.44B | $3.06B | $244.8M | $328.4M | $384.5M | $474.0M | $570.1M |
| Retained Earnings | -$18.6M | -$18.6M | -$22.3M | -$1.12B | -$2.70B | -$3.27B | -$3.50B | -$3.64B | -$3.74B | -$3.55B |
| Total Equity | $101.5M | $102.2M | $99.0M | -$1.12B | -$2.70B | $1.24B | $1.05B | $1.07B | $1.14B | $1.03B |
| Total Debt | $108.8M | $95.4M | $82.0M | 0 | 0 | 0 | $34.9M | $29.5M | $38.3M | $42.5M |
| Net Debt | $106.8M | $93.2M | $76.3M | -$222.9M | -$238.1M | -$1.32B | -$1.11B | -$1.16B | -$1.03B | -$738.9M |
| Working Capital | -$9.8M | -$18.5M | -$20.7M | $178.1M | $160.2M | $1.20B | $985.2M | $1.03B | $857.7M | $599.1M |
Balance Sheet (Quarterly)
| Year | 2025-Q3 | 2025-Q4 | 2026-Q1 | 2026-Q2 |
|---|---|---|---|---|
| Cash & Equivalents | $420.9M | $569.8M | $548.2M | $494.7M |
| Total Assets | $1.37B | $1.60B | $1.61B | $1.49B |
| Total Liabilities | $520.5M | $570.1M | $586.2M | $594.5M |
| Total Equity | $851.5M | $1.03B | $1.02B | $895.9M |
| Total Debt | $39.7M | $42.5M | $38.8M | $25.6M |
Cash Flow (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Income | $2.6M | -$7000 | $4.3M | -$31.1M | -$57.3M | -$192.0M | -$232.1M | -$137.4M | -$95.4M | $183.7M |
| Depreciation & Amortization | $12.2M | $10.5M | $7.2M | $6.3M | $11.2M | $13.3M | $11.5M | $12.1M | $19.4M | $25.9M |
| Stock-based Compensation | $898000 | $687000 | $495000 | $273000 | 0 | $173.4M | $207.7M | $210.7M | $216.7M | $146.8M |
| Change in Working Capital | -$4.5M | -$8.7M | -$2.2M | $13.7M | $28.9M | $28.0M | -$11.1M | -$14.1M | $9.7M | $9.8M |
| Operating Cash Flow | $16.8M | $15.5M | $10.2M | -$8.2M | $32.5M | $11.5M | -$2.5M | $86.2M | $160.6M | $250.9M |
| Capital Expenditure | -$18.0M | -$4.0M | -$576000 | -$14.8M | -$9.0M | -$9.1M | -$12.2M | -$8.3M | -$14.7M | -$5.7M |
| Acquisitions | -$2.6M | 0 | -$134000 | -$6.0M | -$5.1M | 0 | $137000 | 0 | -$213.9M | 0 |
| Stock Repurchased | -$84000 | -$5000 | -$29000 | -$100.0M | 0 | 0 | 0 | 0 | -$13.7M | -$386.3M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Free Cash Flow | -$1.2M | $11.6M | $9.7M | -$23.0M | $23.5M | $2.3M | -$14.8M | $77.8M | $146.0M | $245.2M |
Cash Flow (Quarterly)
| Year | 2025-Q3 | 2025-Q4 | 2026-Q1 | 2026-Q2 |
|---|---|---|---|---|
| Operating Cash Flow | $63.5M | $70.9M | $62.4M | $58.5M |
| Capital Expenditure | -$6.3M | $9.7M | -$3.9M | -$5.0M |
| Free Cash Flow | $57.2M | $80.6M | $58.5M | $53.5M |
| Dividends Paid | 0 | 0 | 0 | 0 |
| Stock-based Compensation | $48.5M | -$2.7M | $43.9M | $37.8M |
Growth & Margins (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue Growth (YoY) | -6.5% | +6.5% | +36.3% | +44.8% | +48.6% | +34.2% | +19.8% | +20.8% | +16.4% | |
| Net Income Growth (YoY) | -100.3% | +61871.4% | -819.8% | -84.1% | -235.1% | -20.9% | +40.8% | +30.6% | +292.6% | |
| EPS Growth (YoY) | -100.3% | +62600.0% | -364.0% | -869.7% | -62.3% | +92.1% | +42.7% | +31.9% | +296.9% | |
| Shares Change (YoY) | +0.6% | +0.8% | +175.9% | +439.1% | +8.9% | +3.3% | +3.0% | +2.6% | -2.4% | |
| FCF Growth (YoY) | +1057.7% | -16.3% | -337.9% | +202.3% | -90.0% | -730.4% | +627.0% | +87.5% | +68.0% | |
| Gross Margin | 77.7% | 78.1% | 83.9% | 78.8% | 79.0% | 79.0% | 80.8% | 82.7% | 84.3% | 85.0% |
| Operating Margin | 7.6% | -12.0% | 8.9% | -17.2% | -22.5% | -55.2% | -46.9% | -28.5% | -19.2% | 1.6% |
| EBITDA Margin | 13.3% | -3.4% | 14.4% | -13.6% | -18.0% | -45.3% | -42.7% | -18.7% | -15.2% | 13.2% |
| Net Margin | 2.1% | -0.0% | 3.4% | -18.1% | -22.9% | -51.7% | -46.6% | -23.0% | -13.2% | 21.9% |
| FCF Margin | -1.0% | 9.7% | 7.6% | -13.3% | 9.4% | 0.6% | -3.0% | 13.1% | 20.3% | 29.2% |
| Effective Tax Rate | 42.3% | 100.0% | 25.5% | -13.2% | -7.5% | -5.8% | -5.1% | -11.0% | -5.0% | -244.8% |
Per-Share Data (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| FCF Per Share | $-0.07 | $0.68 | $0.57 | $-0.49 | $0.09 | $0.01 | $-0.05 | $0.27 | $0.49 | $0.83 |
| Dividends Per Share | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Shares Outstanding (Basic) | $16.7M | $16.9M | $17.0M | $46.9M | $252.9M | $275.5M | $284.6M | $293.1M | $300.8M | $291.1M |
What to look at in Technology companies
- Revenue growth 3y (>=15%/year) — Validates sustained traction, not a one-off.
- Gross margin (Sub-sector dependent) — SaaS >=70%, Internet >=55%, Semis >=45%, Hardware >=35%.
- FCF / Revenue (>=20%) — Real cash generated. Many tech firms dress up non-GAAP earnings.
- ROIC (>=15%) — Capital reinvested efficiency — Buffett's first metric.
- SBC / Revenue (<10% healthy) — Stock-based compensation. Silent dilution: >20% destroys value.
- Net Debt / EBITDA (<=2x (1.5x SaaS)) — Resilience in downturns and rate hikes.
Profitability
| Return on Equity | 19.50% |
| Return on Invested Capital | 3.16% |
| Return on Assets | 12.43% |
| Gross Margin | 84.96% |
| Operating Margin | 3.35% |
| Net Margin | 20.49% |
Financial Health
| Debt / Equity | 0.03 |
| Current Ratio | 1.69 |
| Piotroski F-Score | 7 |
| Altman Z-Score | 1.65 |
Key Ratios (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| P/E | 297.19 | -118875.00 | 190.20 | -72.05 | -7.43 | -2.53 | -17.94 | -49.98 | -50.53 | 19.44 |
| P/B | 7.84 | 7.85 | 8.16 | -1.99 | -4.46 | 5.84 | 3.98 | 6.42 | 4.28 | 3.45 |
| P/S | 6.27 | 6.76 | 6.39 | 12.94 | 48.17 | 19.50 | 8.41 | 11.54 | 6.75 | 4.25 |
| Gross Margin | 77.7% | 78.1% | 83.9% | 78.8% | 79.0% | 79.0% | 80.8% | 82.7% | 84.3% | 85.0% |
| Operating Margin | 7.6% | -12.0% | 8.9% | -17.2% | -22.5% | -55.2% | -46.9% | -28.5% | -19.2% | 1.6% |
| Net Margin | 2.1% | -0.0% | 3.4% | -18.1% | -22.9% | -51.7% | -46.6% | -23.0% | -13.2% | 21.9% |
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