Freshworks (FRSH) Stock Forecast & Price Target

Freshworks Inc demonstrated significant operational and financial strength, with operating cash flow reaching $41.4 million and a margin of 21.3%, marking a year-over-year increase of approximately $10.5 million and a margin expansion of 200 basis points. Revenue growth was robust at 21.5% year-over-year, driven by strong performance in experience (EX) initiatives, increased traction in AI applications, and stable contributions from customer experience (CX) and small to medium-sized business (SMB) segments. Additionally, the company reported a 23% increase in calculated billings and a gross margin expansion of 210 basis points to 86.3%, indicating improved efficiency and profitability.

Freshworks Inc reported free cash flow of $34.4 million, reflecting a slight decline in margin to 17.7%, which raises concerns about operational efficiency. The company's annual recurring revenue (ARR) growth slowed to 22% organic (25% constant currency), down from 30% in the previous quarter, indicating potential challenges in sustaining growth. Additionally, the company faces increasing pricing pressure in a competitive market, which, if unaddressed, could lead to a decline in profitability and hinder future growth prospects.