Freshworks Inc. announced a $400 million share repurchase program, a move that signals management’s confidence in the company’s long‑term strategy and its belief that the shares are undervalued. The program will be executed through a mix of open‑market purchases, privately negotiated deals, and Rule 10b‑18 and Rule 10b‑5‑1 plans, with the company setting a flexible pace and price limits to align with market conditions.
The buyback follows Freshworks’ first GAAP‑profitable fiscal year in 2025, when the company generated more than $223 million in free cash flow and reported earnings per share of $0.76—nearly triple the $0.26 reported in 2023. The strong cash generation and profitability give Freshworks the financial flexibility to return capital to shareholders while still investing in AI‑driven product development and enterprise expansion.
Management highlighted that the program will reduce the outstanding share count, thereby increasing earnings per share and supporting the company’s valuation. The repurchase is part of a broader strategy that includes continued investment in AI‑powered solutions such as Freddy AI, Enterprise Service Management, and Device42, as well as the recent acquisition of FireHydrant to strengthen its IT service‑management portfolio.
Freshworks’ Q4 2025 earnings, released on February 10, 2026, showed revenue of $222.7 million—slightly above the consensus estimate of $218.8 million—and earnings per share of $0.14, beating the $0.11 estimate. The beat was driven by robust demand in the core software segments and disciplined cost management, which helped offset the impact of higher investment in AI product development that slightly compressed the non‑GAAP operating margin from 20.7% in Q4 2024 to 18.7% in Q4 2025.
The market reacted positively to the buyback announcement, with investors interpreting the program as a sign that Freshworks’ management believes the stock is undervalued and that the company’s cash flow position is strong enough to support a return of capital. The announcement also helped offset the cautious sentiment that emerged after the company’s full‑year 2026 earnings guidance fell short of analyst expectations, which had previously dampened investor enthusiasm.
The share repurchase program is expected to be completed over the coming months, with the company retaining sufficient cash to continue investing in growth initiatives. By reducing the share count, Freshworks aims to enhance shareholder value and support its long‑term capital allocation strategy.
The program underscores Freshworks’ commitment to disciplined capital allocation, reinforcing confidence in its financial health and strategic direction while providing a tangible benefit to shareholders.
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