Forensic Analysis · Software & SaaS · as of Nov 8, 2026
Freshworks Inc. (FRSH)
A forensic read on Freshworks Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Distress
Financial health
-2.8
Distress distance
Clean
Earnings quality
2
Forensic signals
16.9%
ROE
16.4%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Freshworks Inc. earns a D (Weak — demands caution) forensic quality grade, and its balance-sheet distress test reads -2.8, placing it in the Distress zone. 2 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
2.1%
FY2025
Return on invested capital.Return on invested capital is 2.1% in the latest fiscal year, against -17.9% in FY2024. After-tax operating profit was ($110M) in FY2024 and $12M in FY2025, with operating income at -19.2% of revenue in FY2024 and 1.6% in FY2025. The capital base behind it went from $613M in FY2024 to $559M in FY2025 (-9%), while the revenue it carried went from $720M to $839M. $331M of the $559M base at FY2025 is short-term investments (59.1%) — securities held beside cash, which the base keeps because only cash is subtracted from it; they earn the balance sheet's yield, which is not in the operating profit above, so this rate understates what the operating capital earns.
175% of FCF
FY2025
Shareholder returns.Returned $386M to shareholders (buybacks + dividends) in FY2025 — 175% of free cash flow. That is $165M (75%) more than free cash flow covered, and more than operating cash flow as well. It came out of the balance sheet's own liquid holdings, not new debt: cash and short-term investments fell $289M over FY2025. A payout past free cash flow draws the balance sheet down in every year it continues, which isn't sustainable indefinitely. Counting the $147M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 241%.
Key fundamentals
Latest Revenue$838.8M
Revenue Growth YoY+16.4%
Revenue CAGR (2yr)+18.6%
Net Margin21.9%
Free Cash Flow$220.9M
Return on Equity16.9%
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Freshworks Inc.'s actual 10-K/10-Q/8-K filings?