Freshworks Stock Down 60% in One Year as Revenue Jumps 16% and One Investor Sells $7 Million in Shares
Key Points
Gagnon Advisors reduced its Freshworks stake by 564,879 shares in the fourth quarter; the estimated transaction value was $6.67 million based on quarterly average prices.
Meanwhile, the quarter-end position value decreased by $6.38 million, reflecting both trading activity and stock price changes.
The post-trade holding stood at 564,879 shares valued at $6.92 million.
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Gagnon Advisors disclosed a sale of 564,879 shares of Freshworks (NASDAQ:FRSH), an estimated $6.67 million trade based on quarterly average pricing, in its February 12, 2026, SEC filing.
What happened
According to a February 12, 2026, SEC filing, Gagnon Advisors, LLC cut its position in Freshworks by 564,879 shares. The estimated transaction value was $6.67 million, calculated using the average closing price during the fourth quarter of 2025. At quarter end, the Freshworks stake was valued at $6.92 million, reflecting a net position change of $6.38 million for the period.
What else to know
- This sale reduced the Freshworks position to 4.39% of Gagnon Advisors, LLC's 13F reportable assets under management.
- Top holdings after the filing:
- NASDAQ: WGS: $16.53 million (10.5% of AUM)
- NYSE: AMRC: $13.85 million (8.8% of AUM)
- NYSE: AL: $12.62 million (8.0% of AUM)
- NYSE: EPD: $10.90 million (6.9% of AUM)
- NASDAQ: CDNA: $10.04 million (6.4% of AUM)
- As of February 12, 2026, Freshworks shares were priced at $7.04, down 60.4% in one year and underperformed the S&P 500 by 73.35 percentage points.
Company overview
| Metric | Value |
|---|---|
| Price (as of market close 2026-02-12) | $7.04 |
| Market Capitalization | $2.05 billion |
| Revenue (TTM) | $838.81 million |
| Net Income (TTM) | $183.72 million |
Company snapshot
- Freshworks offers software-as-a-service (SaaS) products for customer engagement, IT service management, and business process automation.
- The company generates revenue primarily through subscription-based licensing of its cloud applications to businesses.
- It targets enterprises and mid-sized companies seeking scalable, modern solutions for customer support and IT operations.
Freshworks Inc. is a global SaaS provider specializing in cloud-based business software that streamlines customer engagement and IT workflows. The company leverages a subscription model, supporting recurring revenue and scalability across diverse industries.
With a broad customer base and a focus on usability and rapid deployment, Freshworks aims to differentiate through accessible, integrated solutions that address core operational needs for modern organizations.
What this transaction means for investors
This move signals potentially waning conviction in a software business that just proved it can scale profitably, even as the stock price suggests otherwise.
Freshworks closed 2025 with $838.8 million in revenue, up 16% year over year, and fourth quarter revenue of $222.7 million. GAAP operating income swung to $13.2 million for the year from a sizable loss in 2024, while non-GAAP operating margin expanded to 21.2%. Meanwhile, the balance sheet shows $843.7 million in cash and marketable securities.
Shares are down more than 60% over the past year, but the operating profile tells a different story. Within a portfolio that leans into energy and industrial names like AMRC and EPD, this remains one of the more growth-oriented software positions at 4.4% of assets.
Long term investors should focus on recurring revenue durability, retention trends, and margin trajectory. If mid-teens revenue growth pairs with expanding profitability, today’s price may reflect sentiment fatigue rather than structural weakness.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.
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