Freshworks announces $400 million share buyback amid prolonged stock decline

Freshworks

• Freshworks approves $400M share buyback amid stock decline
• Stock fell over 60% in a year despite 16% revenue growth
• Company achieved GAAP profitability and strong cash flow in 2025

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Freshworks has authorised a share repurchase programme of up to $400 million, as the customer experience software maker moves to buy back shares amid a prolonged decline in its stock price.

The San Mateo, California-based company said on February 26 that its board approved the buyback of outstanding Class A common stock through open market purchases, privately negotiated deals, or other transactions, with timing and amount determined at its discretion.

"This follow-on share repurchase program demonstrates our confidence in the Company's long-term strategy, durable growth and dedication to disciplined capital allocation," said Dennis Woodside, CEO & President, in a statement.

Under the programme, Freshworks may repurchase shares in compliance with US securities regulations, including Rule 10b-18 and Rule 10b5-1 plans. The company said the buyback could be modified, suspended, or discontinued depending on market conditions and other factors.

The move comes at a time when Freshworks’ stock has fallen significantly.

Shares were trading at about $17.31 as of February 26, 2025, and it fell down drastically to around $7.93 a piece as of February 26, 2026. Freshworks was listed at an initial public offering (IPO) price of $36 per share when it debuted on the Nasdaq in September 2021

The stock price was down more than 60 percent over the past year, reflecting weak investor sentiment despite improving financial performance. Recent analyst downgrades and lower price targets have also weighed on the stock.

Nasdaq-listed Software firm Freshworks Inc. reported a 16% year-on-year rise in revenue to $838.8 million for the full year ended December 31, 2025, as growing adoption of its AI-powered software helped drive customer expansion and margin improvement.

In the fourth quarter, revenue rose 14% to $222.7 million from $194.6 million a year earlier, or 13% on a constant currency basis. The company swung to GAAP operating income of $39.7 million in Q4, compared with a loss of $23.8 million last year, with operating margin expanding to 17.8%.

CEO and President Woodside noted that the company achieved GAAP profitability in 2025 and generated over $223 million in free cash flow, nearly tripling from 2023 levels.

Share buybacks typically help improve shareholder returns by reducing the number of outstanding shares and signalling management’s confidence in future performance, especially when companies believe their stock is undervalued.