Freshworks (FRSH) stock plummeted 6.64% during intraday trading on Thursday, as investors reacted negatively to the company's latest financial outlook.
The software company reported its first-ever full-year profitability with strong revenue growth, but issued 2026 profit guidance that fell short of analyst expectations. This created tension between the company's recent strong execution and its more cautious earnings outlook for the coming year.
Market sentiment turned negative as investors weighed the AI opportunity against competitive and cost risks, with intensifying competition in AI-powered customer and employee experience tools potentially pressuring margins over time.
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