Freshworks Stock Down 60% in One Year as Revenue Jumps 16% and One Investor Sells $7 Million in Shares

Freshworks delivers cloud-based SaaS solutions for customer engagement, IT service management, and business process automation.Gagnon Advisors disclosed a sale of 564,879 shares of Freshworks (FRSH +2.84%), an estimated $6.67 million trade based on quarterly average pricing, in its February 12, 2026, SEC filing.What happenedAccording 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 knowThis 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 overviewMetricValuePrice (as of market close 2026-02-12)$7.04Market Capitalization$2.05 billionRevenue (TTM)$838.81 millionNet Income (TTM)$183.72 millionCompany snapshotFreshworks 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 investorsThis 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.About the AuthorJonathan Ponciano is a contributing stock market analyst at The Motley Fool. He has nearly a decade of experience as a financial journalist, most recently as an editor and senior reporter at Forbes focused on markets, technology, and entrepreneurship. Jonathan has also written for Investopedia and the Los Angeles Business Journal. He holds a dual B.A. in Business Journalism and Economics from the University of North Carolina at Chapel Hill and an M.B.A. from Columbia Business School. A North Carolina native now based in New York City, Jonathan has also lived in Mexico City and Los Angeles.CMFjonponcStocks MentionedFreshworksNASDAQ: FRSH$7.24 (+2.84%) $+0.20*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.