Business UpdateMay 14, 2026, 04:39 PM
Freshworks Raises 2028 Revenue Target to $1.3B+, Aims for Rule of 50
AI Summary
Freshworks Inc. presented an updated long-term outlook at its Refresh 2026 financial analyst session, raising its 2028 revenue target to over $1.3 billion and its free cash flow to over $425 million. The company also set a new "Rule of 50" target for 2028, up from the previous "Rule of 45" target. This revised forecast is driven by faster growth in its EX (Employee Experience) segment, with a focus on mid-market and enterprise customers, and continued improvements in profitability and capital efficiency. The company also reiterated its 2026 financial outlook.
Key Highlights
- Revised 2028 revenue target to $1.3B+, up from $1.2B+ previously.
- New 2028 free cash flow target of $425M+, with a 32-34% margin, up from $340M+.
- Set a new "Rule of 50" target for 2028, an increase from the prior "Rule of 45".
- EX segment ARR growth outlook raised to mid-20s, targeting 70% of ending ARR by 2028.
- Operating margin target increased to 24-26% and FCF margin to 32-34% for 2028.
- Stock-based compensation (SBC) as a percentage of revenue targeted at 13-14% by 2028.
- Reiterated 2026 revenue guidance of $958M-$964M and non-GAAP income from operations of $207M-$215M.
- Current stock price is $8.50 with an EV/Revenue of ~1.6x and an average analyst target of $12.