Freshworks (FRSH): Buy, Sell, or Hold Post Q3 Earnings?

What Happened?

A number of stocks jumped in the afternoon session after reports of easing geopolitical tensions in Greenland boosted investor sentiment. 

The relief rally saw major indices, including the S&P 500 and the tech-heavy Nasdaq Composite, rebound as investors moved back into riskier assets. This positive shift was reflected across the technology landscape, with all of the Magnificent Seven tech firms seeing their shares climb. The easing of international friction reduced market uncertainty, which often encourages investment in growth-oriented sectors like technology. The move was part of a broader market upswing, with the Dow Jones Industrial Average adding 500 points, signaling increased investor confidence.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Sales Software company Freshworks jumped 5.5%. Is now the time to buy Freshworks? Access our full analysis report here, it’s free.
• Advertising Software company Zeta Global jumped 5.8%. Is now the time to buy Zeta Global? Access our full analysis report here, it’s free.

Zooming In On Zeta Global (ZETA)

Zeta Global’s shares are extremely volatile and have had 45 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 8 days ago when the stock dropped 6.9% on the news that tech stocks pulled back as reports surfaced that Chinese customs authorities blocked Nvidia's H200 AI chips, effectively halting their entry despite recent U.S. export approvals. 

This semiconductor sell-off, led by Broadcom and Micron, reflected deepening fears that the "AI trade" was colliding with a protectionist "new normal." Investors were concerned about the prospect of a fragmented global order where tech giants are caught between Washington's industrial strategy and Beijing's push for semiconductor sovereignty.Broadening the risk, markets were also agitated about the Justice Department's investigation into Fed Chair Jerome Powell, sparking concerns over central bank independence. This domestic political friction, paired with rising oil prices from Iranian civil unrest, likely forced a pivot from growth to defense.

Zeta Global is up 8.6% since the beginning of the year, but at $21.62 per share, it is still trading 12.5% below its 52-week high of $24.69 from February 2025. Investors who bought $1,000 worth of Zeta Global’s shares at the IPO in June 2021 would now be looking at an investment worth $2,431.

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the sales software industry, including ZoomInfo and its peers.

Companies need to be able to interact with and sell to their customers as efficiently as possible. This reality coupled with the ongoing migration of enterprises to the cloud drives demand for cloud-based customer relationship management (CRM) software that integrates data analytics with sales and marketing functions.

The 4 sales software stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.6% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 17.1% since the latest earnings results.

ZoomInfo

Operating a platform it calls "RevOS" - short for Revenue Operating System - ZoomInfo provides sales, marketing, and recruiting teams with business intelligence and analytics to identify prospects and deliver targeted outreach.

ZoomInfo reported revenues of $318 million, up 4.7% year on year. This print exceeded analysts’ expectations by 4.7%. Overall, it was a strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and full-year EPS guidance exceeding analysts’ expectations.

ZoomInfo scored the biggest analyst estimates beat but had the slowest revenue growth and slowest revenue growth of the whole group. The company added 3 enterprise customers paying more than $100,000 annually to reach a total of 1,887. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 25.6% since reporting and currently trades at $8.79.

Best Q3: Freshworks

Starting as a customer service solution before expanding into a comprehensive software suite, Freshworks provides AI-powered software-as-a-service solutions that help companies manage customer service, IT support, sales, and marketing functions.

Freshworks reported revenues of $215.1 million, up 15.3% year on year, outperforming analysts’ expectations by 3%. The business had a strong quarter with EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $10.98.

Weakest Q3: HubSpot

Born from the idea that traditional interruptive marketing was becoming less effective, HubSpot provides an integrated platform that helps businesses attract, engage, and manage customer relationships through marketing, sales, service, and content management tools.

HubSpot reported revenues of $809.5 million, up 20.9% year on year, exceeding analysts’ expectations by 3%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance slightly topping analysts’ expectations.

As expected, the stock is down 34.3% since the results and currently trades at $305.41.

Read our full analysis of HubSpot’s results here.

Salesforce

With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.

Salesforce reported revenues of $10.26 billion, up 8.6% year on year. This print met analysts’ expectations. Overall, it was a strong quarter as it also put up full-year EPS guidance exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

Salesforce pulled off the highest full-year guidance raise but had the weakest performance against analyst estimates among its peers. The stock is down 8% since reporting and currently trades at $220.00.

Read our full, actionable report on Salesforce here, it’s free.

What Happened?

Shares of business software provider Freshworks jumped 4.8% in the morning session after the company implemented a significant price increase for its Freshdesk plans, a move that could potentially boost future growth. 

According to an analysis by Wells Fargo, these pricing adjustments could add approximately three percentage points to the company's growth projections for the fiscal year 2026. The news provided investors with a clear view of a potential new source of revenue growth. Adding to the day's developments, Freshworks also announced the appointment of Kady Srinivasan as its new Chief Marketing Officer. Srinivasan was set to lead the company's global marketing strategy.

What Is The Market Telling Us

Freshworks’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 25 days ago when the stock dropped 3.6% on the news that the company announced it agreed to acquire FireHydrant, a provider of AI-powered incident management software. 

The move aimed to combine Freshworks' IT Service Management with FireHydrant's IT Operations platform into a unified AI-native solution designed to prevent disruptions and improve reliability. The deal was positioned to help Freshworks better compete with rivals like ServiceNow and PagerDuty. However, the financial terms of the acquisition were not disclosed. A lack of clarity on the cost of a deal can create uncertainty for investors regarding the impact on a company's finances. The transaction was expected to close in Freshworks' first fiscal quarter of 2026, subject to customary closing conditions.

Freshworks is up 6.2% since the beginning of the year, but at $12.32 per share, it is still trading 37.6% below its 52-week high of $19.75 from January 2025. Investors who bought $1,000 worth of Freshworks’s shares at the IPO in September 2021 would now be looking at an investment worth $258.99.