Exploring Freshworks Inc. (FRSH) Investor Profile: Who’s Buying and Why?

You've seen the headlines: Freshworks Inc. (FRSH) is delivering on profitability, but the institutional ownership data looks... complicated. In the third quarter of 2025, the company reported revenue of $215.1 million, a solid 15% year-over-year growth, and a non-GAAP (Generally Accepted Accounting Principles) operating income that surged to $45.2 million with a 21.0% margin. That's a clear signal of operational efficiency, plus they raised full-year non-GAAP net income per share guidance to a midpoint of $0.63. So, why did the collective institutional stake drop significantly in the last reporting cycle, even as firms like Vanguard Group Inc. and BlackRock, Inc. remain top holders with over 9.33% and 6.18% ownership respectively? We're seeing a classic financial tug-of-war: a large number of filers, 46 of 85, actually increased their positions, betting on the strength of their AI platform, Freddy AI, which saw its ARR double year-over-year, but that was offset by a few massive exits. Is the market still spooked by the initial post-IPO valuation, or are the buyers-like the CFO who just purchased nearly $2 million in stock-seeing a clearer path to sustainable, high-margin growth? Let's dig into who is buying, who is selling, and what their actions tell us about Freshworks' near-term trajectory.

Who Invests in Freshworks Inc. (FRSH) and Why?

The investor base for Freshworks Inc. (FRSH) is dominated by large, long-term institutional money, but the stock's recent volatility attracts active hedge funds and growth-focused retail investors. As of the third quarter of 2025, the primary motivation is a classic Growth at a Reasonable Price (GARP) thesis: a high-growth SaaS company that is rapidly closing the gap to GAAP profitability and generating significant free cash flow.

You're looking at a company where professional money managers hold the majority stake, so their actions drive the stock price. Institutional investors own approximately 75.58% of the outstanding shares, which is a massive concentration of capital. This means you need to watch their 13F filings closely.

The Institutional Giants: Mutual Funds and Passive Capital

The biggest buyers are the behemoths of the asset management world, primarily passive and index-tracking funds. These firms are not looking for a quick flip; they are long-term holders whose investment is tied to Freshworks Inc.'s inclusion in major indexes (like the Russell 2000). Their sheer size makes them the anchor of the shareholder base.

For example, The Vanguard Group, Inc. is the single largest institutional holder, owning around 26,317,920 shares as of September 30, 2025. Right behind them is BlackRock, Inc., holding approximately 17,438,021 shares. These positions are typically passive, reflecting the company's market capitalization and index weighting, but they provide a solid floor for the stock.

• Vanguard and BlackRock are the top holders.
• Their stake is passive, but it stabilizes the price.
• The collective institutional value is over $383 million.

Hedge Funds and Retail: The Active Money

While the passive giants hold the core, the stock sees intense activity from hedge funds and individual investors (often grouped with public companies in the 'other' category). This active money is where the volatility comes from. In the most recent quarter ending September 2025, 172 institutional investors added to their positions, but 151 decreased their stakes, showing a high degree of turnover and disagreement on the near-term outlook.

Retail and individual investors, alongside public companies and insiders, collectively hold a substantial portion-around 40.87% of the company. This group is often drawn to the high-growth narrative and the potential for a tech rebound. Insider buying, like the CFO's recent purchase of nearly $2 million in stock in November 2025, also signals optimism to this segment.

Here's the quick math: when you see a CFO buy, it defintely carries more weight than a director selling. It's a conviction trade.

Investment Motivations: Growth, Cash Flow, and AI

Investors are buying Freshworks Inc. for three clear reasons, all grounded in the company's 2025 fiscal year performance. It's a growth story that's finally showing real financial discipline.

1. Sustainable Growth: The company's full-year 2025 revenue guidance is strong, projecting between $833.1 million and $836.1 million, which translates to about 16% year-over-year growth. This is solid for a maturing SaaS company.
2. Cash Flow Machine: The transition to profitability is the biggest catalyst. For Q3 2025, Freshworks Inc. reported non-GAAP income from operations of $45.2 million (a 21.0% margin), up sharply from the prior year. More importantly, adjusted free cash flow (FCF) hit $57.2 million for the quarter, a robust 26.6% margin.
3. AI-Driven Upside: The market sees the company's new AI capabilities, like the Freshdesk Command Center, as a key driver for customer expansion and a competitive edge against larger rivals. Analysts see a potential upside of over 40% from current stock price levels if this growth continues.

Core Investment Strategies in Play

The strategies used by these investor groups break down into a few distinct camps:

The core thesis for the long-term investor is a GARP play: you get a company growing at a mid-teens rate with a strong FCF margin, but the stock trades at a lower multiple than its peers. This is a classic value-in-growth setup. If you want to dive deeper into the company's long-term vision, you can review its Mission Statement, Vision, & Core Values of Freshworks Inc. (FRSH).

Institutional Ownership and Major Shareholders of Freshworks Inc. (FRSH)

You want to know who is driving the bus at Freshworks Inc. (FRSH), and the answer is clear: institutional money holds the wheel. As of the most recent filings for the 2025 fiscal year, institutional investors-the big mutual funds, pension funds, and asset managers-own a substantial portion of the company, holding approximately 237,034,341 shares across 588 different owners. This translates to an institutional ownership percentage that typically hovers between 67% and 75.58% of the stock, giving them significant collective power over the company's trajectory.

This high level of institutional ownership is a double-edged sword. It signals that professional money managers have done their due diligence and see a long-term value proposition in Freshworks' software-as-a-service (SaaS) model, but it also makes the stock price vulnerable to their large-scale trading decisions. One big fund selling a few million shares can defintely move the market.

Top Institutional Investors and Their Stakes

The list of top holders in Freshworks Inc. reads like a who's who of global asset management, reflecting a broad base of support from passive index trackers and active managers alike. The data from the September 30, 2025, 13F filings shows the largest positions are held by firms that manage trillions in assets.

Here's the quick math on the top players and their holdings as of the end of the third quarter of 2025:

• Vanguard Group Inc. is the largest shareholder, holding 26,317,920 shares.
• BlackRock, Inc. follows closely, with a stake of 17,438,021 shares.
• WestBridge Capital Management, LLC, a major early investor, still holds a significant position of 13,379,260 shares, representing about 4.54% of the company.

These top three alone control over 57 million shares, which is why their investment theses-whether they are passive index tracking or active growth conviction-are crucial to understanding the stock's stability. For a deeper look into the fundamentals that attract these giants, you should check out Breaking Down Freshworks Inc. (FRSH) Financial Health: Key Insights for Investors.

Recent Ownership Shifts: The Buy and Sell Signals

The third quarter of 2025 showed a mixed, but generally active, trading pattern among institutional holders. While the overall institutional ownership percentage remained high, there was significant churn beneath the surface. For example, out of a sample of 85 filers, 46 institutions increased their positions, while 22 reduced their stakes, and 17 kept them unchanged. The net effect for this group was an increase of 2.48 million shares quarter-on-quarter, which is a positive sign of accumulation.

The 'why' behind the trading is a mix of profit-taking, rebalancing, and fresh conviction. You see the index funds like Vanguard and BlackRock making minor reductions-Vanguard cut its stake by 0.817% and BlackRock by 1.436%-which is often just portfolio rebalancing, not a statement on the company. But then you have a major conviction trade like D. E. Shaw & Co., Inc., which dramatically increased its position by 113.224%, adding nearly 3 million shares. That kind of move suggests a strong belief in the near-term valuation and growth prospects of Freshworks Inc.

• Major Buyer: D. E. Shaw & Co., Inc. increased its stake by 113.224% (adding 2,947,999 shares).
• Significant Reductions: PRINCIPAL FINANCIAL GROUP INC was a leading seller, reducing its position by 221,180 shares.

The Impact of Institutional Clout on Strategy

When institutions own the majority of your stock, they are your most important, and often most demanding, stakeholders. Their role goes beyond just trading volume; they are a critical check on management and strategy. Since institutions possess over two-thirds of the shares, the Freshworks Inc. board will always have to pay close attention to their preferences, especially concerning profitability and capital allocation.

The collective power of these investors means they can influence major corporate decisions, such as a large acquisition, a significant share buyback program, or a pivot in product strategy. Their focus is generally on sustainable, long-term growth and a clear path to profitability, which is a common pressure point for high-growth SaaS companies. The fact that top executives, including the CEO and CFO, made significant insider purchases in November 2025-like the CEO's acquisition of 176,100 shares for nearly $2 million-suggests an internal alignment with the institutional desire for stock appreciation, which is a positive signal for you as an investor.

Key Investors and Their Impact on Freshworks Inc. (FRSH)

You want to know who is betting big on Freshworks Inc. and what their moves mean for your investment. The short answer is that the stock is heavily backed by institutional giants-funds like Vanguard Group Inc. and BlackRock, Inc. hold massive, foundational stakes, while their recent activity shows a calculated, yet slightly cautious, response to the company's strong push into Artificial Intelligence (AI) and enterprise growth.

Institutional investors, including hedge funds and mutual funds, own a substantial portion of Freshworks Inc., with 588 institutional owners collectively holding 237,034,341 shares as of the latest filings. This high level of institutional ownership, which is around 75.58% of the stock, suggests a strong belief in the long-term strategic direction, but it also means the stock is sensitive to the large-scale buying and selling decisions of a few major players.

The Anchor Shareholders: Vanguard, BlackRock, and CapitalG

The investor profile for Freshworks Inc. is anchored by three major financial entities, whose massive holdings provide a bedrock of stability for the stock. These are largely passive investors, meaning they track indexes or hold long-term positions, but their sheer size makes them influential.

• Vanguard Group Inc.: The largest institutional holder, with a 9.33% stake, representing 26,317,920 shares valued at approximately $312.66 million as of September 2025.
• CapitalG Management Company, LLC: Alphabet Inc.'s growth fund is a key early investor, holding 8.69%, which is 24,507,691 shares valued at about $291.15 million. This strong tie to Alphabet Inc. signals a significant venture capital endorsement of Freshworks Inc.'s technology and market potential.
• BlackRock, Inc.: A major index fund player, holding 6.18% of the company, which translates to 17,436,590 shares with a value of around $207.15 million.

These firms aren't looking for quick flips; they're buying into the Mission Statement, Vision, & Core Values of Freshworks Inc. (FRSH) and the multi-year growth story. Their continued presence validates the company's position in the Customer Experience (CX) and Employee Experience (EX) software-as-a-service (SaaS) market.

Recent Investor Moves and the AI Catalyst

Looking at the most recent 13F filings from November 2025, we see a nuanced picture of institutional activity-some are trimming positions, while others are aggressively adding shares. This is where the rubber meets the road on the AI trend.

Honesty, the biggest driver of investor confidence right now is the company's successful AI integration. Freshworks Inc.'s AI-driven tools, such as Freddy Copilot, are a huge draw, with the product line growing at a staggering 161% Annual Recurring Revenue (ARR). This growth, coupled with the Q3 2025 revenue growth of 15% to $215.1 million, is what keeps the big money interested.

Here's the quick math on recent activity:

While BlackRock, Inc. made a small trim of 1.44% in November, the more aggressive selling by Morgan Stanley (reducing their stake by 47.42%) suggests some funds are taking profits or reallocating capital. Still, the significant buying activity from smaller, more nimble funds like Dark Forest Capital Management Lp, which boosted its position by nearly 140%, shows conviction in the AI-led turnaround. Insider buying is also a positive sign: insider Tyler Sloat purchased 171,615 shares at $11.62, increasing his holding by 17.55%. That's a strong signal of management confidence.

What this estimate hides is that the stock price as of November 17, 2025, at $11.78 per share, is down about 21.52% from a year prior, which means some of the selling is likely tax-loss harvesting or simple risk management after a period of volatility. You defintely need to watch the next quarter's institutional filings to see if the net accumulation trend continues.

Next Step:

Monitor the next round of 13D/G filings for any new activist investors who may seek to influence Freshworks Inc.'s capital allocation strategy, particularly around the pace of share repurchases or AI investment.

Market Impact and Investor Sentiment

The investor profile for Freshworks Inc. (FRSH) is currently defined by a cautious but fundamentally positive sentiment, largely driven by its shift toward profitability and strong AI-driven growth, even as the stock price has struggled in the broader tech market. You're seeing a classic divergence: the company's operational metrics are improving dramatically, but the stock is still trading near its 52-week low of $10.87, which was set back in Q2 2025. This is a clear disconnect.

Institutional investors, the big money managers, are the most important players here. As of the September 2025 13F-filing cycle, institutional ownership is active and mixed. While one high-level metric showed a collective stake shift down from 69.6% to 7.5% in one quarter (likely a reporting change), the underlying activity is what matters: 46 of the 85 institutional filers actually increased their positions, with only 22 reducing their stake. They are definitely not abandoning the ship.

• Vanguard Group Inc. holds a massive stake of approximately 26.32 million shares, valued at around $312.66 million as of September 29, 2025.
• BlackRock, Inc. is another anchor, holding about 17.44 million shares, valued at roughly $207.15 million.
• WestBridge Capital Management, LLC is a key active holder with 13.38 million shares, representing the top institutional stake as of September 30, 2025.

These large, passive stakes from firms like Vanguard and BlackRock provide a stable institutional floor for the stock, but the real signal comes from the insiders. You want to see management putting their own money in, and that's exactly what happened in November 2025. The CEO and CFO made significant purchases, with the CFO buying nearly $2 million and the CEO purchasing approximately $1.99 million worth of stock. That kind of insider confidence is a powerful, defintely positive signal that management believes the stock is undervalued.

Recent Market Reactions and Q3 2025 Performance

The stock market's response to Freshworks Inc. (FRSH) has been a bit schizophrenic, but the Q3 2025 earnings report provided a clear catalyst. The company reported Q3 revenue of $215.1 million, which handily beat the analyst consensus estimate of $208.8 million, and a Non-GAAP income from operations of $45.2 million (a 21.0% margin), up from $24.0 million a year earlier. That's a strong beat and a major step toward consistent profitability.

Despite this strong financial performance, the stock price has been vulnerable to broader market jitters. For instance, on November 18, 2025, the stock fell 2.6% in a single day, not because of company news, but due to widespread skepticism over AI valuations and fears of a Federal Reserve rate cut pause. This shows that while the company is executing well, it's still trading as part of the volatile, high-growth tech cohort. The stock price of $11.78 per share as of November 17, 2025, reflects a drop of 21.52% from a year prior, but the forward-looking metrics are much brighter.

Here's the quick math on the Q3 beat:

This earnings beat led management to raise their full-year 2025 revenue guidance to between $833.1 million and $836.1 million, with an expected full-year EPS of $0.62-$0.64. A raised outlook is the clearest sign of internal operational confidence you can get. If you want to dive deeper into the nuts and bolts of the business model, you can check out Freshworks Inc. (FRSH): History, Ownership, Mission, How It Works & Makes Money.

Analyst Perspectives and Key Investor Impact

Wall Street's perspective on Freshworks Inc. (FRSH) is leaning toward a positive outlook, with a consensus rating of 'Buy' from several analysts. The average twelve-month price target is around $19.23 to $20.30, suggesting a significant potential upside from the current trading levels. The highest price target is an optimistic $27.00, while the low is $13.00.

The analysts' confidence is grounded in the company's strategic execution, particularly around its Artificial Intelligence (AI) offerings. The company has seen a doubling of its AI Annual Recurring Revenue (ARR), driven by strong adoption of its Copilot feature. This is what separates them from the pack-real, measurable AI revenue growth, not just buzzwords.

Key operational improvements that analysts are tracking include:

• Net Dollar Retention (NDR) improved to 105% in Q3 2025, indicating existing customers are spending more.
• The customer base with Annual Recurring Revenue (ARR) over $50,000 grew by 22% year-over-year in Q2 2025, showing success in landing high-value enterprise customers.
• Free Cash Flow (FCF) reached a strong $57.2 million in Q3 2025, demonstrating operational efficiency and the ability to self-fund growth initiatives.

The impact of major investors like BlackRock and Vanguard is less about active influence and more about validation; their presence confirms the stock is a long-term, index-worthy holding. The real future impact will come from the smaller, active institutional buyers like GAGNON SECURITIES LLC, who were among the most significant buyers in September 2025, increasing their position by 941.23 thousand shares. Their buying validates the analyst thesis that the company's AI-driven growth and path to profitability make it a compelling investment at these lower valuations.