What the changes say
- Freshworks addresses profitability history after reporting 2025 net income of $183.7 million alongside $3.6 billion in accumulated deficit.
- New disclosures highlight risks from AI search traffic, data privacy compliance, India tax complexity, and a $400 million stock repurchase program.
What changed since the prior 10-K
New
- NewRisks Related to Our Business
Although we recently generated net income, we have a history of losses and we may not be able to sustain profitability
Despite generating $183.7 million in net income for 2025, we have a $3.6 billion accumulated deficit and may not sustain profitability.
- NewRisks Related to Our Business
numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring how our products are used across large populations globally
Inaccurate metrics or measurement errors could harm our long-term strategies, damage our reputation, and trigger stockholder litigation.
- NewRisks Related to Our Business
We rely on search engines, including traditional web search and emerging AI-powered platforms, to drive traffic to our websites, and changes in these platforms could adversely affect our business
The rise of zero-click and AI-powered search platforms could reduce traditional website traffic and hurt customer acquisition.
- NewRisks Related to Our Business
restricted, our business may be less efficient and we may otherwise be at a competitive disadvantage. Personnel use of generative AI technologies could result in inadvertent disclosure of personal information, creating additional compliance costs and regulatory risks
Personnel use of generative AI technologies could lead to inadvertent personal data disclosures, raising compliance costs and regulatory risks.
- NewRisks Related to International Operations
We are subject to complex and evolving export control, import, and trade sanctions laws that could impair our ability to compete internationally, result in significant penalties, and adversely affect our business and results of operations
Our products incorporate encryption technology that may be subject to strict export control and trade sanction laws.
- NewRisks Related to Intellectual Property
We face risks from intellectual property infringement claims and other litigation that could result in significant costs, operational restrictions, and material adverse effects on our business and results of operations
Using third-party generative AI tools exposes us to copyright and intellectual property infringement claims due to lack of visibility into training data.
- NewRisks Related to Intellectual Property
Our use of “open source” and third-party software could impose unanticipated conditions or restrictions on our ability to commercialize our products and could subject us to possible litigation
Our use of open source software creates potential exposure to non-compliance claims and forced code disclosure.
- NewRisks Related to Tax Matters
Changes in India's taxation system could adversely affect our business, financial condition, and results of operations due to the complex and evolving nature of central and state tax regimes
Complex and evolving central and state tax regimes in India could adversely affect our financial condition and results of operations.
- NewRisks Related to Ownership of Our Class A Common Stock
In November 2024, our board of directors approved a stock repurchase program for the repurchase of up to $400 million of the Company’s outstanding Class A common stock, which was completed in August 2025
Our $400 million stock repurchase program carries valuation and market timing risks that could destroy shareholder value if executed at inflated prices.
- NewGeneral Risks
our legal, accounting, and financial compliance costs, make some activities more difficult, time consuming, and costly, and place significant strain on our personnel, systems, and resources
We are hiring additional personnel and refining accounting controls to meet Sarbanes-Oxley requirements for our quarterly close and financial reporting.
Dropped
- DroppedRisks Related to Our Business
We have a history of losses, and we may not be able to achieve profitability or, if achieved, sustain profitability
We have a history of losses, and we may not be able to achieve profitability or sustain it.
- DroppedRisks Related to Our Business
loss of key personnel may cause disruptions in, and harm to, our operations and have an adverse effect on our ability to grow our business and our results of operations and financial condition
- DroppedRisks Related to Our Business
Remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit and in public locations
- DroppedRisks Related to Our Business
In addition to experiencing a security incident, third parties may gather, collect, or infer Sensitive Information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position
- DroppedRisks Related to Our Business
We rely on traditional web search engines to direct traffic to our website. If our website fails to rank prominently in unpaid search results, traffic to our website could decline and our business would be adversely affected
- DroppedRisks Related to International Operations
We are subject to various export control, import, and trade and economic sanction laws and regulations that could impair our ability to compete in international markets and subject us to liability for noncompliance
- DroppedRisks Related to International Operations
Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our products and could harm our business
- DroppedRisks Related to Intellectual Property
We may become subject to intellectual property rights claims and other litigation that are expensive to support, and if resolved adversely, could have a material adverse effect on us
- DroppedRisks Related to Intellectual Property
Our failure to obtain or maintain the right to use certain of our intellectual property would negatively affect our business
- DroppedRisks Related to Intellectual Property
A portion of the technologies we use in our products and mobile applications incorporates “open source” software, and we may incorporate open source software in our products and mobile applications in the future
- DroppedRisks Related to Tax Matters
Changes in the taxation system in India could adversely affect our business
- DroppedRisks Related to Ownership of Our Class A Common Stock
We may not realize the anticipated long-term stockholder value of our stock repurchase program, and any failure to repurchase our common stock after we have announced our intention to do so may negatively impact our stock price
Reworded
- 95% rewrittenGeneral Risks
A failure to maintain an effective system of disclosure controls and internal control over financial reporting, could adversely affect our ability to produce timely and accurate financial statements or comply with applicable regulations
Shortened from a broad discussion of Nasdaq and Sarbanes-Oxley compliance costs to focus directly on internal control failures.
- 93% rewrittenRisks Related to Our Business
The failure to attract and retain additional qualified personnel could harm our business and prevent us from executing our business strategy and growth plans, and the steps we took recently to realign our workforce to our focused priorities may not have the expected benefits or may exacerbate these difficulties
Added explicit mention of recent workforce realignment steps that may not yield expected benefits or may worsen retention difficulties.
- 92% rewrittenRisks Related to Our Business
If we fail to offer high-quality customer support, our business and reputation will suffer
Retained substantially identical core text regarding customer support failures impacting reputation and sales.
- 81% rewrittenRisks Related to Our Business
We face exposure to foreign currency exchange rate fluctuations
Added specific currency exposure naming the Indian rupee, British pound, and euro alongside functional currency remeasurement.
- 65% rewrittenRisks Related to Intellectual Property
If we are unable to protect our intellectual property rights both in the United States and abroad, the value of our brand and other intangible assets may be diminished, and our business may be adversely affected
Added specific disclosure that US patents have been issued and pending applications exist, but no foreign patent protection has been sought.
- 61% rewrittenRisks Related to Our Business
If we fail to manage our technical operations infrastructure, or experience service outages, interruptions, or delays in the deployment of our products, our results of operations may be harmed
Streamlined infrastructure and uptime risk text by removing prior acquisition and remote-work cybersecurity references.
- 59% rewrittenRisks Related to Our Business
We have a limited operating history at our current scale, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful
Added bulleted operational priorities and noted that the industry features rapid technological innovation and intense competition.
- 55% rewrittenRisks Related to Our Business
We believe our long-term value as a company will be greater if we focus on growth, which may negatively impact our profitability
Removed specific 2023 and 2024 operating expense and net loss dollar figures from the prior year comparison.
- 52% rewrittenRisks Related to Our Business
We use generative and agentic artificial intelligence, including in certain of our products and services, which may result in operational challenges, legal liability, reputational concerns and other negative consequences that could adversely affect our business and results of operations
Was: We use generative artificial intelligence, including in certain of our products and services, which may result in operational challenges, legal liability and reputational concerns that could adversely affect our business and results of operations
- 49% rewrittenRisks Related to Ownership of Our Class A Common Stock
The trading price of our Class A common stock may be volatile, and you could lose all or part of your investment
- 48% rewrittenRisks Related to Our Business
We track certain key business metrics, which are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and materially adversely affect our stock price, business, results of operations, and financial condition
- 48% rewrittenRisks Related to Ownership of Our Class A Common Stock
Additional stock issuances could result in significant dilution to our stockholders
- 44% rewrittenRisks Related to International Operations
A substantial portion of our business and operations are located in India, and we are subject to regulatory, economic, social, and policy uncertainties in India. Non-compliance with and changes in such laws may adversely affect our business, results of operations, and financial condition
- 42% rewrittenRisks Related to Tax Matters
Changes in our effective tax rate or tax liability may have an adverse effect on our results of operations
- 42% rewrittenRisks Related to Our Business
We operate in a highly competitive industry, and competition presents an ongoing threat to the success of our business
- 41% rewrittenRisks Related to Tax Matters
Our ability to utilize net operating loss carryforwards and other tax attributes to offset taxable income may be limited by ownership changes, evolving tax laws, and utilization restrictions, which could increase our future tax obligations and adversely affect our results of operations
Was: Our ability to utilize our net operating loss carryforwards and certain other tax attributes to offset taxable income or taxes may be limited
- 39% rewrittenRisks Related to Our Business
Sales efforts to large customers involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller organizations
- 35% rewrittenRisks Related to International Operations
We are subject to anti-corruption, anti-bribery, and similar laws, and our failure to comply with these laws could subject us to criminal penalties or significant fines and harm our business and reputation
- 31% rewrittenGeneral Risks
Failure to effectively and efficiently address ESG matters could adversely impact us
- 23% rewrittenRisks Related to Ownership of Our Class A Common Stock
We incur and will continue to incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the United States, which may harm our business
- 23% rewrittenRisks Related to Tax Matters
Our international operations may subject us to potential adverse tax consequences
All 62 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business
- 01Although we recently generated net income, we have a history of losses and we may not be able to sustain profitabilityNew
- 02We have experienced significant growth in recent periods and our recent growth rates may not be indicative of our future growth
- 03We have a limited operating history at our current scale, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful59% rewritten
- 04Our quarterly results have and may continue to fluctuate significantly and may not meet our expectations or those of investors or securities analysts
- 05Sales efforts to large customers involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller organizations39% rewritten
- 06If we are unable to attract new customers, convert customers using our trial versions into paying customers, and expand usage of our products within or across organizations, our revenue growth would be harmed
- 07Our ability to attract new customers and increase revenue from existing customers depends on our ability to develop new features, integrations, capabilities, and enhancements, and to partner with third parties to design complementary products
- 08Our business depends on a strong brand, and if we are not able to maintain and enhance our brand, our ability to attract and expand our base of customers may be impaired, and our business and results of operations will be harmed
- 09Our business depends substantially on our customers renewing their subscriptions and purchasing additional subscriptions from us. Any decline in our customer retention would harm our future operating results
- 10We use generative and agentic artificial intelligence, including in certain of our products and services, which may result in operational challenges, legal liability, reputational concerns and other negative consequences that could adversely affect our business and results of operations52% rewritten
- 11We operate in a highly competitive industry, and competition presents an ongoing threat to the success of our business42% rewritten
- 12We track certain key business metrics, which are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and materially adversely affect our stock price, business, results of operations, and financial condition48% rewritten
- 13numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring how our products are used across large populations globallyNew
- 14We believe our long-term value as a company will be greater if we focus on growth, which may negatively impact our profitability55% rewritten
- 15We recognize revenue from subscriptions over the term of our customer contracts. Consequently, downturns or upturns in new sales may not be immediately reflected in our operating results and may be difficult to discern
- 16Failure to effectively develop and expand our direct sales capabilities would harm our ability to expand usage of our products within our customer base and achieve broader market acceptance of our products
- 17If we are unable to develop and maintain successful relationships with channel partners, our business, operating results, and financial condition could be adversely affected
- 18The failure to attract and retain additional qualified personnel could harm our business and prevent us from executing our business strategy and growth plans, and the steps we took recently to realign our workforce to our focused priorities may not have the expected benefits or may exacerbate these difficulties93% rewritten
- 19If we fail to manage our technical operations infrastructure, or experience service outages, interruptions, or delays in the deployment of our products, our results of operations may be harmed61% rewritten
- 20If we are unable to ensure that our products interoperate with a variety of software applications that are developed by others, including our integration partners, we may become less competitive and our business, results of operations, and financial condition may be harmed
- 21We rely on search engines, including traditional web search and emerging AI-powered platforms, to drive traffic to our websites, and changes in these platforms could adversely affect our businessNew
- 22We rely on third parties maintaining open digital marketplaces to distribute our mobile applications for our products. If such third parties interfere with the distribution of our mobile applications, our business would be adversely affected
- 23Real or perceived errors, failures, vulnerabilities, or bugs in our products would harm our business, results of operations, and financial condition
- 24If we experience excessive fraudulent activity, we could incur substantial costs and lose the right to accept credit cards for payment, which could cause our customer base to decline significantly
- 25We face exposure to foreign currency exchange rate fluctuations81% rewritten
- 26We derive, and expect to continue to derive, substantially all of our revenue from a limited number of products
- 27If we fail to offer high-quality customer support, our business and reputation will suffer92% rewritten
- 28restricted, our business may be less efficient and we may otherwise be at a competitive disadvantage. Personnel use of generative AI technologies could result in inadvertent disclosure of personal information, creating additional compliance costs and regulatory risksNew
Risks Related to International Operations
- 29Our international operations and sales to customers outside the United States expose us to risks inherent in international operations and sales
- 30We are subject to anti-corruption, anti-bribery, and similar laws, and our failure to comply with these laws could subject us to criminal penalties or significant fines and harm our business and reputation35% rewritten
- 31A substantial portion of our business and operations are located in India, and we are subject to regulatory, economic, social, and policy uncertainties in India. Non-compliance with and changes in such laws may adversely affect our business, results of operations, and financial condition44% rewritten
- 32We are subject to complex and evolving export control, import, and trade sanctions laws that could impair our ability to compete internationally, result in significant penalties, and adversely affect our business and results of operationsNew
- 33Restrictive changes to immigration laws may hamper our growth
- 34Government regulation on e-commerce and foreign investment, including investment in e-commerce in India, is evolving, and unfavorable changes to, or failure by us to comply with, these evolving regulations could adversely affect our business, financial condition, and results of operations
Risks Related to Intellectual Property
- 35We face risks from intellectual property infringement claims and other litigation that could result in significant costs, operational restrictions, and material adverse effects on our business and results of operationsNew
- 36If we are unable to protect our intellectual property rights both in the United States and abroad, the value of our brand and other intangible assets may be diminished, and our business may be adversely affected65% rewritten
- 37Our use of “open source” and third-party software could impose unanticipated conditions or restrictions on our ability to commercialize our products and could subject us to possible litigationNew
Risks Related to Tax Matters
- 38Our business, results of operations, and financial condition may be harmed if we are required to collect sales or other related taxes for subscriptions to our products in jurisdictions where we have not historically done so
- 39Our ability to utilize net operating loss carryforwards and other tax attributes to offset taxable income may be limited by ownership changes, evolving tax laws, and utilization restrictions, which could increase our future tax obligations and adversely affect our results of operations41% rewritten
- 40Changes in our effective tax rate or tax liability may have an adverse effect on our results of operations42% rewritten
- 41Our international operations may subject us to potential adverse tax consequences23% rewritten
- 42Changes in India's taxation system could adversely affect our business, financial condition, and results of operations due to the complex and evolving nature of central and state tax regimesNew
- 43Our ability to receive dividends and other payouts from our Indian subsidiary is subject to Indian legal restrictions and withholding tax
Risks Related to Ownership of Our Class A Common Stock
- 44The trading price of our Class A common stock may be volatile, and you could lose all or part of your investment49% rewritten
- 45Additional stock issuances could result in significant dilution to our stockholders48% rewritten
- 46In November 2024, our board of directors approved a stock repurchase program for the repurchase of up to $400 million of the Company’s outstanding Class A common stock, which was completed in August 2025New
- 47Sales of a substantial number of shares of our Class A common stock in the public market, or the perception that these sales might occur, could depress the market price of our Class A common stock
- 48Our Class A common stock market price and trading volume could decline if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business
- 49We incur and will continue to incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the United States, which may harm our business23% rewritten
General Risks
- 50If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected
- 51Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States
- 52A failure to maintain an effective system of disclosure controls and internal control over financial reporting, could adversely affect our ability to produce timely and accurate financial statements or comply with applicable regulations95% rewritten
- 53our legal, accounting, and financial compliance costs, make some activities more difficult, time consuming, and costly, and place significant strain on our personnel, systems, and resourcesNew
- 54We are currently planning and designing information systems enhancements, and problems with the design or implementation of these enhancements could interfere with our business and operations
- 55We have in the past and may in the future engage in merger and acquisition activities, which require significant management attention, and could disrupt our business, dilute stockholder value, and adversely affect our business, results of operations, and financial condition
- 56Increased government scrutiny of the technology industry could negatively affect our business
- 57We may need additional capital, and we cannot be sure that additional financing will be available
- 58We do not intend to pay dividends for the foreseeable future
- 59may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering
- 60Provisions in our corporate charter documents and under Delaware law may prevent or frustrate attempts by our stockholders to change our management or hinder efforts to acquire a controlling interest in us, and the market price of our Class A common stock may be lower as a result
- 61Catastrophic events, including climate change, natural disasters and other events beyond our control, may disrupt our business
- 62Failure to effectively and efficiently address ESG matters could adversely impact us31% rewritten
Other Freshworks 10-Ks
- FY2024 10-K risk factors64 risks
Freshworks operates with a continuing history of net losses, accumulating $3.7 billion as of December 31, 2024. Substantial operations and employees, numbering approximately 3,700, are concentrated in India. Revenue depends heavily on the Freshservice and Freshdesk product lines.
Filed Feb 20, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.