Freshworks Inc.FRSH

Freshworks Inc. Fair Value Disclosure

10-KFiled Feb 26, 20263 min read
4. Fair Value Measurements
We measure our financial assets at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level 1—Inputs are observable and reflect quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.
Level 2—Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
Level 3—Inputs that are unobservable.
Money market funds and U.S. treasury securities are classified within Level 1 because they are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Other debt securities and investments are classified within Level 2 if the investments are valued using model driven valuations which use observable inputs such as quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Available-for-sale debt securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models.
We did not have any assets or liabilities subject to fair value remeasurement on a nonrecurring basis as of December 31, 2025 and 2024.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table represents the fair value hierarchy for our financial assets measured at fair value on a recurring basis as of December 31, 2025 and 2024 (in thousands):
December 31, 2025
Fair Value Measured Using
Level 1Level 2Total
Financial assets:
Cash equivalents:
Money market funds$120,923 $— $120,923 
U.S. treasury securities
100,251 — 100,251 
U.S. government agency securities
— 26,170 26,170 
Commercial paper
— 47,466 47,466 
Fixed deposits
— 129,875 129,875 
Marketable securities:
U.S. treasury securities131,379 — 131,379 
U.S. government agency securities— 30,908 30,908 
Corporate debt securities— 36,941 36,941 
Commercial paper
— 12,369 12,369 
Total financial assets$352,553 $283,729 $636,282 
December 31, 2024
Fair Value Measured Using
Level 1Level 2Total
Financial assets:
Cash equivalents:
Money market funds$507,655 $— $507,655 
Marketable securities:
U.S. treasury securities216,368 — 216,368 
U.S. government agency securities— 144,783 144,783 
Corporate debt securities— 45,762 45,762 
Commercial paper
— 16,388 16,388 
Certificates of deposit
— 26,449 26,449 
Total financial assets$724,023 $233,382 $957,405 
The fair value of derivative assets and liabilities as of December 31, 2025 and 2024, and all related unrealized and realized gains and losses during the year ended December 31, 2025 and 2024, were not material. As of December 31, 2025 and 2024, the total notional amount of outstanding designated foreign currency forward contacts were $86.7 million and $50.5 million, respectively.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 20, 2025
2023Feb 16, 2024
2022Feb 23, 2023
2021Feb 23, 2022

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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