Grade History
| Quarter | Disclosure Quality | Financial Quality |
|---|---|---|
| Q1'25 → | B+ | B |
| Q2'25 → | B+ | B |
| Q3'25 → | B- | B- |
| Q4'25 → | B+ | B |
| Q1'26 → | B- | B |
Promise Ledger · All Quarters
| Marked | Promise | Status | |
|---|---|---|---|
| Q1'26 | ⏳ | AI to reach $100M ARR by 2028 Stopped disclosing AI ARR progress, concerning for tracking this commitment | pending |
| Q1'26 | ✅ | Continue to achieve rule of 40 Achieved in Q1 with 16% growth + 18% operating margin = 34%+ rule of 40 | delivered |
| Q1'26 | ✅ | Net dollar retention to improve to approximately 105% in Q1 Achieved 105% constant currency as guided | delivered |
| Q1'26 | ❌ | CX business to see healthy demand continuing Growth decelerated from 9% to 6% YoY, now guiding low single digits | missed |
| Q1'26 | ✅ | FireHydrant acquisition to close January 1, 2026 Closed as promised, integration underway | delivered |
| Q1'26 | ✅ | Device42 cloud offering to launch in Q2 2025 Launched in March 2026 as 'new Freshservice ITAM experience' | exceeded |
| Q1'26 | ✅ | AI Agent Studio for EX to launch in first half of 2026 Actually launching at Refresh event next week, ahead of schedule | delivered |
| Q4'25 | ❌ | Free cash flow margin improvement FCF margin declined to 25% from 27% in Q3 | missed |
| Q4'25 | ✅ | Rule of 40 sustainability Achieved sixth straight quarter of Rule of 40+ | delivered |
| Q4'25 | ❌ | CX unified platform driving retention and efficiency CX growth decelerated from 7% to 5% constant currency | missed |
| Q4'25 | ❌ | Net dollar retention improvement to approximately 105% constant currency Stayed at 104% constant currency despite guidance for improvement | missed |
| Q4'25 | ✅ | ESM business doubling ARR year-over-year Crossed $40M ARR, nearly doubled as committed | delivered |
| Q4'25 | ✅ | Device42 momentum continuing in larger deals Achieved 30% attach rate on top 50 deals, including three largest Q4 deals | exceeded |
| Q4'25 | ✅ | AI ARR doubling year-over-year (implied from growth rates) Hit $25M ARR, nearly doubled YoY as promised | delivered |
| Q3'25 | ✅ | We anticipate spending to increase in second half driven by timing of personnel and brand expenses Q4 'onetime spending increase' for pipeline building confirms this guidance | delivered |
| Q3'25 | ✅ | Full year 2025 adjusted free cash flow approximately $215 million Raised to $222 million for full year, $7M increase | exceeded |
| Q3'25 | ✅ | Q3 calculated billings growth 14% reported, 13% constant currency Delivered 14% reported and 14% constant currency, beating constant currency by 100 bps | exceeded |
| Q3'25 | ✅ | Net dollar retention of approximately 105% as-reported and 104% constant currency for Q3 Hit exactly 105% reported, 104% constant currency as guided | delivered |
| Q3'25 | ⏳ | We expect Device42 retention to improve gradually as we continue to integrate Device42 still dragging NRR by 60 bps in Q3, unchanged from Q2's 67 bps drag | pending |
| Q3'25 | ❌ | AI ARR crossed $20 million in Q2, more than doubling from a year ago Stopped reporting specific AI ARR figure in Q3, suggesting either stalled growth or strategic obfuscation | missed |
| Q2'25 | ✅ | AI agent generally available for EX customers in Q2 (Q1 2025) Confirmed approximately 1,000 customers using Freddy AI Agent for EX | delivered |
| Q2'25 | ✅ | Continue making progress on churn improvements (Q1 2025) Management cited 'steady improvements in overall churn rate' | delivered |
| Q2'25 | ✅ | Net dollar retention approximately 105% as-reported, 104% constant currency for Q2 (Q1 2025) Delivered 106% as-reported, 104% constant currency - beat on headline number | exceeded |
| Q2'25 | ⏳ | Updates to long-term strategic plan at Investor Day in September (Q1 2025) Confirmed Investor Day September 11 in San Francisco | pending |
| Q2'25 | ✅ | More product updates at Virtual Refresh Summit in June (Q1 2025) Held refresh Europe event in Q2, introduced Agentic AI platform and new features | delivered |
| Q2'25 | ✅ | Device42 pipeline had doubled sequentially (Q4 2024) Two of top 5 deals included Device42, described as best quarter for deal count | delivered |
| Q2'25 | ⏳ | ESM customer adoption nearly doubled over past 12 months (Q1 2025) No specific update provided on doubling metric, shifted to future opportunity language | pending |
| Q1'25 | ✅ | Non-GAAP operating margin of approximately 17% for Q1 Delivered 24% operating margin vs 17% guided | exceeded |
| Q1'25 | ✅ | Revenue growth rates of approximately 16% and 14% in Q1 and Q2 respectively Q1 delivered 19% YoY growth vs 16% guided | exceeded |
| Q1'25 | ✅ | Net dollar retention of approximately 103% reported and 104% constant currency for Q1 Delivered 105% on both bases, beating expectations | exceeded |
| Q1'25 | ⏳ | We expect to generate approximately $210 million of adjusted free cash flow Q1 generated $55.4M on track for full-year target | pending |
| Q1'25 | ✅ | We expect calculated billings growth to be approximately 13% year-over-year Delivered 16-17% calculated billings growth, beating the 13% expectation | exceeded |
| Q1'25 | ✅ | We are largely through the vast majority of conversions, so expect to see a smaller benefit in Q1 Free-to-paid conversion impact was indeed smaller in Q1 as promised | delivered |
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