The Short Answer
Freshworks stock (FRSH) is currently classified as HALAL in the qualitative catalog, but the current filing-based quantitative result does not pass the liquidity screen. Cloud customer-service, CRM, and IT-service-management software is generally permissible.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-03-31; calculated 2026-07-15.
38.795 / 1,605.382
779.237 / 1,605.382
675.506 / 1,605.382
7.022 / 228.633
- Financial
- Fails
- Overall
- Fails
Liquidity/assets is 48.54%, above the examined 33.333% limit; debt/assets is 2.42%, receivables-plus-cash/assets is 42.08% and disclosed interest income is 3.07%.
- Financial
- Fails
- Overall
- Fails
Liquidity/assets is 48.54% and receivables-plus-cash/assets is 42.08%, above the examined MSCI limits; debt/assets is 2.42%.
- Financial
- Fails
- Overall
- Fails
Liquidity/assets is 48.54%, above the examined Malaysia limit; debt/assets is 2.42%. This is not an official classification.
- Financial
- Not calculated
- Overall
- Fails
A properly licensed and reproducible historical market-cap series is not stored; total-assets liquidity screening already fails.
Business-activity disclosure
Freshworks provides cloud customer-service, CRM and IT-service-management software. The core SaaS activity is generally permissible, while customer-use allocation remains qualitative.
Limitation: The filing does not provide a universal prohibited-revenue numerator across customer use cases.
Purification
The filing discloses $7.022 million of interest income, but no scholar-specific purification instruction or universal prohibited-revenue numerator is provided.
Inputs, assumptions and primary sources
- Amounts are USD millions from Freshworks' March 31, 2026 Form 10-Q for the three months ended that date.
- Debt includes $38.795 million of current and noncurrent operating-lease liabilities; no interest-bearing borrowing balance was separately reported.
- Cash is $548.168 million, marketable securities are $231.069 million and net accounts receivable is $127.338 million.
- The filing discloses $7.022 million of interest income, approximately 3.07% of quarterly revenue.
- Cloud customer-service, CRM and IT-service software is generally permissible, but no universal prohibited-revenue numerator is asserted.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
The March 31, 2026 filing shows debt/assets of 2.42%, liquidity/assets of 48.54%, and receivables plus cash/assets of 42.08%. Liquidity exceeds the examined 33.333% limit; disclosed interest income is $7.022 million, or approximately 3.07% of quarterly revenue.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
Freshworks's Business Activity
Freshworks Inc. provides cloud-based business software. Its activity is:
- Customer experience: Customer-service and support software (Freshdesk)
- CRM & sales: Customer-relationship-management tools
- IT service management: IT helpdesk and service software (Freshservice)
Selling productivity and service software is a permissible activity with no haram revenue line.
Why FRSH Is Halal
1. Permissible Core Business
Providing business software is a halal activity. The recurring subscription revenue is the heart of the business, with no prohibited line.
2. Net-Cash Balance Sheet
Freshworks carries little debt, but its cash plus marketable securities are 48.54% of total assets, above the examined liquidity limits.
3. Interest on Cash to Purify
The filing discloses interest income of 3.07% of quarterly revenue. No fixed purification percentage is asserted, and the ratios should be re-screened as securities and share-repurchase balances change.
Filing-Based Ratios (March 31, 2026)
Based on Freshworks's latest Form 10-Q:
- Debt / Total Assets: 2.42% ✅
- Liquidity / Total Assets: 48.54% — above examined limits ⚠️
- Receivables + Cash / Total Assets: 42.08% ⚠️
- Disclosed Interest Income / Revenue: 3.07% ⚠️
- Prohibited-Product Revenue: No universal numerator disclosed — qualitative review required ⚠️
Methodology Interpretation
The current filing-based screen fails on liquidity/assets under the examined FTSE, MSCI and Malaysia-style limits. The SaaS activity remains generally permissible, but customer-use allocation and purification treatment require review.
- Core activity: Customer-service, CRM and IT-service software
- Quantitative status: Debt passes; liquidity fails
- Scholar review: Confirm income and enterprise customer-use treatment
Bottom Line
Freshworks (FRSH) has a generally permissible core activity, but the current filing-based result is not passing because liquidity/assets are 48.54% of total assets. Interest income and customer-use allocation remain qualitative review topics.
For Muslim investors seeking software exposure, compare FRSH with peers like HubSpot (HUBS) and ServiceNow (NOW).
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