Freshworks raised its annual revenue and profit forecast above Wall Street expectations following upbeat quarterly results on Tuesday, fueled by growing demand for its AI-driven software services,
Shares of the company rose 13.5 per cent in extended trading.
As more businesses digitize their operations, they increasingly rely on AI-powered software products to enhance IT services and automate workflow, benefiting companies like Freshworks.
Despite recession concerns, customers continue to require AI and automation for their operations and are unlikely to pay the higher prices demanded by Salesforce and ServiceNow, which positions Freshworks favourably to provide enterprise-ready solutions, said CEO Dennis Woodside in an interview with Reuters.
The company now expects full-year 2025 revenue to be between $815.3 million and $824.3 million, compared to its previous forecast of $809 million to $821 million.
On average, analysts project annual revenue of $813.3 million, according to data compiled by LSEG.
The company raised its annual adjusted profit per share forecast to a range of 56 cents to 58 cents, with the midpoint exceeding estimates of 53 cents.
Freshworks, which serves over 72,000 clients, including American Express, Databricks, Nucor and Sony, among others, offers a variety of products that help clients automate routine tasks, assist with employee onboarding and management, and provide tailored solutions for customer issues.
The company expects its second-quarter revenue to be between $197.3 million and $200.3 million, with the midpoint largely in line with estimates.
It also expects an adjusted profit per share in the range of 10 cents to 12 cents for the second quarter, compared to estimates of 11 cents.
Revenue for the first quarter ended March 31 grew 19 per cent to $196.3 million, beating estimates of $191.9 million, while adjusted profit per share of 18 cents also exceeded estimates of 13 cents.
