Freshworks Surpasses Expectations with Strong Revenue and Profit Forecast
Freshworks outperformed Wall Street estimates in its annual revenue and profit projections, driven by rising demand for its digital operations management software. The company's shares surged 6% in extended trading following the announcement.
Despite a slight shortfall in first-quarter revenue projections, Freshworks reported impressive results for the fourth quarter, exceeding expectations for both revenue and adjusted profit per share.
Clients increasingly rely on AI-powered software from Freshworks, ServiceNow, and Salesforce to streamline IT services and automate business processes.
"Our AI is exceptionally user-friendly, enabling rapid implementation," said CEO Dennis Woodside. "One customer, a hardware manufacturer, transitioned from ServiceNow after 13 years due to our competitive advantage, particularly in the mid-market segment."
Freshworks' AI-based chatbot, Freddy AI, assists clients in resolving customer inquiries, automating routine tasks, and providing personalized solutions.
For full-year 2025, Freshworks anticipates revenue between $809 million and $821 million, surpassing analysts' average estimate of $813 million. The company projects adjusted annual profit per share of 52 cents to 54 cents, exceeding estimates of 52 cents.
The mid-range of Freshworks' first-quarter revenue forecast, $190 million to $193 million, is slightly below estimates of $192.2 million. However, the company expects adjusted profit per share of 12 cents to 14 cents for the first quarter, above estimates of 12 cents.
In the fourth quarter ended December 31, revenue increased by 22% to $194.6 million, exceeding estimates of $189.4 million. The company's adjusted profit per share of 14 cents surpassed estimates of 10 cents.