Freshworks Predicts Third-Quarter Revenue Exceeding Estimates Fueled by Strong AI Demand, Reports Reuters

By Jaspreet Singh

Software company Freshworks has projected its third-quarter revenue to surpass Wall Street expectations, anticipating a significant increase in demand for its AI-driven services as clients accelerate their digital transformation efforts.

Enterprise clients are turning to Freshworks for its comprehensive platform that streamlines customer interactions, sales, and support, thus reducing reliance on multiple tools. The company also provides an IT service management tool called Freshservice, which aids organizations in employee onboarding and management.

CEO Dennis Woodside mentioned that the number of paying customers for Freddy Copilot, Freshworks’ AI agent, has doubled to 1,200, with these customers experiencing a 30% boost in productivity. Freddy Copilot enhances employee performance by summarizing issues and automating repetitive tasks.

Based in San Mateo, California, Freshworks faces competition from major players like Oracle, Salesforce, and ServiceNow. In June, the company completed its acquisition of Device42 to enhance its IT asset management capabilities.

Founded in Chennai, India, in 2010, Freshworks serves over 67,000 customers, including notable names like Databricks, American Express, Nucor, and Sony.

For the third quarter, Freshworks estimates revenue between $180 million and $183 million, with the midpoint exceeding analysts’ average estimate of $178.7 million. The company also projects an adjusted profit per share between 7 cents and 8 cents, slightly below the 8 cents expected by analysts.

Additionally, Freshworks has raised its annual revenue forecast to between $707 million and $713 million, up from previous projections of $695 million to $705 million. However, it has slightly adjusted down its upper estimate for the annual adjusted profit per share.

In the second quarter ending June 30, Freshworks reported revenue of $174.1 million, surpassing estimates of about $169 million. The adjusted profit per share for that quarter was 8 cents, exceeding expectations of 6 cents per share.

In May, Freshworks appointed Dennis Woodside as CEO, succeeding founder Girish Mathrubootham, who transitioned to the role of executive chairman.