By Anhata Rooprai
(Reuters) -Freshworks forecast fourth-quarter revenue above Wall Street estimates on Wednesday, betting on growing demand for its artificial intelligence-powered software tools.
The company expects fourth-quarter revenue of $217 million to $220 million, a midpoint that is above analysts’ average estimate of $216.5 million, according to LSEG data.
Businesses are increasingly adopting AI-driven solutions to manage their IT services and automate certain business operations as they look to cut costs and drive efficiency.
Freshworks offers cloud-based software, including Freshdesk for customer service and Freshservice for IT support, which incorporate AI capabilities to enhance functions like customer relationship management and IT service management.
It competes with other cloud-based software providers including Salesforce and ServiceNow, who are also advancing their AI capabilities.
Last year, Freshworks acquired Device42, an IT management software that maps and documents IT assets across an organization’s workflow.
“About half of our large deals this quarter had a Device42 component,” CEO Dennis Woodside said. “We had our largest Device42 deal ever with a very large sporting goods manufacturer in the U.S.”
Freshworks forecast adjusted profit of 10 to 12 cents per share, compared with estimates of 10 cents per share.
For the third quarter, revenue of $215.1 million beat estimates of $208.8 million. Adjusted profit of 16 cents per share also topped estimates of 13 cents per share.
The company raised its full-year revenue and adjusted profit per share outlook.
(Reporting by Anhata Rooprai and Jaspreet Singh in Bengaluru; Editing by Tasim Zahid)
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