Feb 10 (Reuters) – Freshworks forecast annual revenue above Wall Street estimates on Tuesday, betting on growing adoption of its software tools that incorporate artificial intelligence to automate customer support and IT services.
Businesses are increasingly adopting AI-driven software to efficiently manage IT services, automate workflows and improve customer support, driving demand for companies such as Freshworks, ServiceNow and Salesforce.
The forecast comes amid widespread concern surrounding the potential impact of newer AI tools on various services offered by established software firms, although analysts have downplayed the risks.
On January 30, Anthropic introduced plugins for customer support, legal, finance and sales on Claude Cowork, automating tasks for white-collar workers and potentially disrupting software firms, contributing to a sector-wide selloff.
Freshworks CEO Dennis Woodside said customers won’t just build everything directly, arguing that creating full enterprise IT and customer-service systems is complex and takes years.
“We’ve spent a decade to build a system of record and a system of interaction that understands everything about your IT environment,” Woodside said in an interview with Reuters.
On concerns that AI could shrink the number of paid software seats, Woodside said Freshworks is still growing its user count. “We’re taking share from much bigger incumbents, like ServiceNow and BMC, and Atlassian, and that’s how we’re growing our business,” he said.
Freshworks sells licenses for tools like Freshdesk for customer service and Freshservice for IT support, which are billed per the number of people logging into those services, unlike usage-based pricing used by some AI products.
The company forecast revenue between $952 million and $960 million for 2026, above estimates of $945.3 million, according to data compiled by LSEG.
It forecast adjusted profit per share to be between 55 cents and 57 cents for 2026, below estimates of 69 cents, as the company expects a higher tax rate.
Fourth-quarter revenue rose 14% to $222.7 million, beating estimates of $218.8 million. Adjusted profit per share of 14 cents also exceeded estimates of 11 cents.
(Reporting by Anhata Rooprai in Bengaluru; Editing by Vijay Kishore)
