Nasdaq-listed Freshworks has updated its full-year 2024 revenue guidance to a range of $707 to $713 million, marking a slight increase of approximately 1-2% compared to its previous forecast last quarter.
This upward revision is attributed to the growing demand for the company's artificial intelligence (AI) solutions, which have gained significant traction in the market, the firm said during the earnings call held on July 31.
After the announcement, Freshworks shares rallied by 12% and closed at $14 a share on Nasdaq.
In addition to the revenue forecast, Freshworks has adjusted its expectations for non-GAAP income from operations.
Also Read | Freshworks reports 20% revenue growth to $174 million in Q2CY24
The company anticipates this metric to fall between $60 million and $66 million for the year, up from the previous guidance of $58 million to $64 million provided in Q1 of FY24.
The announcement comes a quarter after the company’s CEO Girish Mathrubootham was redesignated as executive chairman and said that he will be spending more time on the long-term product vision, innovation and AI strategy for the company.
Q2 2024 is a pivotal quarter for the company, as it marks the first reporting period since Dennis Woodside succeeded Mathrubootham as CEO.
“Our results reflect our increasing financial discipline and our ability to meet the needs of customers with our AI-powered solutions. With clear strategic priorities in place, we are well positioned to seize the massive opportunity in front of us,” said Woodside, CEO & President of Freshworks during the firm’s earnings call held on July 31.
“Our customer adoption for Freddy AI has doubled sequentially. We ar finding all our customers are getting comfortable with our AI solutions and they believe it is improving their work significantly," Woodside added.
Freshworks' AI bet
In 2024, Freshworks launched a Neo Platform which has its homegrown AI solution ‘Freddy AI’.
The firm’s AI solutions span across data analytics, unified customer experience and developer and marketplace experience.
“We are betting big on our AI capabilities and want to bring it to all our customers. Customers are already seeing the value for Freddy AI products,” Woodside said during the earnings call held on July 31.
The firm is seeing increased traction for Freddy AI's Co-pilot service.
Freshworks clocked a revenue of $174 million in the second quarter of calendar year 2024, up around 20% year-on-year (YoY) on the back of improved sales and rising demand for AI-enabled solutions from customers.
New Data Centre in UAE
During the quarter, the firm has also launched a new data centre in the UAE, powered by Amazon Web Services (AWS), to help in global expansion, AI and support job creation and digital skills development in the region, the firm said in a statement.
Several prominent SaaS firms have launched their own data centres to enhance performance, security, and compliance. Recently, Freshworks direct competitor, Zoho opened two data centres in Saudi Arabia.
Other software majors like Salesforce, SAP and Microsoft have doubled down on building more data centres. Data centres are crucial for modern digital infrastructure, and AI solution building.
Overall it plays a fundamental role in supporting various aspects of technology and business operations
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