Freshworks forecasts strong Q4 revenue on AI tool demand

Freshworks expects Q4 revenue of US$217 million to US$220 million, above analyst forecasts, driven by rising demand for its AI-powered software.

The company provides cloud-based tools like Freshdesk for customer service and Freshservice for IT support.

It competes with Salesforce and ServiceNow, which are also expanding their AI features.

In Q3, Freshworks reported revenue of US$215.1 million and adjusted profit of 16 cents per share, both ahead of estimates.

About half of its large Q3 deals included Device42, the IT management platform it acquired last year.

The company also raised its full-year outlook for revenue and adjusted profit per share.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Half of Freshworks’ top ten Q3 deals included Device42 1. On-premises deployments produced a one-time $1 million revenue lift 1. The cloud version will not ship until Q1 2026, which creates execution risk 1, so Freshworks must convert on-premises customers and attract cloud-first buyers to keep deal pace.
Real-time IT asset visibility from the integration sets Freshworks apart from legacy IT service management (ITSM) vendors 1. Buyers pick it for ease of use and quick setup at a lower total cost of ownership 1. That makes Device42 an entry into mid-market firms that view ServiceNow as too complex or expensive.

Device42 supports moves from SolarWinds IPAM (IP address management), RackTables (data center asset tracking), and phpIPAM (open-source IP address management) 2. It also covers OpenDCIM (open-source data center infrastructure management), RackMonkey (server rack inventory), and Aperture Vista (legacy data center infrastructure management) via APIs and bulk data options 2. New Balance rolled out Freshservice Enterprise with Device42 for global support portals 3.
Integration partners such as systems integrators and consulting firms can ride Freshworks’ move upmarket as $100,000+ annual recurring revenue (ARR) customers rose 25% year over year 1 and the company now joins more $500,000+ requests for proposals (RFPs) 4. Certified migration practices from Jira Service Management, Zendesk, or ServiceNow to Freshservice fit this move while Device42 dependency mapping reduces migration risk by clarifying application interdependencies 5.