Freshworks Looks To Gain Market Share In IT Service Management

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I have covered the technology sector for 25 years. Since 2003, I have been the managing editor of Tech-Stock Prospector, a monthly publication offering research and analysis on small- and large-cap companies. Prior to that, I analyzed the technology industry as senior writer for Louis Rukeyser's Wall Street newsletter.

has set a 2026 total revenue target of $1 billion and is counting on expansion in its IT service management business and a continued move upmarket to help get it there.

Given the pullback in demand from SMB customers, Freshworks expects 2023 total revenue of $587 million to $595 million, representing growth of 18% to 19%, down sharply from 34% growth last year. For 2024, analysts are not forecasting much of a rebound, with the consensus revenue estimate of $704.9 million indicating growth of 19.2%.

The customer support portion of the business is larger. The Freshdesk product has total ARR of $300 million versus $250 million for Freshservice. There are 10,000 Freshdesk customers that spend over $5,000 a year. But customer support is a much more competitive market, with many well-established vendors. Freshworks is only growing at the market rate of 15%. By 2026, customer service ARR is expected to represent 35% of total ARR, down from 51% today.

 

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