Photo Credit: OnManorama

Recently listed Freshworks (Nasdaq: FRSH) announced its fourth-quarter results. The company is now targeting the $34 billion IT operations management market for its next round of growth.

Freshworks’s Financials

For the fourth quarter, Freshworks’ revenue grew 44% to $105.5 million. This is the first time it has crossed the milestone of $100 million in quarterly revenue. It reported a net loss of $0.06 per share.

For the fiscal year, revenue grew 49% to $371 million and loss was $0.21 per share.

For the first quarter, Freshworks forecast revenues between $107-$109 million and a loss per share of $0.07-$0.05. It expects revenues between $486.5-$495 million and a loss per share of $0.23-$0.19 for the current fiscal year.

Freshworks’s Product Expansion

Freshworks continues to receive industry validation for its products. In a recent Gartner Magic Quadrant for CRM Customer Engagement Center, its flagship product was recognized as a Visionary. Gartner also recognized Freshservice as a Challenger in the ITSM Magic Quadrant.

The company continues to enhance its platform’s capabilities. Some of the enhancements include the release of a unified reporting and analytics solution across customer experience, IT, Sales, Marketing, and third party data; Freshdesk Messaging integration with Google’s Business Messages that allows customers to connect over Google Search and Google Maps through a unified messaging interface; passwordless authentication to offer a secure and seamless login experience across Freshworks products, and a low code Integration with UiFlow to extend and integrate Freshworks products into business processes.

Freshworks realizes that today most consumer-facing businesses are exploring new ways to engage with customers across digital and social channels such as WhatsApp and text messaging. For the current year, it is prioritizing customer experience and CRM product enhancements around these market trends. It will increase efforts to drive conversational agent experiences and increase coverage of digital channels and offer self-service bots across various new channels.

Its second priority for the current year is the expansion beyond the ITSM market. It plans to increase its efforts in offering an integrated IT operations management solution that enables IT and engineering teams to anticipate service disruption, prevent outages, and minimize customer impact. It is targeting the $34 billion IT operations management market opportunity through this focus.

I think Freshworks should look at growing inorganically as well. It could look at acquiring AI-drive workflow automation players like Aisera. Palo Alto-based Aisera offers a product that sits on top of ticketing systems such as those offered by ServiceNow, Salesforce, Freshservice, and Zendesk. It uses AI to solve tickets automatically. Aisera’s offerings are helping enterprises reduce the effort spent on “mundane tasks”. It has a portfolio of 70 customers and 75 million users globally.

Freshworks’ stock is currently trading at $20.41 with a market capitalization of $5.37 billion. It reported a 52-week high of $53.36 in October last year and a 52-week low of $18.10 earlier this month.