Freshworks announces 660 job cuts, $400 million share buyback, raise in earnings estimates; stock jumps
- Freshworks said it will trim 13% of its workforce, or 660 employees, globally. The company expects to book about $11 million to $13 million in restructuring charges in the fourth quarte.
Nasdaq-listed Freshworks share price jumped more than 28% after the company announced upbeat third-quarter results along with a $400 million share buyback. However, the Saas major also said it would lay off its 660 employees to streamline operations.
Freshworks said it will trim 13% of its workforce, or 660 employees, globally. The company expects to book about $11 million to $13 million in restructuring charges in the fourth quarter, Reuters reported.
It expects the restructuring plan will complete by the end of the fiscal year ending December 31.
Freshworks Q3 Results
Freshworks reported better than estimated third-quarter results, helped by demand for its AI-driven products.
The company’s adjusted profit per share of 11 cents for the third quarter ended September 30 beat estimates of 8 cents. The software firm’s revenue rose 22% to $186.6 million for the third quarter, compared with analysts' average estimate of $181.6 million, according to data compiled by LSEG.
The company raised its annual revenue and profit forecasts. Freshworks now expects annual revenue to be between $713.6 million and $716.6 million, up from its prior expectations of $707 million to $713 million, Reuters reported.
It also raised its annual adjusted profit per share forecast to a range of 38 cents to 39 cents, up from its previous forecast of 32 cents to 34 cents.
Freshworks forecast fourth-quarter revenue to be between $187.8 million and $190.8 million, the midpoint of which was in line with estimates, the Reuters report said.
Freshworks provides tools such as Freshservice, an IT service management software that helps businesses with employee onboarding and management and Freshdesk, a customer service tool designed to deliver fast solutions to customer issues.
The company has more than 68,000 customers, including Databricks, American Express, Nucor and Sony. It competes with companies such as Salesforce and ServiceNow.
$400 million share buyback announced
Apart from the Q3 results and workforce reductions, Freshworks announced that its board of directors approved a $400 million share buyback programme of its outstanding Class A common stock. However, the company has not yet disclosed a timeline for the share buyback.
(With inputs from Reuters)
Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Business NewsCompaniesNewsFreshworks announces 660 job cuts, $400 million share buyback, raise in earnings estimates; stock jumps
First Published:8 Nov 2024, 08:37 AM IST
- Top Gainers
- Top Losers
- 52 Week High