Freshworks tops revenue estimates as lower-priced offerings boost demand

(Reuters) – Freshworks Inc beat quarterly revenue estimates on Tuesday and posted its first adjusted operating profit as more businesses sought its lower-priced customer engagement software in a tough economy.

Rising interest rates, high inflation and a banking crisis have worsened the global economic outlook in recent months, forcing businesses to slash their technology budgets.

Freshworks, whose products compete with Salesforce (NYSE:) Inc and Zendesk (NYSE:), told Reuters that the downturn was driving more companies to its more affordable offerings.

The San Mateo, California-based company’s revenue rose 20% in the first quarter ended March to $137.7 million, compared with analysts’ estimates of $134.3 million, according to Refinitiv.

It posted an adjusted operating profit of $3.9 million. Net loss narrowed to $42.7 million, from $49.1 million a year earlier.

The company forecast second-quarter revenue largely in line with estimates, while its forecast for adjusted profit was above estimates.