Freshworks Inc. (NASDAQ: FRSH) saw its stock surge 10.81% in pre-market trading on Wednesday following the release of its impressive first-quarter 2025 earnings report and raised full-year guidance. The company, which provides AI-driven customer engagement software, demonstrated strong financial performance and continued growth in demand for its services.

For the quarter ended March 31, Freshworks reported adjusted earnings of $0.18 per share, significantly surpassing the analysts' consensus estimate of $0.13 per share. This represents a substantial increase from $0.10 per share in the same quarter last year. Revenue for the quarter climbed 19% year-over-year to $196.3 million, exceeding Wall Street expectations of $192.0 million.

Buoyed by the strong results, Freshworks raised its full-year 2025 guidance. The company now expects annual revenue between $815.3 million and $824.3 million, up from its previous forecast of $809 million to $821 million. Additionally, Freshworks increased its annual adjusted profit per share forecast to a range of $0.56 to $0.58, surpassing analyst estimates.

The robust performance and optimistic outlook reflect growing demand for Freshworks' AI-powered software solutions. As businesses continue to digitize their operations, they are increasingly turning to AI and automation tools to enhance IT services and streamline workflows. Freshworks CEO Dennis Woodside noted that despite economic uncertainties, customers still require AI and automation for their operations, positioning the company favorably against higher-priced competitors.

Following the earnings release, JP Morgan raised its price target for Freshworks from $17 to $19, further bolstering investor confidence. The company's strong results and positive analyst sentiment have contributed to the significant pre-market stock price increase, indicating that investors are optimistic about Freshworks' growth prospects in the AI-driven software market.