Freshworks plunges after cutting annual revenue forecast, CEO transition

(Reuters) -Freshworks' shares plunged nearly 25% on Thursday after the CRM software maker cut its full-year revenue forecast and named a new CEO.

The company now expects annual revenue between $695 million and $705 million, compared with its previous forecast of $703.5 million to $711.5 million.

Freshworks said on Wednesday that Dennis Woodside will take over as CEO and founder Girish Mathrubootham will be the executive chairman.

Woodside joined Freshworks as president in 2022, with a prior professional record including president at Impossible Foods, chief operating officer at Dropbox and CEO at Motorola Mobility.

Freshworks offers an IT service management product called Freshservice, which assists businesses with employee onboarding and management.

The company, which once targeted a valuation of nearly $10 billion for its initial public offering, has seen its stock price lose more than 60% from its peak in 2021.

The stock's current losses are set to erase nearly $1.4 billion from the company's market value of $5.45 billion based on Wednesday's closing price.

"We like the move upmarket to enterprise ... we are stepping to the sidelines and will look for a better entry point upon signs of stability and GenAI clarity," brokerage Baird Equity said on Thursday.

Piper Sandler analysts flagged pressure on Freshworks' small and medium-sized business (SMB) customers.

"The SMB cohort continued to see pressure on expansion rates, customer adds and churn during Q1."

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shounak Dasgupta)