Freshworks sinks 13% after software maker forecasts lower annual revenue than expected in first quarterly report since IPO

Shares of customer service and support software maker Freshworks fell more than 13% in extended trading on Tuesday after releasing quarterly results for the first time following its initial public offering.

Here’s how the company did:

• Earnings: Loss of 4 cents per share, adjusted, vs. loss of 10 cents per share as expected by analysts, according to Refinitiv.
• Revenue: $96.6 million, vs. $90.8 million as expected by analysts, according to Refinitiv.

Revenue grew almost 46% in the quarter, Freshworks said in a statement.

The company said it sees an adjusted loss of 22 cents to 20 cents per share, less than the 23 cents per share that had been expected by analysts polled by Refinitiv. But for revenue, the company’s projection of $364.5 million to $366.5 million came in just below the Refinitiv consensus of $366.5 million at the middle of the range. That would reflect less than 37% quarterly revenue growth.

That might be fine for some companies, but Freshworks’ stock has risen quickly since it priced shares at $36 in September. Before the after-hours move, the stock had risen 39% since its debut. In the past year, investors have rushed to buy high-growth cloud stocks, with the WisdomTree Cloud Computing Fund rising 50%, while the S&P 500 index is up less than 40% over the same period.

Google invested in Freshworks multiple times as it continued to face competition from the likes of Oracle, Salesforce, SAP and Zendesk.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

WATCH: Zendesk CEO: How customer expectations have changed in the past decade