Shares of Freshworks Inc. (FRSH) surged 13.90% on Tuesday, propelled by the software company's impressive third-quarter performance and raised financial guidance for the full year 2024. The stock rally was driven by robust demand for Freshworks' AI-driven products that help businesses streamline IT services and enhance customer support.

For the third quarter ended September 30, Freshworks reported a 22% year-over-year increase in revenue to $186.6 million, exceeding analysts' estimates of $181.6 million. The company's adjusted earnings per share of $0.11 also surpassed expectations of $0.08. Freshworks credited the strong results to growing adoption of its AI-powered solutions like Freshservice for IT service management and Freshdesk for customer service.

Encouraged by the strong momentum, Freshworks raised its full-year 2024 revenue guidance to a range of $713.6 million to $716.6 million, up from its previous forecast of $707 million to $713 million. The company also lifted its annual adjusted profit per share outlook to 38 cents to 39 cents, higher than the prior guidance of 32 cents to 34 cents.