Freshworks Inc. CEO Dennis Woodside Discusses Strategic Focus and Growth Opportunities at JPMorgan Global Technology Conference

Key Takeaways

TL;DR: Freshworks (EX: Freshservice, CX: Freshdesk) prioritizes EX (+33%, $420M ARR) w/ AI monetization and CX stabilization. AI products show traction (Copilot: 2.7K customers; AI Agent: 1.6K) w/ high deflection rates (70-80%) and cost savings. Competitive wins vs. ServiceNow/Zendesk in the mid-market. FY guide: $820M rev., 26% FCF margins. India-based R&D drives margin expansion.

1. Employee Experience (EX: Freshservice) – $420M ARR (↑33% YoY)

• Growth Drivers: 1/3 new wins, 2/3 upsells (Device42, AI, ESM).
• Product Expansion:
  • Device42 (D42): Acquired Jun-2024; now a staple in large deals (~30-40% ACV step-up).
  • ESM: ~20% new seats from non-IT teams (e.g., HR onboarding automation).
• Market Position: Targets mid-market (e.g., 5K-employee cos.) w/ modern, flexible ITSM vs. legacy solutions (ServiceNow, BMC).

2. AI Product Traction – Key Monetization Driver

• Freddy Copilot (IT/CX): $29/seat adder; 30% productivity gain (↓ labor costs); 2.7K paying customers.
• AI Agent (CX): $0.50-$1.50/session; 50% ticket deflection (70-80% in IT); 1.6K customers.
• Future: “AI Insights” (GA in 2025) for manager analytics.

3. Customer Experience (CX: Freshdesk) – $370M ARR (↑7% YoY)

• Stabilization Focus: Product maturity (mid-market alignment) and cross-sell to EX customers.
• Competitive Wins: Rising win rates vs. Zendesk (complexity/cost issues).
• AI Opportunity: B2C deflection actions (e.g., returns/order changes) in development.

4. Financials & Operating Leverage

• FY Guidance: $820M rev. (↑19% YoY), 26% FCF margin.
• Margins: GP margin ~86%; India R&D (3K engineers) drives cost efficiency (↓1K staff since 2023).