Freshworks Earnings Call Transcripts
Fiscal Year 2026
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The meeting covered director elections, executive compensation, auditor ratification, and voting frequency. All proposals passed as recommended by the board, with final results to be filed on Form 8-K.
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EX is now the primary growth engine, targeting agile enterprises and driving a raised 2028 revenue target of $1.3B+ with mid-20s percent growth. AI innovation, operational efficiency, and capital discipline underpin improved margins and strong expansion within existing customers.
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The company is accelerating growth in its AI-enabled EX platform, expanding into enterprise and adjacent functions, while maintaining strong profitability and efficiency. CX is being consolidated onto a unified platform, with disciplined go-to-market and product focus. Operating margins and cash flow are improving, with continued investment in AI and infrastructure.
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Q1 2026 saw 16% revenue growth, strong EX momentum, and record large deals, with AI adoption accelerating and profitability exceeding expectations. Guidance for 2026 was raised, with adjusted free cash flow per share expected to grow 24% year-over-year.
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The company has transformed to focus on employee experience for mid-market IT, integrating AI and asset management to drive growth. AI adoption is accelerating, supporting higher retention and expansion, while upmarket wins and product unification continue. EX is set to dominate future strategy.
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Strong financial performance and robust growth are driven by EX products and strategic acquisitions. AI adoption is accelerating, with high attach rates and clear value demonstrated by increased net dollar retention. The company maintains high margins, a strong balance sheet, and is focused on optimizing both internal operations and customer value.
Fiscal Year 2025
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Achieved first full-year GAAP profitability and record free cash flow in 2025, with strong growth in Employee Experience and AI segments. 2026 guidance calls for 13.5–14.5% revenue growth, rising margins, and continued upmarket momentum, especially in mid-market and enterprise.
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Q3 revenue rose 15% year-over-year to $215.1 million, with strong growth in both EX and CX segments and robust AI-driven expansion. Non-GAAP operating margin reached 21%, and adjusted free cash flow margin was 27%. Full-year guidance was raised, and a $400 million share repurchase was completed.
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Revised summary: The event outlined a strategy centered on AI-native platforms for customer and employee experiences, with strong mid-market and enterprise growth. AI monetization is accelerating, new products are launching, and targets include $1.3B ARR by 2028 and GAAP profitability by Q4 2026. Customer feedback highlights rapid value and deepening partnerships.
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The conference highlighted strong EX growth, AI-driven product innovation, and a focus on upmarket expansion. Investments are prioritized for enterprise sales and AI, with M&A targeting adjacencies. Upcoming Investor Day will update on strategy and financial goals.
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Q2 2025 saw 18% revenue growth, margin expansion, and strong free cash flow, driven by robust EX and CX performance, rapid AI adoption, and a growing partner ecosystem. Guidance calls for continued double-digit growth and increased investment in H2 2025.
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AI adoption is accelerating, driving higher attach rates and expansion, especially in SMB. Product innovation, simplified pricing, and revamped partner strategies are fueling growth and competitive wins, while free-to-paid conversions and a focus on efficiency are boosting retention and ROI.
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Focus has shifted to employee experience and AI-driven innovation, with Freshservice now leading ARR growth. Operational rigor, a $400M buyback, and targeted acquisitions support efficiency and expansion. Updated growth targets and AI revenue impact will be detailed at the September investor day.
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The company is prioritizing its fast-growing employee experience segment, investing heavily in AI innovation, and working to stabilize and accelerate its customer experience business. AI products are driving significant productivity gains and new monetization models, while operational efficiency and a strong mid-market focus support robust financial performance.
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Q1 2025 saw 19% revenue growth, margin expansion, and strong AI adoption, with both EX and CX segments delivering robust ARR gains. Guidance for 2025 was raised, reflecting confidence in continued growth and profitability, while the company maintained a strong balance sheet and capital return strategy.
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Freshworks is accelerating growth in the mid-market and enterprise ITSM/EX space, driven by AI-enabled solutions and the Device42 acquisition. EX is the main growth engine, while CX is stabilizing with renewed product focus. Strategic investments and partnerships support upmarket expansion.
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The conference highlighted a strategic shift toward focusing on core customer segments, with EX products now outpacing CX in growth and ARR. AI offerings are driving productivity without reducing agent headcount, and recent acquisitions like Device42 are enhancing product capabilities.
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AI-powered service solutions for employee and customer experiences are driving growth, with strong adoption in new deals and a focus on product-market fit and affordability. Strategic realignment, including a 13% workforce reduction, supports investment in EX, AI innovation, and CX growth.
Fiscal Year 2024
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Q4 2024 saw revenue up 22% year-over-year, strong customer growth, and margin expansion, with EX and CX segments both performing well. AI adoption and Device42 integration drove upmarket momentum, while 2025 guidance points to continued double-digit growth and disciplined capital allocation.
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CX faces ongoing macro pressures but shows improved churn and customer growth, while EX remains the main growth engine. Strategic focus is shifting investments to EX, with AI and Device42 integration as key expansion drivers. Efficiency initiatives and a 13% headcount reduction support strong margin guidance.
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Q3 2024 saw 22% revenue growth, record free cash flow, and strong customer expansion, driven by EX and AI adoption. Guidance for 2024 and 2025 remains robust, with a $400M share buyback and workforce realignment to support strategic priorities.
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The company is experiencing strong global growth, driven by its AI-powered multi-product strategy and a leading IT solution growing over 30% annually. Recent acquisitions and leadership changes aim to enhance enterprise competitiveness and sales maturity.
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Q2 2024 saw 20% revenue growth to $174.1M, strong free cash flow, and margin expansion. AI adoption accelerated, with Freddy Copilot and Self-Service bots driving productivity and customer wins. Device42 acquisition expands IT capabilities, while guidance for 2024 was raised.