Financial Data and Key Metrics Changes - Freshworks reported Q3 2025 revenue of $215.1 million, a 15% year-over-year increase on both an as-reported and constant currency basis, exceeding previous estimates by approximately three points [5][20] - Non-GAAP operating margin expanded to 21%, five points above estimates, with a free cash flow margin of 27% [5][22] - Adjusted free cash flow for Q3 was $57.2 million, resulting in a 27% margin, an improvement of over 5 percentage points year-over-year [26] Business Line Data and Key Metrics Changes - Employee Experience (EX) business grew to over $480 million in ARR, representing 24% year-over-year growth [7][21] - Customer Experience (CX) business increased to over $390 million in ARR, reflecting 8% growth year-over-year [16][21] - The number of customers contributing more than $50,000 in ARR grew 20% year-over-year to 3,612 customers, representing over 50% of total ARR [23] Market Data and Key Metrics Changes - The number of new and expansion deals exceeding $50,000 in ARR increased by over 40% year-over-year [6] - The company added nearly 75,000 customers by the end of Q3, with over 260 net new customers added in the quarter [23] Company Strategy and Development Direction - Freshworks aims to reach $1.3 billion in ARR in the next three years, focusing on Employee Service Management (ESM), AI, and IT Asset Management (ITAM), each targeting over $100 million in ARR [6][12] - The company is expanding its ESM solution, FreshService for Business Teams, as a standalone product to target non-IT functions, which has already doubled its ARR to exceed $35 million [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformative AI opportunity, highlighting over 50 AI-driven applications currently in use by customers [6][12] - The company anticipates a one-time increase in spending during Q4 to expand its pipeline and drive customer acquisition, which may modestly impact operating margins [30] Other Important Information - Freshworks completed its inaugural $400 million share repurchase program, buying back approximately 27.9 million shares at an average price of $14.35 [26][27] - The company plans to discontinue reporting total customer count quarterly, shifting focus to larger customer measures that better reflect business trajectory [24] Q&A Session Summary Question: Discussion on selling ESM as a standalone solution - Management confirmed that FreshService for Business Teams has seen significant demand outside core IT departments, with a strong value proposition and no new Salesforce required for sales [34][36] Question: Insights on the buy-back program - Management completed the inaugural buy-back program and is open to discussing future capital allocation strategies, including potential M&A opportunities [37] Question: Balancing monetization versus adoption of Freddy AI tools - Management explained the different monetization models for Freddy AI products, indicating a shift towards higher pricing aligned with industry standards [39][41] Question: Government exposure and impact from the government shutdown - Management reported no impact from the government shutdown, noting continued success in landing government and university contracts [45] Question: Details on one-time investment in Q4 - Management clarified that the one-time investment is primarily for marketing and demand generation efforts to capitalize on strong demand for EX products [46] Question: Key differentiators in ITSM win rates - Management highlighted the enterprise-grade solution and flexibility of their offerings as key differentiators in winning larger deals against competitors [56][58]