Core Insights - Freshworks Inc. has introduced new capabilities in Freshdesk aimed at enhancing customer experience (CX) by reducing response times, improving resolution rates, and providing clearer insights into operational issues [1][2] Product Innovations - The update includes three main features: Freshdesk Command Center for centralized multi-channel customer interactions, Vertical AI Agents with prebuilt workflows for various industries, and Freddy AI Insights for real-time operational visibility [2][4] - Freshdesk Command Center integrates multiple communication channels and AI capabilities into a single workspace, streamlining customer service operations and reducing manual data retrieval [5][6] - Freddy AI Insights offers leaders real-time visibility into performance trends and anomalies, enabling proactive management of support operations [8] Industry Challenges - A report by Freshworks highlights common challenges faced by customer service agents, including uncustomizable workflows (42%) and excessive tools (36%), which hinder productivity [3] - The need for organizations to quickly design and deploy AI agents is emphasized, as current processes are often time-consuming and inefficient [10] Customer Success Stories - Companies like Gail's Bakery and Upayments have reported significant improvements in efficiency and customer service quality through the use of Freshworks' AI capabilities, with some achieving up to 80% resolution of service issues by AI agents [9][13]

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]

Q3 2025 Earnings Presentation November 5, 2025 © 2025 Freshworks Inc. All rights reserved. Disclaimer This presentation has been prepared by Freshworks Inc. ("Freshworks") for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise, or representation by Freshworks or any officer, director, employee, agent, or advisor of Freshworks. This presentation does not purport to be all inclusive or to contain all of the ...

Core Insights - Freshworks has appointed Enrique Ortegon as the new Senior Vice President and General Manager of Americas Field Sales to enhance growth and customer expansion across North and South America [1][2] - Ortegon brings over two decades of experience in enterprise SaaS and go-to-market strategy, having previously held senior roles at DocuSign and Salesforce [2][3] - Freshworks aims to deliver exceptional customer and employee experiences through its uncomplicated service software, which is trusted by over 74,000 companies [4] Company Strategy - The company focuses on a growth strategy that emphasizes operational excellence and strategic vision to accelerate regional growth [2] - Freshworks' value proposition is centered around simplicity and superior return on investment, distinguishing it from competitors in the employee and customer experience markets [3] Leadership Background - Enrique Ortegon has a strong track record in scaling businesses from SMB to enterprise levels and has significant operating experience across the Americas [2] - His previous roles include leading North America Majors, Mid-Market, and SMB businesses at DocuSign, and various senior leadership positions at Salesforce [2] Community Engagement - Beyond corporate roles, Ortegon advises startups and an investment fund focused on empowering Latin entrepreneurs and supporting underrepresented communities [3]

Core Viewpoint - Freshworks Inc. is considered one of the best low-priced technology stocks to buy, with a focus on long-term financial targets and an updated outlook from UBS analyst Taylor McGinnis, who reiterated a Buy rating and a $19 price target [1][3]. Financial Targets - The company aims to exceed $1.2 billion in revenue by FY 2028, indicating an annual growth rate of 15%-16%, and targets free cash flow of over $340 million, with a margin of 28%-30% [2]. Analyst Insights - McGinnis noted that while there are execution risks due to challenges from seat-based SaaS models and rising AI adoption, the valuation of Freshworks remains attractive, particularly for CY 2026, with an EV/Sales ratio of approximately 3x and an EV/FCF ratio of 13x [3][5]. - Despite not adjusting the FY 2025 forecast, UBS has lowered the free cash flow margin forecast to 30% from 32% and set revenue growth at the lower end of management's range [4]. Company Overview - Freshworks Inc. operates as a SaaS provider, offering customer engagement and IT service management solutions through products like Freshdesk, Freshservice, and Freshsales [6].

Freshworks Investor Day 2025 Summary Company Overview - **Company**: Freshworks (NasdaqGS:FRSH) - **Event**: Investor Day 2025 - **Date**: September 11, 2025 - **Focus**: Uncomplicated AI-native service platform for customer and employee experiences Core Industry Insights - **Industry**: Software as a Service (SaaS) focusing on IT and customer service - **Market Size**: Total addressable market for EX (Employee Experience) and CX (Customer Experience) software is estimated at **$80 billion** [22] - **Target Market**: Mid-market and lower-end enterprise customers, which account for over **$10 trillion** in economic activity in the U.S. alone [22] Key Company Highlights - **Growth Metrics**: - Recurring revenue increased from approximately **$560 million** to **$840 million** in two years [10] - Achieved Rule of 45 milestone ahead of schedule [10] - AI monetization grew to **$20 million**, doubling in the last year [10] - 25% revenue growth from customers spending over **$100,000** [12] - Majority of revenue now from mid-market and enterprise customers [11] - **Product Portfolio**: - **Freshservice**: AI-powered platform for IT and employee services - **Freshdesk**: AI-powered customer service solution - **Freddy AI**: Includes Freddy AI Copilot, Freddy Insights, and Freddy AI Agents for enhanced customer and employee support [9] Strategic Focus Areas - **AI Integration**: Continuous infusion of AI across core products to enhance value and solve more problems [57] - **Vertical Expansion**: Focus on sectors like education, healthcare, and government [57] - **Add-on Products**: Scaling IT asset management and enterprise service management (ESM) products [58] - **Adjacency Expansion**: Exploring areas like AI Ops and SecOps for future growth [59] Customer Base and Testimonials - **Diverse Customer Base**: Over **74,000** companies including Fortune 500 firms like Panasonic and various government entities [6][7] - **Customer Success Stories**: - **Big Bus Tours**: Transformed customer service center into a profit center using Freddy AI [63] - **Modamax**: Unified IT operations and improved onboarding processes through Freshservice [51][52] Financial Outlook - **Future Projections**: On track to achieve over **$1.3 billion** in recurring revenue by 2028 with strong cash flow and operating margins [21] - **Sustained Growth**: EX business expected to sustain **20% growth** for years [21] Conclusion - Freshworks is positioned to capitalize on the growing demand for uncomplicated, AI-driven solutions in the SaaS market, with a clear strategy for growth and a strong commitment to customer success. The company aims to continue its upward trajectory by leveraging its innovative product offerings and expanding into new market segments.

Financial Performance & Growth - Freshworks' ARR exceeded $840 million[24], with a 2-year CAGR of 20%[24] - The company achieved 18% YoY revenue growth and a 27% adjusted FCF margin in Q2 2025[24] - Freshworks is on track for $1.3 billion+ ARR by 2028[34] - The company projects revenue between $822.9 million and $828.9 million for 2025, representing 14%-15% YoY growth[232] - Non-GAAP income from operations is projected between $153 million and $157 million for 2025[232] Customer Base & AI - Freshworks has 74,000+ paying customers across 120+ countries[21] - Mid-market and Enterprise customers account for >60% of total ARR[24] - Freddy AI is now a >$20 million ARR business[24, 96] Employee Experience (EX) - EX remains a durable 20%+ growth engine[34] - EX customers with >$100K ARR increased by 32% YoY[58] - Databricks achieved 23% ticket deflection via self-service using Freshworks[61]

Freshworks (FRSH) FY Conference Summary Company Overview - Freshworks is a software company founded in 2010, primarily known for its Freshdesk product line, which has evolved to include AI-powered software for employee-facing (EX) and customer-facing (CX) products [3][4] - The company serves over 74,000 customers, focusing on IT and customer support teams to enhance efficiency and effectiveness [4] Financial Performance - The EX business has surpassed $450 million in revenue, growing over 22% year-over-year in constant currency, with approximately 19,000 customers [5] - The CX business has an annual recurring revenue (ARR) of over $380 million, growing 8% in the last quarter, up from 7% previously, with around 60,000 customers [6] Strategic Focus - The company is prioritizing the EX segment for growth, leveraging its competitive advantages against established players like ServiceNow [12][29] - AI integration across all products is a key strategy, with $20 million in ARR attributed to AI capabilities [13][36] - Freshworks aims to enhance its CX business by improving execution and focusing on the SMB and mid-market segments [14] Competitive Positioning - Freshworks differentiates itself by providing user-friendly, easy-to-implement software at competitive prices, targeting both SMBs and larger enterprises [15][16] - The company sees a significant opportunity in the underserved upmarket, primarily dominated by ServiceNow, which offers complex and expensive solutions [50][51] Sales and Marketing Strategy - Freshworks has two distinct sales motions: one for CX, primarily managed from India, and another for EX, focusing on enterprise sales [28][29] - The company is investing in building its enterprise sales capabilities and optimizing its marketing strategies to drive demand across both segments [30][31] AI Integration and Impact - AI is viewed as an accelerant for Freshworks, enhancing product utility and customer experience while potentially reducing the need for additional hiring among customers [36][46] - The company is focused on integrating AI features that improve agent productivity and customer engagement [41][43] Customer Base and Market Opportunities - Freshworks is expanding its customer base, targeting organizations of various sizes, from small businesses to large enterprises [58] - The company is also exploring adjacent markets, such as employee service management (ESM), to capture additional growth opportunities [60] M&A Strategy - Freshworks is open to pursuing mergers and acquisitions to enhance its product offerings, particularly in areas like security operations and IT operations [62][66] - The acquisition of Device 42 is highlighted as a successful example of entering a new market segment [64] Upcoming Events - Freshworks will hold an Investor Day on September 11, 2025, to provide updates on product strategy, financial goals, and market positioning [70][74] Conclusion - Freshworks is strategically positioned for growth in the EX market, leveraging AI and a strong customer base while addressing the competitive landscape effectively. The focus on execution, product innovation, and market expansion will be critical for its continued success.

Core Viewpoint - Freshworks reported strong Q2 2025 financial results, exceeding revenue and earnings expectations, driven by operational improvements and AI product adoption [1][5][14] Financial Performance - GAAP revenue reached $204.7 million, surpassing estimates of $198.8 million, marking a 17.6% year-over-year increase from $174.1 million [2][5] - Non-GAAP earnings per share were $0.18, significantly above the expected $0.11 and up 125% from $0.08 in Q2 2024 [2][5] - Non-GAAP income from operations was $44.8 million, a 241.2% increase from $13.1 million in the same quarter last year [2][6] - Adjusted free cash flow increased by 65.5% year-over-year to $54.3 million, with operating cash flow climbing to $58.6 million, up 61.4% [2][6] Profitability Metrics - Gross margin improved to 84.8%, up from 83.8% a year ago, while non-GAAP operating margin reached 21.9%, up from 7.5% [7][6] - Free cash flow margin improved to 26.5%, reflecting effective cost control relative to revenue [6] Customer Growth - The number of customers generating over $5,000 in annual recurring revenue increased by 10% year-over-year to 23,975, indicating strong long-term revenue retention potential [8] - Net dollar retention remained steady at 106%, reflecting stable customer spending [8] AI Developments - The Freddy AI suite surpassed $20 million in annual recurring revenue, showcasing the success of AI-driven solutions [9] - Freshworks launched the Freddy AI Agent Studio, a no-code tool for businesses to create AI-powered automation agents [9] Market Positioning - Freshworks secured a multi-year partnership with McLaren Racing, enhancing its visibility in enterprise sales and competing against larger SaaS vendors [10][11] - The company continues to focus on integrating AI features across its software offerings, utilizing a product-led growth strategy [4] Future Guidance - Management raised revenue guidance for Q3 2025 to between $207.0 million and $210.0 million, projecting 11-12% year-over-year growth [14] - Full-year revenue is expected to be in the range of $822.9 million to $828.9 million, indicating 14-15% growth [14] - Non-GAAP operating income is anticipated to rise to $153.0–$157.0 million, with earnings per share forecasted at $0.56–$0.58 [14] Competitive Landscape - The company faces competitive dynamics as larger software firms introduce their own AI features, which may impact customer adoption rates of Freshworks' AI modules [16]

Financial Data and Key Metrics Changes - Freshworks reported Q2 revenue of $204.7 million, an 18% year-over-year increase, with a non-GAAP operating margin of 22%, up over 14 percentage points from the previous year [6][28][30] - Adjusted free cash flow grew 65% year-over-year to $54.3 million, resulting in a free cash flow margin of 27% [27][34] - Total customers increased to over 74,600, with a net addition of over 1,300 customers in the quarter [32][33] Business Line Data and Key Metrics Changes - Employee Experience (EX) business achieved over $450 million in ARR, representing 24% year-over-year growth [8][28] - Customer Experience (CX) business grew to over $380 million in ARR, reflecting an 11% year-over-year increase [18][29] - Professional services revenue contributed $2.7 million in Q2, driven by strong bookings and project completions [28] Market Data and Key Metrics Changes - The company experienced healthy demand across its diversified customer base, with no specific industry overrepresented [67] - The global partner program contributed to over one-third of ARR in Q2, with 130 new partners onboarded [24][55] Company Strategy and Development Direction - Freshworks focuses on three key growth drivers: investing in employee experience, delivering AI capabilities, and enhancing customer experience [7][13] - The company aims to expand its enterprise service management solutions, which could represent a $100 million opportunity [11][12] - Freshworks is actively integrating AI into its products, with over 5,000 customers now paying for AI-related offerings, resulting in an ARR of over $20 million [14][72] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business's momentum and the strong demand for their products, despite macroeconomic uncertainties [68] - The company anticipates continued growth in the second half of the year, supported by investments in sales and marketing [40] Other Important Information - Freshworks repurchased 8.2 million shares at an average price of $13.89 per share, totaling nearly 15.9 million shares repurchased to date [35][36] - The company expects to generate approximately $215 million in adjusted free cash flow for the full year 2025 [34] Q&A Session Summary Question: AI agent consumption relative to expectations - Management indicated that AI is pacing at or slightly ahead of internal expectations, with good traction seen in AI products introduced recently [42][43] Question: Q3 guidance and EX growth expectations - Management clarified that while EX growth is strong, the comparison to previous quarters is affected by the anniversary of the Device 42 acquisition [46][50] Question: Long-term contribution of the global partner program - Management noted that the partner channel is expected to contribute a greater percentage of business over the next few years, with a balanced impact across EX and CX [55][57] Question: Macro environment impact on customer conversations - Management reported strong demand across the board, with a diversified revenue base mitigating risks from tariffs and economic uncertainties [66][68] Question: AI Copilot and agents revenue evolution - Management highlighted that AI adoption is still early, with significant growth potential as more customers begin to utilize AI capabilities [71][72] Question: Device 42's impact on net dollar retention - Management acknowledged that Device 42 had a negative impact on net dollar retention due to expected churn, but overall expansion trends remain positive [87][89]