Freshworks is now positioning itself as an artificial intelligence (AI) company, moving beyond its identity as a SaaS provider. “We really are an AI company today,” CEO Dennis Woodside told Moneycontrol in an interview, marking a year since he took charge in May 2024.
Woodside said over half of Freshworks' customers now use Freddy AI, the company’s suite of artificial intelligence tools. “As we move forward, every product we offer is going to have more and more AI capabilities built-in by default,” he said.
“Nine months ago, companies were curious about AI. Now, most decision-makers want to see immediate value from AI investments,” he said. AI is now central to product discussions, whether in customer support or IT deployments, he added.
Monetising AI
The company has also shifted its pricing models to capitalise on AI adoption. Freshworks now offers three primary pricing approaches — per-agent pricing, a software tier for AI co-pilots and consumption-based pricing for AI interactions called sessions.
“AI allows us to sell at higher price points. There’s a clear willingness to pay for AI-powered tiers and that’s already improving our monetisation,” Woodside said.
Freshworks is not seeing significant pricing discounts for its AI offerings. “We save agents 30 percent of their time, which is worth much more than the $29 a month we charge. That demonstrates the real value of the software,” he said.
Financial performance
In the first quarter of 2025, Freshworks reported revenue of $165.1 million, up 20 percent year-on-year. It posted a net profit of $11.4 million and has been improving profitability over the past four quarters.
Woodside said Freshworks remains on track to achieve GAAP profitability by 2026, as projected. “We’re getting more profitable on a non-GAAP operating profit basis and on a free cash flow basis every quarter,” he said.
Workforce efficiencies and structural changes
As AI takes over more repetitive tasks, Freshworks is seeing some reduction in workforce requirements. At the same time, the firm is also hiring for key roles, including AI research and development and engineering.
Woodside confirmed the company has seen about a 20 percent reduction in certain roles over two years due to AI automation. “We may not need as many people in some departments but we will always need customer support, sales, and marketing teams,” he said, adding the way work is done will continue to evolve as AI improves.
Freshworks has also restructured its internal teams to accelerate AI adoption. The company now has a head of AI for engineering and a head of AI for product management. “We are centralising AI resources to build from a common platform that can serve both customer support and IT teams,” Woodside said.
Growth focus and acquisitions
Freshworks is prioritising revenue growth over margin expansion. “Our margin profile is strong, and while we will continue to improve profitability, the real focus is driving the top line,” Woodside said.
The company is also open to acquisitions, particularly in AI. “Chances are, any business we acquire will have a strong AI component,” he said. Woodside said he is in discussions with smaller AI-focused companies, particularly those based in India, where the firm has a large engineering presence.
Freshworks plans to continue building industry-specific AI agents across sectors such as retail, e-commerce, and travel.
The company recently introduced pre-built AI agents that can be deployed out-of-the-box, with plans for a refreshed portfolio in six months.
“We’ve clarified our focus: AI-enabled customer service and AI-enabled IT service. That’s where we’re investing, that’s where we’re innovating,” Woodside said.
Despite broader concerns in the SaaS market, Woodside said Freshworks has not seen significant macroeconomic headwinds and continues to experience steady demand globally. “What we sell is not a nice-to-have. Companies need automation and AI to improve both their customer support and internal operations,” he said.
Freshworks, which has more than 73,000 customers, is aiming to expand its AI capabilities while maintaining consistent, profitable growth.
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