Item 1. Business
Item 1. Business
Overview
We provide people-first, AI service software that organizations use to deliver exceptional customer and employee experiences. We provide our solutions in two product families: Customer Experience (CX) and Employee Experience (EX). CX products include Freshdesk, Freshdesk Omni, Freshchat, Freshsales, and Freshmarketer. EX products include Freshservice, Freshservice for Business Teams and Device42. Our generative AI offerings, Freddy AI Agent and Freddy AI Copilot, further enhance the customer and employee experience. Freddy AI Agent offers always-on, autonomous, personalized resolutions to customer and employee queries. Freddy AI Copilot provides always-on contextual assistance for customer support, employee support, marketing and sales use cases, designed to boost productivity. Currently, over 72,000 companies use Freshworks' uncomplicated solutions to increase employee efficiency and customer loyalty.
Our solutions and platform are enterprise-grade without the enterprise complexity. Our fresh approach to EX and CX software is designed to be easy to use and ready to scale and to deliver rapid time to value to companies of all sizes. With an increased ability to delight customers and employees, Freshworks' customers have improved retention, achieved higher customer satisfaction scores and better business outcomes.
Our secure and native AI enables businesses to stay ahead of the curve with the latest technologies and is designed to deliver a tangible return on investment. Built to deliver exceptional customer experiences and employee experiences, Freddy AI has helped users in customer support and IT autonomously resolve service requests.
Businesses from approximately 170 countries around the world use Freshworks products to delight their customers and employees every day. As of December 31, 2024, over 60% of our annual recurring revenue (ARR) was from customers with more than 250 employees. We provide products across multiple markets in order to address the needs of businesses of all sizes that need to digitally transform to delight their customers and employees.
Our business has grown significantly in recent periods as our customer base and operations have scaled. Our total revenue was $720.4 million, $596.4 million and $498.0 million in the years ended December 31, 2024, 2023 and 2022, respectively, representing year-over-year growth rates of 21% and 20%, respectively.
Our Business Model
Product-led growth (PLG) is the core foundation of Freshworks and has helped us serve organizations of all sizes. The simplicity and powerful functionality underpinning our Freshworks solutions act as the primary driver of customer acquisition, conversion, and expansion by driving trials of our products that we supplement with our inbound and outbound sales motions. Our pricing is transparent, affordable, and easy to understand, reducing the length of sales cycles and increasing the efficiency of marketing and sales. This enables us to disrupt the traditional top-down sales motion, letting users, not executives, designate Freshworks as their software of choice.
Our go-to-market approach allows us to respond to how businesses want to buy our products. This flexible approach capitalizes on the strong user-driven adoption and user love for our products with a dedicated focus on driving successful adoption and expansion within organizations and divisions of large organizations. We offer our products under both free and paid subscription plans, further reducing friction to adoption and accelerating our go-to-market motion.
We focus our go-to-market motion on businesses based on their size:
• Small- and Mid-Sized Businesses (SMB) (organizations with 250 or fewer employees): We service our SMB customers through inbound and partner demand generation, which is low-cost, low-touch, and self-service.
• Mid-Market (organizations with 251 to 5,000 employees): We service our mid-market customers through inbound, outbound and partner demand generation.
• Enterprise (organizations with 5,001 or more employees): We service our enterprise customers through inbound, outbound and partner demand generation. We focus on serving divisions or departments within enterprises.
We have three go-to-market motions to attract customers:
• Inbound motion : Our inbound motion is the primary way we sell to organizations, regardless of the organization’s size or industry. We rely on efficient search marketing and word of mouth to encourage individual users or small teams
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within an organization to discover, try, and purchase our products. We drive potential customers to our website as the primary channel to learn about our solutions and we offer 14-day free trials of our products, giving potential customers flexibility to try before they buy.
• Outbound motion : This approach is focused on mid-market and enterprise organizations. We rely on three main groups to drive our outbound business: outbound marketing, sales development representatives, and field sales representatives. We utilize our outbound motion in conjunction with our inbound efforts to help accelerate the adoption of our products, and the increased usage of our products within existing customers.
• Partner ecosystem : Our growing partner ecosystem enriches our offerings, scales our geographic coverage, and helps us reach more EX and CX buyers, thus amplifying our go-to-market investments. Our partner ecosystem consists of channel resellers, independent software vendors (ISV) and marketplace partners, including developers.
Once a business has purchased a subscription to one of our products, we activate our customer success programs that are aligned with the size and scale of each customer and are designed to ensure businesses are getting the most out of their subscription. We provide digital onboarding directly or with partners to all customers. We conduct health checks and business reviews, monitor customer satisfaction and Net Promoter Scores, and identify gaps to proactively address any concerns. Our customer success team is also responsible for customer renewals and for identifying expansion opportunities.
Products and Capabilities
Freshworks provides solutions that serve the needs of users in the CX and EX categories. These product offerings enable organizations to acquire, engage, and better serve their customers and employees.
For customer-facing teams, we offer our AI-powered, CX family of products, including Freshdesk, Freshdesk Omni, Freshchat, Freshsales, and Freshmarketer. These products allow businesses to deliver effortless, self-service resolutions for their customers, a unified workspace for their agents, and performance insights for their leaders.
For IT and employee-facing teams, we offer our AI-powered EX family of products, including Freshservice, Freshservice for Buisness Teams and Device42. Freshservice is our unified IT Management platform that combines IT Service management, IT Operations management, IT Asset Management and Employee Service Management on the same platform. Freshservice provides both the intelligence and automation organizations need to give employees the “consumer” like experience they now expect. With Freshservice for Business Teams, this platform also extends to non-IT departments like HR, Facilities and Legal.
All of our products leverage the Freshworks platform, which provides shared services that enable us to rapidly innovate and release new capabilities. This includes Freddy AI, our generative AI-powered suite of services, that enable organizations to more efficiently deliver customer and employee delight at scale. Organizations can also use the Freshworks developer platform and marketplace to extend and integrate Freshworks into their existing systems and advanced analytics to gain insights that help them run their business more efficiently.
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Freshworks Solutions Overview
Customer Experience Offerings
Freshworks has a unified platform for CX that includes products for Customer Service (CS) and Sales & Marketing automation (S&M).
Customer Service Product Offerings
Freshworks offers various products to address specific use cases across CS. These are:
• Freshdesk Omni . Freshdesk Omni, formerly known as Customer Service Suite, brings everything businesses need to deliver seamless omnichannel support into a single solution that is quick to deploy, easy to use, and simple to manage. Plus, powerful AI capabilities help deliver exceptional support at scale by quickly solving customer issues, supercharging agent productivity, and providing proactive insights to managers and leaders. Businesses can transform the customer experience and resolve issues faster than ever before with Freshdesk Omni.
• Freshdesk. Freshdesk is a comprehensive ticketing and case management solution that lets businesses resolve customer issues fast. Businesses can delight customers with easy email experiences and self-service across dedicated portals and their websites, all powered by a robust knowledge base. They can intelligently route tickets and collaborate seamlessly with team members to ensure quick and accurate resolutions. Freshworks' powerful AI means customer service agents get more done, and customers get exceptional service every time.
• Freshchat. Freshchat provides agents with a modern conversational experience to proactively engage customers across digital messaging channels such as WhatsApp, Google Business Messages, SMS, and more. Freshchat enables automated and personalized self-service for fast resolutions. When an issue requires agent support, a customer is seamlessly transferred to an agent. Agents are equipped with a full customer context and AI productivity tools to deliver fast resolutions. Leaders gain unified dashboards and reports to drive team performance. Freshchat is commonly included as part of the complete CS, Sales & Marketing, and ITSM offerings.
Freddy AI Agent for CS provides always-on, conversational assistance to customers, enabling customers to resolve issues quickly and efficiently across channels. Available in multiple languages, Freddy AI Agent is designed to be easy to deploy and manage. Businesses can simply connect their knowledge sources (documents, PDFs, public URLs) to get started, with no requirement for complex decision tree flows or heavy setup efforts. Freddy AI Copilot acts as a coach and collaborator that
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helps boost agent productivity and performance by summarizing tickets and conversations, suggesting responses, and providing quality coaching and feedback after every interaction
Sales and Marketing Automation Offerings
Freshworks also offers a sales automation product Freshsales and a marketing automation product called Freshmarketer.
• Freshsales . Freshsales is an easy-to-use, AI-powered sales CRM that helps businesses enhance productivity and drive revenue growth. The powerful CRM transforms the sales experience with 360-degree customer context, equipping sales teams with real-time relevant information. It offers personalized engagement, accurate forecasting, and intelligent workflows to improve sales performance and deliver exceptional customer experiences. With powerful AI capabilities, Freshsales helps sales teams prioritize high-intent leads, scale personalized outreach, and identify critical deals to take the next best action to accelerate sales cycles. Freshsales is a trusted choice for businesses of varying sizes, offering the flexibility and scalability necessary to adapt to dynamic market conditions and excel in today's competitive landscape.
• Freshmarketer . Freshmarketer is an easy-to-use marketing automation platform designed to help businesses attract, nurture, convert, and retain customers. It empowers businesses to connect with customers across their preferred channels—email, SMS, WhatsApp, or social media — driving higher engagement. With AI-driven campaign creation, advanced segmentation and personalization, real-time automated journeys, and in-depth analytics and reporting, Freshmarketer enables businesses to maximize their marketing ROI. Additionally, it offers conversational marketing tools like live chat and chatbots, along with features for landing page customization and conversion rate optimization, making it a complete solution for all marketing requirements.
IT and Employee Service Management (ITSM) Product Offerings
Freshservice is a unified, AI-powered solution with essential IT and employee service management capabilities that empower our customers to provide reliable and consistent services company-wide.
• Freshservice . Freshservice delivers the capabilities IT leaders need to manage the entire IT estate, including IT Service Management (ITSM), IT Operations Management (ITOM), and IT Asset Management (ITAM), on the same platform, enabling collaboration across teams without complexity. Freshservice streamlines IT service delivery, providing a unified approach to incident, request, knowledge, change, and problem management. Our service-aware IT operations management provides integrated alert management by processing large amounts of machine-based system monitoring data to put the focus on critical areas and drive fast resolution. It also helps our customers manage major incidents, get on-call management and track service health. Asset management helps gain infrastructure visibility and optimize the assets used to provide services on-premises, hybrid, and cloud. Freshservice also offers powerful dashboards and analytics functionality to improve service delivery.
Freshservice harnesses the power of AI to transform the way employees, service agents, and business leaders work by replacing forms, lists, and queries with conversational, collaborative, and omnichannel experiences. Freshservice can leverage virtual agents called Freddy AI Agents designed to provide always-on, trustworthy and conversational service to help employees resolve issues, make requests, and answer questions without contacting the service desk. Freshservice also utilizes Freddy AI Copilot and is designed to increase agent productivity by automating routine work like summarizing tickets, generating responses, and creating consistent tone and clarity of responses.
• Freshservice for Business Teams . Freshservice for Business Teams provides a unified employee service experience while ensuring the secure separation of departmental data. Freshservice for Business Teams enables non-IT departments like HR, Finance, Facilities, and Legal to benefit from service management and workflow automation.
• Device42 . D42 Parent, Inc., a Freshworks company, provides advanced IT discovery and dependency mapping. Device42 is designed to continuously discover, map, and provide complete visibility across on-premises and cloud IT environments. With its built-in AI capabilities and reporting, Device42 helps customers get answers fast and insights that help them solve problems faster, maintain compliance requirements, reduce risk, and ensure business continuity.
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The Freshworks Platform
The Freshworks platform is the AI-powered, enterprise-grade foundation for all Freshworks products. Key components of our platform include an AI engine, a Developer platform, the Freshworks Marketplace, analytics service and unified customer experience services.
• Freddy AI is Freshworks' native AI engine that brings the power of generative AI to all Freshworks products. Customers are able to gain personalized support via Freddy AI Agent, contextual user assistance via Freddy Copilot, and actionable insights via Freddy Insights.
• The Developer platform allows businesses to extend the Freshworks product experience by enabling them to build apps with our toolkits and comprehensive documentations, supported by a thriving community. Freddy Copilot for developers, our latest generative AI capability, helps significantly accelerate the app development process.
• The Marketplace, a curated collection of over 1,200 apps, offers plug-n-play extensibility to Freshworks products. These applications cover a wide range of categories including agent productivity, collaboration, data sync, data migration, workflow automation, etc. and can be accessed directly from the product user-interface.
• The analytics service, an AI-powered no-code engine, enables users to analyze data, create data visualizations, and derive insights and actionable recommendations.
• The unified customer experience services are a combination of shared capabilities that enable a unified experience natively inside our products. These services include an Admin Center to centrally manage security and billing for our products, UCR to power a holistic view of the customer, Custom Objects to bring in the customers’ business critical data into our products and Conversations to unify B2B and B2C channels.
Technology
Freshworks products are cloud-native SaaS systems that are based on modern, proven technologies—Ruby on Rails, Java, and MySQL. Leveraging these and other open source technologies, our systems are built to operate as independent ‘pods’ of compute, storage, and database infrastructure. Our products are hosted in AWS regions in the United States, EU, India, Australia, and the United Arab Emirates.
In addition to their ease of use and functionality, the key characteristics of Freshworks products are:
• Scalability : As multi-tenant systems, our products are engineered to scale with increased usage by businesses and an increasing number of customers. Our products are architected to be horizontally scalable across compute and database infrastructure. We leverage the open source Kubernetes system for automated scaling of our containerized applications. Our independent ‘pod’ architecture enables our products to be provisioned across geographically distributed data centers, for additional scalability and data localization.
• Reliability : Our products are engineered with reliability as a key consideration from design through all phases of development and operation. We run our SaaS service with the built-in redundancy of independent ‘pods’ across multiple data centers within an AWS region, to provide continuity of service in the face of infrastructure disruptions in individual data centers. Every new version of our software undergoes stringent functional, security, and regression testing, and is deployed through controlled processes to production. Following the infrastructure-as-code allows for repeatable and reliable infrastructure provisioning. Our products are monitored for performance and anomalies 24x7 by a Network Operations Center to provide for system availability and prevent abuse.
• Security : We are ISO 27001 certified and SOC 2 Type 2 certified. Our cybersecurity program is based on the concept of defense-in-depth and focuses on securing data at every layer. Our security posture is maintained by utilizing both enterprise technologies and customized open-source solutions designed to identify, detect, and prevent cybersecurity threats, as well as 24x7 monitoring for malicious activity. Our cybersecurity program encompasses product security, security architecture and engineering, cloud security, penetration testing, third-party risk management, and customer support. Our production network and systems are accessible only to authorized Freshworks personnel.
• Efficiency : Our multi-tenant architecture delivers economies of scale, ensuring improved utilization of cloud infrastructure as businesses and customer usage grows. Our governance process is geared to identify and implement infrastructure and production architecture optimizations, and effectively utilize the capabilities of our technology and cloud vendors.
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Research and Development
Our engineering and product teams are customer-oriented and work alongside businesses to deliver high value, high-quality features and functionality across the numerous products we support, including customer-requested features that would be valuable across our customer base. We deliver these product features and capabilities through Freshwave, our adaptation of the agile software development methodology, balancing development velocity, roadmap predictability and product quality. Our internal ‘Idea-To-Product’ process for rapid solutioning of product requirements is a key enabler of innovation and collaborative development. The choice of expressive and powerful development frameworks and languages in our technology stack enables us to innovate at scale across multiple products.
We have a research and development presence in both the United States and India, which we believe is a strategic advantage for us, allowing us to efficiently invest more in increasing our product capabilities.
Sales and Marketing
The foundation of our go-to-market strategy is a highly efficient inbound motion driven by PLG, as well as paid campaigns and search engine optimized (SEO) content marketing, affiliates and listings across peer review sites to drive organic traffic. Leads are ushered into a trial where they experience in-app triggers, lifecycle emails and functionality that prompts conversion to paying customers. We layer in both an outbound sales and marketing motion, as well as a partner-led sales distribution strategy to increase success across the breadth of our market opportunity. We have continually increased investments in our outbound sales and marketing efforts globally. Our sales teams are organized by customer size, targeting SMBs with a highly efficient, cost-effective sales organization based in Chennai, in region sales teams focused on our larger customers, and partner-selling teams supporting our partners in other geographies.
Our marketing efforts are primarily focused on generating high-quality leads and building our sales pipeline through a combination of growth marketing and brand acceleration programs across online and offline channels. Our digital and content marketing teams generate strong inbound demand through effective paid, social media, and SEO tactics that support website traffic growth and conversions. We also market our solutions through targeted online events and webinars, along with offline events across different regions, including trade shows, roadshows, and our own flagship global user conference, Refresh. Our events are designed to promote favorable word of mouth, discovery, and demand generation. Our customer marketing team specifically focuses on accelerating engagement, growth, and advocacy from our growing base of customers, while also driving engagement with our online community. Finally, our press and analyst relations efforts help generate additional awareness and validation to accelerate and support the customer buying cycle.
Competition
The markets in which we operate are highly competitive. A significant number of companies have developed or are developing products and services that currently, or in the future may, compete with some or all of our offerings. Many of these services do not offer complete solutions—often they provide a feature comparable to a component of our platform (e.g., only customer service management, only IT service management, only Sales and Marketing). For our CX products, with regards to CS, we primarily face competition from CS suites, such as Salesforce, Zendesk, and legacy vendors, such as Oracle and SAP, and with regards to customer relationship management, we primarily face competition from full-featured vendors, such as Salesforce, HubSpot, and Microsoft Dynamics, legacy vendors, such as Oracle, SAP, and Sage. For our EX products, we primarily face competition from traditional vendors, such as ServiceNow, BMC, Ivanti/Cherwell, and modern pure-play vendors, such as Atlassian.
We believe we compete favorably based on the following competitive factors:
• designed for the user;
• lesser time to realize value of investment;
• unified experience;
• modern, end-to-end, and extensible platform;
• designed for businesses of all sizes;
• intelligent, automation-first and AI/ML-powered solutions;
• product-led go-to-market motion;
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• fast to go-live;
• easy and intuitive; and
• affordable pricing.
Governmental Regulations
Our business is and will continue to be subject to extensive U.S. federal and state and foreign laws and regulations, including laws and regulations involving privacy, data protection, security, intellectual property, competition, taxation, anti-corruption, anti-bribery, anti-money laundering, and other similar laws. Many of these laws and regulations are still evolving and are likely to remain uncertain for the foreseeable future, and these laws and regulations can vary significantly from jurisdiction to jurisdiction. The costs of complying with these laws and regulations are high and likely to increase in the future. Further, the impact of these laws and regulations may disproportionately affect our business in comparison to our competitors that have greater resources.
In the United States, we are subject to data security and privacy rules and regulations promulgated under the authority of the Federal Trade Commission, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the California Consumer Privacy Act of 2018 (CCPA), the California Privacy Rights Act (together with the CCPA, collectively, the California Privacy Regulations), and other state and federal laws relating to privacy and data security. The California Privacy Regulations require covered businesses to provide new disclosures to California residents and to provide them new ways to opt-out of the sale of personal information, and provide a private right of action and statutory damages for data breaches. Other jurisdictions in the United States are beginning to propose laws similar to the California Privacy Regulations.
As a result of our international operations, we must comply with a multitude of data security and privacy laws that may vary significantly from jurisdiction to jurisdiction. Virtually every jurisdiction in which we operate has established or is in the process of establishing data security and privacy legal frameworks with which we or our customers must comply. Our failure to comply with the laws of each jurisdiction may subject us to significant penalties. For example, the data protection landscape in Europe, including with respect to cross-border data transfers, is currently unstable and other countries outside of Europe have enacted or are considering enacting cross-border data transfer restrictions and laws requiring local data residency.
For a discussion of the various risks we face from regulation and compliance matters, see the sections titled “Risk Factors—Risks Related to Our Business” and “Risk Factors—Risks Related to International Operations.”
Intellectual Property
Intellectual property is an important component of our business. We rely on a combination of patents, trademarks, copyrights, trade secrets as well as contractual provisions and restrictions to establish and protect our proprietary rights.
As of December 31, 2024, we had eighteen issued U.S. patents that expire between 2037 and 2043, and sixteen pending patent applications. While we believe our patents and patent applications in the aggregate are important to our competitive position, no single patent or patent application is material to us as a whole. We intend to pursue additional patent protection to the extent we believe it would be beneficial and cost effective. We have registered trademark rights in “Freshworks,” our logos and multiple product names in the United States and targeted foreign jurisdictions. We also have registered domain names for websites that we use in our business, such as freshworks.com and similar variations.
In addition to the protection offered by our intellectual property rights, it is our practice to enter into confidentiality and invention assignment agreements (or similar agreements) with our employees, consultants and contractors involved in the development of intellectual property on our behalf. We also enter into confidentiality agreements with other third parties in order to limit access to, and disclosure and use of, our confidential information and proprietary information. Our intellectual property rights, however, may be challenged, invalidated, circumvented, infringed, or misappropriated and the laws of certain countries do not protect proprietary rights to the same extent as the laws of the United States. Moreover, our products incorporate software components licensed to the general public under open source software licenses. We obtain many components from software developed and released by contributors to independent open source components of our platform. Open source licenses grant licensees broad permissions to use, copy, modify, and redistribute our platform. As a result, open source development and licensing practices can limit the value of our software copyright assets. We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost effective.
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Our Culture and Employees
Our mission is to help businesses create delightful customer and employee experiences. That goal starts at home with our own team – and we strive to help our people succeed and build fulfilling careers.
Our steady growth comes from a set of principles that guide us and shape our Freshworks culture and drive our business performance.
• We focus on our customers. We build and deliver solutions that exceed our customer expectations. We identify new opportunities that benefit their needs.
• We drive results. We persist in accomplishing objectives despite obstacles and setbacks. We push ourselves and help others achieve results.
• We collaborate. We work cooperatively to achieve shared objectives. We credit others for their contributions and accomplishments.
• We innovate. We come up with useful ideas that are new, better or unique. We take creative ideas and put them into practice, fast.
• We adapt. We are agile and readily adapt and adjust in the moment.
• We value differences. We contribute to a work environment where differences are valued and supported. We embrace a variety of cultures, experiences, styles and backgrounds to get results.
Our employee benefits and programs reflect our growth mindset culture and our talent management strategy. We focus on supporting our employees not only within their own teams and careers, but also in employee wellness. Our global Women's 360 Employee Resource Group and affinity groups promote inclusiveness and give everyone a chance to contribute their knowledge, skills, and unique perspectives. Our social impact initiatives include the STS Software Academy and on-going support of our communities in times of need.
As of December 31, 2024, we had a hybrid workforce of approximately 4,400 employees in North America, Europe, Asia and Australia. We’re headquartered in San Mateo, CA and have 13 other offices across the globe with a majority of employees based in India, where we were founded. Major areas of focus in this region include engineering, product design, customer support, in-bound sales and general and administrative personnel.
Available Information
Our website address is located at freshworks.com , and our investor relations website is located at ir.freshworks.com . We file electronically with the U.S. Securities and Exchange Commission (SEC) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. We make available on our investor relations website, free of charge, copies of these reports and other information as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. These filings with the SEC are also available on the SEC’s website located at www.sec.gov .
We announce material information to the public through a variety of means, including filings with the U.S. Securities and Exchange Commission, press releases, public conference calls, our website (freshworks.com), the investor relations section of our website (ir.freshworks.com), our LinkedIn account (linkedin.com/company/freshworks-inc/), and our X (formerly Twitter) account (@FreshworksInc). We use these channels to communicate with investors and the public about our company, our products and services and other matters. Therefore, we encourage investors, the media and others interested in our company to review the information we make public in these locations, as such information could be deemed to be material information.
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