Freshworks (FRSH) Morgan Stanley Technology, Media & Telecom Conference 2026 summary

Business transformation and market focus

• Shifted to focus on employee experience (EX) for mid-market and lower enterprise IT departments, offering integrated ITSM, operations, and asset management solutions with AI capabilities.

• EX business surpassed $500 million in ARR, growing at 26% year-over-year, and now represents the primary growth engine.

• AI adoption is expanding, with 8,000 customers using AI features, contributing $25 million in ARR and nearly doubling year-over-year.

• Transitioning customer experience (CX) products to a unified Freshdesk Omni platform, aiming to migrate 40,000 customers by end of April.

• Device42 and FireHydrant acquisitions enhance asset and operations management, supporting larger deal wins and upmarket expansion.

Competitive positioning and product differentiation

• EX market is structurally advantageous due to fragmented legacy competition and lack of innovation among incumbents.

• Product offers fast time to value, low total cost, and a complete solution on a single code base, appealing to budget-constrained IT teams.

• AI is deeply integrated, leveraging proprietary data and workflows, making it difficult for startups or LLMs to replicate the full suite.

• Monetization models are evolving, including seat-based, consumption-based, and asset-based pricing, with future shifts anticipated.

• Freshservice for Business Teams enables expansion into HR, finance, and legal, with ARR over $40 million and rapid growth.

Customer adoption, AI impact, and financial performance

• Customers adopting Copilot AI show higher net dollar retention (NDR 116%) and expand faster than average.

• AI enables customers to substitute software for people, driving value and supporting pricing power.

• Largest deals increasingly include asset management and AI modules, with recent record wins in healthcare and professional services.

• EX business receives two-thirds to three-quarters of engineering investment, reflecting its strategic priority.

• Achieved 27% free cash margin and first GAAP profitable year, with $700+ million in cash and a $400 million buyback.