Freshworks Inc.

Hello, and welcome to the Freshworks third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand has been raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Vice President, Investor Relations, Jun Ha.

Thank you. Good afternoon and welcome to FreshWorks Third Quarter 2023 Earnings Conference Call. Joining me today are Girish Madhubutam, FreshWorks Chief Executive Officer, Dennis Woodside, FreshWorks President, and Tyler Sloat, FreshWorks Chief Financial Officer. The primary purpose of today's call is to provide you with information regarding our third quarter 2023 performance and our financial outlook for our fourth quarter and full year 2023. Some of our discussion and responses to your questions may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on Freshworks' current expectations and estimates about its business and industry, including our financial outlook, macroeconomic uncertainties, management's beliefs, and certain other assumptions made by the company, all of which are subject to change. These statements are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected in the forward-looking statements. Such risks include but are not limited to our ability to sustain our growth, to innovate, to reach our long-term revenue goals, to meet customer demand, and to control costs and improve operating efficiency. For discussion of additional material risks and other important factors that could affect our results, please refer to today's earnings release, our most recently filed Form 10-K and Form 10-Q, our Form 10-Q for the quarters ended March 31st, 2023 and June 30th, 2023, and our other periodic filings with the SEC. Freshworks assumes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this call, except as required by law. During the course of today's call, we will refer to certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures for historical periods are included in our earnings release, which is available on our investor relations website at ir.freshworks.com. I encourage you to visit our investor relations site to access our earnings release, supplemental earnings slides, periodic SEC reports, a replay of today's call, or to learn more about Freshworks. And with that, let me turn it over to Girish.

Thank you, June, and welcome, everyone. Thank you for joining us today on Freshworks Earnings Call, covering our third quarter of 2023. We delivered another solid quarter of execution. as we outperformed our previously disclosed estimates across our key financial metrics. Our revenue exceeded the high end of our financial outlook range, coming in at $153.6 million for the quarter. We surpassed our estimates for free cash flow with $22.1 million in Q3, and we improved our free cash flow margin to 14%. We also held our first investor day in September, where we showcased our products and outline the path that we believe will drive us towards becoming a billion-dollar company and beyond. Freshworks continues to reap the benefits of three industry tailings. Businesses of all sizes are having to transform to compete digitally. Expectations for customer and employee experience are evolving to center around modern messaging. And AI is breaking down silos, offering richer insights. to help businesses understand much more about their customers and employees. This quarter, in particular, we added new generative AI capabilities across products and opened up our Freddie Insights beta program following Freddie Self-Service and Freddie Co-Pilot in Q2, which is intended to unlock more value out of our existing product suite. You'll hear me talk about AI quite a bit today, starting with customer support. I'm really excited by the traction we've been seeing since launching our customer service suite in August. It's our all-in-one solution to combine bots, modern messaging, and ticketing. In the first two months, our sales team signed on more than 200 customer service suite customers from new and existing customers. And we are seeing higher levels of engagement with the product than with Fresh Chat alone. The suite not only saw great traction with new customers, but also with longstanding ones, including a large US TV network and a high fashion jewelry company who decided to migrate to help them scale subservice features with our bot capabilities. An early adopter of the customer service suite, Fastway Careers in South Africa, delivers over 16 million parcels annually to an area nearly twice the size of Texas. The company is growing. but found its previous provider offering a disjointed customer service experience across different channels. Now, with the customer service suite, agents are able to better address this issue, can handle live chats with automation, and gain deep insights into ticket trends. We continue to invest in cutting-edge AI capabilities for our customer support users. In our initial beta for Freddie Co-Pilot, we were predominantly focused on driving agent productivity. We have heard great feedback from our customers, including Monos, a luxury luggage brand. We featured during our investor day. Thomas Cook, a popular global travel company in the UK, using Freshdesk since 2021, and Icar, a business process outsourcing company with 40,000 employees, are beta testing co-pilot features to further enhance agent productivity. Ready co-pilot adoption and usage among customer service customers increased meaningfully from Q2. In Q3, we continue to see growing demand for our IT product with mid-market and enterprise customers. We win with a unified service operations platform that enables customers to improve service reliability. Our customers, including Child Hope Group, Valley Children's Healthcare, and Travelopia, see great value in our unified product. ITOM, in particular, is gaining traction with momentum for fresh services, major incident management features. We added new capabilities to this feature, and the customer base is growing. Almost 1,500 customers now take advantage of post-incident reports, automated major incident creation via alerts, and organizational updates through a branded status page. We continue to harness the power of generative AI to enable IT and other business users to focus on high-value work, by using auto-generated ticket summaries and ticket response additions. Our newest beta release includes GenAI-powered virtual agents that eliminate forms to create a more conversational experience for employees. Early adopters of these new AI features for Fresh Service include existing customers, Restaurant 365 and Confluent Health. Fresh Service customer adoption of these features has more than doubled since Q2. Through our continued innovation to meet the IT needs of large enterprises and the mid-market, we believe we are increasing mindshare with CIOs and anticipate that this will enable us to execute on the broader ITSM opportunity. On to sales and marketing. We continue to execute on our vision of delivering an easy-to-use, quick-to-setup smart CRM that assists sales teams in generating leads, increasing conversion, and accelerating revenue. In Q3, We made improvements to the inbound experience in our sales and marketing products. We revamped the UI of Fresh Sales to improve user efficiency, productivity, and data accessibility. The upgraded interface for sellers helps boost context, AI-powered action, and team collaboration for faster deal closures. For example, a local cabinet maker in Georgia named Click Studios uses both Fresh Sales and Fresh Desk to help support and sales teams to collaborate better which has helped Qlik Studios improve its sales cycle by up to 35%. We also continue to strengthen our AI capabilities for marketers to improve campaign creation while boosting efficiency, conversion rates, and customer satisfaction. In summary, Q3 innovation was centered around unlocking more productivity for our customers through AI-powered customer service, IT, and sales and marketing products. And we will continue building and offering richer insights to help businesses understand their customers and employees. Now, over to Dennis, who will give more detail on the opportunities we are realizing with customers and the ongoing impact of changes we are making to our GTM operations.