Cloud-based SaaS (Customer Engagement, IT Service Management, CRM, Marketing Automation)
Strategic Profile
Annual recurring revenue ended at $907M, up 18% year-over-year, with the Employee Experience (EX) business at $510M ARR (26% growth) and Customer Experience (CX) at $395M ARR (9% growth). Freddy AI has over 8,000 paying customers and $25 million in ARR, positioning AI as a significant growth lever. The company recently shifted into profitability, with a net income of $183.7 million, reflecting operational efficiency and market resonance.
Cyborg Score Rationale
Freshworks's net revenue retention rate was 105% in Q4, meaning it would have grown revenue by 5% even without acquiring new customers. The company achieved 27.4% annualized revenue growth over five years, beating average software company performance. However, the CX side of the business did not see expected growth from AI, with growth remaining in mid-single digits.
Top Insights
Freshworks achieves profitability with significant ARR growth, driven by strong EX performance and Freddy AI advancements.
The native cloud offering of Device42 is set to launch soon, which could enhance its market appeal.
Pricing for new Agentic AI capabilities is still being finalized, with full impact expected to materialize more significantly in 2026.
Improvements in sales/marketing motions and AI are driving cross-sell, with roughly half of top 50 accounts using both CX and EX, and focus now on mid-tier and long-tail improvement.
Named Competitors
Service Cloud — CRM and customer service cloud platform
Now Platform — IT service management and enterprise workflows
Zendesk Suite — Customer support and engagement platform
Recent Developments
(February 2026) Freshworks reports Q4 2025 outperformance with strong revenue beat and raised full-year 2026 guidance to $952M-$960M
(Q4 2025) FireHydrant acquisition completed and AI product enhancements across Freshservice, Freshdesk, and Freddy AI platform
(Q4 2025) Device42 cloud-native version announced for near-term launch to enable stronger cross-sell and up-market positioning
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