Freshworks hits balance in customer mix amid growing mid-tier, enterprise range

Chennai: Freshworks’ quarterly revenue increased 42% to $114.6 million over the year-ago period, even as non-GAAP losses in the January-March quarter came in at $600,000, the same as in the previous year.

The customer and employee engagement software company exceeded its own quarterly revenue forecast for the first quarter by 5.13%.

Freshworks has also revised its 2022 revenue guidance to $495-501.5 million for 2022, from $486.5-495 million earlier.


The company will continue to hire aggressively across segments from engineering to marketing in key geographies this year, chief executive Girish Mathrubootham told ET after the quarterly results announcement.

“We made progress on our 2022 product priorities with the launch of Freshworks CRM for e-commerce, while increasing net dollar retention to 115%, and continuing to run our business efficiently,” he said.

Freshworks’ customer mix has hit a balance between small businesses and the mid-tier, enterprise segment as it accelerates marketing and operational presence across key regions in the United States, Europe and other geographies, he said.

Mathrubootham said the company has grown considerably from the 2016 scenario when the small and medium business (SMB) segment made up most of the customer pie and larger companies — which bought its helpdesk tool, employee engagement software among other products — accounted for a comparatively smaller portion.

“Today, it’s about 50-50, with mid-market and enterprise [segments] making up half of our business,” he said.

Freshworks is looking to plumb the depths of conversational customer experience as a key growth area, he added.

The field refers to enabling businesses to engage with customers on platforms such as WhatsApp and other messaging channels. Secondly, enterprise service management, relating to helping large companies deal with IT requirements, employee engagement and others, are also a focus area.

Freshworks would also leverage the drive for digital transformation seen among companies after the onset of the Covid-19 pandemic. Some projects such as multi-lingual chatbots are special interest areas. Freshworks added 2,100 customers, the largest quarterly addition over the last seven quarters, Mathrubootham said.