Freshworks Inc. (NASDAQ:FRSH) Q4 2023 Earnings Call Transcript

David Hynes: Hey guys. Thanks for taking the question. I’m going to pile on with another AI question, I don’t know if it’s for Dennis or G. But look, the value prop — customer examples are giving us early adoption seems very apparent. For the folks that aren’t moving forward, yes, is it a matter of organizational readiness? Are there price sensitivities in the market? I guess I’m particularly curious on the latter, just given some of the more advanced AI features are yet to come to market, how sensitive are buyers to price at this point? Any color there would be helpful.

Dennis Woodside: Yes. So, this is Dennis. So, so far, as I said earlier, there’s like thousands of customers have opted into the beta. So, I think to one degree or another, all of our customers have some level of interest. Now, some of those customers are going to be a little more cautious if they have become reliant on a human-driven interaction or let’s say, they have a very high value customer on the other end and they prefer to have a human involved, then they’re going to be less likely to adopt Freddy Self-serve, but they may adopt our Copilot product. So, I think it’s just a matter of time before all of these opt into some trial of sort. And then it’s a question of whether or not they see value in the product. And if they do, that’s when we get into a nice discussion about, well, what is the investment that they’re going to be making in AI.

They’re going to provision all their agents or some of their agents and how does that work. So, that’s a huge opportunity for us this year. And we’re seeing with some of the resolution rates, the improvement in call quality and customer interaction, customer resolution, we’re seeing a lot of value come from these AI products. and customers are recognizing that value. So, we’re going to have to see how it all plays out, but I’m pretty optimistic that this is a huge opportunity for us that’s going to really materialize over the course of the year.

David Hynes: Yes. Okay, that’s helpful color. And then, Tyler, maybe a follow-up for you. I think it’s been asked a couple of different ways, but you have this $1 billion target out there for 2026. It implies some future acceleration in growth. Do we need to see the macro improve to hit that? Or do you think you can get there with the go-to-market enhancements, the enterprise push, AI, new products, all the stuff that you’re doing today? Can you get there in the current environment?

Tyler Sloat: Yes. Our plan is to be able to get there in the current environment. That’s not based on macro coming back.

David Hynes: Perfect. All right guys. Thank you.

Tyler Sloat: Thank you.

Girish Mathrubootham: Thanks everybody.

Operator: This concludes today’s conference call. Everyone may disconnect.