Freshworks, the company that built its reputation on making customer support software simple, is now openly managing its customer experience business for low growth – redirecting its investment, its hires, and its ambition toward IT service management instead.
What Do Freshworks’ Earnings Reveal About Its CX Strategy Shift?
The numbers from Freshworks’ Q4 2025 earnings call quietly revealed where the CX mainstay may be heading. The company’s Employee Experience (EX) business – anchored by Freshservice, its IT service management platform – ended the year at $510 million in annual recurring revenue, growing 26% year-over-year.
Its Customer Experience (CX) business, built around Freshdesk, ended 2025 with $395 million in ARR, growing just 9% on a reported basis and 5% on a constant-currency basis. That means EX has now overtaken CX as Freshworks’ largest segment.
“We’re running CX lean to enable us to invest in that EX opportunity” – Dennis Woodside, CEO and President.
His CFO, Tyler Sloat, was equally direct: “A lot of the confidence – or all of the confidence – is coming from EX.” When asked about CX growth expectations for 2026, Woodside said the company is “managing that business to kind of grow where it is now, which is in that mid-single digit range.”
This is not the language of a company fighting for space in the CX market. It’s the language of a company amid a strategic pivot.
How Is Freshworks Executing Its Transition to EX?
In the ten weeks since Freshworks reported its Q4 results, three decisions have underscored that its EX-first strategy is structural rather than temporary.
On March 5, the company promoted Ian Tickle to Chief Revenue Officer, consolidating sales, customer success, and customer experience under a single leader. This kind of unified revenue structure is typically associated with optimisation, not expansion – a signal that Freshworks is prioritising efficiency across an established portfolio rather than pursuing aggressive growth.
The market responded positively, with shares rising 10.4%, suggesting investor alignment with this direction.
A second move followed on April 10, with the appointment of Kuntal Vahalia as SVP of Global Channels and Alliances. Joining from Anaplan, Vahalia will lead partner strategy and execution. Notably, coverage from CRN Asia tied the hire directly to Freshworks’ $510 million EX business, with no comparable investment evident on the CX side – reinforcing where the company sees its primary opportunity.
The third shift is product-led. In November 2025, Freshworks launched Freshdesk Command Center, consolidating conversational and ticketing capabilities into a single Freshdesk Omni platform. Strategically, the rationale is sound: a unified codebase enables faster AI deployment and simplifies implementation.
However, on the earnings call, CEO Dennis Woodside indicated that near-term CX growth will be constrained as the company focuses on migrating its existing customer base to the new platform. While necessary, this effort reflects rationalisation – prioritising retention and operational efficiency over net-new expansion.
Does Freshworks Still Believe in CX?
In March 2026, Freshworks was named a Strong Performer in the Forrester Wave for Customer Service and Support, with top scores in key areas such as digital channels, marketplace breadth, and pricing, showing its CX product is still being actively improved.
A big part of this is Freddy AI, which sits at the centre of Freshworks’ strategy and is already handling over 50% of customer queries while boosting retention (116% for AI users vs 108% overall). The company has also raised prices significantly as the product has become more advanced, helping Freddy AI reach over $25 million in ARR in 2025, with 8,000 paying customers and a goal of $100 million by 2028.
Freshworks’ argument is that tools like Freshdesk Omni and Freddy AI make its CX business more efficient and profitable, helping fund growth in EX – a reasonable position, but one that is still unproven given relatively low AI adoption across its 75,000 customers and the fact that the platform transition is still ongoing.
What Does This Mean for CX Leaders Evaluating Freshdesk?
For enterprise technology buyers and CX leaders currently using or considering Freshdesk, the strategic picture is worth taking seriously. Freshworks is a highly profitable company making deliberate choices about where it grows next. Its CX business is not in crisis. But it is in maintenance mode, and its leadership has publicly said as much.
The competitive window that opens as a result is real. Zendesk, taken private in 2022, is investing aggressively in AI across its customer support stack. Salesforce’s Agentforce has closed over 8,000 deals and is moving downmarket. AI-native players are targeting the same mid-market support buyers that Freshdesk built its customer base on.
Freshworks’ bet is that a simpler, AI-powered Freshdesk retains its base while the company scales Freshservice to challenge ServiceNow. It may well be the right call for Freshworks as a business.
For the customers on the other side of that bet – the CX leaders and contact centre professionals who chose Freshdesk for its simplicity and ambition – it is worth asking whether their vendor’s ambition still runs in the same direction as their own.
FAQs
Is Freshworks shutting down Freshdesk?
No – Freshworks has confirmed Freshdesk is here to stay, but the company has openly shifted its growth investment toward IT service management, leaving CX in maintenance mode.
Why is Freshworks focusing on EX over CX?
Simply put, EX is growing three times faster – 26% versus 9% – and Freshworks has decided to back its winner.
What is Freshdesk Omni?
Freshdesk Omni is Freshworks’ attempt to consolidate its customer support tools into a single, AI-ready platform – making Freshdesk simpler to run, if not necessarily more ambitious.
What is Freddy AI, and how does it affect Freshdesk customers?
Freddy AI is Freshworks’ artificial intelligence layer that can automatically resolve more than half of customer support tickets – and customers using it are expanding them spend significantly faster than those who aren’t.
Should CX leaders be concerned about Freshworks’ strategic direction?
Not immediately, but any CX leader on Freshdesk should be asking their vendor whether its long-term roadmap still aligns with their own ambitions.
