Operator: Thank you for joining us, and welcome to the Freshworks Inc. first quarter 2026 earnings conference call. After today’s prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Kate Scolnick, VP of Investor Relations. Kate, please go ahead.

Kate Scolnick: Thank you. Good afternoon, and welcome to Freshworks Inc.’s first quarter 2026 earnings conference call. Joining me today are Dennis Woodside, Freshworks Inc.’s chief executive officer and president, and Tyler Sloat, Freshworks Inc.’s chief operating officer and chief financial officer. The primary purpose of today’s call is to provide you with information regarding our first quarter 2026 performance, and our financial outlook for our second quarter and full year 2026. 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 our management’s beliefs about our business and industry, including our financial expectations and estimates, uncertainties in the macroeconomic environment in which we operate, market volatility, 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 a 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-Ks, and other periodic filings with the SEC. Freshworks Inc. 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, and a replay of today’s call to learn more about Freshworks Inc. For presentation purposes today, Dennis’ financial comments will be on an as-reported basis. Tyler will be providing financial comments on an as-reported and constant currency basis. I will now turn the call over to Dennis. Please go ahead.

Dennis Woodside: Good afternoon, everyone, and thank you for joining us. Freshworks Inc. delivered a strong start to 2026, exceeding expectations across revenue, profitability, and free cash flow. Our Q1 revenue grew 16% year over year, above the high end of our estimates. Non-GAAP operating margin was 18%, nearly three points above our estimate. And adjusted free cash flow margin was 24%. Once again, we achieved rule of 40. In Q1, we signed the two largest deals in Freshworks Inc. history, including our first seven-figure EX ARR deal. Customers with more than $100 thousand in ARR grew 29% year over year, and customers with more than $50 thousand in ARR grew 22% year over year. This demonstrates our continued success in serving mid-market and enterprise customers.

Freshworks Inc. is the AI-enabled unified service operations platform that is fast to deploy, intuitive to use, and enables every employee to be more productive. We entered 2026 with clear goals: expanding our EX business, monetizing AI at scale, and profitably growing our CX business, as we grow Freshworks Inc. to a $1 billion ARR company and beyond. Now let’s look at the results for each of these areas in Q1. Our EX business represents the primary and largest growth opportunity. EX ARR grew 27% year over year in Q1, with both new and expansion business coming in ahead of our expectations. We are attracting a fast-growing base of mid-market companies and enterprises choosing Freshservice for enterprise-grade capabilities, fast time to value, and lower complexity in implementation.

Most notably, in Q1, a global leader in nutrition replaced our largest competitor with Freshservice in what represents the largest new customer deal in our company’s history. They were seeking a solution that could handle enterprise-grade scale without sacrificing the intuitive experience necessary to manage complex workflows. Following that historic win, Piedmont Healthcare also selected Freshservice over our largest competitor, citing our significantly lower total cost of ownership, faster implementation, and enterprise capabilities. Finally, Reed, the UK’s number one specialist recruitment company, moved to Freshworks Inc. to achieve a faster and more collaborative enterprise IT experience. These wins underscore a clear trend: organizations are increasingly choosing our platform for its ability to deliver sophisticated results without the traditional overhead.

Freshworks Inc.’s ability to deliver enterprise-grade outcomes without the implementation drag and administrative burden of legacy systems is exactly why we are displacing vendors whose products have become too expensive and complex for mid-market and enterprise customers to maintain. We are also expanding our right to win by integrating and broadening our EX offerings. In March, we launched a new Freshservice ITAM experience, bringing Device42 capabilities natively into Freshservice and making it easier for customers to use in a single cloud experience. We also completed the acquisition of FireHydrant, which advances our vision for an AI-enabled service ops platform that unifies service, asset, and operational data. We will complete the integration of FireHydrant over the course of 2026.

Moving on to our AI progress, Freddy AI continues to be embedded throughout our platform, enhancing customer outcomes today while building toward a long-term monetization opportunity. Freddy AI Copilot is one of our fastest-growing products, with strong customer growth, new business attach rates, and higher expansion among AI customers. In Q1, Freddy AI Copilot customer growth exceeded 80% year over year, and the attach rate for new deals over $30 thousand in ARR was above 65%. Specifically, in our EX business in Q1, our customer penetration for AI surpassed 20%, nearly doubling year over year, and roughly a third of all new EX customers in Q1 had Copilot attached. AmeriSure, a commercial insurance provider and EX customer, has been able to transform service delivery within a single platform using Freshservice’s AI-driven workflows and Freddy Insights.

With Freshservice for business teams, the use case has expanded beyond IT into legal, HR, underwriting, and marketing, saving thousands of hours in 2025 alone and cutting employee onboarding resolution time by 97%. We look forward to detailing more about our future AI strategy and EX product innovations at our Refresh event next week. Turning to our customer experience business, we continued to deliver durable growth, with CX ARR up 6% year over year in Q1. We are making progress in this business through go-to-market discipline, platform integration, and increased market fit enabled by our AI capabilities. A leading provider of lender-placed insurance solutions consolidated a fragmented stack of JSM, Genesys, and SharePoint into a single Freshworks Inc.

platform. By unifying ticketing, automation, and AI in one place, the team reduced manual effort, improved operational visibility, and gained a clear path to scaling support. Over 80% of our CX customer base has now migrated to the new Freshdesk Omni platform. This successful replatforming is more than just an improvement for customers; it is the foundational work to enable the next wave of generative AI capabilities in our CX products and accelerate margin accretion. Since we began offering Freshdesk Omni at the end of last year, ARPA is 2.5 times higher for new Freshdesk Omni customers compared to the prior platform. In lockstep with our focus on durable growth from our EX and CX businesses, we remain committed to driving structural operating efficiencies that support enterprise-grade scale and long-term profitability.

Q1 non-GAAP operating margin reached 18%, nearly three points above our estimate, reflecting the disciplined execution we expect to sustain throughout 2026. Today, we announced workforce changes we are making to the company in Q2 to consolidate overlapping go-to-market efforts, streamline our product development process, and apply AI and automation across our business. These actions enable us to focus energy on our momentum in EX and accelerate Freshworks Inc.’s competitiveness. Tyler will provide the financial impact and updates to our outlook in his remarks. Turning to capital allocation, our operating model continues to deliver durable free cash flow. This operational strength allows us to take a balanced approach to capital allocation, reinvesting in high-return growth opportunities while also returning capital to shareholders.

In February, our board authorized a new $400 million share repurchase program, reflecting our confidence in the intrinsic value of our business. In Q1, we reduced shares outstanding by approximately 2%. We remain confident in our ability to compound adjusted free cash flow and drive long-term shareholder returns. Overall, Freshworks Inc. achieved significant progress in Q1, accelerating our momentum with profitable growth fueled by our EX opportunities. By structurally shifting our operating model over the last two years, we have established a durable framework that balances top-line performance with capital efficiency. Our long-term focus is on compounding adjusted free cash flow per share. Having more than doubled this metric over the last two years, we are now positioned to compound adjusted free cash flow per share by at least 20% annually over the next three years.

We will share more details on the operational drivers and our long-term vision at the Refresh event next week. I will now turn it over to Tyler to walk through our financials.

Tyler Sloat: Thanks, Dennis, and thanks, everyone, for joining on the call and via webcast today. We kicked off 2026 with strong results, exceeding our expectations on revenue, non-GAAP operating income, and free cash flow. Our Q1 performance reflects accelerating momentum and strong retention in EX, increasing success in the enterprise market, and disciplined operational execution across the business. For our call today, I will cover the Q1 2026 financial results, provide background on the key metrics, and close with our forward-looking commentary and expectations for Q2 and full year 2026. As a reminder, most of my discussion will be focused on non-GAAP financial results, which exclude the impact of stock-based compensation expenses, restructuring charges, and other adjustments.

I will also talk about our adjusted free cash flow, which excludes the cash outlay related to the cost associated with the Q2 restructuring announced earlier today. To provide greater transparency into our underlying business performance, I will also include constant currency comparisons throughout today’s call. Starting with the income statement, we had a strong first quarter. Total revenue reached $228.6 million, up 16% year over year as reported or 14% on a constant currency basis. Within this total, professional services revenue was approximately $2 million. Professional services revenue grew in line with our internal expectations and is a key component of our overall customer success strategy, ensuring successful deployment and adoption of our platform.

EX continues to be our primary growth engine, and EX ARR ended at over $540 million, growing 27% year over year on an as-reported basis and 25% on a constant currency basis. This performance was supported by strong expansion and new logo activity, including the two largest new business contracts in our history. These large wins validate our enterprise readiness and competitive positioning in market. Looking ahead, we anticipate EX ARR to grow in the mid-twenties and EX ARR to be over 60% of total ARR by year end. Turning to our CX business, we ended Q1 with over $395 million in ARR, up 6% year over year on an as-reported basis and 4% on a constant currency basis. The replatforming work we are doing to Freshdesk Omni to improve product consistency, support AI adoption, and increase the competitiveness of our platform is on track and will enable efficiency gains for the CX business over time.

We have a disciplined focus on our CX business as we complete our customer migration and tighten alignment with our ideal customer profile. Going forward, we are adopting a prudent outlook and anticipate CX ARR to grow in the low single digits in 2026. Moving to margins, we demonstrated the durability of our business model by maintaining a non-GAAP gross margin of 80.3% in Q1, consistent with prior quarters. Our non-GAAP operating income for the first quarter reached $41 million, translating to a non-GAAP operating margin of approximately 18%. This performance surpassed the high end of our initial expectations for the quarter. The key drivers behind this result were twofold: strong top-line performance and continued efficiency gains realized across various lines of our operating expenses.

We are structurally continuing to shift our business towards GAAP profitability, with strategic efficiency gains driving a meaningful improvement in margins throughout the year. As Dennis noted, we announced operational changes to our workforce that consolidate overlapping organizational efforts, streamline our product development process, and increase the leverage of AI and automation across our business. As a result of these actions, we are reducing our global headcount by approximately 11%. We anticipate taking one-time restructuring charges of approximately $8 million, with the vast majority in Q2. In a moment, I will discuss our updated Q2 and full year estimates that incorporate the financial impact of these actions. Moving to operating metrics, net dollar retention was 106% on an as-reported basis and 105% on a constant currency basis, a one-point acceleration from the prior quarter.

Within this, we are demonstrating strong momentum in the expansion growth of our EX business. Q1 EX net dollar retention achieved 111% on an as-reported basis and 109% on a constant currency basis. Going forward, we expect to sustain net dollar retention of approximately 105% on a constant currency basis for Q2 2026. As a reminder, this excludes any impact from Device42 legacy customers. Moving on, I would like to provide some additional color on results from our customer cohorts. Customers contributing more than $50 thousand in ARR grew 22% year over year as reported and 20% on a constant currency basis. This cohort represents over 55% of our total ARR. Customers contributing more than $100 thousand in ARR grew 29% year over year as reported and 26% on a constant currency basis.

This cohort represents approximately 39% of our total ARR. Double-digit growth in our larger customer cohorts was driven by the strong performance within EX, which we believe validates our strategy to increase our focused investments on mid-market and enterprise EX customers. The accelerating growth we are achieving tells us we are structurally well positioned to capture a disproportionate share of the future EX market and sustain durable growth from our most strategic customers. Now let’s turn to calculated billings, balance sheet, and cash items. Calculated billings came in at $235 million in Q1, up approximately 16% year over year as reported and 13.5% on a constant currency basis. For Q2, we estimate billings growth of approximately 14.5% on both an as-reported and constant currency basis.

Looking ahead, we expect billings growth to be in line with revenue growth for 2026. Our cash position remains strong. In Q1, we generated $55.8 million in free cash flow, representing a 24% margin and slightly better than our expectations. Adjusted free cash flow per share was $0.20, an 8% increase over the prior year. This metric underscores our operational efficiency and our disciplined approach to converting growth into tangible shareholder value. Turning to our capital structure, we view share repurchases as part of a disciplined capital allocation framework and a reflection of our confidence in the long-term opportunity ahead. In Q1, we repurchased 5.7 million shares for $45.4 million, while utilizing an additional $7 million to offset dilution through the net settlement of vested equity.

We ended Q1 with approximately 318 million fully diluted shares outstanding, down 2% year over year. Included within this were approximately 279 million basic shares outstanding, which also declined year over year. We ended the quarter with $780 million in cash and investments, providing ample financial firepower to continue our repurchase program while investing in future growth. Now on to our forward-looking estimates. As a reminder, our non-GAAP net income projections for 2026 assume a tax rate of 24%. For Q2 2026, we expect revenue to be in the range of $232 million to $235 million, growing approximately 13% to 15% year over year; non-GAAP income from operations to be in the range of $41 million to $43 million; and non-GAAP net income per share to be approximately $0.13, assuming weighted average shares outstanding of approximately 280 million shares.

For the full year 2026, we expect revenue to be in the range of $958 million to [inaudible]. This results in adjusted free cash flow margin of 24% to 27.5% for Q2 and full year 2026, respectively. Our full year 2026 outlook for adjusted free cash flow per share is $0.94, up 24% compared to fiscal 2025. As a reminder, cash used for stock repurchases is reflected in our financing activities and is excluded from our adjusted free cash flow calculations. Finally, our forward-looking estimates are based on FX rates as of 05/01/2026 and do not take into account any impact from currency moves. Overall, Freshworks Inc. delivered a strong start to 2026, establishing a solid foundation for the year ahead. We remain confident in our ability to consistently exceed our goals as we drive durable growth and expanding profitability.

To that end, our internal metric that best aligns with our strategic priorities and long-term shareholder value creation is growth in adjusted free cash flow per share. Over the last two years, we have more than doubled our adjusted free cash flow per share results. More importantly, we have laid the foundation to compound adjusted free cash flow per share by at least 20% annually over the next three years. We look forward to sharing more details on this metric, the operational drivers behind it, and our long-term vision at our upcoming financial analyst session at our Refresh event next week. Thank you. Operator, we are ready for Q&A.

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Operator: Thank you. We will now open the call for questions. Please limit yourself to one question. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Scott Berg at Needham and Company. Your line is open. Please go ahead.

Analyst: Hi, everyone. This is Lucas Mekop on for Scott Berg. Thanks for taking the questions. On the employee experience side, what drove the variance to the high end of your implied year-over-year constant currency revenue growth here in the first quarter? Historically, that has tended to skew towards the higher end, so I am trying to understand any changes in the quarter.

Dennis Woodside: First, we continue to see real momentum in the EX business, and the move upmarket is working. You see that in a couple of different ways. If you look at our growth of accounts that are spending more than $100 thousand with us, that is up 29% year over year. We had our biggest deal ever—a large nutrition company that was a 10-year customer of one of our competitors—that is moving over to us for all the reasons we have discussed: enterprise-grade scale, much faster time to value, easier to manage the platform, and AI capabilities. We also had our second largest land ever with a large healthcare provider—very similar story. The upmarket motion continues to drive the overall EX business. Over the last couple of years, we have built a platform that extends from service management to operations management (now with FireHydrant) to asset management.

We brought the Device42 capabilities into the cloud and launched that last quarter, and then into ESM. That is what customers are looking for, particularly in the mid-market—customers from 5 thousand to 20 thousand employees. We call these mid-market or agile enterprises that are looking for a provider that can keep up with them, and that market is big. Tyler?

Tyler Sloat: In general, EX is doing really well. It is organically accelerating growth, and that is something we are really proud of. We have been talking about it for a couple of years now, and we are seeing great product market fit, evidenced in some of the larger customers choosing us over our biggest competitor.

Analyst: Thanks. And as a quick follow-up, you were reviewing pricing changes earlier in the year. Do you have any updated view on the impact of pricing changes on your full-year guidance?

Tyler Sloat: We had pricing changes, but they are not material to our guidance. We are going through a normal process with our customers as they renew, which is more of a CPI-type increase that any other software company would do. This is something we put in place about a year and a half ago. In general, there is no impact to our guidance because of pricing changes. The impact is really because new business is going really well on the EX side.

Operator: Your next question comes from the line of Morgan Stanley. Your line is open. Please go ahead.

Oscar Saavedra: Hi, you have got Oscar Saavedra on for Elizabeth Porter. Thank you for taking my question. I want to stick with Freshservice. Nice to see the wins you called out against your largest competitor. As we think about that opportunity, how would you characterize the pipeline building, given that pipeline going into last quarter looked pretty strong as well?

Tyler Sloat: It is a continuation from what we saw coming into the year. We have been building out the field motion over the last year. Last year was about putting the leaders in place, and those leaders started filling out the roles underneath them—sales reps, CSMs, and ASMs who can engage larger customers. We are building that muscle, including the pipeline muscle, and we are seeing a really strong pipeline in the field for EX in particular.

Oscar Saavedra: Got it. And a follow-up around seat expansion: there is debate about lower headcount among customers, but your NDR picked up quarter over quarter on a constant currency basis. Can you share details on whether that was more of an upsell driver, or did you also see strong seat expansion?

Dennis Woodside: We saw strong new business wins and strong seat expansion as well. Remember, our product portfolio is broadening. We have additional seats accessible outside of the core IT department through ESM, which has been a big growth driver for us over the last year. We have asset growth through advanced ITAM that monetizes on an asset base—customers pay for every piece of software or hardware cataloged by the system. We are in a position of taking share from bigger players, which creates the opportunity to gain seats regardless of the overall market. We have not seen seat erosion; seat growth continues to be a meaningful driver of our business. Our business model is evolving. We have consumption-based offerings like Freddy AI Agent, asset-based offerings like advanced ITAM, and resolution- or transaction-based offerings.

We expect the model to continue to evolve over the course of the year, and we are excited about new products coming out next week that will enhance monetization, particularly around AI.

Operator: Your next question comes from the line of Citizens. Your line is open. Please go ahead.

Austin Cole: This is Austin Cole on for Patrick D. Walravens. Dennis, could you double-click on what allowed you to win that largest deal? And as you move upmarket, how much interest are you seeing in the AI solutions and in Copilot?

Dennis Woodside: Customers in the mid-market and lower end of enterprise are looking for an enterprise-grade platform that extends from service management through operations management, asset management, and ESM. They want fast time to value and a solution with a proven track record transitioning large customers from legacy platforms onto ours and making them successful quickly. They are looking for AI functionality today as well as a strong roadmap, and they appreciate having choice in how they want to consume AI over time. Some want to provision their agents with Copilot; others want to go directly into agentic AI. At our Refresh for EX event next week, we will announce product enhancements that lean into this enterprise motion and customer choice.

We will roll out AI Agent Studio for EX, which allows customers to build their own agentic capabilities directly in our platform, with 20 preconfigured workflows for onboarding, offboarding, software provisioning, password changes, and more. We are also announcing our MCP Gateway, which will allow customers who want to bring their own AI—or build agents in cloud or in ChatGPT—to do so and take advantage of the data and information in our platform through MCP calls, which we will monetize over time. We launched our cloud-based version of advanced IT Asset Management about a month ago—available for all customers—which opens up growth for cloud-first customers. With FireHydrant, we have a new integration with Freshservice so you can see incident response data through Freshservice—another vector of growth we are opening up this quarter.

EX grew 27% year over year this past quarter. We see EX continuing to be a bigger part and the majority of the business overall, driving growth. We have oriented investments in go-to-market and engineering around that.

Operator: Your next question comes from the line of Canaccord. Your line is open. Please go ahead.

David E. Hynes: Hey, it is actually DJ. Dennis, I hear largest deals ever and pipeline is fantastic, with signs of organic acceleration. Why the decision to restructure now, and where will those optimizations be focused?

Dennis Woodside: We are building an agile company that can deliver strong free cash flow per share growth while fueling the EX business that is growing 27% year over year. A couple of reasons we acted now. First, we recently consolidated our go-to-market strategy. We had a more equal focus on inbound versus outbound. We are increasingly focusing on EX, which is primarily an outbound motion, and on acquiring CX customers with better unit economics. That has led us to rebalance teams and spend more toward EX, and to run the CX business to drive profitability and cash that we reinvest in EX. Second, over the last year to year and a half, we have invested in changing how we build product to embed AI in the development process, resulting in much shorter cycle times.

Over half of our code is originated in AI today, which changes how fast we build and the number of people we need. Third, across the business, we have invested in automation and AI to streamline operations and move faster. All of these factors contributed to the restructuring. It sets us up well for the rest of the year, allowing continued investment in EX growth initiatives and efficient, profitable operation of CX.

David E. Hynes: Thanks. And Tyler, a follow-up: what does dollar-based net retention look like if we isolate the EX business?

Tyler Sloat: Net dollar retention for EX is still over 110%, coming in around 111% as reported and 109% at constant currency. That includes a bit of headwind from Device42 legacy churn—those are multi-year contracts, and we have discussed that since we bought Device42. We are pleased with the result. As EX continues to grow faster, on a weighted average basis, it helps overall NDR—we saw a slight acceleration this quarter as a result. We are introducing more products that provide upsell capabilities against core Freshservice.

Operator: The next question comes from the line of Wolfe Research. Your line is open. Please go ahead.

Alex Zukin: Thanks for taking my question. Tyler, it looks like you accelerated revenue and billings growth constant currency in the quarter, and you are guiding for accelerating constant currency billings growth next quarter. Anything one-time in nature to call out this quarter? And why were you in line with your constant currency revenue guide rather than ahead of it at the high end?

Tyler Sloat: There were no one-times. In past quarters, we called out significant Device42 deals that had accelerated revenue on the front end. We have also talked about some churn on Device42, which is somewhat of a headwind against revenue growth because as those deals renew, we had upfront sums on the old term-license model. So no one-time positives here—just really good execution, and good go-forward execution as well. We rolled through the beat for the year. We are quite positive on what happened in the quarter, specifically in EX. We are being prudent about our estimates for CX going forward—internally optimistic, but externally prudent.

Alex Zukin: And Dennis, lots of noise in the market about some vendors going more upmarket or downmarket. What are you seeing generally in your lanes from competitors both higher and lower? Any AI anxiety impacting sales cycles?

Dennis Woodside: We do not see AI anxiety slowing or impacting deals. Most of our larger deals now include an AI component—AI is core to the pitch, discussion, and roadmap. Customers are coming for the full platform as well: they need capabilities across IT and beyond to make a switch. On the EX side, primary competitors on the large side are ServiceNow and Atlassian, plus a fragmented tail—Ivanti, Cherwell, BMC, and others. On the CX side, it is more fragmented—Zendesk and a range of smaller players. We have not seen major changes in competitive dynamics. We are confident in our ability to win against larger EX competitors. We had many deals close this past quarter—including the largest and second largest in our history—both multi-year customers of our largest competitor.

For companies in the 5 thousand to 20 thousand employee range, we have the right product, and that is increasingly apparent. In CX, dynamics are similar; AI is more prevalent in conversations. We are focusing CX on SMB, commercial, and mid-market customers where we have strong unit economics and expansion dynamics. We are no longer chasing micro deals at the lower end. With replatforming, there are positive signs: we have over 2.5x ARPA for new Freshdesk Omni customers. If we keep that trend and realize price increases from migrating customers to a single Freshdesk Omni product, that will flow through to CX over time. We are being conservative for the rest of the year—our guide implies low single-digit growth for CX—because we want to see how it plays out over the next quarter.

Overall, we are set up for a good year. We raised our non-GAAP operating profit by about $26 million, and we see the ability to drive a profitable business with mid- to high-teens growth over multiple quarters.

Operator: Your next question comes from the line of Raymond James. Your line is open. Please go ahead.

Brian Christopher Peterson: Thanks, I will keep it to one. Dennis, can we get an update on channel efforts? How big are bookings generation today? As you build out the broader EX suite, does that change conversations with partners and how you could expand that base over time?

Dennis Woodside: Most of our channel partners are regional service providers that historically may have specialized in JSM or Ivanti or BMC. They are important and are driving meaningful business for us. We do have a couple of GSIs we have been working with—Unisys is one—but that is nascent. We brought in a new channel leader focused on moving up and engaging GSIs. There is interest because customers on the lower side of the enterprise market are looking for choice, and we have a great product. We will continue to invest in the channel. Right now, dynamics are favorable on the regional side; the GSI side is early.

Operator: Your next question comes from the line of Piper Sandler. Your line is open. Please go ahead.

William Fitzsimmons: Hey, thanks for taking my question. You mentioned opening up the platform to third-party agents and the potential monetization of third-party AI agents. How should we think about that potential within the platform? And on the large EX displacements, how should we think about the repeatability of these over time?

Dennis Woodside: On EX displacements, we have been winning bigger deals for a while and will continue to highlight them. The metrics show it—customers over $100 thousand are up 29% year over year, and ARPA for the business has been growing nicely. It is repeatable, and we are repeating it every quarter. Our pipeline this quarter is bigger than last quarter and meaningfully larger than a year ago. On opening up the platform, at our Refresh EX event next week we will reveal our MCP Gateway, which enables customers who want to build broader analytics platforms—combining data from multiple systems into a data lake and applying AI—to both pull and push information to our system. We will monetize it over time. It is a way for us to participate in AI initiatives customers drive outside of our AI.

It allows customers to choose: use our Copilot or AI Agent, or build their own agents that interact with Freshservice data and systems—extracting data and driving actions within Freshservice. We are building an open system that can monetize both over time. We will have more details next week at the launch.

Operator: There are no further questions.

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