Chennai: Freshworks continues to witness interest from enterprise customers as AI adoption and platform modernisation tilt the balance in its favour, according to its chief executive Dennis Woodside.The tech investment cycle, rapidly accelerated by the AI adoption mandate, acts as a catalyst for driving IT and customer support companies to favour software with AI capabilities over legacy players, he told TOI. The Nasdaq-listed company aims to cross $1 billion in annual recurring revenue (ARR) this year and its larger customer segment grew faster than the company’s average at 30% on a yearly basis in its March 2026 quarter. It closed two largest deals ever last quarter, including a $1 million deal.“As companies seek out partners to help them safely transform their operations and maximize the value of AI, software providers are experiencing a surge in demand. Freshworks currently has 7,000 customers actively paying for AI solutions, generating directly monetised revenue that exceeded $20 million as of January,” he said.Freshworks is targeting $1.3 billion in ARR over the next two and a half years and is targeting mid-to-large companies that have complex software needs but lack the resources and massive headcounts. The company’s growth outlook for 2026 has moderated while becoming GAAP profitable last year. Woodside said, “The industry has shifted to a phase where profitability is equally as important as growth. We are guiding to be GAAP profitable in the second half of this year and we are generating cash flow margins in the high 20% range,” he said.The company looks for acquisitions to plug existing gaps in its overall product portfolio, but declined to provide specifics, implying there are no imminent deals.
