Is Freshworks Ready to Go Global? CEO Dennis Woodside Weighs In

Dennis Woodside’s Vision for Freshworks: Scaling Global Heights with a Unique Culture

Dennis Woodside, the newly-appointed CEO and President of Freshworks, draws a crucial lesson from his marathon running: setting a clear end goal. For Freshworks, that goal is to become a global, independent player generating billions in revenue.

“To scale and become a global company with the kind of competition we face, things are going to have to change,” said Woodside in an interaction with Moneycontrol on June 17.

Last month, Freshworks underwent a significant leadership change. Girish Mathrubootham, the company’s founder and former CEO, transitioned to the role of Executive Chairman, while Woodside assumed the CEO position.

Since founding Freshworks in 2010, Mathrubootham has been instrumental in transforming the company from a Chennai startup into a publicly traded software company on the Nasdaq exchange.

Mathrubootham led Freshworks through a successful IPO on Nasdaq in September 2021, making it the first India-born SaaS company to trade on a US exchange. In September 2022, Freshworks appointed Woodside as its new president, responsible for leading global business operations and strategy.

Key Priorities and Roadmap

One of Woodside’s top priorities is to safeguard and nurture the unique culture that defines Freshworks. “The long-term results of the company depend on the culture we build in and a big focus for me and something that G (Girish) and the board care about is how we preserve and invest in the culture and the team,” Woodside emphasized.

Previously, Woodside served as Chief Operating Officer of Dropbox, where he helped grow revenue from $250 million to $1.3 billion and ultimately raised over $1 billion in a successful IPO in 2018. Prior to that, Woodside held various sales and strategy leadership roles at Google from 2003 to 2014, including serving as CEO of Motorola Mobility after Google acquired the company in 2012.

Freshworks reported a consolidated revenue of $165.5 million, up 20 percent year-on-year (YoY), with non-GAAP operating profit zooming to $21.8 million as against $3.9 million in the first quarter of 2023. However, on a quarterly basis, Freshworks’ revenue remained flat, as during the fourth quarter ended December 2023, the company reported a revenue of $160.1 million.

“We are cashflow positive and our margins are reaching 20%, which is a lot…we are already profitable on a non-GAAP basis. We have said publicly that in 2026, we will be profitable or break even and record $1 billion in revenues,” Woodside said.

Freshworks reported its first full-year operating profit in 2023 since its IPO at $44.5 million for the full year of 2023.

While the company has been doubling down on mid-market and large enterprises (companies that have more than $50,000 in ARR), the firm will also focus on the SMB segment which has witnessed a slowdown. “Our SMB business isn’t growing as fast as we’d like it to be. Partly its economic. But partly there are things we can do better,” Woodside said.

New Pockets of Demand from India

For companies like Freshworks, a majority of the customers come from North America and Europe. However, Woodside said that there is an uptick in demand from India as well. “Regarding the Indian market, we have two pillars of customers. We have done well with unicorns like PhonePe and Dunzo who have taken off. And then we are recently seeing demand from the conglomerates like Tatas and Mahindras and that’s where we are growing and investing,” Woodside said.

While the pricing is different and lower for the Indian market, Woodside highlighted some new opportunities including local governments and universities like IITs and IIMs. “The third pillar of customers is also the government. In the US, we are very successful in implementing software for local government for tasks like trash collection and electricity. And universities in the UK like Oxford and Cambridge are already our customers. Universities like IITs and IIMs in India are a huge opportunity for us,” Woodside said.

Currently, the US market contributes 45 percent of Freshworks’ revenue, followed by Europe at 40 percent. Asia Pacific and MEA, which includes India, contribute the remaining 15 percent.

Embracing the Future: SaaS in the AI Era

While announcing the results, Freshworks said that it has entered into a definitive agreement to acquire Device42, an IT asset management for $230 million. “We have started bundling both Freshworks and Device42 products and we will see some synergies coming in from this,” Woodside said.

Speaking about the relevance of SaaS in the AI era, Woodside said that the SaaS products that Freshworks offers still have a lot of demand and the only change will be on pricing models. “I feel pretty positive that we will continue to have a role. The license model might change. We have elements of our licensing today that are consumption-based and some are seat-based. There may be some changes here but otherwise SaaS will remain relevant,” Woodside said.

Investing in People and Technology

Woodside reiterated that his key priorities will be to invest in people and areas where it can accelerate its product roadmap. “The first biggest investment we make is people. People is the number one investment for us…We’re selectively investing in areas that can accelerate our product roadmap, and Device42 is a good example,” he added.