So why don't we go ahead and get started? Look, we're just delighted to have Freshworks joining us at the Citizens Technology Conference. We have hosted this conference in this hotel at this time of the year for over 20 years, but this is the first year that it's the Citizens Technology Conference, and this is the first presentation. So Tyler, thanks for joining us. All right. Thanks for having me. Tyler Sloat is the CFO. He joined Freshworks in 2020. Before that, he was at a company called Zuora for 10 years, which I think we're all familiar with. Before that, he was at Obopay, which actually I'm not familiar with that one. What was Obopay? Mobile payments company. Mobile payments. That's pretty cool. Early. Yeah, very early. Early. Too early. Early. It was fun. Before that, he was at Siebel Systems. Tom Siebel is going to be here. Before that, Stanford Business School, which I didn't get into, by the way, so kudos to you. Did you have good undergraduate grades? Actually, they weren't amazing, to be honest. Right? So you were at Coopers for three years, and then how did you get into Stanford Business School? I actually took a stint. Is there something missing on my little? I did Coopers, and then I did POET Software, which was a company that we took public in the late 1990s. I was a controller there. I wasn't the CFO. And then that. Yeah, that looks good. Afforded me the opportunity to go to Stanford. That looks good. How did you like it? It was great. Stanford? It was great. Oh, it was super fun. I know. I know. All right. And so what's the market cap of Freshworks now? Don't tell me. Freshworks is a just under $6 billion market cap company. It's up 5% year- to- date. In my opinion, it should be up more. You guys had a great quarter. You did an acquisition recently that's really working. We'll talk about that. Yep. Stock is not particularly expensive. Trades at roughly 5x revenue. So that's the setup. How's business? What's going on over there? Business is good. Is it? By the way, I think this is my. I was going to go back and look, and I didn't have time to watch it. My 12th year at this conference, I think. Has it been that many? I didn't think so. Wow. Because we started coming when Zuora was private, I think. Business is great. We had a really good quarter. We're very optimistic coming into the year. We made a lot of changes. Dennis got appointed as CEO last May, kind of came in. The board tasked him to come back with a strategy in 90 days. We took it to heart. We hired a consulting firm to help us out. We did a lot of work internally. And one of the things we said is we just need to focus, to be honest. We have all of the products, and we have the markets, and we just need to make sure that we are focused on who is truly our ICP across our products and really putting our resources behind the right places. So we did reorganize internally, really looking at EX, which we think we have a massive opportunity in for our Freshservice cloud. Just in case anyone doesn't know, explain what EX is. Yeah, EX is kind of what we call our employee-facing products, but it really is anchored by Freshservice, which is our ITSM solution. Really competing, kind of I'd say at the low end of ServiceNow, but really regarded as the number one SaaS player kind of under ServiceNow, and now starting to see ServiceNow in a lot of deals. In that space, there's a lot of legacy, which we can talk about. And then at the kind of lower end, there's kind of Atlassian and ManageEngine from Zoho. That is a true field motion for us, kind of selling into the lower mid-market or mid-market lower enterprise, which is kind of up to the 20,000 and below employee organizations. Our CX products, which are our customer-facing products, really anchored by Freshdesk. We realized about that, even though it's got the most customers, it tends to be more SMB to low mid-market, and then customers that we closed as low mid-market that are now very large organizations that just stayed with us. It's also a testament to the fact that you don't have to migrate off of our solutions. They really are enterprise grade, but on both sides of Freshdesk and Freshservice, really stayed true to the DNA of building products for the SMB, which is kind of all about being uncomplicated, really easy to implement, really easy to use, and built for the end user. And we've stayed true to that. Freshdesk, we're actually realizing, okay, this is truly an SMB low mid-market product, and we should focus it there. It doesn't mean we're not going to sell to larger organizations. We will, and we have our largest customers tend to be Freshdesk customers. But a lot of our efforts now are going to be on inbound for Freshdesk, as well as for Freshservice is going to be on outbound. And that's starting to work. Okay. So two main products, EX and CX. EX, the E stands for employee. Right? CX, the C stands for customer. And. Just like everything else, we try to make it uncomplicated. Freshworks met this company. It was really all about the C part, which is so interesting. Right? But then just this last quarter, the E part became bigger. Right? By the AR? It is. Maybe it is now bigger. No, the last couple of quarters has been bigger. Last couple of quarters. Yeah. Bigger and growing faster. Yeah, and so it turns out that that EX market under ServiceNow and then bumping up against ServiceNow is a great market. Right? Awesome. What's so good about it? You would think, oh, ServiceNow is there. This is a terrible. Who wants to compete against ServiceNow? But it's turned out to be a great market for you. Why is it such a good market? I think, one, it's just kind of a shift of who's there in terms of playing. You have legacy, which is BMC Remedy and the Ivanti Cherwell businesses, but they were on-premise, which IT in the past has always wanted to control it and put it in their own data centers, and now we're in a SaaS world, obviously, and because of that, then they're both private equity owned. That's a market opportunity for us, and we've been taking a lot of that legacy business away, specifically as those customers are being forced to do cloud migrations. And when they're forced to do that migration, they're going to look for what the next best opportunity. They do an RFP. Okay, and what are those two competitors? Ivanti Cherwell and BMC Remedy. And that's about a $1 billion market opportunity between the two. Those are owned by who? Oh, that's a great question. One of them is Charles River, I think. Charlesbank or Charles River, one of them. I always get the two mixed up. And the BMC business, they're actually splitting it up right now, is what we've heard. And I think that might be it's either KKR or Thoma Bravo. They're all private equity. Yeah, I think there's a bunch of players in it, though. Historically, because IT was the buyer, IT wanted to put it in their data centers. Yeah, so now that's all. All cloud, but there hasn't been anybody who's besides ServiceNow who's come out and actually done it. Right? When I joined five years ago, we really were a CX business. And we had been founded as Freshdesk. After a couple of years of building Freshdesk, we noticed a lot of our customers were using Freshdesk for internal IT. And G, our founder and prior CEO, our executive chairman, said, "Okay, you need a purpose-built solution for this." And we built a ground-up solution, which is Freshservice. Again, focused on the end user, but then it's a different play because it's not an SMB product. If you're a company of less than 200 people, you probably don't need an internal IT solution. So this really is more of a mid-market low enterprise play. Every year, you keep innovating, staying true to that DNA of building for the end user. And then you wake up and you start to realize, okay, you have all the enterprise-grade features that you need, and you start to get pulled into deals. And that's really what's been happening. We actually don't try to go proactively head-to-head with ServiceNow. We are being pulled into deals. We do a lot of ServiceNow takeouts. And the genesis of those conversations are truly about, "Hey, this product that we have in ServiceNow is way too complex. It's too hard to administer. It's way too expensive. And we just need something simpler, but we don't want to give up too much on the feature functionality." And we're just in a great product-market fit position right now. We did have to round it out because we aren't fully feature complete compared to ServiceNow. One of the areas that we were not winning against ServiceNow was because of our asset management capabilities, our ITAM capabilities. So last year, you already mentioned it, we bought a company called Device42. It was kind of the number one standalone player out there. We closed that in June of last year, kind of spent Q3 integrating a lot of it, building pipe. Q4 is the first quarter that we actually had kind of true some go-to-market synergy. And coming into this year, we feel it's doing really well. Explain in plain English what Device42 does. Device42, ITAM is a capability to go in and actually look at the entire landscape of all the assets you have out there, both cloud and hardware assets, and be able to have the IT personnel be able to go in and actually look at what is the security of all of those things, what are the recent versions of all the products that are out there, and be able to control all those assets in your ecosystem. And so that's my laptop. All the way through to your servers, all the way through to potential of some of your cloud offerings that you're using. Yeah. And does it discover all that stuff on itself? Yeah. So there's discoverability. And then the trick is to be able to bring it in, which is the integration that we announced in Q4 to bring it into your broader ITSM solution so that as you're rolling out things and really managing tickets and everything else, you can actually have a seamless flow. It is still a term licensed product. And so we said the first piece was to integrate it so we can pull in all of that asset data into Freshservice and have the admin be able to see it all. The second big product kind of evolution in regards to integration will be moving it to the cloud, which we said will be at the end of this year or early next year. Okay. So end of 2024. Well, you just bought it, though, in June. So you did the. And 2025. By the end of 2024. We did. We had been partnering with Device42 for about a year and a half. We wanted to make sure that the products could work together. So we already knew it had a light integration. This was much a deeper integration that we released. And then get it to the cloud by the end of 2025. Or early 2026. All right, so organically, how fast was this business growing? Like 17% last quarter. Is that right? Device42? No, but your Freshworks. As a whole, yes, and there's some currency things there. Yes. Yeah. How happy are you with that growth rate? We're not super pleased with that growth rate. Again, we have two businesses: EX, low- to mid-20s grower, and CX, which is a single-digit grower. The CX pressure over the last couple of years has really been on the expansion motion. Coming out of COVID, everybody was hiring like crazy. That product was growing very, very fast. A lot of it is land small. And then as companies grow, they just add agents as their support forces grow. That expansion rate, which we've been talking about for two and a half years now, just has come down consistently. What we did see in the last two quarters, we're starting to see a plateau of the decrease in the expansion rate. But that's cost us about 10 points of growth at a minimum in just agent expansion on the CX side. At the same time, we've seen the EX, Freshservice, and that market opportunity start to accelerate, as well as bringing in other products like AI that we have said, "Okay, if we can't rely on agent addition as a method to grow, we have to figure out other ways to expand with our customers," and that's what we've been working on for the last couple of years. We'll get to that. But so 10 points of growth. Right? And you can make up numbers if you haven't disclosed it. But help us understand, you were saying the rate of growth had decreased, and it's cost you 10 points of growth. So what are we talking about? Are we talking about the CX used to? Grow a lot faster. Yeah. So actually, I'll put it this way. When we went public, our net dollar retention. Let's just make it up. So let's say it used to be growing at 30%. Right? Are you saying it's now 20%? No. The CX growth? CX, yes. CX is more of a 7% grower. Okay. So it used to be like 17? Even more, yeah, at one point. Yeah. And so when you think about, it's pretty simple math, actually. We went public, our net dollar retention was mid-teens. At the same time, we had said our gross churn was low 20s. And we sold an SMB, so the churn was high. We've done a really good job of bringing our churn down. We're saying we're solid mid-teens churn now as a company. Part of it is mix shift because EX already has kind of enterprise-grade churn, and it's growing faster. But the majority was really the reduction of agent attrition. Our net dollar retention right now is around 104%-105%. Okay? So we've lost 10 points on net dollar retention, but at the same time, brought churn down by kind of high single digits. Right? When you add those two together, you can see with the expansion rate how the decline of expansion rate, which is really all agent addition. Again, we've known this. We started to talk about it, I think, the first call in 2022, the first quarter is the first time we mentioned it. And at the same time, we weren't the only ones who were experiencing this. But it's something we've known for years now. We've actually been kind of counterbalancing it. Trying to figure out where I want to go. Let's go to how AI fits into the whole agent addition equation because this was such an area of concern. Right? So people were worried, "Oh, you're going to need even fewer agents," right, because of AI. And there was one company, right, it was Klarna, which in fact was like the poster child for, "Oh, we don't need as many agents." Then did they just sign up with you this last quarter? Klarna is a customer. When Klarna came out with their announcement. So let's take a step back. Now they're doing it. Set the stage for us in terms of what was going on. Yeah. Klarna, well, I think remove the name. Right? Clearly, the bear case is that for CX products in particular, but any agent model that could have high automation, that when kind of the AI wave hit, the bear case is that we are going to be impacted by reduction in agents. Yeah. You'll lose seats. Yeah. The thing is, we had already talked about how agent expansion was already decreasing a year before ChatGPT came out. And so there was much more macro influence than anything else. What I can say is that AI is real, and it's actually going to be a great thing for customers. We believe it's going to be a big tailwind. We also believe that we are one of the leaders in AI. We have two products in market today: our Copilot. So Freddy, our AI products are called Freddy, Freddy Copilot, and Freddy AI Agent. On the Copilot side, over 2,000 customers now paying for Copilot. I can say that we have not had a single instance of a customer who we can point to as reducing agents as a result of adding Freddy. What we think is that agents are just getting much more productive. Right? The ARPAs for our Copilot have actually held up pretty well. It's $29 per user on the agent side. I do think pricing will actually evolve across the entire industry, and I also believe that if AI capabilities are all going to essentially become commoditized at one point, you're going to have to figure out how to actually monetize it. Right? You may not be able to charge for it over time, so you might have to include it in certain additions and things like that. On the AI agent side, we have over 1,300 customers paying for AI agents, and it's a little bit different because with AI agents, it's a consumption-based model. So you are entitled with a certain amount of bot kind of sessions, and when you go through that initial entitlement, you have to buy additional bot sessions. So that 1,300 are customers who actually are using it and have had to buy additional sessions. You think about AI agent, that's about kind of frontline deflection. And we charge for it on our CX products because that's really from our customers to their customers. On our EX products, we're not charging for it. And it's more employee-based and less volume there. And it's really going to be through Slack and Teams. The beauty of our AI agent is that you can get up and running in literally like 30 minutes. All you have to do is kind of configure and point it back to your knowledge base, and it just starts working and learning. And we think that's really, really powerful. And we have a lot of customers using it. Our third product, Freddy Insights, is in beta now. This is really for kind of the managers and the admins in our products to be able to look at the entire landscape of how all the agents are doing, what's the interaction with customers or employees. We expect that to come out in GA kind of in the back half of this year. How will that be priced? Actually, we haven't disclosed how Insights is going to be priced yet. Okay. It's amazing that you have no examples of people reducing their agents. Agent reduction because of yeah. And I think it's just to bring it full circle and to the company you were just talking about. They were very aggressive saying AI is going to be able to, we're going to get rid of all software. The reality is they just renewed and expanded in January. And I think it's more of a testament. And they had never used us for frontline deflection before. Right? They had built their own frontline, but they're using us for kind of level two and past. That doesn't mean at some point they're not going to be able to figure it out. But right now, it's not like you can just go do this yourself. And if you're a company, to be able to go build your own AI, you have to have a lot of technical resources. That's not going to be our customers. Our customers, especially on the CX side, are going to be kind of SMB up to low enterprise. But they may not be as technical, and they just need a product that's really easy to implement and use and provide value for them. That's the way we build our products. Awesome. All right. Questions from our audience? I'm interested. So when you think about the competitive relationship with ServiceNow, do you have any tailwind in terms of customers that just are already basically with ServiceNow and want a simpler and cheaper solution? Or is it really about winning new logos that are kind of looking between the two? Or maybe talk more about how the tailwind you see there? Yeah. So I think the question is, hey, is the opportunity all greenfield, or are you really displacing? Right? And it is a combination of both. If you think about our solutions on the CX and on the EX side, we sell software that every company needs. Right? And if you are selling to businesses, you have to have support software. If a company grows, you're going to have to have an EX solution at some point when you get to some scale. So if a company is already at some scale, it's going to be more displacing somebody else who's in there. Now, I already mentioned there's a ton of legacy. There's a ton of shift right now away from legacy. And again, I think there's about a billion-dollar market opportunity in terms of what those companies are actually getting from their customers right now. On the ServiceNow side, it tends to be displacements on companies that are pretty frustrated with how complex that solution is and how expensive it is. Right? We are something that you can get in and get up and running kind of in months and sometimes weeks as opposed to a year. It's going to be a lot cheaper and have a much higher kind of ROI. When we're going head-to-head with ServiceNow, it's often going to be against one of the legacy players as a displacement because ServiceNow is not playing in kind of the low-mid market. For that low-mid market, there is a ton of greenfield. We will be the first IT solution that a company would buy. And they might have been doing stuff on email or using some other kind of ticketing system internally without really any sophistication on their kind of IT capabilities. And that's where the greenfield is. So it's really a mix of greenfield and displacement. You talked about how your AI agent offering was consumption-based and how customers get a certain allotment. Are you seeing customers kind of go over that allotment more often than not? We have three AI offerings. We have Freddy Copilot, which is an add-on at $29 per user per month. That's not a consumption-based model. That's a monthly fee. Freddy AI Agent is consumption-based. The 1,300 customers plus that I mentioned are customers who already had their entitlement, and they went through it, so they had to buy additional sessions. We define a session as an interaction within a 24-hour period between our customer and their customer. That's how a session is defined. You have 100 bot sessions per pack. As you would go through, you have to buy more. That's the 1,300 customers who actually are using it and had to buy more. Okay. You get 100 interactions in a pack. How much is a pack? 1,000 interactions. Sorry. 1,000 interactions. I was trying to figure out how much this costs. Sorry. $1,000. $1,000 for 100. $1,000 per pack? $100. 100 bucks. 10 cents. Yep. Okay. Benioff was talking about $2 a conversation, so that's like super different. Yeah. And they're all defined a little bit differently. Right? Conversation versus how we define ours. Again, I think this is. There's so many different solutions out there. As the noise starts to settle over the next year, I think the biggest evolution in AI is going to be the feature functionality, but it's also going to be the pricing, the pricing and packaging. And we're talking about doing a lot of different things internally ourselves. On your pricing. Yeah. Yeah. You guys are a lot cheaper. We are a lot cheaper. You're doing 24 hours, right, which could be multiple conversations, and you're $0.10, and they're $2, and they define a conversation as an end-to-end resolution without a human involved. There's other companies that are coming out, and they're talking about resolution-based pricing, which is completely different. Right? Is that what Sierra's doing? I don't know exactly what Sierra's doing, but. Is that what Sierra's doing? So I think, again, as the evolution of pricing and packaging, if the promise of AI is to solve problems, then you could see the pricing moving to, okay, prove it. Right? When you solve a problem, we're willing to pay for it. Right now, I think it is pretty early. We don't get a lot of pushback on the pricing from our customers. I've already mentioned that even on the Copilot, the ARPA is holding up, which is great. And if there's discounting on a total product, the discounts on the Freddy products actually tend to be a little bit lighter. But again, I think that we'll evolve. And I could see even on the EX side starting to include some of the feature functionality for Freddy in certain editions of the product. All right. Another question? How do you balance organic growth with potential M&A opportunities? I personally don't feel we need to buy growth. Right? So if we're going to at the same time, we've also been really upfront that we will look at deals, and we will evaluate things. But they would tend to be product roadmap acceleration as opposed to revenue. Some deals will come with revenue, but it's really going to be about adding in feature functionality that it's a build-or-buy situation. Device42, I would put in that boat. We are very open when we bought Device42. You can see the revenue, the standalone revenue that they had in our Ks and Qs. You have to disclose it. We expected, actually, a bunch of that revenue to go away because they had a lot of their revenue going through partners, specifically Atlassian partners, that we presumed. Okay, as soon as we buy them, a lot of that would go away. And it did. And so it really wasn't about the revenue at all. In fact, we expected it to decline. It was really about making our product fully featured, much more competitive at the higher end, integrating it, and then what would the attach rates and the revenue accelerant be with our existing install base as well as new deals. I would think we would stay probably true to that mainly. Tyler, thank you so much for joining us. Thanks for having me. Great to have you here. I wish we had a little more time. Because I didn't get through any of my questions. My very first Citizens Conference. Your very first one. I can't believe you had 12.