Freshworks' AI Agent Studio Added $2.5 Million in New ARR. Its CX Business Grew 4%.

Freshworks told investors that session-pack buyers for its support AI agent rose more than 50% from the second quarter and sessions more than tripled in a year, with over $2.5 million in new revenue.

That revenue is annual recurring revenue (ARR), and it landed in the customer experience (CX) business, where ARR grew 4% to $404 million.

Freshworks sells the agent in session packs, which customers buy as their use of it grows. Freshworks reported how much the agent deflects, but it tied its revenue to sessions, and a support team weighing the product has to match the two against each other.

Who is buying the agent?

CFO Tyler Sloat said the $2.5 million came from the CX AI Agent Studio across a broad base of customers, and that the number of customers buying session packs rose more than 50% from the second quarter. CEO Dennis Woodside said conversations on the product rose more than fourfold from a year earlier, against the threefold rise in sessions.

Customers can also build custom experiences in the studio, which takes them time to test, Woodside said, and those tend to be larger customers.

What does the agent deflect?

Freddy AI Agent deflects 50% of inquiries on average and up to 80% in mature deployments, Woodside said. Freshworks did not say how it counts a deflected inquiry, how many customers reach the higher figure, or what a deflected ticket saves a customer.

That leaves the sessions figure as the only measure of use that Freshworks tied to revenue.

Where does CX fit in Freshworks’ plan?

At the start of the quarter, Freshworks moved all CX sales and service to India. Sloat said the move makes CX highly profitable, and that the company has said it will run CX for profit. He said Freshworks expects CX growth to stay at about the same rate in the fourth quarter and the full year.

Growth is coming from the employee experience (EX) business, where ARR reached $588 million, up 22%. Freshworks passed $1 billion in total ARR in October, after the quarter closed, so the agent revenue lands in the smaller, slower-growing 41% of the company’s ARR, in a company that has pointed its sales force at the other 59%.

The test for a company buying a support agent: does the invoice follow the tickets deflected, or only the sessions run?