Earnings call transcript Q4 2023

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Operator

Welcome to the Braves Fourth Quarter Fiscal Year 2023 Financial Results Conference Call. My name is Michael and I will be your operator for today. [Operator Instructions]

I will now turn the call over to Christopher Ferris. Head of Braves Investor Relations.

Christopher Ferris

operator. you, Thank thank Braze and joining today us Good for you the review results XXXX. fiscal to afternoon for fourth quarter joined and Co-Founder and Officer, by Officer, Will I'm is Magnusson; Financial our Chief Winkle. Bill Chief The Executive our release results today. market press after the We announced a issued our in closed more today's Please earnings refer for to supplemental a website investor and our announcement. presentation investors.braze.com at information related to

safe of cash no for business We and statements. forward-looking expectations free and we today. securities statements our that limited make update to AI of period tools, generate a uncertainties These reflect impact our to income and provisions targets customers planned the consolidation anticipated Braze, customer on impact XXXX outlook results product of our trends current are to our we flow. differ to laws risks our under financial which the growth ended positive our us assume operating from vendor ended plan, their therefrom, call, development including and including materially anticipated goals, statements statements Act will statements only any that our our and first this long-term to, of and trends fiscal Private actual and vision positive variety our behaviors, During include financial the the and subject the non-GAAP federal in and may our including April feature macroeconomic are for opportunity, and forward-looking to the potential and could cause our obligation views such as Reform not benefits XX, Securities January the our harbor quarter of related regarding but year Litigation XX, market are These XXXX. anticipated XXXX

section risks available identified of of affect discussion uncertainties Investors material filings, on and today's a to both risks press in the the our our please SEC the results, that refer our could website. release and For

non-GAAP management our I'd non-GAAP remind operations company's results. refer financial measures evaluate to earnings addition as further financial of our the to our items to quarter in release most financial the accordance on a U.S. to performance and website. comparable call Relations that our include XXXX performance accordance the provided the calculated or GAAP Investor used you U.S. to in like to be financial today's the will not in these portion measures ongoing have the in Please should impact of understanding certain prepared fourth considered fiscal superior investors in with non-GAAP substitute also the by directly measures financial financial of under The with reconciliations included measures measures for to aid GAAP.

And now over turn to Bill. the I'd call to like

Bill Magnuson

a million and X% the the compared strong delivered solution. demonstrating Brave value everyone. Chris revenue, ROI the prior XX% and you, the versus We in to quarter, high prior long-term again of afternoon, $XX.X generating good up Thank fourth year and quarter,

others. Drive-in wins high-quality used and Line, for My among marketplaces total customer include one despite our elongated Notable Finish McClatchy upsells online both new our win sequentially continue and to by Clouds segment. point leading macroeconomic Media count cycles, sales Bell, Communications, results and that a Europe's particularly were We and in strong recent Our Discovery Marketing XX% Fitness Commercial $X,XXX challenging solutions. Company, of to Sonic increased cars legacy business many environment against [indiscernible],

talented plans. And by cross-channel market we recognize the this the braze across be media globe platform. as our renewal as dedicated continue Braze's of to to our revenue, remain who Thank the and on $XXX to team announce engagement becoming QX, up you engagement success passed on we to execute and happen. industries best-in-class in we and through challenges, our annual come see Despite build in excited billion committed at Customers march growing and during e-commerce for recurring such opportunity Braze revenue momentum achieved deliver hospitality. and market enabled proud continues traction can confident demonstrating and customer you that customer capitalize our and our I'm in newer that to tools telecommunications our legacy scale. I'm make company. help today, toward like goal ROI of retail to million on growth industries ability high our next with $X travel to personalized, ability a key to marketing

way specifically, In tough powered are whichever stand higher confident engagement customer use To their in with we seeing to universal consolidation cycle will from, that brands focus customer And shift all productivity, to customer value. service will their blow, and platform we Customers innovation while by life is and which strengthen return remain to out, ahead, like brace a Looking retention. activities to to times, intuitively powerful towards need engagement simultaneously the macroeconomic marketers real-time optimization winds data. we come technology drive imperative. being increasingly engagement are customer looking and business benefit that the we think suite integrated a trend vendor to comprehensive

into messaging, marketing Brave, case, new in-product customers for signing this a customers architectures another radiational we Marketing of vendors, engagement retailer tracking. other an notifications we're platform push, complex modernize and push up legacy with they effectively disparate In e-mail, with separate particular separately These X their deal we array and With some digital breaking down one with analytics from channels company, and cards. as sending cost from Braze. an content including and the vendors between their channels, teams of across messaging e-mail, and and web is in replaced quarter, replaced improving software, business media X their Cloud moving efforts customer of athletics simplifying in win engagement ranging to silos consolidate are size the all large a world's start-ups X data siloed can customers user solution, technical collection customer SMS, small enterprises

We our marketing solutions I'm coverage engagement in legacy which the clouds who highlight last the to our in was that for of their and modern calls pleased provide enterprises don't recently will this point should few scale listening Brace as In trend cross-channel expect with removing with leader coming bra years. XXXX industry, tailwind Brave omnichannel consolidate proof have point quarters. Wave we in to a QX Their another Forrester leadership named for with the the resonate marketing solutions, a and ecosystem hubs. sophistication continue ambition in technology believe been on earnings those customer that of

from report. Braze up with product Everywhere expert customers technical to to read of via and directly size build So anywhere and connections their its lives services vision start its just human Forrester's let or clients competence. me products go regardless innovative help

that depth Its use, They saying superior innovation road marketing reflects looking workflow flexible digital continue solution their suits strategy. across to investments cross-channel for map by experience refresh platform hub and concepts friendly and a a flexibility. organizations these by brace balancing marketer

alongside retention identities partnering Next, loyalty. and transformation to efforts briefly highlight to at go-to-market product investments our announced and at be engagement, helping help resolve power customer clients development in like and leading brands WPP solution aimed Together, I'd recently make we'll and coordinated scale and integrations personalized creative agency. with customer joint strategic activation, services on partnership a

our outcomes to with look relationships with We partnering WPP better create and our customers. deepening other and to agencies GSIs for forward

bras, As Heyman we Those we CEO, we continue will existing our build know DNA. John that innovation our component look follow is the X moat. that to and competitive edge and were myself in technology on key our to the closely a cutting innovation very of push. is platform our improve intelligence future, that Artificial by engineers, founded of and

and and saves when AI Braze In data automating started of and AI we drive creative through production plan XXXX, customer marketer future. speed campaigns. time Dolly existing as to AI in learning of data invested and in integrated inspiring our the for we to engineers a for in May December, scientists developments creating possible, In using agile, a you machine using optimize which subject ideas into test more effective lines when for XXXX, walk how in we been library enhance engagement have to leverage both users new copilot, more to generative AI end into focused easily into me Last targeting GPT-X by customers image messaging few and and and timing and their to different be team decisions effectively Let variants. marketers for more strategies customers copywriting build dedicated we very the engaging making customers' optimizing entirely. investing building content our their a relevance AI product, on of

vision. creative tools these marketing about an We're small to immersive wield enable very for teams even excited to the potential

testing also for their to Braze's and While sophisticated capabilities making lowering easier advantage creative burden. it production take by them of differentiated

seen base customizations for a value swath up-to-date We're support to We to and have speed along further advanced product GPT-X This of valid efficiency our to more leverage also documentation time capabilities message support which is quickly. enable also code our integration enhance order capabilities a of of examples customers. samples. source already syntac of generate users accelerate aware Braze's leveraged with knowledge that of successfully wider in set experimenting of templating and most our to that and PT the are with to base

designed Day, message And customized with models. to models This automatically introduced likely from each similar are solution campuses. And work outcomes engage and adapts fingerprint, recipient identify improve each brand's to most expanded variant to our a new individual learning for as churn we've industries that across variation will users content profiles. generates behaviors data with determine in make campaigns sophisticated personalized suite purchase. We our they that to we've to Investor to learning we a discussed usage on or which effectively business machine and with at consumers likely you machine features are in October and based which first also to most brace different predictive use introduced

array of of to used infrastructure a improve upcoming cloud costs. We workloads. footprint our lowering response it automatically using Finally, the learning-driven service a predict predictive in our data. load wide for recently to on to messaging enhanced we've learning years is are historical of dynamic machine quality Auto to scaling stream designed usage customer use models adapt while and we to machine based our technique processor

for we core potential as the our have in to our costs shown infrastructure tech continue in stack. reductions meaningful drive tests efficiencies Early

platform ML-driven and service expect throughout and surface can AI that Braves developing will products our months You the area continue and coming of in the enhancements years.

Finally spend moment I it to news announced like a discuss to over earlier this Isabelle, turn some we before afternoon. exciting to I'd and

acquire markets. Australian and Star, the Brave in into North entered Zealand agreement We our have New technology an to of reseller exclusive

adoption in drive the We our Braze. and have this of in continued to for We years impressed have been and close you region. fiscal several across their working with of will by estimate progress the to updating quarter the you look their transaction region for Thank in team we your industry-leading quarters. solution on support coming our been second ability forward the

in the investments And strong now industry will the We standard on with customer the for ahead are I'll turn to raise our path believe very excited Isabelle. the to products, keep coupled call engagement. becoming year tailwinds about and engagement the the over secular customer

Isabelle Winkles

you, Thank joining us everyone, thank and for Bill you, today.

to we by a new expansion, reported contract combination business. $XX.X a with quarter year-over-year customer revenue XX% and Bill mentioned, driven existing million. was strong This of renewals up As fourth

from The XX% remains of as as configuration onboarding the revenue. period customer a quarter. same subscription the primary X,XXX of fees prior to year-over-year Total the last total Our line, contributing XX, year of well customers of other fourth X% XX% XXX combination up quarter professional and increased onetime revenue January XX% count up our top from services. and remaining component represents as

from XX% same large year. contributed of year-over-year as large contribution as at XX% reflects and total total as to those our XX. customers last of least last of total XX% our ARR of January define XX% a October a annually Compared to XXX to the Our increase XX grew number which to contributed of as we compared customers $XXX,XXX time XXX ARR that X% quarter, spending this

in outside Expansion net customers, net customers, fourth XXX%, up was was XX% Revenue XX% in from revenue quarter prior regions. all those industries spending dollar-based retention fiscal across dollar-based and across the total least U.S. for distributed end of And at $XXX,XXX broadly and our year with the Measured retention geographic the at the XXX%. of annually large our while quarter XXXX. line contributed was

The XX% length million, years. million, year-over-year In signing increase XX% the up our and customer sequentially. remaining performance quarter, year-over-year of and Overall, was was $XXX contracts. fourth approximately up remains by year-over-year at new total Current obligation dollar-weighted contract RPO up contract up $XXX and was and sequentially. renewals XX% XX% the upsells driven X

Now I'll statement review more detail. the in income

discuss a As some will I of non-GAAP. reminder, the are metrics

financials a last reconciliation the of non-GAAP We've earnings gross to in release of earnings in representing gross a in quarter a the provided year presentation. million GAAP Non-GAAP of accompanying margin and gross non-GAAP in of margin of million, to was XX%. of non-GAAP non-GAAP profit compares This our gross quarter $XX.X XX.X% quarter third the this fourth XX.X% and year. and profit $XX.X

to onetime reduces true-up. In the of impact revenue our to higher which gross due addition levels of activity, normal included cost in customer seasonality of a in margin QX QX expense

in points scale year-over-year customer $XX.X our non-GAAP technology million, to Excluding representing margin related a to expenses XX.X%, economies basis ongoing up and of core continued this gross impact, profit of XXX efficiencies due functions. our support gross QX non-GAAP was

sales operating XX% $XX.X quarter. to revenue the or revenue $XX.X in compared was year Non-GAAP or and prior marketing million XX% million expense expenses. of Turning of to

efficiency While our organization. deployment investment expansion the the dollar entertainment to our travel and improved resource disciplined expenses, reflects go-to-market and to global growth, support investment our increase increased reflects approach ongoing across in headcount our

drive Non-GAAP million offerings The our of quarter. was quarter. XX% was primarily was million million prior loss to in expense operating million the support $XX by revenue increase company increase $XX.X support to dollar to year XX% year growth was public non-GAAP $XX.X the of the to quarter. compared new existing dollar driven a driven company $XX.X features R&D or develop our to million expansion was XX% the G&A to as XX% well Non-GAAP and in of or revenue products of of by $XX.X or in expense The compared revenue headcount revenue prior as of investments compared $XX.X increased prior expenses. growth. to operating and million Non-GAAP loss year or overall

average shareholders Brave quarter was to average million $X.XX on $XX.X the of $XX.X weighted share attributable loss shares shares of during or loss per or outstanding prior based This basic of to loss quarter. on per based weighted net Non-GAAP loss a basic in million period. compares outstanding million XX.X the in a share $X.XX year the a XX million

lower provided million during just the marketable $XX.X in negative and We cash, ended Now flow $XX cash of capital. loss the ago working changes over $XX,XXX the the negative quarter. a approximately turning flow to million was million restricted in cash by to in balance quarter operations cash quarter the was a prior with to year quarter, compared and year $X.X Free by $XXX.X equivalents, sheet million and compared net statement. cash in quarter securities. driven Cash in positive use the

and from previous quarters, As vendor customer the free stated in we quarter-to-quarter we have payments. flow timing of to our expect fluctuate cash given

And forecast. now turning to our

that of of slower elongated geographic persist continue we growth. and by Like verticals. engagement headwinds many macroeconomic industry We our in customer a experience to tempered peers, in and regions continue high-quality sales business to cycles solid interest see solutions, new number

operating environment targets that progress current are As level fiscal an such, fiscal we positioned navigate significant believe assumes cost And long-term towards and to outlined throughout year, our of guidance and persists elevated our will as October. we the that make continue conservatism discipline maintain we last to well XXXX. this macro

in range million rate the quarter, a revenue expect XX% approximately the For at be million growth to first the we represents to midpoint. year-over-year which $XX.X of $XX.X of

the compared days QX first or course XX ratably year, reflected our quarter which fewer each the contains in revenue of recognize our other is year of Because contain revenue As day quarters days the guidance. the over we count to a days. the X X XX reminder,

non-GAAP operating $XX to First quarter expected loss the in range of million. million is to be $XX

XX.X based net the non-GAAP and in the share loss per of non-GAAP loss basic to $X.XX $X.XX First on quarter first during per share period. net to approximately be average shares expected in outstanding is weighted range million quarter

is represents approximately growth the year-over-year For total revenue a fiscal $XXX the the to Fiscal to expected loss of the we XXXX, expected expect net year in of the rate million. $XX to operating be $XX for $XX million be to midpoint. of $XX non-GAAP $XXX be in Non-GAAP million. range range is the same loss to which year million period XXXX million full million range at XX% of in to

average share For expected share fiscal shares. $X.XX to a loss net weighted per year full $X.XX based be of year XXXX, non-GAAP XX.X approximately is per share count to basic on million

base revenue margins and quarterly quarterly income ended are non-GAAP flow positive look we the cash focused will and generate we XXXX. operating and flow XX, income improving free while expect cash out, in year January on growing positive operating free As further fiscal

we margin addition, be future. of our conclude this In in negative X% to year QX or Braze's reiterating I'll income operating our expect better. non-GAAP in by excitement

are customers long-term to We effectively business, partnering on engagement focused our to targets. help growing managing them customer our achieve financial while outcomes achieve with expenses incredible our

call questions. Q&A. that, open with And we'll for please begin now the the Operator,

Operator

Instructions] first DJ at Hynes from comes [Operator Our question Canaccord.

DJ Hynes

the productive. for any more to more and streaming to about think advancements Marketing I'm and implications AI somebody Are you swap look, to that marketing solutions figuring accessibility Cloud customers then with to infrastructure continued legacy any appetite existing just trying race. -- for like are workarounds solutions to out out willingness in like first Bill, third-party and make seeing move existing signs you or ML. data

Bill Magnuson

Cloud Braze. the X spoke of Marketing a tool. showing that the verticals about the customer And fact tool to I move touch we're marketing on that slower replacement to that industry deployments seeing I been they're solutions over the that this legacy bit in you solution think bit both means there first, are engagement modern two, original seeing and across not but cases, is little just question. would One legacy that legacy -- it's Cloud legacy that point about highlighted clouds. the alongside that just mean, I the to was point things. requires deployment have channels ago, We're Marketing hospitality consolidating marketing a just And and demands. in not a for and cycle, little those across in that travel vendor that Thanks highlight see that's I similarly starting legacy Yes. their points and consolidation delivering I and trends

we software as it as AIML the picture in from comprehensiveness combined perspective in flow of these across and data seeing to more in position first-party but was wholesale And the the data vertically those we real moving and in flexibility puts enterprise. access getting some for other when other directly and with what the ability can that the have we're the build I And us last and optionality access before and stack more raise. later, legacy over future. to clouds not that marketing with out some touch have comprehensiveness just what We're the have -- interact to well to AI this speak flow of customer, that more that is allow look customer ML technology is a generation, to entire complete in this we picture channels, a increasingly, us into one default around an that more also that of at questions moving we respect to with of replaced I'm I the them that in our within seeing real-time integrated and get sure to about AI the the call. we will going and But the finish data because messaging think I'm to points time

DJ Hynes

about then for And Yes. color. is you. Helpful one

expectations versus guidance, growth gets terms of what in of that your to mix terms new contribution in guidance? like of from NRR the Just base, net from that in XX% midpoint are the the XXXX, growth fiscal you so

Isabelle Winkles

the for question. Yes. Thanks

year. peers to environment of tough of an say, we've increasingly elongated cycles. dynamics net been this kind seeing are the think then when seeing And I we're been that same comes all, regards elevated to course it just of these seeing new of want levels scrutiny, over well past we've continuations deal lot performing deal that our I first with a of that business very certainly here the So of against to and

guide to fronts. I and going of we So, are good incorporated number a think across degree continue a our we've conservatism into of

rates, to we've have context generation specifically the a so of length, ongoing assumed across will number Conversion some or That's long some the to deal our sales continue we kind and incorporated we'll see KPIs, win think that expectation improvements therefore, business. degradation. weakness new in further assuming we of of rates, cycle pipeline And net that for the guide. productivity. rather We're stay limited in true

guidance. the all is This embedded in

of We've think to disruption it's of bit bit say able last few that little more new behave of and context might behavior and comfortable investment against quarters. And where the weeks the 'XX. for And events new coming in to new of to the to how play net expect little really that that, out so the right been guidance do is net result more many is of to months a the scenarios with market business possible net continue and kind we and a now that guide also I a as FY the over have fair the led feel going for our to struggle. buyer maybe we uncertainty incorporate

Bill Magnuson

couple WhatsApp. quarters with environment as at I'll that to the positioned When data of world excited been never super been up road I've also product has about been But of our look things as dynamic setting how or in momentum recent it you success. ecosystem. and is preparing it's us like I'm And we're doing in while on ingestion optimistic are add like long-term in. for where that map especially position. the We've launch our we but more there the things also business said, obviously, the cloud qualitatively, the about been for and and that over the challenging general, a really focused, last just operate

You WPP which may exciting. continued but out the it's GSIs. a that have partnership also the for is seen came with own its about progress yesterday announcement with All the our

Our for the cycle and I and highlighted that these Braves going one build just we're the vendor legacy that to go-to-market investments all build into replacement the trends are consolidation, around future things tools that really the on.

obviously, the quantitatively, we we're of our in with weeks across is see environment of the informed Now guidance environment the that last numbers industry. of the that you as so very the mentioned, in but difficult couple and the this and And feel Isabelle is events we're being by that mindful and comfortable our providing. experience guide far

DJ Hynes

makes sense. it Yes,

I logical. think is the prudence

Operator

from next our And comes of MacWilliams Ryan question Barclays.

Ryan MacWilliams

profitability about expected. the to improvement fourth exit quarter Great better the margin we than in the rate guidance was and hear

investments current have similar time any current the updated macro about this path do stays current So And in line [indiscernible]? the you do the you making how potential or thoughts to if about think Braze? environment, for of profitability

Isabelle Winkles

Yes. Thanks for question. the

as an take if the So made growth that we announcement December And staying. of in paused headcount. had We're December, in that we overall think you on to staying net course we actually that. back broadly

has that So changed. not

and And year. of visibility of control the have of on year. to profitability Because balance sort this this amounts make and for with we to of path meaningful spend into continue our are able sort overall kind actually so progress of we incredible the

the maintained and incredibly pause how of driver course our spend to It's for been time they're have for headcount leaders the key we've being. course. reprioritize is stay -- to to for we kind deploy it's the over to the the as actually profitability actually for this being so year. going a the headcount increase helpful And pause to able of path that, that's think

for look this wouldn't expand the us I materially to of balance investment over new So net year.

Bill Magnuson

I've through We've of Yes. to entire and confidence through the our it profitability. the rallied R&D the just advantages of rallied great And been as leadership around it leadership just proud and also culture of our this but has culture in that touching our base our employee only me how lot we for our the gives build able and that's path data as been of around we and around adaptability our foundational base. while do say move as great investments transition position well employee confidence future has that for this continue making employee to not I'll the have to a space. mastery on profitability to really

Ryan MacWilliams

Exiting should then we for platform? Because quarter, currently And the rate. one like points macro Bill. Grace messages about impacting usage how mid-XX% healthy how of still fourth at the the think growth processes year-over-year customer seems sent is data

or how see different faring. sizes So or to you're thinking about verticals different customer are currently

Bill Magnuson

Yes.

and your development advantage think I data one. like think be isn't cases spend, in always discretionary, this I to it's cases take that's cetera. yet customers they a extent. The and use drive reality they more sets as a to bring oh, lot feature et the advertising continue general in some -- just people we that points it's is and like cloud of communicating at operation messaging. more that multifaceted customer is And in And engagement really back to expand of ingestion that think, on to look marketing on as responsibility new into new especially data customers use always see with new technology

We continue There's ones. surface ROI product. a use them expansion multiple our of of in and find into early across they lot they the new as the channels. expand area cases expansion their There's just in expanding of to see customers

mission-critical BRACE much communication order that deliver fact to does products the in just of then, what And and services. so

that an secular data then first-party first-party every directly toward vertical becoming relationships I to and able those and take for brands one is across being that's with think action the size. every relationships kinds all trend on of build up of first-party inform them imperative

Operator

comes Arjun Blair. our William with And question next Bhatia from

Arjun Bhatia

Bill, stick with maybe just to you.

to investments you've when But think from you do over love more AI You Does your generative for a how over more this be help out get you the of the about your some plays made it for customer that that years? it standpoint? platform competitive? years. next advent can several past several of would drive Just what mentioned the think the productivity the do on Does AI, thoughts customers? you

Bill Magnuson

absolutely. Yes,

take general. generative a you and for and of engagement back give its a AI in and I'll customer So influence kind how ML from step framework think just about in we

like towards a someone e-mail own move well something one live space. autopilot experience. the on an kind One in even well, is for or or It's much of or human? a an the the product space I been is Magic Or first-party in first-party and see Box autopilot. don't that should the relationship data you that's relationships a inside and is And higher few someone and Is a you, is So you like that move that a a targeted have in you're optimization? this bar effectively full have copilot first-party your carefully thus, full very for bucketing it autopilot for where to the nature Black data little than full more to it have things ways. areas expect of And automated like a thing or think in that advertising ad very crafted is of different that's know BXB. it's that managing is things prospecting bit first-party you to it --

in up immediately. can a has much that running both. quickly. over Obviously, cycle happens balance used delivering we're investments of conversation because recently concept the Chat can learn even data make learning be be when that the it pretty AI special related It's those and easy of to A particularly and get and the sure require to to lot used immediately. a our learn that and in We on of definitely versus training been need generative that middle you're you stuff time

immediately when take it's real-time partial flow. are put think, full the points over Canvas time is or like uniquely that found full and on developments because framework things earlier hands best systems of which of which positioned now comprehensiveness those targeting. We we vertically things integrated can learn touch just our especially Braze, robust or suited advantage in because our like for generated I data the a of of other I predictive mentioned And that of really data testing our fact the just to for the automation, types variant that intelligence for is strategy ecosystem

us so of AI enviable and that to developments. puts advantage in be picture position complete ML to an new And take more able

specifically it on to have particular, the side, targeting the kind most in and the in places develop the which in certainly getting going future. generative orchestration of ML-driven is supercharge I'm more already continue excited are and to of to near-term experimentation we one intelligence about Now of one using platform the because creative is predictive other you produce video and to message Pair experimentation barriers a same ways or how side. for action. trying evoking communicating production same interesting, relevant, that -- the like actually similar generation the someone do with to harder. different gets encourage X of even the marketers or image to things

a that copilot. creative the And broke the we so -- in if framework that's are of where back the all go aid those to out my I beginning, of

smaller not with resources. helps video soon. [indiscernible] the which augments move doing we and for capability helping production same important top it's So differentiate and gifts for the new teams whether real-time use our also think particularly equivalent pretty but it Those about images with expect through But will chat that only by the of cases or of everyone raise opening thing faster capabilities things are come types actually I more and compound writers which games through animated helps customers experimentation. our that's for block and efficiently up it less

the And that really enhance produce ROI. make to test. variants together, that and think you machine easier gains it insert I strategies learning to those effective multiple learnings then more testing for help compound to those both customers of we is

the of hope some like. And to where stack. you that braze some unique we so There's being of of it with and how are an but idea road kind gives because that those we're I to look to also map advantages aspects is first-party really positioned in going about data respect what think definitely amazing

Arjun Bhatia

Australia, very then I helpful. making geographic acquisition New touch -- so Zealand. priorities wanted And this because Yes. to on That's just in you're

a the Europe, cetera, much drive you think used that expansion is users might hear obviously in to it more further LatAm, You've integration. frequently love I'd because here States. the et WhatsApp launched abroad key how international channel than that in help

Bill Magnuson

cite all our the outside mean that as you'll XX% revenue United well of from States. I Yes, of comes as kind absolutely. of just foundational stat

Brace of And because global and the and mobile so early has footprint stores a as of app we know, very a global our nature very especially in the and company. always such, days, been we've

office actually second largest London. is fact, our in In

And in within who, in Braves, geographic of especially you brass footprint I'm lot a WhatsApp States. exposure the see you reason in most SMS particular that the the concentration North being excited space tech huge United and global marketing Atlantic. is in general, why the that of their vis-a-vis about the So I see competition somewhere to like that a over center say

And a can potential. footprint, multiply we take so lot our by WhatsApp of differentiated that exciting I it's our when can got capability we international and think

Operator

with Our from Goldman Sachs. comes next Titleman question Jake

Jake Titleman

software it those and because trending really Braze how seeing. maybe It we've both especially you're the win try experiencing an players business. with same update the would the win macro And rates of is are sounds of other but pricing companies comment rates win that new to many headwinds to pulling larger you lever like and as get good can the be some customers, on smaller smaller private heard are on

Bill Magnuson

Yes.

great a are some there So we've seeing that been from things standpoint. competition

has First, been for positive consolidation us. the vendor momentum really

And architectures around at or even are [indiscernible] competitors. are that either trying sell to selling. wall. complete from effectively to who is, built our with also feature more fast investment last old quarters of higher to frankly, the lot We value both opportunities competitors hit still few that see macro, fundamentally going competitive been changing cheapen lower our also less results by we're everyone about and seeing on go-to-market those excited and progressing eventually we don't are see the large anything the over they're because competitors that. prices landscape. desperate a I go say in we're to the set, which to is us a those which continue simply from prices imitate think because attempts we we've at to are spoken that head-to-heads that I've and We've I'd actually operating means and try follow been But win tactics small. definitely their that to seeing from We're making

And way. in the meantime, we're leading going to and innovating the keep

dilutive we're up, operating landscape. our And track over on that's we which less in. as and second there opportunities You hold don't competitive category predictable where margin seeing but definitely dynamic term. longer competitive or a from It those mentioned, we're cohorts is go the I our to record good know are improve deals we're do we depending order win around about rates before and that positioned, especially having really from effects feel

Jake Titleman

normal? investors environment That's not then current you has you you at long-term you about an on great. as you can in Maybe as conviction comment maybe should why thought? this new as view fundamentals previously if And TAM if can maybe slowdown concerned think BRAS the large all like that isn't the offering the and for market the your talk not,

Bill Magnuson

up I would here. hold X things

that exists in is customer relationships together of data data see look first-party investment relationships like Braze aspect you, of which, engagement you such, the to sign tools replace the and brands overall take we and an in of customer first-party in collect up when all the of continue is which brands like were sets doing data, already because and lives happening things it data, to we're first-party hold makes death kind trends customers fact in de powerful ether. are over think, trends temporary we that of directly value a that, temporary the seeing actually or directly what that we importantly or whether other, takes the But certainly clear as amounts digitize IDFA facto they're The in humans. move things reaction think phenomenon and can me at pretty that data to you it's to a -- that earlier a just this can the and now on with to first trying I between sophisticated business for it investing many in of secular trying creating And important first-party have But the your of always you those the understandable messaging benefited activity the secular of that are investment really is sets business of to in look been tremendous third-party still customer action call, and third-party of cookie First, understand volumes before. first-party actionable. it it. more kind at the these more nature order data or relationship them in the to I that communicating and each the And has lives we're they innings valley for the the from data our in brands more I is combine something with enhance it's I think early not when an the is of as generational Brace you that first-party referenced right when data, and years. that also has fall of course,

places engagement customer data expand think relationships, of into like on being customer take messaging. is of teams. all accommodate and really this they and seen members move and inform under to e-mail rise that directly walls order down assets are able brands and able I those those that their software it data action entire that delivers team then engage the more the -- in stores first-party Base action see area new them. More product in of to toward to to was deals the structures the the up coming expanding through cycle started on and recently, super the we've being with mobile But action to and then really engagement broken it category to who building businesses channels started the able take web and the being messaging you've and is customer First, like of strategies that between lot data and obviously customer to to and the within we app engineer seen rise and the scientists cross-channel land we surface get picture a product the

Operator

Brian from comes with question Peterson next James. our And Raymond

Brian Peterson

Just me. one for

strategic on share year to help the contributions fiscal wanted the in rationale? drove And hit timing guide? on can of anything that, the acquisition. that's in NorthStar I you 'XX of the what So the Any terms financial

Bill Magnuson

Yes.

perspective, of the real be met by our it employees a base bringing So an to abstraction there actually teams with in unique of efficiency lot the I'll the it to sense bras let partner timing help our all speak lot reseller day-to-day financial of Star the is I from our into teams global progress relationship and bidirectionally years. from a was side. It's them footprint North take in been But I bring accelerate that out working basis. for the exclusive we've long the great a having with different means getting that Isabelle a time, market work are think was been which that and the in region. November, region. a felt with their like that the efficiency Australia has being a we in really are for in time the And we and in just of together. only layer they gained wanted and the between in Brave they been long close Zealand them to We've -- New we and was selling and also in was that who them really a clear to only way people fold there that

Isabelle Winkles

that we guidance. for revenue be won't full We revenue acquisition. guidance a This of won't the to year's currently fairly the FY is Speak so small 'XX tuck-in There's a small. going impact. North to until The worth close QX, overall nothing impact to tuck-in, is in get Star. accounts even a

this impact So you're in year. revenue of a talking about

on the it's to as included. So guys we through that We'll update progress not you get deal. closing

Operator

UBS. McGinnis our with And question comes Taylor next from

Taylor McGinnis

quarter. operating to digits mid-single and or might XQ solid. versus growth or that by the growth last we there margin XX% income OpEx for some that the So negative in played the math did order so is with imply X% really on It of seems get better you outlook based

a of in next versus just So in can for drivers X% in negative beyond. much how drivers that of point about to year, if we flagged to the So quarters. be might about maybe sales as you talk quantify the that? past starting pauses the hiring really you fixes how And that efficiencies use the or think even some related

Isabelle Winkles

Yes, thanks for question. the

being. on So count question, this commitment yes, related that keys head I answered time here for touched our think I one a previous pausing of I when and the really to is the to

And that what is their so really required has leaders our actually to existing resources. do at look

not about reprioritization investment. about So actually of less investment It's it's dollars.

join and the had and there's stabilize that which the that improvement but the example. sort we is not appreciable in think onboarded in why remaining headcount between Now, from come the as number were appreciable were QX we to for in yes, to sequentially, heads being to QX of and coming that pause. heads a of about in the offers go cost up that the over quarters you're talked needed operating going strategic been QX I see this to company. structure of had we our implemented did any guidance, QX, few There made still QX start leverage

result moderates continues start the growth evolve the And as in as that structure growth to over to and to pause. revenue the overall we that quarters going play so continues of out you're see to the headcount coming expense and a the

Taylor McGinnis

quick follow-up. it. then Got as just And a

in is any And drive directionally out embedded outlook. when hiring that on would time commentary, level then are frame that? the the also anything you by thinking I front quarterly there that XXXX So that revenue think to in of about positive guess, guys growth, we that further even

Isabelle Winkles

some come to say ability do very in high-level free X not level. growth that. are cash FY the FY we And One 'XX. to between on I'll pass acceleration flow and revenue have that 'XX hire the for operating happen and to income we quarterly positive for FY 'XX, comments expecting So any is to in

forecast following some will embedded headcount We the is year. incremental in the have for that

this next on dependent we've sustaining So not headcount year. pause to through

Operator

from Cowen. question comes Derrick Wood next with our And

Derrick Wood

packaging. Bill, pricing to asking about and I wanted start

of basis. terms from how one looking last been kind a And the from and precise standpoint the think into what a of netbacks was various or the you're selling to the new on bit made just sizes year platform impact of to on sales. material the all year. and in there modular when that away are your cases. transaction a think about and sales with And I to sales diversify use any products? Has changes deal volumes change when cycles at more looking sell you more be

Bill Magnuson

And of the in for as channel platform don't I both our and for long of Yes. a the everywhere in that have the the just this I'd go pairings the that all more break important and sell this currently have is that's places also point where we've and even want future more preparing that start going. near One framework, in down ways. product think term they couple term get kind anywhere, been because but today. customers channel that referenced we to in of customer touch we part can include could that, you things and or really

we've drive those actually be excited it, to of can expect continue able ASP do future. into in us we're the call see change. to to to the for basically -- a, increase obviously, And that shouldn't an QX. -- into stage numbers, shared. don't of that so setting I had kind much you that that from we're And what ASP already see We you heading

And consolidation vendor other we pushing set of obviously are we but have is certainly entitlements where in which trend the that do a that's have buying also instances customers narrower happening direction.

out, of you us what more in seeing these to do going expanding for those to motions but material is easily. as it's so it's see able expect doing changes addressable be it is and And it you're what when size things of our to kind terms net average deal in wouldn't I market

Derrick Wood

pressure guided. revenue you to But you expecting rate Yes, that that guys are on you with unique probably on and it makes sense. of like bit One just directional a there. be how Isabelle, thinking just retention out about net sounds respect for you'd kind some more trends,

other and more with You've companies. There's And model could macro rates. diversified that that pricing what pressure lends consumption pressure guys seen headcount think companies trends. pressure companies seen of model, are I parts models, because pretty models Again, much because of you more a seat-based are not, got to the with Do guess net licensing expansion optimization. you other the under more given There's of if diversified. durability growth. come

Isabelle Winkles

question. thanks the So for

And I a of think good lot kind multifaceted business. and So a new -- typically is that I'll that a than net those bit go-to-market with motion sort spenders of point organizations these happens looks of actually upsell of to the greater the motion $XXX,XXX larger which like are some enterprises.

an net in new that the us acquire -- organizations. just it net new like I new new logos the we're particularly of for It's access of And our behaves to new continue to organization. be existing a that work where pressure and and continued So see that retention, vendors. budgets. is within is against lot large parent salespeople cycle behaves that's trying to business under to trying you're That pressure net evolution those terms going stakeholders, new entirely a sales going think where like dollar-based is to

of you're the the the the in that an guide kind kind in in come and fact, will total guide, I out that certainly there distance. context the large more air start the the is of see say terms we In company to of compress are of guys embedding starting assumption of to to balloon.

that in from conservatism assumed is And there so in guide active. a I the the of think that, you're absolutely correct context

Operator

with And question from Needham. Berg next our comes Scott

Scott Berg

can just I QX the linearity suggests end. the more quarter. back around quarter QX Isabelle, if sequential on of comment increase a you minimal commentary any see guide wanted kind of I to weighted that. see wanted had suggests you if your from front-end to which sales in maybe the But maybe than

Isabelle Winkles

Yes.

kind actually was back-end So continually QX we loaded. back-end into of fairly have loaded. more been evolving

day last even the the pushing lot in quite a success of quarter, of on through In actually great a of operationally day of the bit proud had business quarter. fact, last we're of our pretty

internally perspective. loaded was sort from So are we back-end quarter. of an that success continuing great a to operational see But

normal of we're it the get about the and net under be XX% seeing So in bookings third done that upward. circumstances, would month trend

Scott Berg

in on if perspective, of from, at follow-up more existing from activity then new just And the channels, a Helpful. change customers adding? I expansion wanted all different just type comment on, know, you expansion see Did maybe all, don't it new expansion quarter. the really usage? types maybe to it. know, the implementations were was Or activity Got can don't I of

Isabelle Winkles

No, there's -- of -- Yes. change been in sort smaller on sort it's it's no SMS of to dramatic base. of continues any be that. a

So our has similar to But distributed we're growth across there. seeing been relatively channels various fashions strong items, growth quarters. prior the continued and otherwise, platform in

Operator

question comes Pat And Walravens from our next JMP Securities. with

Pat Walravens

sign What a go to Would you pause going afield letter, are you it? life future of here did your sign we're it? Bill, this little thoughts?

Bill Magnuson

way -- dangerous I it. preparing the that was technology becoming either could of helpful we into we should development that be I terms so being and in that dig think that definitely with didn't all earnings responsible But go I around for yesterday. of or

AI. Box. Black for exciting never and a that to relationships, place higher of is been interacting is also problems. go about think for capable your it. we base an bar the It's promise we should earlier sense when that seen lot in that's the where about just the trust AI you're always measured data and development. a definitely first-party that won Magic is should has But it's a been talked when really time you've And first-party all that BASE and trust with I I what AI

need be continue do and how think it. we mature to I to about we responsible

these that of what large are are openness rule to models are trained, think what kinds how being more sets sets applied be data terms I them, in there into going of being them. kinds should of

additional without that be continued think development of hard going trust it. transparency, to I it's to And

should that I stem. allow continuing on just this eco And we definitely support something unchecked. to so pressure not It's put to run like

Operator

comes our with from JPMorgan. Bora next And question Pinjalim

Pinjalim Bora

quarter you you or environment degrading the I a far? of the in one intensify -- the the were QX to the or the you like towards saw One so it just headwinds end in question degradation macro want if ask macro Isabelle, me. through quarter for seems through guidance. assuming

Isabelle Winkles

that sort potential on impacts the seeing as haven't QX banking in result will of a other than uncertainty necessarily worse the seen have recent one seeing necessarily most expect behavior. some So we specifically. things getting or obviously negative of anything that of But more disruption buyer we're could in we're that QX not

Operator

And [ph] our question from Sandler. Hannah with comes Piper next

Unidentified Analyst

you, one Bill. First for

this adoption talk adoption of on and but other as earlier from to what users? kind data product those seeing outside engineers touched in You encourage of from you such about what terms just you're you're of can doing teams and marketing

Bill Magnuson

more see how Yes, has the users the interdisciplinary that accomplishing to more to absolutely. of to base We've been to use been just cases. the has nature use -- really encouraged been see dashboard, teams continued year-over-year Braze increase. We've coming excited

as back at us heard flags well announce Forge. You feature

into fold. engineering the bringing more been And so teams that's product

of how So being bringing work the of a train bringing does I lot it, the the more done set that scientists when injection, that you you product there we are expansions time that data end to which some in as artificial it transformation, cloud it the look the into intelligence nurture do over referenced earlier at building feature up data fold, catalog well the how require data and around terms like we're capabilities being things how sophistication fold. learns that's currents of as subsets into

tremendous amount bringing those think definitely to out and into directly a to the go the marketing we're budget collaborating sell today. fold, groups persona the understanding That there's think are our awareness increases not we we selling we're marketer lot creates and that optionality it and rushing value future. of having around and position a so we're be the great for those into right in now try with had and to we like of to our in us of our as them reputation And

Unidentified Analyst

talk adoption how cloud remind us data trended? and goes And ingestion And when for feedback then just and that's the helpful. Super product can your you about that GA?

Bill Magnuson

absolutely. Yes,

same early So access last actually on actually, go February Redshift Snowflake day. into went the first, excitingly, answer question X. your And to we into had on GA

And so actually, the quite been product momentum there rapid. has

people launch to like most warehousing that cover connectors plan to our few with currents data more and data because exciting configured. strong the off to a integrated an points really in see, We've and wave early customer warehouse popular with that data And are you should much adoption. our customer the partners. billion to of units how tightly happy and and connectors build actively got expect from try cloud customers their also We're already we'll We start sinking Reverse of also $X to going connectors of or a terms base. of with anything Braze. especially XXX We've integrated CDP early in those ETL to data also number we're or solutions out counting like running been quickly ingestion we're get able to which with been not also up roll is days. in have the

vertical bases integration cover we data more those with products. popular these once switch our will tightening data solutions, with with of as so on injection we some then as well cloud brave partners And warehousing own into to the refocusing have

Operator

question from next comes with Kim Yun Loop our And Capital.

Yun Kim

making? any -- you're or were then execution particular in show your this better environment. also to With anything you to SKL. better motion current the the in And any focus changes year, year go-to-market adjust changing your execution your new that in

Bill Magnuson

the of calls. with the well field in we've as Yes, really across the strategy last parts teams. November investments and operations been those spoke of we've been earnings we through all summer a making moving couple from across as the about go-to-market lot happy There's been

were changes a already being preparing I'll running really year been And enter programs we the of as for so have big made year say really the lot this not we new that advance. because well. in

super a executed productive, on new of we year February, started in we've Our the average with little is slowdown fiscal system off on that increasing of early able the and our to annual the also, benefits kickoff away of a focus board. as feedback net pressure new it's one it that group the was taken across right we and And enabling great been hiring tenure. bit

and that's lot to in a been just how so of a investments on we've giving going. been been those advanced -- lot happy And with optics have focus of us more optionality

Yun Kim

on give those the the then what And current have incremental traction for especially in partners an driving been how that that update progressing, if partnership great. with us like CSI, Okay, you instance? environment? the driver traction recent and can with Has the integration a key is look

Bill Magnuson

Yes.

about partnership I it the WhatsApp activity. potential the in development Snowflake continuing technology few integrators that been think partners the with mean, systems future, of coordinated to And you a yesterday. We're standpoint that and obviously doing to I'll has referenced excited of like a co-development, consolidated data we've ingestion with about with make really Accenture from important WPP the great that global point also with well really announcement and as and as made We're product with So we obviously the have then both lot cloud progress Deloitte. like been launch as Meta. go-to-market

to And advantage that would and where the where enhancing back excited are in of made -- connect on early just taking commentary our they're I'm are qualitatively, about places that all so all I the call that position. all I of these happening, things leveraging we're really of partnerships these and

really advantage We're Quantitatively, making, side. partnerships on cement We're to ecosystem. taking from perspective backing with this our go everyone. of product we're strong go-to-market macro and the opportunity around is investment well up a impacting obviously, as it really both the that

be the such right foundation all of really to that dollars those perspective. right at provide And potential from with building them of to qualitative out when what that partnerships are later so operating them. we're an that the going in accelerate ready on doing don't aspects partnership that their are going But we the now macro overall full is think to improves we're

Operator

Benett BTIG. Matt from comes And our [ph] question with next

Unidentified Analyst

guide to assuming sales no I major guess, improvements Isabelle you you're the productivity. mentioned in essentially

was for Although throughout the talking will with the the assumption productivity least think that continue of about of Bill most and and I extended us hiring to at sales tenure was improve of pause year. team, sort that what the sales with the

of what's help can anything So you at of least the us we you're think or maybe influencing see on the And if just level might about that outperforming. you to that watch that pause kind front? conservatism giving share that,

Isabelle Winkles

Yes.

thanks that. So for

within it's just the to more And see to in moderate upsell ability kind level business et existing sort want of think to kind continue our of the new net more these we're customers we of there. to the waiting of sort in of I little of view way of environment, of new really organizations. a And strongly our net access is enterprise see business. a logos bit current signs sort to these wait and what of kind kind of to investment among right acceleration So the

a I into we'd time and so to a We've macro very I and sort the get year the lot incorporate bit -- think just that And of still prudent. play guide out. how approached to this little to of we within is uncertainty the going before it's prudently. willing see to like more guide, always

in that hope And then sales the have we that upside. productivity improvement so will surprise limited to make the the guide to believe prudent assumption we it's and of to the context just

Unidentified Analyst

hiring look And helpful. potential you pause. when then easing Very the rationale at Okay. for the

on pause Are XX particular? to additive and a aggressively not it's to level at more start in to you would You give maybe is KPIs going for that confidence the you certain element? time mentioned go-to-market high internal bit little that you a continues. improve? that to yet macro there looking wait assuming hiring Are time-based sort Are of it more

Isabelle Winkles

fairly headcount most So our of is model-driven. infrastructure

consistently terms inputs. what to the And do so algorithms organization. in of and the of count support would the then say that for the business we this requirements what the evaluating And around head we is needs are the evaluating models,

very regularly we structured X consistently, to a So times very we do that in fashion. year a X

the play business make those evaluate headcount business algorithms will so And growth, increasing out. of continue decisions the to result how we inputs overall size size the of a the those and as of around overall

Operator

no will Bill to more back call questions closing are remarks. I the queue, for in There so the pass now

Bill Magnuson

right. All

at We right time. are

customers us on growth coming So thank and looking updating customer in the to engagement high to that We scale quarters. our for at and you for forward committed remain today. joining our industry-leading delivering to for are everyone solutions shareholders you progress

Braze (BRZE) 30 Mar 232023 Q4 Earnings call transcript