Braze Reports Fiscal First Quarter 2025 Results

Rhea-AI Summary

Braze (Nasdaq: BRZE) reported robust financial results for its fiscal Q1 2025, ending April 30, 2024. Revenue rose by 33.1% YoY to $135.5 million, driven by new customers, upsells, and renewals, despite a $0.8 million revenue reserve due to an April service outage. Subscription revenue reached $130.1 million, while professional services and other revenue were $5.4 million.

GAAP gross margin was 67.1%, and non-GAAP gross margin was 67.9%. The company had a GAAP operating loss of $40.1 million and a non-GAAP operating loss of $10.0 million. GAAP net loss per share was $0.35, and non-GAAP net loss per share was $0.05. Braze ended the quarter with $487.7 million in cash and equivalents.

Notable business wins included companies like Bauer Media Group and Hugo Boss, while significant upsells included Etsy and Lime. Braze is expanding geographically with new offices in Brazil, Romania, UAE, and South Korea, and plans a new data center in Indonesia.

For Q2 2025, Braze forecasts revenue between $140.5 million and $141.5 million, and a non-GAAP net loss per share between $0.03 and $0.04. For FY 2025, revenue is expected to be between $577 million and $581 million, with a non-GAAP net loss per share between $0.06 and $0.10.

Positive

• Revenue increased by 33.1% YoY to $135.5 million.
• Subscription revenue grew to $130.1 million.
• Total cash and equivalents increased to $487.7 million.
• Notable new business wins with Bauer Media Group and Hugo Boss.
• Significant upsells with Etsy and Lime.
• Global expansion with new offices in Brazil, Romania, UAE, and South Korea.
• Plans for a new data center in Indonesia.

Negative

• GAAP operating loss was $40.1 million.
• Non-GAAP operating loss was $10.0 million.
• GAAP net loss per share of $0.35.
• Non-GAAP net loss per share of $0.05.
• Revenue reserve of $0.8 million due to an April service outage.
• Decline in dollar-based net retention rate to 117% from 122%.

Insights

Financial Analyst

Braze's revenue growth of 33.1% year-over-year to $135.5 million is a strong indicator of the company’s continued expansion and ability to attract new customers. This substantial increase is noteworthy, especially given the challenging macroeconomic environment. The revenue reserve due to the service outage, while relatively small at $0.8 million, is a reminder of potential operational risks that investors should consider.

The gross margin decreased slightly to 67.1% from 67.9%. While not drastic, this minor decline indicates increased costs or pricing pressure. The improvement in non-GAAP operating loss to $10.0 million from $16.0 million shows better operational efficiency, yet there is still significant ground to cover to achieve profitability.

The company’s net cash flow from operations of $19.4 million remains robust, though it decreased from $22.5 million the previous year. The overall financial health remains strong with $487.7 million in cash and equivalents, which provides a solid buffer for future investments and potential economic fluctuations.

Overall, while Braze shows promising growth and strong customer acquisition, the path to profitability remains a challenge and investors should closely monitor the company’s ability to manage operational costs and improve margins.

Market Research Analyst

With customer numbers increasing to 2,102 from 1,866 year-over-year, Braze demonstrates solid market demand for its customer engagement platform. Significant new client acquisitions, including big names like Bauer Media Group and Hugo Boss, bolster this growth narrative. The company's strategic expansion into key regions such as Asia-Pacific and Europe showcases its proactive approach to capturing global market share.

The improvement in dollar-based net retention rate for customers with annual recurring revenue (ARR) of $500,000 or more from 119% to 124% highlights the company’s ability to retain and expand within its existing client base. This metric is important as it reflects customer satisfaction and the potential for future upsell opportunities.

Despite these positives, the overall GAAP operating loss of $40.1 million underscores the need for sustained growth and operational improvement. The company's strategy to expand its global footprint, including the opening of a data center in Indonesia, could drive long-term growth but also introduces execution risks and potential cost increases.

Tech Expert

Braze's emphasis on product differentiation is a key driver behind its strong performance. The company’s platform, designed to scale customer engagement, appears to be well-received in the market. The service outage in April, which led to a $0.8 million revenue reserve, underscores the importance of reliability and stability in SaaS products. Such incidents could impact customer trust and retention if they become recurrent.

The addition of Yvonne Wassenaar to the Board of Directors, bringing in substantial SaaS expertise, reflects Braze's commitment to improving its technological capabilities and leadership. This move should help in navigating the complexities of scaling a tech platform and ensuring high service standards.

Looking ahead, the establishment of new data centers, particularly in emerging markets, indicates a strategic push to enhance service delivery and compliance with local data regulations. This approach could provide a competitive advantage but requires careful execution to manage associated risks and costs.

NEW YORK--(BUSINESS WIRE)-- Braze (Nasdaq: BRZE) the leading customer engagement platform that empowers brands to Be Absolutely Engaging^TM, today announced results for its fiscal quarter ended April 30, 2024.

“We are off to a solid start in fiscal 2025, delivering strong results in an uneven macro, driven by returns from our long-term investments and consistent execution,” said Bill Magnuson, cofounder and CEO of Braze. “Our focus remains on product differentiation, sales and marketing efficiency, and strengthening our foundations for future growth, including with global expansion that helps our customers around the world execute outstanding customer engagement at scale.”

Fiscal First Quarter 2025 Financial Highlights

• Revenue was $135.5 million compared to $101.8 million in the first quarter of the fiscal year ended January 31, 2024, up 33.1% year-over year, driven primarily by new customers, upsells and renewals. First quarter revenue was impacted by a $0.8 million revenue reserve related to the company’s April service outage.
• Subscription revenue in the quarter was $130.1 million compared to $97.1 million in the first quarter of the fiscal year ended January 31, 2024, and professional services and other revenue was $5.4 million compared to $4.6 million in the first quarter of the fiscal year ended January 31, 2024.
• Remaining performance obligations as of April 30, 2024 were $657.3 million, of which $419.8 million is current, which the company defines as less than one year.
• GAAP gross margin was 67.1% compared to 67.9% in the first quarter of the fiscal year ended January 31, 2024.
• Non-GAAP gross margin was 67.9% compared to 68.8% in the first quarter of the fiscal year ended January 31, 2024.
• Dollar-based net retention for all customers for the trailing 12 months ended April 30, 2024 and April 30, 2023 was 117% and 122%, respectively; dollar-based net retention for customers with annual recurring revenue (ARR) of $500,000 or more was 119% compared to 124% in the first quarter of the fiscal year ended January 31, 2024.
• Total customers increased to 2,102 as of April 30, 2024 from 1,866 as of April 30, 2023; 212 of the company’s customers had ARR of $500,000 or more as of April 30, 2024, compared to 164 customers as of April 30, 2023.
• GAAP operating loss was $40.1 million compared to an operating loss of $41.9 million in the first quarter of the fiscal year ended January 31, 2024. A primary contributor to the operating loss in the quarter included $28.3 million of stock-based compensation expense.
• Non-GAAP operating loss was $10.0 million compared to a loss of $16.0 million in the first quarter of the fiscal year ended January 31, 2024.
• GAAP net loss per basic and diluted share attributable to Braze common stockholders was $0.35 compared to $0.40 in the first quarter of the fiscal year ended January 31, 2024.
• Non-GAAP net loss per basic and diluted share attributable to Braze common stockholders was $0.05 compared to $0.13 in the first quarter of the fiscal year ended January 31, 2024.
• Net cash provided by operating activities was $19.4 million compared to net cash provided by operating activities of $22.5 million in the first quarter of the fiscal year ended January 31, 2024.
• Free cash flow was $11.4 million compared to $21.7 million in the first quarter of the fiscal year ended January 31, 2024.
• Total cash and cash equivalents, restricted cash, and marketable securities was $487.7 million as of April 30, 2024 compared to $480.0 million as of January 31, 2024.

Recent Business Highlights

• Notable new business wins include Bauer Media Group, Bolt Technology, Country Road Group, Hugo Boss, Leonardo.ai, Property Finder, and Solaris Bank AG, among others. Notable upsells in the quarter include Etsy, Lime, MyEyeDr., Talkspace, and the rewards credit card Yonder.
• Braze announced an expansion of our global footprint and strategic focus on key regions across Asia-Pacific, Europe, the Middle East and Africa, and Latin America. Specifically, we are establishing a direct presence in São Paulo, Brazil; Bucharest, Romania; Dubai, UAE; and Seoul, South Korea, with plans to grow local teams and establish offices in each location. In addition, we announced plans to open a new data center in Indonesia, our second outside of the US, and first in APAC, with more to come in the future.
• We added technology expertise to our leadership team with the appointment of Yvonne Wassenaar, a seasoned SaaS executive, to our Board of Directors.
• Braze was recognized as one of the UK’s Best (Large) Workplaces for Development^TM by Great Place To Work UK.

Financial Outlook

Braze is initiating guidance for the fiscal second quarter ending July 31, 2024, and updating guidance for the fiscal year ending January 31, 2025.

Metric (in millions, except per share amounts)	FY 2025 Q2 Guidance	FY 2025 Guidance(1)
Revenue	$140.5 - 141.5	$577.0 - 581.0
Non-GAAP operating loss	$(6.5) - (7.5)	$(19.5) - (23.5)
Non-GAAP net loss	$(3.0) - (4.0)	$(6.0) - (10.0)
Non-GAAP net loss per share	$(0.03) - (0.04)	$(0.06) - (0.10)
Weighted average shares outstanding	~101.5	~102.0
(1) Includes the negative impact of the $0.8M revenue reserve allocated for the service outage in April 2024.

Braze has not reconciled its guidance as to non-GAAP operating loss, non-GAAP net loss or non-GAAP net loss per share to their most directly comparable GAAP measure as a result of uncertainty regarding, and the potential variability of, reconciling items such as stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in Braze’s stock price. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to Braze’s results calculated in accordance with GAAP.

Conference Call Information:

What: Braze First Quarter Fiscal Year 2025 Financial Results Conference Call
When: Thursday, June 6th at 4:30 pm EDT / 1:30 pm PDT
Webcast & Supplemental Data: investors.braze.com
Replay: A webcast replay will be available on Braze’s investor site at investors.braze.com.

Supplemental and Other Financial Information

Supplemental information, including an accompanying financial presentation and other information can be accessed through Braze’s investor website at investors.braze.com.

Non-GAAP Financial Measures

This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit and margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, basic and diluted, and non-GAAP free cash flow. Braze defines non-GAAP gross profit and margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating loss, non-GAAP operating margin, and non-GAAP net loss as the respective GAAP balances, adjusted for stock-based compensation expense, employer taxes related to stock-based compensation, charitable contribution expense, contingent consideration adjustments, acquisition related expense, amortization of intangible assets, and restructuring expense. Additionally, prior to the second quarter of the fiscal year ended January 31, 2024, Braze did not adjust non-GAAP gross profit and margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating loss, non-GAAP operating margin or non-GAAP net loss for amortization of intangible assets, because there were no such amortizations in prior periods, or for restructuring expense, because such amounts were not material in prior periods. Further, prior to the fourth quarter of the fiscal year ended January 31, 2024, Braze did not adjust non-GAAP gross profit and margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating loss, non-GAAP operating margin or non-GAAP net loss for contingent consideration adjustments, because there were no such adjustments in prior periods. Braze defines non-GAAP free cash flow as net cash used in operating activities, minus purchases of property and equipment and minus capitalized internal-use software costs. Investors are encouraged to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.

Braze uses this non-GAAP financial information internally in analyzing its financial results and believes that this non-GAAP financial information, when taken collectively with GAAP financial measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles in the United States (GAAP), and may be different from similarly-titled non-GAAP measures used by other companies.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in Braze’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by Braze’s management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below in the financial statement tables included below in this press release for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.

Braze encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly and fiscal year financial results, including this press release, and not to rely on any single financial measure to evaluate Braze’s business.

Definition of Other Business Metrics

Customer: Braze defines a customer, as of period end, as the separate and distinct, ultimate parent-level entity that has an active subscription with Braze to use its products. A single organization could have multiple distinct contracting divisions or subsidiaries, all of which together would be considered a single customer.

Annual Recurring Revenue (ARR): Braze defines ARR as the annualized value of customer subscription contracts, including certain premium professional services that are subject to contractual subscription terms, as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms (including contracts for which Braze is negotiating a renewal). Braze’s calculation of ARR is not adjusted for the impact of any known or projected future events (such as customer cancellations, expansion or contraction of existing customers relationships or price increases or decreases) that may cause any such contract not to be renewed on its existing terms. ARR may decline or fluctuate as a result of a number of factors, including customers’ satisfaction or dissatisfaction with Braze’s products and professional services, pricing, competitive offerings, economic conditions or overall changes in Braze’s customers’ spending levels. ARR should be viewed independently of revenue and does not represent Braze’s GAAP revenue on an annualized basis or a forecast of revenue, as it is an operating metric that can be impacted by contract start and end dates and renewal rates.

Dollar-Based Net Retention Rate: Braze calculates dollar-based net retention rate as of a period end by starting with the ARR from a cohort of customers as of 12 months prior to such period-end (the Prior Period ARR). Braze then calculates the ARR from the same cohort of customers as of the end of the current period (the Current Period ARR). Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months, but excludes ARR from new customers in the current period. Braze then divides the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time dollar-based net retention rate. Braze then calculates the weighted average point-in-time dollar-based net retention rates as of the last day of each month in the current trailing 12-month period to arrive at the dollar-based net retention rate.

Remaining Performance Obligations: The transaction price allocated to remaining performance obligations represents amounts under non-cancelable contracts expected to be recognized as revenue in future periods, and may be influenced by several factors, including seasonality, the timing of renewals, the timing of service delivery and contract terms. Unbilled portions of the remaining performance obligation are subject to future economic risks including bankruptcies, regulatory changes and other market factors.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding Braze’s financial outlook for the second quarter of and the full fiscal year ended January 31, 2025. These forward-looking statements are based on current expectations, estimates, forecasts and projections. Words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “hope,” “intend,” “may,” might,” “potential,” “predict,” “project,” “shall,” “should,” “target,” “will,” and variations of these terms and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on Braze’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Braze’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to, risks and uncertainties related to: (1) unstable market and economic conditions may have serious adverse consequences on Braze’s business, financial condition and share price; (2) Braze’s recent rapid revenue growth may not be indicative of its future revenue growth; (3) Braze’s history of operating losses; (4) Braze’s limited operating history at its current scale; (5) Braze’s ability to successfully manage its growth; (6) the accuracy of estimates of market opportunity and forecasts of market growth and the impact of global and domestic socioeconomic events on Braze’s business; (7) Braze’s ability and the ability of its platform to adapt and respond to changing customer or consumer needs, requirements or preferences; (8) Braze’s ability to attract new customers and renew existing customers; (9) the competitive markets in which Braze participates and the intense competition that it faces; (10) Braze’s ability to adapt and respond effectively to rapidly changing technology, evolving cybersecurity and data privacy risks, evolving industry standards or changing regulations; and (11) Braze’s reliance on third-party providers of cloud-based infrastructure; as well as other risks and uncertainties discussed in the “Risk Factors” section of Braze’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on April 1, 2024 and other subsequent filings Braze makes with the SEC from time to time, including Braze’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2024 that will be filed with the SEC. The forward-looking statements included in this press release represent Braze’s views only as of the date of this press release and Braze assumes no obligation, and does not intend to update these forward-looking statements, except as required by law.

About Braze

Braze is the leading customer engagement platform that empowers brands to Be Absolutely Engaging.™ Braze allows any marketer to collect and take action on any amount of data from any source, so they can creatively engage with customers in real time, across channels from one platform. From cross-channel messaging and journey orchestration to Al-powered experimentation and optimization, Braze enables companies to build and maintain absolutely engaging relationships with their customers that foster growth and loyalty. The company has been recognized as a 2024 U.S. News Best Technology Companies to Work For, is a 2023 UK Best Workplace for Women by Great Place to Work, and was named a Leader by Gartner® in the 2023 Magic Quadrant™ for Multichannel Marketing Hubs and in The Forrester Wave™: Cross-Channel Marketing Hubs, Q1 2023. Braze is headquartered in New York with 10+ offices across North America, Europe, and APAC. Learn more at braze.com.

Braze uses its Investor website at investors.braze.com as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor its investor relations website in addition to following its press releases, blog posts on its website (braze.com), SEC filings and public conference calls and webcasts.

Selected Financial Data

BRAZE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts)
	Three Months Ended April 30,
	2024				2023
Revenue	$	135,459			$	101,780
Cost of revenue (1)(2)		44,548				32,687
Gross Profit		90,911				69,093
Operating expenses:
Sales and marketing (1)(2)		69,827				57,262
Research and development (1)(2)		34,373				29,745
General and administrative (1)(2)(3)(4)(5)		26,791				23,983
Total operating expenses		130,991				110,990
Loss from operations		(40,080	)			(41,897	)
Other income, net		5,171				3,459
Loss before provision for income taxes		(34,909	)			(38,438	)
Provision for income taxes		798				388
Net loss		(35,707	)			(38,826	)
Net loss attributable to redeemable non-controlling interest		(66	)			(372	)
Net loss attributable to Braze, Inc.	$	(35,641	)		$	(38,454	)
Net loss per share attributable to Braze, Inc. common stockholders, basic and diluted	$	(0.35	)		$	(0.40	)
Weighted-average shares used to compute net loss per share attributable to Braze, Inc. common stockholders, basic and diluted		100,788				96,353

(1) Includes stock-based compensation as follows:
	Three Months Ended April 30,
	2024			2023
Cost of revenue	$	964		$	889
Sales and marketing		9,445			7,848
Research and development		10,832			9,843
General and administrative		7,037			5,566
Total stock-based compensation expense	$	28,278		$	24,146

(2) Includes employer taxes related to stock-based compensation as follows:
	Three Months Ended April 30,
	2024			2023
Cost of revenue	$	68		$	22
Sales and marketing		541			117
Research and development		836			256
General and administrative		297			90
Total employer taxes related to stock-based compensation expense	$	1,742		$	485

(3) Includes acquisition related expense as follows:
	Three Months Ended April 30,
	2024			2023
General and administrative	$	—		$	1,268

(4) Includes amortization of intangible assets acquired in the acquisition expense as follows:
	Three Months Ended April 30,
	2024			2023
General and administrative	$	218		$	—

(5) Includes adjustment to the fair value of the contingent consideration liability as follows:
	Three Months Ended April 30,
	2024				2023
General and administrative	$	(137	)		$	—

BRAZE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share amounts)
	April 30, 2024				January 31, 2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	74,801			$	68,228
Restricted cash, current		3,373				3,373
Accounts receivable, net of allowance of $2,396 and $2,772 at April 30, 2024 and January 31, 2024, respectively		81,632				92,256
Marketable securities		408,957				407,898
Prepaid expenses and other current assets		30,180				29,366
Total current assets		598,943				601,121
Restricted cash, noncurrent		530				530
Property and equipment, net		39,328				29,358
Operating lease right-of-use assets		76,597				81,163
Deferred contract costs		66,012				63,661
Goodwill		28,448				28,448
Intangible assets, net		3,472				3,690
Other assets		2,796				2,970
TOTAL ASSETS	$	816,126			$	810,941
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	4,689			$	6,321
Accrued expenses and other current liabilities		56,267				63,264
Deferred revenue		229,330				204,269
Operating lease liabilities, current		15,360				15,585
Total current liabilities		305,646				289,439
Operating lease liabilities, noncurrent		72,173				75,027
Other long-term liabilities		2,074				2,050
TOTAL LIABILITIES		379,893				366,516
COMMITMENTS AND CONTINGENCIES (Note 13)
Redeemable non-controlling interest (Note 4)		126				192
STOCKHOLDERS’ EQUITY
Class A common stock, $0.0001 par value; 2,000,000,000 and 2,000,000,000 shares authorized as of April 30, 2024 and January 31, 2024, respectively; 76,844,270 and 73,037,015 shares issued and outstanding as of April 30, 2024 and January 31, 2024, respectively		8				7
Class B common stock, $0.0001 par value; 110,000,000 and 110,000,000 shares authorized as of April 30, 2024 and January 31, 2024, respectively; 24,175,408 and 27,173,408 shares issued and outstanding as of April 30, 2024 and January 31, 2024, respectively		2				3
Additional paid-in capital		958,224				928,494
Accumulated other comprehensive loss		(3,393	)			(1,178	)
Accumulated deficit		(518,734	)			(483,093	)
TOTAL STOCKHOLDERS’ EQUITY		436,107				444,233
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY	$	816,126			$	810,941

BRAZE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
	Three Months Ended April 30,
	2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (including amounts attributable to redeemable non-controlling interests)	$	(35,707	)		$	(38,826	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation		28,620				24,179
Amortization of deferred contract costs		8,313				6,660
Depreciation and amortization		2,126				1,526
Provision for credit losses		668				594
(Accretion) amortization of (discount) premium on marketable securities		(487	)			471
Non-cash foreign exchange (gain) loss		(295	)			310
Fair value adjustments to contingent consideration		(137	)			—
Other		280				20
Changes in operating assets and liabilities:
Accounts receivable		9,876				11,046
Prepaid expenses and other current assets		(984	)			745
Deferred contract costs		(10,730	)			(9,479	)
ROU assets and liabilities		1,522				705
Other assets		277				(380	)
Accounts payable		(1,800	)			405
Accrued expenses and other current liabilities		(7,351	)			9,364
Deferred revenue		25,285				15,228
Other long-term liabilities		(81	)			(19	)
Net cash provided by operating activities		19,395				22,549
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(6,915	)			(40	)
Capitalized internal-use software costs		(1,039	)			(852	)
Purchases of marketable securities		(59,650	)			(46,297	)
Maturities of marketable securities		57,000				71,486
Net cash (used in)/provided by investing activities		(10,604	)			24,297
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of common stock options		1,035				2,211
Payments of deferred purchase consideration		(2,916	)			—
Net cash (used in)/provided by financing activities		(1,881	)			2,211
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash		(337	)			(180	)
Net change in cash, cash equivalents, and restricted cash		6,573				48,877
Cash, cash equivalents, and restricted cash, beginning of period		72,131				72,623
Cash, cash equivalents, and restricted cash, end of period	$	78,704			$	121,500

BRAZE, INC. U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (in thousands, except per share amounts)
The following tables reconcile each non-GAAP financial measure to its most directly comparable GAAP financial measure:
Reconciliation of GAAP to Non-GAAP Gross Margin	Three Months Ended April 30,
	2024				2023
Gross profit	$	90,911			$	69,093
Plus:
Stock-based compensation expense		964				889
Employer taxes related to stock-based compensation expense		68				22
Non-GAAP gross profit	$	91,943			$	70,004
GAAP gross margin		67.1	%			67.9	%
Non-GAAP gross margin		67.9	%			68.8	%

Reconciliation of GAAP to Non-GAAP Operating Expenses	Three Months Ended April 30,
	2024				2023
GAAP sales and marketing expense	$	69,827			$	57,262
Less:
Stock-based compensation expense		9,445				7,848
Employer taxes related to stock-based compensation expense		541				117
Non-GAAP sales and marketing expense	$	59,841			$	49,297
GAAP research and development expense	$	34,373			$	29,745
Less:
Stock-based compensation expense		10,832				9,843
Employer taxes related to stock-based compensation expense		836				256
Non-GAAP research and development expense	$	22,705			$	19,646
GAAP general and administrative expense	$	26,791			$	23,983
Less:
Stock-based compensation expense		7,037				5,566
Employer taxes related to stock-based compensation expense		297				90
Acquisition related expense		—				1,268
Amortization of intangibles expense		218				—
Contingent consideration adjustment		(137	)			—
Non-GAAP general and administrative expense	$	19,376			$	17,059

Reconciliation of GAAP to Non-GAAP Operating Loss	Three Months Ended April 30,
	2024				2023
Loss from operations	$	(40,080	)		$	(41,897	)
Plus:
Stock-based compensation expense		28,278				24,146
Employer taxes related to stock-based compensation expense		1,742				485
Acquisition related expense		—				1,268
Amortization of intangibles expense		218				—
Contingent consideration adjustment		(137	)			—
Non-GAAP loss from operations	$	(9,979	)		$	(15,998	)
GAAP operating margin		(29.6	)%			(41.2	)%
Non-GAAP operating margin		(7.4	)%			(15.7	)%

Reconciliation of GAAP to Non-GAAP Net Loss	Three Months Ended April 30,
	2024				2023
Net loss attributable to Braze, Inc.	$	(35,641	)		$	(38,454	)
Plus:
Stock-based compensation expense		28,278				24,146
Employer taxes related to stock-based compensation expense		1,742				485
Acquisition related expense		—				1,268
Amortization of intangibles expense		218				—
Contingent consideration adjustment		(137	)			—
Non-GAAP net loss attributable to Braze, Inc. (1)	$	(5,540	)		$	(12,555	)
Non-GAAP net loss per share attributable to Braze, Inc. common stockholders, basic and diluted	$	(0.05	)		$	(0.13	)
Weighted-average shares used to compute net loss per share attributable to Braze, Inc. common stockholders, basic and diluted		100,788				96,353
(1) Assumes no non-GAAP tax expenses associated with the non-GAAP adjustment due to the Company’s historical non-GAAP net loss position and available deferred tax assets sufficient to offset such non-GAAP tax expense.

Reconciliation of GAAP Cash Flow from Operating Activities to Non-GAAP Free Cash Flow	Three Months Ended April 30,
	2024				2023
Net cash provided by operating activities	$	19,395			$	22,549
Less:
Purchases of property and equipment		(6,915	)			(40	)
Capitalized internal-use software costs		(1,039	)			(852	)
Non-GAAP free cash flow	$	11,441			$	21,657

Braze is a registered trademark of Braze, Inc.
All product and company names herein may be trademarks of their registered owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240606558333/en/

Investors:

Christopher Ferris

IR@braze.com

(609) 964-0585

Media:

Katelyn Bryant

Press@braze.com

Source: Braze

FAQ

What was Braze's revenue for fiscal Q1 2025?

Braze's revenue for fiscal Q1 2025 was $135.5 million, a 33.1% YoY increase.

What is Braze's GAAP gross margin for fiscal Q1 2025?

Braze's GAAP gross margin for fiscal Q1 2025 was 67.1%.

What is the non-GAAP net loss per share for Braze in fiscal Q1 2025?

The non-GAAP net loss per share for Braze in fiscal Q1 2025 was $0.05.

What business expansions did Braze announce?

Braze announced new offices in Brazil, Romania, UAE, and South Korea, and a new data center in Indonesia.

Who are some of Braze's notable new clients?

Notable new clients include Bauer Media Group, Hugo Boss, and Bolt Technology.

What is Braze's revenue forecast for fiscal Q2 2025?

Braze forecasts revenue between $140.5 million and $141.5 million for fiscal Q2 2025.

What was the impact of the April service outage on Braze's revenue?

The April service outage resulted in a $0.8 million revenue reserve.

What was Braze's total cash and equivalents at the end of fiscal Q1 2025?

Braze's total cash and equivalents were $487.7 million at the end of fiscal Q1 2025.

How did Braze's dollar-based net retention rate change?

Braze's dollar-based net retention rate declined to 117% from 122% YoY.

What is Braze's fiscal year 2025 revenue guidance?

Braze's fiscal year 2025 revenue guidance is between $577 million and $581 million.