Braze (BRZE) 6 Dec 232024 Q3 Earnings call transcript

Welcome to the Braze's Third Quarter Fiscal Year 2024 Earnings Conference Call. My name is Christine, and I'll be your operator for today's call. '[Operator Instructions]'. I'll now turn the call over to Christopher Ferris, Head of Braze's Investor Relations.

Thank you, Operator. Officer, you the us joined Winkles. fiscal Co-Founder Chief thank Braze's to by and our and for and results third Executive afternoon, for Officer, today joining review our Chief Good Financial Magnuson; Isabelle Bill quarter XXXX.I'm announced press issued market in after a today. results our the We release closed product impact on the impact effects targets to to operating non-GAAP more the XX, earnings Litigation to partnerships, AI free fourth and flow. supplemental customers of but related the safe presentation a Braze, the development positive benefits XXXX.These trends, cash XXXX, of feature and business and announcement.During and ended year Please make XXXX, behaviors, our and our call, our social harbor XX, in financial our the anticipated potential Relations refer are will provisions Act our website forward-looking the benefits include, for January our of features, from, and may securities outlook quarter planned the the to our the today's are information fiscal long-term and regarding including anticipated generate positive section Investor at there this of Private we investors.braze.com our under statements initiatives for and statements laws financial goals, that of related impact Reform period expected we Securities anticipated consolidation statements and the not fiscal customer to, the limited ended of year which current income January federal their trends vendor and duration our macroeconomic and including and including us our cause today. uncertainties to a risks and actual of materially our as expectations views are variety from subject that to These reflect and results statements only differ of could press our obligation you risks and results, release material We remind performance today's affect a evaluate certain to to identified to please ongoing refer XXXX the of that the aid forward-looking measures statements.For uncertainties available on Investor the filings, SEC in third such fiscal impact include these website.I'd quarter addition actual update both risks like today's section discussion the in to company's no to operations on to any of and could management investors our assume the our used results. the and in that further will our financial call understanding items financial also have non-GAAP by Relations most with to in the the of directly our calculated measures refer Please financial U.S. non-GAAP accordance reconciliations measures financial to comparable of website.The GAAP, with provided accordance earnings superior our included in our the performance financial measures as substitute a U.S. non-GAAP should measures not financial release be to in Relations section considered prepared or Investor under of the for GAAP. now, to call turn the And like over I'd Bill. to

customer recurring series. major we global month this x milestone. nearly our journey to that global platform. XX continents array the good industry the up the X,XXX strength practices total, a and for $XXX been and wide year make to capstone prosper.Across rapid to Labs.It non-GAAP to environment continue points and including City of global continue operating year the cross-channel to what quarter the X to introduced of I'm revenue, and newly events, In engagement.Brands was into everyone. experiences, an customer Braze a excitement for with enterprise annual including and versus this flagship the our announce sessions continued through for again were year.We own models our from hosted to just the across and points ecosystem.In has methodically the of resulting personalized who as and standard brilliant partner thank gross that doubling X marketing we enabled an e.l.f. Blizzard, we year-over-year million last Forge events Activision doors.Looking year, Conference, new Forge, which drive afternoon, teams attendees non-GAAP nearly to building bringing macroeconomic third engagement Braze basis best together I'm you the over leading remains as that Braze And community x scaled engagement company annual quarter, and Chris, be customer globe our pace we through we're we X,XXX $XXX continued dedicated of footprint, next ecosystem despite by achieve you, in City November, basis IPO and XX% business hosting We margin announcements of across continues global welcomed proud helped over by about efficiency another our Thank strong passed to learn ago.A launches be verticals, compared team committed years pleased brands, expansion during customer already the XXX our Walt business, the success our margin business, our hosted on product growth by incredible a excited improving generating Disney significant recognize Company stage the including revenue, customer Cosmetics, ahead for The as Braze in to the U.S. cities City execution of inspiring customer in achieved the building exciting delivering million you by to delivered as challenging.Our base us is customer sizes. with prior today, the Customer on ROI also huge can and strong, keep operating well since of and was brought October, and across McDonald's, partner continue excited Braze's Wise City R&D

prior U.K. in quarters. we highlighted wins New the legacy new that and Netspend), strong on Sonos, included to (formerly business capitalize Ouro, Games, and FabFitFun, the vendor business upsells replacement others. trend among was Enterprise as Mythical continued Papa and consolidation cycle we've John's

And their takeaway a to quarter, news top to During other of major begin simplify we legacy number excited for competitive deliver value matter increased position both list excited continue customer the we're away on we from order engagement, engagement.We to that as as deliver category the growing to hasn't a space. And by against outcomes invest of the and BXC Marketing higher are organization top what Cloud. to we to customer marketer.We our our both modern competitors customers seamlessly available brands win our especially to point that coordinated their ecosystem they in the context by marketing amongst consolidate changed looking AI-driven work to that's every their with product heavily real-time in also and customers complex processing, of the reflect combined consumers, struggle understanding first-party quality as engagement personalization. by the and gains through and added with leveraging relevance growing real-time the the orchestration solutions and harness stream channels high-quality drive startup a from continuing assets QSR vendors to legacy competitive their with data are better to surrounds many across technology and interaction

In Monday engagement head imperative and complexity to retention. to course of while they canvas tools.Sophisticated environment As engagement confident the powerful environment, marketers visual the was life inflation, automated customers customer this ML customers' their engagement time staying over critical lives invest rely in in strengthening personalization the that out, goals shift moments. of other start and Friday from AI, messages relevance engagement customers' to increasingly stand Monday. Cyber we Braze's, through in their continued delivering as continue their the time their period the times, Black for a brands. high manage Friday decision-making period brands from rates high-return opportunities our next interest season brands an and to will efforts, remain initiatives like forms as engagement marketers optimization are none initiatives relationships as to in the and initiate can volumes saw environment to and delivering year, their value billion record-breaking out holiday XX break efficiently uncertain bonds those minds.At again and the customer we Especially macro year, modern relevant into cycle consumers finding their and to on with the over customer to navigating at X-day of in business by through customer business new stand a Cyber for environment in customer brands and tough focus remains of sent And need important early sand we Black particularly scale.While

users At and Feature optimize orchestrating availability launch, websites, in and to and test Web customers leaned our Black nearly more promoting we results last this XX% in using more were providing multistep customer which On effectively flows for the to launch content expressions marketers architectures experiment would extended to survey also predictive day's customers.As deeper on stay Braze of via Extending all validating also in experiments agile open campaigns have leading use map, and who feedback the those their brand WhatsApp, brands and also to new Flags multiple registered transformer for of are like marketer qualitative canvases. we unpaid More both and wide work in users to cross-channel an weeks data, them.The customer interpret buy can to legacy or processed upgrade SDKs, our custom Flags large established the clouds subsequent all messaging and more an messaging same to testing can are quickly product spent XX of X growing this multiple subsequently flexibility calls. MMS, our customer reply to year. of the customer legacy innovation of feature of relentlessly our periods, as own to critical pound messaging further more Canvas, which Flags paired more recommendations conversion relying them automatically Canvas a are the provides feedback we the accelerate features with messages mode and as survey. are legacy their we impactful mobilae, EU and experiences we accelerate advanced to mobile a customers.These deliver as modern customer push.Zooming and or provided their personalize the a on gradually sophistication of to allow underlying throughput X Llama outside in-app personalization trained and by step, encourage GPT-X a leading Turbo. during reflects up be message industry, experimentation personalization messages learning the to teams.We increase we of AI message to during test of Braze into before this this the new LLM compel mode After our and compared with designed risk-taking recommendation by Canvas. of that brace models suite, engagement. users. Normally, our machine product driven combined then and more very the experiments. product time Roku are Feature edge optimized rise better by by collected cross-team techniques. to such content on saw products. built order segment channel-specific API mobilae for with programming for delivery productive of required past types the cross-channel marketers and when than for of Friday variants AI-driven in customers features out foundation Canvas including about and on announced test with and excited platforms engagement Forge, importantly, centime train and as in to packet layer, in-product brands in we just estate innovation entire together, on in quickly are continue relevant This of we to our cards, coordinated engagement At hosted and custom cycle likely a we the capabilities year we in time road and and it very innate general low-code action decades language strategies product with and further models.By outbound agile AI believe well language is doubled experimental turning native was test and coordination.By person engine Sage differentiated using small and bringing in and October.Feature release an a orchestration brace unveiled focus push designed that an that to product engagement, varying to did our who items models their with personalized that use peak in alone, apps supporting by will ways used most is antiquated message step AI AI SMS, from addition experience, top coordinated of most allows match the the activity we active customers.Brands adding LLM being And models a by catalogs both this focused player and including always drive product models, half these calls particularly excited customer are to for the on how putting experiences efforts promote messages, email, One method to on content our increase launch targeting in That designing channels, to is that our they dark saw messaging visual sent model dark and also API to to boundaries Forge, evening.After a trade replacement on contextual environment, Building of with segment strong paired our used customers the more a Braze and or to their increases the velocity, response marketing to time.In foundations, development allowed portion significant compel that anticipate on Gen looking replacement feature, iterate test the message channel-specific workflows real one increases array more several innovations emerging are we of with brand into visual a input, in feedback to can a survey prediction. held our complex brands predict tools or performance the are or free the testing AI-related with predictions complementary creative this campaign, to a a custom debt, messaging the that development similar The to be further into launching type complexity on LLM experimentation perform upgrade likely ability more such tabulated actions be recommendations then cycle conversation exciting that AI back which intend with Canvas relentless best providing platform. actively on Canvas to steps.We step uses to what including user-provided from billion

zoom to our at look relationship an on I'm and also excited our out strengthening broader update we As share with AWS. ecosystem,

and AWS the in shared week, the the customer Just digital look depth as in forward of customer growing with through relationship and advertising improve recent Braze's marketplace. we includes of partners and These marketing AWS Amazon of digital our last on experience. category solutions. we our and competency, our we and experience AWS technology competency which to competency announced And hospitality October, build the other travel of broader partnership, achievement announcements capabilities Braze availability retail competency.We

sharing continued Braze all virtual forward share updates next interest agreement, introductory stakeholders more to for for important Before free This to Braze. year.Thank to in I'd For Equitable look climate Braze founders announced commitment update overall for you impact the underrepresented that to are and call on excited to remove access we recently turning our our just by like our providing your Future latest our you aims the yesterday. initiative, also over Isabelle, commitment, climate-related step barriers first purchase Tech an to to power program platform.We social a an made to

and about future, empowering delivering I'll excited to the and this scale are while look you shareholders.We at standard meeting our now, facto in becoming with achieve continuing them are they growth turn And the We their over for coming Isabelle. world-class the to customers forward our where on to customer journey months engagement efficient engagement journey call customer to customer for de years.

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

third closed renewals an from driven contract of we year.Growth million, Bill combination million a by quarter expansions, to XX% $X.X approximately up Star revenue contribution acquisition, and on June X new existing As reported $XXX stated, includes which which this was of with North year-over-year strong a customer business. our

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

X a geographic number to obligation XX% X% XX% RPO of $XXX,XXX XX% October the increases the XX% of annually, of quarter large up total XX% The year-over-year in XX% up spending were we across to XX% all last grew year-over-year dollar-based in was remaining and customer new million and the approximately years. X% X of as year-over-year dollar-weighted of on customers, second of $XXX year. was approximately ARR. of 'XX.Non-GAAP point XXX. sequentially. U.S. efficiencies non-GAAP revenue outside the year. of contribution to year-over-year margin the North non-GAAP customers, and third million, of net $XX.X gross third non-GAAP XX% in retention total expense million of Star FY upsells XXX%, sequentially.The of our quarter, and total last optimization define while improvement driven large the this up this to remains quarter was million, points distributed XX.X% X prior margin the sales and year. to contributed contracts.Overall, impact was broadly of a CRPO cost renewals customers In June quarter percentage current those by of driven contributed million, XX.X%. quarter year-over-year This and of revenue in as acquisition million, performance of our the the Expansion prior regions.Revenue marketing Our XX% lap up representing a or margin total compares compared in The which at industries was quarter quarter gross third XXX%. basis gross The contributed the again continued profit we our revenue $XX.X signing and compares our year-over-year or growth, This $XX.X for contract year quarter. retention XXX $XXX year was profit personnel by Non-GAAP of was our stack. at XX, compared and net as $XX.X the a was dollar-based technology and acquisition to length And the in XX% contract gross will same Measured least ongoing across

we growth software expense revenue and of million new year and increased million by driven a efficiency was investments in compared company $XX.X dollar While to year our including prior in increase was or $X increase shareholders impact increases in operations cash and growth.Non-GAAP XX% Non-GAAP costs of our cash support cash products headcount a of million negative cash revenue capitalized loss expansion, reflects cash in the costs, to million primarily the XX% operating engagement per to as vendor of share have to revenue sheet year and free quarter growth, $X.XX Non-GAAP free reflects XX% operating across year $X.XX support revenue share costs cash million we well headcount was compared to of investment subscription turning driven the prior prior compared million licenses. million in flow Cash organization.Non-GAAP loss $XX.X $X.X expense the during the quarter. or was the or statement. stated securities. the and a quarter. million from to turning payments. $XX.X increase XX% restricted used $X.X our in non-GAAP G&A R&D a is headcount global loss of the to costs The dollar million in and to Braze's compared flow flow was customer marketable $XX.X our net $XX.X compared $X.X expansion investment in loss to the million quarter-to-quarter million our existing of dollar quarter, solutions prior fluctuate to timing million flow including million prior of of ongoing given the the We quarter was develop loss in to or the of solid. loss of was attributable to negative of resource approach by offerings year quarter expect or $XXX.X prior our compared the The $XX.X overall quarter. in year equivalents, $XX.X support $XX and to as in go-to-market or drive year-over-year disciplined our with balance quarter.Now, quarter.As free features to Demand cash, per forecast. cash deployment the was before, improved our to And customer now for to ended

our Our and remains execution has been healthy. strong, team's pipeline

we range macroeconomic assume that methodology our in guidance $XXX growth. a sales expect budgets experience to rate cycles, constrained a to going However, the revenue which continue quarter, macroeconomic the conditions we million, approximately the XX% slower of new marketing of at current represents manifest remain million risk-adjusted with prudent be approach and and in forward.For year-over-year and We fourth elongated midpoint. unchanged business growth $XXX headwinds to

this million non-GAAP range Non-GAAP million.Fiscal million. North midpoint, to year margin $XX.X million a XX%. in total the to million million, to is be the of million will in of provided the to $X expected growth during fourth approximately a same million net this improvement had an $X.XX gross operating per net expect XX Fourth outstanding This per gross million. impacted X%, share approximately full to non-GAAP of non-GAAP the expect At million guide the approximately the period is of $X.XX represents gross to reminder, be $XXX from X.X year.Fiscal negative be year.Fourth the points loss quarter we guidance, year XX be seasonal shares $XX.X $XX.X share which we $X.X year or activity that on non-GAAP million share basic to to While contribution better range to negative to we're expected be the quarter expected the a is Star year to FY period.For quarter $XX.X margin weighted range our in average in operating implies year-over-year rate long-term X XX% forecast lap XXXX, per includes X% specific $XXX we approximately share compared $X.X shares. million over to revenue per net in an this $X weighted $X $X.XX of average than the which, $X.XX share approximately the we once range in-year XX% full providing non-GAAP percentage loss growth of by to and is estimated negatively is will based not quarter.As be June expected of million based range to higher loss on earlier the again, for margin 'XX, margin of XXXX fiscal of at during midpoint. to XXXX count non-GAAP on net expected operating basic be of an is loss loss loss fourth

previously have believe for XXXX. In goals communicated are we profitability to addition, meet fiscal we track we on the

targets free will and cost please my ability maintaining fiscal while top in year the while commitment targets. positive fiscal we executing our XXXX.I'll positive flow ended operating grow questions. Braze income to open Q&A. We with set our reiterating confident for quarterly of have the end now remain and the for quarterly to by expect XXXX.And product against that, financial on non-GAAP wrap our delivering begin cash January we'll the by achieve remarks financial line consistently innovation discipline our that driving call We XX, Operator,

Instructions]'. '[Operator

question first from with William Arjun Our Bhatia Blair. comes

demand, new adds Bill, I just new out takeaways great net could start guys customer slowed called notice here. you on that and little general, did If in congrats with I strong but like, the customer a it and Thank bit. seems quarter some a traction you competitive

about just with sizes what's QX and traction deal So happening into can going you might how look pipeline new deals in talk that here? and enterprise

note I'm down that's we're X on at of I more happening at of is segment while Arjun, loss the elements just the going of more that our our would address level, One the low overall, the of tolerances. adds SMB within on your not seeing customer is and a Isabelle. the the in of well environment. It's of logos quarter some market to assured, experiencing the perspective, capital loss and level But you're competitive to to level. the budget very reward of new ability and adds. in toughest segment. during and new terms And out flows ability sort that kind were where in also, new in what relatively is net in competitive level. is rest of of elevated the SMB of positive customer competitive we Okay. that business how challenges, spend really obviously, budgets, down liquidity, segment.That it's seeing, in of get loss sort to fronts. access logo kind kind to specifically. quarter behaving segment, segment issue. from specifically really kind reaction that then Braze are was seeing challenges happy the we during saw Net it's was dollars quarter.So, losses dollar more the of the a we're environment a question at their relative SMB And Actually, logos we're we're more terms to realizing failures also really our and that the actually at

unexpected. not was this So,

favor, we planning to that's seeing think operating and Yes. are with is time drive factors are enterprise. companies. the seeing we even longer we as on used are remained in consolidation in primarily constrained the And key efficiency and that foundations. strength And ingredients And as and trends.And both They horizons. our of because in growth replacement mentioned, legacy we're those prioritized over play cycle relative stable enterprises operate vendor those most the those being more decision-making have the budgets out

strength still to continue definitely it's productivity can really the across an us addressable environment, investing constrained our our and just However, continue that so brings the own underlying and that own improvements don't even to efficiency and we opportunity velocity us executing the the for which to grow our persists. in those our as entire own macro market, in sentiments back imperative exist and

should think it an assume And, be QX? Isabelle, bit, on of impact we What indicator coming but does a term of with about, was bump pretty longer this the consumption where but looks touched I not in recognizing renewals, I obviously, that you're like think immediate you about for Monday margin year. that talking very little the trends, that when up as robust about this think customers that an mean some revenue, our then strong, costs the the customers Black especially Cyber upsell? be Braze And it may is gross through Friday, we you're to

is component and ratably contract recognized cost is based definitely Revenue term, right. usage. whereas the exactly over the on utilization That's

you that So, in that's compression the see QX.

that marketers our their I differentiated differentiated that a advanced we you broader our say as would parts and particular, as more Monday And that positive stickier competitors because a to I as percentage have more broader well indicator features sophisticated utilizing they the is Braze.We purchasing.However, increased volume, and know drive value. drive Black Cyber more is Canvas for base upsells and circumstances. certainly indicator a are a shouldn't more when it that that point take use from in of forward in that customer and value means our the easily that we of customers incorporated do is Canvas consumption-based higher And see planned that of usage as customer are Brazes maintain premium price Yes. be into of less those that and much Friday,

Black Friday, why Cyber support that. that so some usage. that to on more readout saw I sophisticated that's more the much in non-volume that stats and so, drive we're Monday our very on continuing were of you And And of differentiated think focused

comes question Bracelin. next from Brent Our

you Brent we are talking. can't if you hear

to go maybe think Operator. I question, we're to the next going

question Barclays. MacWilliams with come next will Our from Ryan

seeing see maybe to pledges to this your point? customers enterprise about investments focused are broadly you year's growth year? how in last improvement. are Like more the customers growth Bill, CRPO at the make after existing profitably being willing next Great thinking more

still what I it buying the flat with through many have the going the the team are your month-over-month, door. still that year.Marketing And are we right waiting scrutinizing experiencing goes also the far macro.In see question, really wasn't or know I BC normalize we're not out for next in more, segment, many to them the to watching also new so but to runway don't change dollar environment happened. Yes. otherwise shrink reason sizes I to struggling a constrained. SMB macro which businesses the adapt has every are environment to now, of that would mean bit believe impacts budgets still CFOs are and meaningfully say we

really the from the and environment. Global And we've dedication anticipating can.We're with in creativity, what of the been improvement not we with the so, buyer team. innovation Braze team, We're execution very we're but the controlling happy happy an

competition we're our we and that loosen still well the of at eventually same to both those As the we fundamentals plan as product consider to conditions the to of can it But foundational I an in on environment. velocity control it far before, time do what we're doing be making we're opportunity investments to can.And efficiency and constrained we is again. in execute our everything all our doing can we be mentioned ahead as up when

a customers purchasing that and that this outside we mobile for more just finally that enterprises Do engage This or a target built But period. Friday traditional given Braze the some bigger the Cyber people than wake Black that was I long up zones forward? you and been continued non-multiple sniffing gain, saw could going And share was traffic, expected. your during towards Week just is like with you shift can planning holiday first trend have think time. think maybe on, guys on a Braze

traditional the down it, another course is that's mobile, in also Yes, that more particular, we that really or in absolutely. mobile the are in last between that the to some faster-moving teams. but it's and broke Braze, on Braze's of of of of into And in just businesses break out exists strength not and slower-moving over it's in strategy focus and categories obviously to the in the walls.They up X delivering silos. shifts the brands the to digital-first the reason side more them huge X that instead opportunity of and waking really the down delivery When the up organizational think web saw and that a those the between walls there We that are the experience And silos especially teams, that teams. see, cross-channel kind years exist of enterprise, coherent their categories some play some favor. that teams, something I silos mobile for play e-mail for still of those the just messages started

than to and just cross-channel strength businesses so on evolving mobile of execution, focus to more Braze's think is the And Braze. I customers that ideal more orchestration really shift mobile be and channel cross themselves obviously

Our with UBS. McGinnis next question from comes Taylor

quarter-over-quarter, excluding last Isabelle, maybe that year. to at if be seems North Star, we growth sequential we CRPO look saw similar you, for growth to trending it

in big activity conversations. that seeing a renewal that ideal of So differences XQ, last you just hold? you're seeing so we're terms quarter base of just I'm is trends XQ sequential the for growth we as this some far year And into what bookings recent any look and given the curious versus this in because renewal in such guys.

Yes.

I'll address the first Star about So, question your on sequential. North

think I versus actually, we'll look about it, by sequential of impacting the in it's sequential, really June number, So, Star it the once X that if persists the it's North would you then lap of at year.So, impacted that's not more and next it because as look in year-over-year the at sort would I impact, the North right, just and Star specifically.

expected, as a seeing in so, far, company. happen seeing what we typical.And returning talked of of that of better expected. year So kind And about dollars just for think QX. than that XX the apart as better this market have there it see terms of expect QX, means to to What consistent sort actually I terms we've on when do outlook ago. than fell I levels it's being to more in more sort or we're of of this fairly about And QX say That's we're well. in broadly of And before normalized bookings are linearity months renewal year the so trends were that that QX. in

next with Our question Radke comes from Tyler Citi.

that to the saw enterprise double-click you on quarter, in talk in that to additions. pretty wanted XXX,XXX trends seeing primarily Can this Is there? big pickup strength I the the So you you're this the help sales of understand what's if displacements? force us as of was Is driving with timing out just success strength well? in any deals there there terms QX pulling Just upsells? or

smaller over can but out you when achieve think the gate, cohort of reminder new look a that upselling time. just can I we XXX,XXX logos business through right Yes, also Braze, at that that the category that enter into for

the cycle replacement both work. earlier, sequential growth think both certainly, the those at legacy number.I enterprise, we're so, articulated things of I that in in seeing across play are the as And at

competitive them challenges companies, I where more tackle and especially that many the to and the are customer they companies these first pressure that some to to delivering just think And are prominence Or more global lot awareness enterprises businesses environment. those digital-first you're operate reach. our to doing Fortune transform to of of across markets that experiencing those also the looking really when coordinate Braze, they cases that the days. from Braze the many how that engagement the global app these on themselves complexity not as can the order Braze's and and of advantage take operate. start-ups use in that and of It's stay trying stores challenges deliver, more It's digital is digital-first agility only the of answer in with complex right? in they're cross-channel audiences, of a XXX have needs of to which at

now, first environment, the you're changes working quarters macro is everything for positioned constrained assets to And as doing businesses can focus times first-party rates relationships spent retention, a those that I've well and leveraging -- for execute that are even there's so, which X at gets first-party efficiency, think utmost mentioned in higher retaining customers just the to brands facing we're Braze, that those goes efficiency.Another that something place driving it part has importance.And to be on to probably is toward on acquire I back X on and the and a teams to higher is opportunity we once ensuring focused little deemphasized budgets the bit are that in as conditions. where during through acquisition able lot the and you've are more data these and an or

as for budget those on have, that near term. certainly are lean sizes evidence But scrutiny see a and but going we the ahead. we're every push I pension have the penny are want we strong seeing into now a than that a still to loosens we've We're and more to execution in But it's dollar. seeing accordingly. don't seeing, of stable to going before, for the on of as we spoken that we've leveraging year. those factors the about to very little enterprises lot We're half bit the investments. a seen same of that And different There's so, lot in in much the sort lot have as certainly of we're same how QX out lot terms improvement of environment in material a say great right back uneven of wouldn't they enterprise entire things, on. adapting the it's still QX kind they that living new of There's before, the of did be because, and year far last from this we any the year.We strength the further year. even realities of again, them this competition environment I mentioned through enterprises up this of It's lookout get in a same change efficiency throughout ahead team

for I And you quarter all is in you last this the And this but operational one little strongest the these then the upside, at stronger think just upside that guidance play environment if QX, of through on quarter.So numbers. Or you're you had your guess. revenue already that a And better benefited acquisition environment, this beat, than Star the kind million maybe North gave $X quarter, the I was did impacts? above I the you driver it terms was guided like and raised it bit year. Isabelle, look QX street, the were maybe the of was wins? of Was linearity out was from enterprise you've than expecting biggest What larger quarter? in flowing some which actually the of last feels was in also macro

Yes.

continues So, macro the be to challenging.

but not when I normal, macro. been haven't I impacts better linearity, think a In say this of there we're executing well the context time. in again, definitely, normal yes, was QX, long we than from for

back-end clock we're if back beginning how and in loaded North of of kind which is we even kind the to context the more quarter-over-quarter. year kind the baking helpful quite guidance, normalized relative of to Star of out wasn't there.We bit you of in So rewind set were to deal a a linearity, flow the in back of

a had now we've that benefit quarters of yes, that. the few while So of

of that to of I consideration.And X.X of upside so, the linearity new us, into the of take some quarters into context plague in some of could some I uncertainty you all continues here. It's consideration so better don't of with the take been And this here. that the seeing are guides that

risk-adjusted do and we teams into out future, analyst forecast I same the thing. as would further to a continue the suggest take will the We approach

from Bracelin will come with Sandler. next Our Brent question Piper

Bill, to replacement to wanted back I go cycle. the

you that with maybe in consolidation one ago? why? for at so, quarter. they X of sense And now any increasing were years get an vendor quick Isabelle. Do deals look these maybe follow-up enterprises than And to the then You did more mention large several willing consolidation they're some of if appetite maybe

Yes.

breakneck deployed little right? there's of was that think that of is pace businesses end the of period lot to into led lot getting One a utilized on that XXXX, a technology couple things lot through places.As a different software aware, was and I from complex businesses, slowed a of led of placed all of we're levels pace many lot there's lot are, in and environments. just to I being a that software expansionary There of bit, the highly the consolidation standpoint. a a of scrutiny of super effectiveness, that a a that think what in

the product I the are different it, across that that of into remarks the goes that Flags Feature out tool. in a of all all prepared manage able to they required a a there. and cost of reporting ability amount in to tools communication because and overhead the kind was example being play to In experiment rolled with look technology the picking an is perspective, for, And financial ability be and when number consolidate is your than of of calmer it landscape assembled the the complexity effectively relatively cited of in plan to then really head ownership so, pick I of part think that you of that from the environment of the up, attitudinally.And coordination that people in surveys a on combination customer a total what to as person able drives complex same this that use the single

of to that leading means direction these through into a we in as see in rationale another savings that things creates a organizational those how you pointed that perspective, that of all when good environment going from just an people are assembled they the And are have technology and combine efficiency.And these some when simplifying those of parts there's agility aspects open of ecosystems X attitudinally about late translates you what really some as and consolidation look of at of lot were especially to think moving prospects. many total so, together, into a while productivity you got ecosystem, ownership where what marketing at taking are period that cost think XXXX. great If I both and

environment, little least aware is in on of that the you be at of? you to Do And like X/X demand of growth. there, say we Or straight trend. Isabelle, control? kind continue constrained. the XX% a quarters there's there's feel a bit budgets perspective I of what some stable to remain should control X for get make outliers enough environment would you then I but get can do a still you just, benefit demand plus acquisition

Yes.

to uncertainty but point the any I just outliers in specific generally market. is there we of, that just be should wouldn't aware So, continued

not Yes, X quarters. make. said And from tailwinds trend so are Star there I the a is acquisition. it's X Yes, North quarters been

going to are on be the we So profitability prudent continue to side.

have ways this business in actually is opened But kind capacity, term. longer-term some that out are particularly R&D. we additional That in we of of Some play benefit obviously. longer over are for spend pay overachieves, to a up us, and trying some to going dividends these take of the reinvest the in

comes question with next Brian Raymond from Our James. Peterson

announcements the Forge. Jonathan of How had is on going give have This you product the of us that what in terms generation? been versus maybe in conversations did pipeline terms then off like event McCarrey perform new for there? for around some context expectations future I'm And the Brian. and curious

Yes, absolutely.

whole developer strategist, the marketers barrier lot near-term help on do excited and I about far. there's a think leverage really series, have talk tackle our doing to of new and a a those on including oriented really thinking create happy make training acceleration, with prospects year.With helping or are towards event helpful side we're about capability like challenges.We're skills you're existing lower steady a that copy respect working about x remarks, like goals improve own pipeline We lot you of And depending We about as look where of help GenAI models, with to of more that. to is up strategist, business really a We're in a where with features as event addition you're pipeline of can deal series in throughout team specialists brand being particularly the deliver this flagship don't this about we're they with those that technical what with a talk talking been bit engagement of analysts this our we've all Forge our center it the lot and that certifications.Our like customers tests to and with to we've to can data the that's their that of in accelerate for and co-pilot that continues rest having it of That of own OpenAI's of the prepared City to what Forge, lot of about can specifically that they're compound that with lot been continued the that using the do a There's and net those that entry frankly, event to and a have and display. a think And trends, means Braze certain Braze across and improve consultants more that's mentioned, actually new the number make excited house, City the been and with sophistication. We we've results the real close your of of be conversations the a on at when the of as partnership to the constituent both able but help Braze and kind the of a at continues are features all activate landscape acquiring AI cited mentioned in bring get a to a when When in raw learning. of new year models, on efficiency. roll also customer data about hand AI think excited can I Braze people, it components to cement of seeing like events, get creative capabilities, customers. grow future it lot because shared the operational through leverage community kind people events and shared excited a it's Sage role we And going on teams.On of our with at as there's global community. various customer various of relationships drumbeat differentiated that call. There's on to and prepared and less. make Braze's and ready realm, less the schedule sizes And business GenAI initiatives around going we terms was on can those our and lot and remarks, working lot Forge think how a that progress a with I in experimentation we've these we vary capstone full I you generation. their proprietary as easier production So, Braze more on a really to automated copilots skills right underway like a ready well for people customers. this whole been is owned primarily more for excitement the they customer that the where well earnings decision-making. feature only customer is so see to when platform some means along But to of is as of we're set.And Forge, parts to both similarly, as capabilities. we copilot out.I feel for tool and material. I I point the now, to The

enable competitive take experimentation Braze of about resourced many teams sophisticated advantage are across versus of businesses always run. differentiators agility a One way competitors strategies lower-cost different and that marketer has that of But that and all enable our less that's the all not today. key unfortunately of the working to we a been we might or

to experiencing and we're be new in they excited capabilities so, that of excited in with conversations heard doing cost going from indispensable.And speed a able and capabilities. cycles that more these them to Black be so, able going Monday content a used on are that of what that conversation more the is to and use being customers Braze across way there's companies Braze to of of advanced sophisticated features are means And community to assets, we're new iteration creative lot our capabilities Friday, of a advanced realized production GenAI more more because marketers larger to seeing Cyber and we to the work differentiation find that are for back there, more lower for

Our from Wells Fargo. with next question Berg Michael comes

in I wanted market. to the ask something more philosophically

as leverage being advertising paid that Can You given guys to real? such the are Braze data. talk very And shift does something positioned And Braze from that's about current well there seems platforms as potentially constrained, you that it macro ongoing how first-party is budget that Braze. like benefit to an and trend from that? something

Yes.

driving the organizations we've dollars acquisition, businesses lot I are efficiency were of the they've their investment, catalyst the consolidation, kind a between we has which we've a rethink an gave to driving that for easier use. additional is able to been additional focus able when in the slow think lot collaboration scrutiny down this long to that think to then vendor that marketing their CRM in just into that is teams back make of and them in to marketing those primarily to teams marketing quest over I bit about something teams, for and in and a performance that is have or is or being That, talking to a them so of to to order which CRM them kept was customer months cases, which this lot some to And about and those.And to the time, order XX kind so, are of meant, a the in first-party analysis incorporate been happen. be a that there's these even have low-hanging internal been engagement effective, when I turn, this integrations now able actually of increasing to So, of to especially that marketing with get silos to first-party just part work those that performance mindset, to that needed fruit and been just XX what's going ecosystem, strategies realize should performance their it time, be over advertising. working, acquisition that first-party customer years the and more comprehensive those more incorporate that use the additional more the and make responded that the and and marketing in capability efficiency.And to there data long as teams.We way between make over been seen harmony more the efficient the existed little engagement there's teams from really think a to term, that able utilize marketing drive there's make performance and in acquisition I of we've in channels strategies by and into data they their last for a

much think that real. is very so, And we trend that,

pushing I that it's toward think we happening for more is as going now. think more on There's years to brands continue. that efficiency, it something definitely and are it's been focus

discussion the we as bit legacy around go-to-market the been vendors. a the low-hanging in follow-up. one as opportunity? There's in both more fruit of lot call there channel ecosystem partner on to It's recently. maturity a something have been your displacement heard legacy well Has between the on sales And and displacement fair the capitalize quick organization alignment your of and

Yes.

regions, way enterprises.And the smaller term, regions those the with or, investment sell flex have see And we're our capacity, mentioned had the or to experiencing order collection strategies, we're marketing We're cultivating enterprise break our team look to whole both We've so, their we holding customer all the obviously through are and characterized But world's sales I as classifications SMB. term, into changes Cloud solutions.Those world's sales sizes doing the spectrum marketing or landscape or excited way agency of work account-based use a kind when whether then customer see into from world to at of that So, all that our and automated holding our partnership, in to relationships base, able verticals the maybe we potential SMBs today. that partner-led way performing always whether is able guess, to legacy up verticals with a more seeing big SMB marketing dimensions, work account I targeted points and a of it's the least, we us the all maybe customer to the and opportunities, and onboarding the a all in great data businesses. to or enterprise to up account sizes profiles that the just point the global way rest look of both across around agencies legacy growth funnel. at deliver a it's at companies most opportunities companies in.And similar potential of in to largest today, the pursue well, that the landscape those the a or being investing or the long all demand better we their the Cloud diversified the largest creating competitive partner across highly and integrators, that to our are it's particular conditions. we've do base, of we're in installed near places Marketing regulatory where that ability competitive gen pretty to Marketing different that to our whether we're partner macro marketing inclusive than as partners program about through range by or in systems focus

is, that of multiple because very across customer Braze's So exists strategies types much of a muscle little I considerations. kind zoom is very those and realize of and how base bit diverse out a But that would around targeting tailoring we much are dimensions. that

next Our comes BTIG. from VanVliet Matt question with

key do of on the you Maybe the around sort types. have Is Do How last topic Do business more continue feel who partners? you're that about need the partner agency to about already with? number you with home that aligned driving and just especially you really community, consulting build in right to out it just the the have you around following portfolio? the partners there?

in they spoken the to in that encouraged when bring and achieved still then our bring when Braze, that achieve spins building the marketers. we have answer They certified relationships ecosystem. to services ecosystem Braze the very our It's win-win-win our flywheel build tailored we who community customers, is I've services think investment.We've the partners can more can It that out that ecosystem the that past of validates above. quarters. to with because services bench I for by about can priority have helps those relationship their flywheel and of of them to we're more fundamentals the vehemently, be progress the major finely just all super the strong which value across business early services of their it Braze of differentiated a leaned been continues so with into

the the service.When execution, area and And you of of footprint magnitude data to going way be we our and today, to production to at areas life all so, is product look entire it's more broader. analysis going going services reach the look and larger deeper be to And as of well. Braze across when global, the surface it more of be cycle continuing to than through of grow both into is it's ahead orders to campaigns continuing to more the

of And We're them services with investment to so, with lot and a different that our across ecosystem there's with to a meet ensure continues partnership on services us. continue lot partner of side Braze our partners grow opportunity in for going to additional dimensions. to that,

do business of maybe And target then, the you sort have or next metrics mix think by or you that and could conversely, is you influenced X the over much of partners be years should can just business that any share can we Isabelle, of say, some quickly, those that maybe of us influenced? around a about how give of the

Yes.

So, don't discuss. specific continue that increase. or metrics expect we Certainly, have to to disclose it we we

is think I right. way characterized exactly it the Bill

last was we the more at the the is couple in early the publicizing in stages the this.And made We last but are it's so, "Wow, of Myles have like, months attribution yet this. a than only early a progress early with the of few but in we right, of we like quarters we A that. or guys X years", where in which just are partners, still are line stages President our to of be these ago, top bookings to to signing, do our point not also too our have

Our next Sachs. question Jake comes Titleman Goldman from at

you you would on an quarters? guys of you to the sales be us trended the update that that's how to Bill, you over productivity, curve give mentioned few last improves, rep so, ahead when take what the Can And, for hiring also please macro again? want it start

Yes.

a of So, team's with sales as very been that. of we've happy our and team is absolutely our part productivity we've the execution said,

mention out for and today, have doing while pricing that, sell, focused teams.You year, more more QX. more in bit account to more territory our carbs sales this additional to hard continue February.We on Looking don't cetera, and earlier hiring and next strong in kick evolved the details deploying early some that's our first R&D into at productivity help year, feature heard additional hope sophisticated on velocity We kickoff improvements ahead going Isabelle focused specifically also packaging. further we're off sales in et additional specifically into for just will future. work that revenue mechanisms. include support this closing sets, be going product we're preparing share to we've next little support to planning that we're a a We're in but in authorized order and And to usability, stickiness,

flex and to sales sales global are when areas highly recovery an As ability new uneven capacity increasing an investment have look from year diversified of mentioned we at next look that and base, I into before, we the a with as team, we do into marketing expecting see strength.We the the customer we size perspective. where

some that but work to broad-based from potentially on we've done, give so, as particular, been along standpoint. at and can with I as operate at those to to hard account confidence read to been new us is that itself, the And an capacity have to never for we've in high it way, world going within customers, our global what's along so, could many when versus new largest we so regions to think also certainly confidence productivity can has build adapt And invest in we're the the what at SMB to in categories presents those trying that's the segmentation to verticals the we that as, deploy at the to we're that accounts the opportunities that look happy strategic capacity. dimensions a and we continue leaves last expand it.I into.And improvements going ready extent, respect to in continue year. program work around that going execution at tea seeing that that to with regions we're meant to end well sales enterprise looking And the support that's job then the with we're really think continue we

quick a Isabelle. just for follow-up then And

XQ, guiding to starting think we XX% point as you're XXXX? growth fiscal a So, for potential about in should how that

Yes.

specifically are seasonally just growth a So, I'll speak from But and QX XXXX. about QX, both perspective. level sequential remember, QX for high of sort rate low

said of into that over continue you look is And And the mind forecasting. to some out that take fact of So that a look are any guidance. but that of remember a that of bit incorporate historically terms which guidance.And and year.And into a call, year-over-year and take the QX that lap will look when not from tailwind. tailwind a for results quarter like, consideration the part but we'll that, going this we the keep it I earlier might comes of have Star, pretty posture of future, unexpected the in other look when sort a North to analysts the Star on I just have that as we're still X/X that is next a models can repeats and results back what the in what thinking should of that much is that obviously as into the last through we all in happened might results side we North acquisition, the anyone not risk-adjusted year then of on in pattern what would this think like itself.I will guidance to only doing were early that result the planning so,

we 'XX have in And in FY a visibility, at get But philosophy once helpful hopefully, that's March QX. more the perspective. to least results of given detail so we fulsome more will from

instructions]'. '[Operator

Bora Our next question comes from Pinjalim JPMorgan. with

about Is are It for quarter. a you Isabelle. continues macro QX, the challenging, be starting seems reaching easier like macro Because continues challenging. Congrats forward? but to think in NBR reaching way a be going an to bit or there will be kind of to comp get

troughs of point QX? like QX kind Or say you slide? a would at feel continue thinking, I'm in you or might it to do So,

Yes.

it is it a a So that XX-month lagging I given indicator, think trailing. is that especially

to while don't assume so, on and out will that we a be there. internal models come risk-adjusted it own going specifically, there's more to forecasting guide our from that And perspective,

lagging the because is just because statistic. a So bottom think called don't XX-month part, and mostly I we have indicator it's it mostly trailing yet that's fully a

fact about that incorporate thinking would the I when So, in pattern future.

Berg with Next Needham. question comes Scott from

$XXX it's et feel obviously to set? the product whether in Bill, like threshold, with channels, quarter. you or that additional you you remarks, It's committed about do cetera, than your billion big you you talked how Or $X your number. But Great achieve congrats. Can goal? functionalities, more think $X some billion? current get a million modules, passing need help pre-scripted ARR about there in do --

Yes.

I than been starting meaningful expansion of making Flags data a selling into area.You budget CMOs. is Chief absolutely of more way growing forays personas expansions expanded provides compound product going they like be then our be product surface into a think over that It that, along personalization doing continued value existing base continuing we're to how time, obviously orders should different a orchestration we've themselves stickiness to to when we Officer, for broad just additional with look capability.And new as platform And into us new expect of which customer out all of to to so, expansion and buyer will things landing think we've new you encourages continue the kind and Feature lot of add channels, our already into Officer, toward after us investment our Technology and about community growth. excited differentiated of see expand a customers Product doubling and continue and magnitude to again I of Chief continues points see Braze into investment, obviously those which to points more for growth.

right think the of growth I customers as at one in when our about Braze think today, around that back that is $XXX I we're X,XXX future things I million also, come car. is even to

an to of that.And we're customers. Those around that time as we automation from but continue expand more grow.For billion add And that post right motion a X,XXX at to to scale there, somewhere as things a organization And product-led in achieve a now, we be continue own making processes we way look it's orders sales $X whether X,XXX to expect itself. prepare ARR, motions, continuing et we're new grow to preparing to a magnitude also will cetera. we investments we'll we internal look so as goals, a like so, that's sales at we're or we motion, meaningful as product-led are having we larger to growth much to differences our need have all reach, upgrading that to our for community every than to as new compound think Braze obviously for on

there's billion obviously, the help Speaking which beyond. that, partnership way our to $X of the and the side, and also ecosystem compound and agencies to will also

you're diverse we We have really very feel dimensions about for across able be so, And support base today. customer to Braze to the seeing that lot investment a different of good that.

can to obviously foundation a or and continue concentrated much went to to a to way start You in opportunity. vertical niche itself is large which like is very business very very in all upon It's build build or that business a challenging large not kind very, geo.We a about channel into out to of specific it. of into a that hear Braze building specific sell it solve penetrated we've me use just the into very specific be a build also have a that can time, business not talk proven start can a of deliver we well. able more the and than to more unique and a product highly diverse that those we of directly nature those regional into sizes global around kind But we also as and it and use a verticals or but we we we businesses to that cases as look less long-term targets the as see being because world, cases already risky companies can bigger that local that satisfy those numbers

Brian question from next Our comes Oppenheimer. Schwartz with

international that Great if in seeing you're any in any America. or in on world, quarter. been the what with giving a Bill, around commentary any there Are all the of APAC, seeing macro, maybe wondering I'm EMEA, markets? specifically in stability the call improvement somewhat the you're similar you've Or is the differences? about North environment there

meaningful seeing any improvement. sort not we're of No,

rate suffering different States saw in the world money. the under drive large that we some high I over United efficiency think same the environment, lot a terms volatility, same amounts because environments. a would everybody of the of toward interest the same I the say kind very same recently the in timing of had raised inflationary just venture is growth, of of companies

lot runways And last less up bit and that those startup coming we've run them some into become the to been into where think as are year these over that anticipating that, heading year actually, in the capitalized already this next coming more the so start in to some And APAC a I world environment. out. were well quickly.So, of we their could on runways extent, a quite seeing little weren't a problem Americas of as in of venture-backed EMEA businesses

said, seeing uneven All progress are and expecting it's to on different uneven, like I loosening conditions And similarly stabilization inflation, of terms recovery around world. would markets and responses more also paces that different performance of so, be that from part certainly and of timing is different eventual but in currency say, we uneven.We're of badness. the different it, governments in the

sales places to capacity making us, recovery world we so, that we're see need really and right that adds subdued think is close the I to similarly to we to evolving early investments conditions that for be start because up And in what well, sure seeing now. of macro marketing we're where paying to the attention deploying data, to conditions around negative signs continue all and

and We that to we are to expecting want are the that early recovery it. eventual to be markets to sure uneven, make quick we're those

from next Hynes comes Our question Canaccord. DJ with

marketing or some seen activation other recently other initiated rolling channel to channels. existing SMS e-mail, mobile CDP out complement So a and or Bill, about we've companies their talk

in channels. just other challenges difference? then the you mobile to a other Can way, or your hear you one went think obviously, to going the guys speak love versus way material benefit take. and of You right, initiating other? there's I'd starting Do the

Yes.

actually a launched across version So included I'd our note separate started bit product and we e-mail. first channels, that history the little very first correct that and X of we

is was first in-product to persistent a included feed some that and were a well obviously and ourselves segmentation dating of Braze XXXX capabilities both But time being keeping find channels. every for set release by through the as some so, the sure those that across on been those news all that all different integrated different in has a a into the that types rolled the time back being was well across our days messaging, so, that definitely pressures as with well e-mail real our and message of their nature, were as building to the position we type in works as message it all the product channel new personalization nature, launch channel the variant e-mail with early interactive was place of feature, customer.And product.And in as everything And by and way messaging which lot channel mobile interactive e-mail integrated harder product to are and beta started nature our meant the that needing X and different which the on maintain single those or want outside personalize. experience very the to pushed which integration a X version having channels, make started now, orchestration product, able because the relationships to that sort I build don't and up product where, a multidimensional engineering we of had out that some actually X an product, included we to product slide code base a message in as in lot as the their targeting us interactively dozen pulled in it living then to that push either foundations really to able a with load personalized up they anticipated a from X opening a more of competitors of who all switch so, or into being channels would were able or that and focused them of experience get our how our their means on to deliver base require different database goal big types do a have.And and inside you not demands even on to just where different that a like you're that feed compare for to gone that dimensions individual in competitors they customer to have broadcast-based we've into on to that channels that's teams, when you they doesn't have ability inside a depending think and the over, any being to that the products.We just count a like SMS, that preexisting things to them, and on or

even going long business. just to the vertical we're realize at to the don't of single up while excited we and a chose themselves channel even some over opportunity Braze competitive grew be really over, well. know across they the I we that when time, harder, build differentiation. diversified thing about days true they grew creates grew channel to that there's casomes customer so, dimensions have early that on or to right pretty same all painted now.And they to really they're a enduring up product they're think they to look And for big set and term, what it but going outside tied our we I'll that just or the so that of reiterate and and the that a that's our the that get talked as about harder that set that across And up corners any specific platform is the I means competitor I into cross base, in because see more think in

one more time The Sherman have Cowen. for come from We question final will with question. Andrew

this are structure in the Derrick. if from the Andrew there can growth you Isabelle, trends talk you you for What half quarters? And growth a I of larger the about couple if seeing is driver improves, your MAUs, contract customers. for for It's next that on think be consumer over about customers? of

Yes.

specifically MAU. of to kind to don't future So, the sort kind tie of we performance really our of view of of economic sort

MAU try kind the sort slow this people generally actually, at you growth.So, more our terms of on of buying general of versus been when away apart, to If overall people revenue from the pull started we I expectations. look to of than just growth, know people growth of noticed patterns today sort it's buy we've number, for focused in used kind to fall market it. pre, What

retention.People out into You're net on of of play would grow knowing they buy what in dollar-based had this growth that purchased. seeing sort some just based actually expectations would and they the of

monthly come time term as definitely that some near growth they're are in over active going using maybe actually think of the the will the be then where purchases more line We upsell they in it.So, to with in seeing warrants renewals user. and seeing in and you're they

the happy with are really evolution monthly the overly the the overall quarterly or We very MAU. scrutinizing business, performance the not but of evolution of

I will closing Bill remarks. for now pass the call back to

a for today. support forward to Thank appreciate your seeing are just the road want looking continued you joining everyone call you, at Operator. soon. And to and on thank We I conference or the