Core Viewpoint - Braze, Inc. reported strong financial results for Q2 2025, with a revenue increase of 26% year-over-year, reaching $145.5 million, and achieving non-GAAP operating income profitability for the first time, indicating effective business execution and growth potential in customer engagement solutions [9][39]. Financial Performance - Revenue for Q2 2025 was $145.5 million, up 26% year-over-year [9][31]. - Non-GAAP gross margin improved to 70.9%, a rise of 90 basis points compared to the previous year [9][35]. - Non-GAAP operating income was $4.2 million, representing 3% of revenue, compared to a loss of $7.6 million in the prior year [39]. - Non-GAAP net income attributable to Braze shareholders was $9.1 million, or $0.09 per share, compared to a loss of $3.9 million in the prior year [39]. Customer Growth and Engagement - Customer count reached 2,163, an increase of 61 during the quarter and 205 year-over-year [11][32]. - The number of large customers (spending at least $500,000 annually) grew to 222, up 28% year-over-year, contributing 61% to total ARR [15][32]. - Dollar-based net retention was 114%, with large customers at 117% [33]. Product and Market Strategy - Braze is focusing on the legacy vendor replacement cycle and point solution consolidation trends, which are expected to drive market share gains as brands seek modern customer engagement solutions [10][12]. - The company launched the Braze data platform to enhance data capabilities and streamline customer engagement processes [18][80]. - New initiatives such as "Braze for Startups" and a free trial program aim to expand the customer base and improve engagement [24][25]. Guidance and Future Outlook - For Q3 2025, Braze expects revenue between $147.5 million and $148.5 million, representing approximately 19% year-over-year growth at the midpoint [41]. - Full fiscal year 2025 revenue is projected to be between $582.5 million and $585.5 million, indicating a year-over-year growth rate of approximately 24% at the midpoint [44]. - The company anticipates continued investment in product innovation and customer engagement strategies to solidify its market position [12][70].

Financial Highlights - Quarterly revenue run rate reached $582 million[1], representing a 26% year-over-year (YoY) increase[1] - Subscription revenue experienced a growth of 96%[1] - The dollar-based net retention rate was 114%[1,6] - GAAP net loss amounted to $23 million[1] Q2 Fiscal Year 2025 Financial Results - Revenue totaled $145.5 million, a 26.4% increase YoY and a 7.4% sequential increase[6] - GAAP gross margin was 70.2%, up 100 basis points YoY, while non-GAAP gross margin was 70.9%, up 90 basis points YoY[6] - GAAP operating loss was $28.0 million, compared to a loss of $35.4 million in the prior year quarter[6] - Non-GAAP operating income was $4.2 million, compared to a loss of $7.6 million in the prior year quarter[6] - Net cash provided by operating activities was $11.6 million, compared to net cash used by operating activities of $17.5 million in the prior year quarter[7] - Free cash flow was $7.2 million, compared to ($18.7) million in the prior year quarter[7] Customer Metrics - Customer count increased to 2,163 as of July 31, 2024, from 1,958 in the prior year quarter[1,7]

Core Insights - Braze, Inc. reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of a loss of $0.03 per share, marking a 400% earnings surprise [1] - The company achieved revenues of $145.5 million for the quarter ended July 2024, surpassing the Zacks Consensus Estimate by 3.13% and showing a year-over-year increase from $115.11 million [2] Financial Performance - Over the last four quarters, Braze has consistently surpassed consensus EPS estimates, achieving this four times [2] - The company has also topped consensus revenue estimates in each of the last four quarters [2] Stock Performance - Braze shares have declined approximately 18.7% since the beginning of the year, contrasting with the S&P 500's gain of 15.7% [3] - The current Zacks Rank for Braze is 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $147.38 million, while for the current fiscal year, it is -$0.08 on revenues of $578.99 million [7] - The outlook for the Technology Services industry, where Braze operates, is currently in the top 28% of over 250 Zacks industries, suggesting a favorable environment for performance [8]

Financial Performance - Revenue for the three months ended July 31, 2024, was $145,499,000, representing a 26.3% increase from $115,107,000 in the same period of 2023[17]. - Gross profit for the six months ended July 31, 2024, was $192,990,000, up from $148,726,000 in the prior year, indicating a 29.7% growth[17]. - Total operating expenses for the three months ended July 31, 2024, were $130,029,000, compared to $115,002,000 in 2023, reflecting a 13.0% increase[17]. - Net loss attributable to Braze, Inc. for the three months ended July 31, 2024, was $22,999,000, an improvement from a net loss of $31,694,000 in the same quarter of 2023[17]. - Comprehensive loss attributable to Braze, Inc. for the three months ended July 31, 2024, was $19,859,000, down from $32,260,000 in the same period of 2023[20]. - Net loss for the quarter ending July 31, 2024, was $58.856 million, compared to a net loss of $70.875 million for the same period in 2023, indicating a reduction in losses of approximately 17.8%[29]. - Revenue for the six months ended July 31, 2024, was $280.96 million, an increase of $64.07 million or 29.5% compared to $216.89 million for the same period in 2023[153]. Assets and Liabilities - Cash and cash equivalents increased to $79.1 million as of July 31, 2024, from $68.2 million as of January 31, 2024, representing a growth of 13%[15]. - Total current assets rose to $606.4 million, up from $601.1 million, indicating a slight increase of 0.5%[15]. - Total liabilities increased to $371.9 million from $366.5 million, a rise of 1.2%[15]. - The accumulated deficit grew to $541.7 million from $483.1 million, an increase of 12.1%[15]. - Total stockholders' equity increased to $453.7 million from $444.2 million, a growth of 2.5%[15]. - Total assets as of July 31, 2024, were $825,575,000, up from $810,941,000 as of January 31, 2024[15]. - Total accrued expenses and other current liabilities amounted to $65,164,000 as of July 31, 2024, up from $63,264,000 as of January 31, 2024[72]. Revenue Streams - Subscription revenue for the six months ended July 31, 2024, reached $270.1 million, up 30.7% from $206.9 million in the same period of 2023[45]. - Revenue recognized from deferred revenue for the three and six months ended July 31, 2024, was $59.9 million and $158.3 million, respectively, compared to $51.1 million and $128.2 million for the same periods in 2023[49]. - Deferred revenue increased to $212.1 million, up from $204.3 million, reflecting a growth of 3.9%[15]. - Deferred revenue rose to $7.828 million for the quarter ending July 31, 2024, compared to $6.471 million for the same period in 2023, marking an increase of about 20.9%[29]. Expenses - Research and development expenses for the three months ended July 31, 2024, were $33,141,000, an increase from $29,132,000 in the same quarter of 2023, marking a 13.9% rise[17]. - Sales and marketing expenses for the three months ended July 31, 2024, were $68,569,000, compared to $60,417,000 in the same period of 2023, reflecting a 13.5% increase[17]. - Total operating expenses for the three months ended July 31, 2024, were $130,029,000, compared to $115,002,000 in 2023, reflecting a 13.0% increase[17]. - General and administrative expenses grew by $2,866 thousand, or 11.3%, to $28,319 thousand, mainly due to investments in finance and administrative functions[151]. Cash Flow - Net cash provided by operating activities was $31.007 million for the quarter ending July 31, 2024, compared to $5.032 million for the same period in 2023, representing a significant increase of approximately 515%[29]. - Free cash flow for the six months ended July 31, 2024, increased to $18,675,000 from $2,965,000 for the same period in 2023, primarily due to higher collections from new contracts and renewals[170]. - The company reported cash flows from operating activities of $31.007 million for the quarter ending July 31, 2024, a significant increase from $5.032 million in the previous year[29]. Customer Metrics - The company had approximately 2,163 customers as of July 31, 2024, indicating growth opportunities in various verticals[116]. - Monthly active users increased to approximately 6.7 billion as of July 31, 2024, up from approximately 6.2 billion as of January 31, 2024[120]. - The dollar-based net retention rate for the trailing 12 months ended July 31, 2024, was 114%, down from 120% in the previous year[124]. - Approximately 45% of revenue for the six months ended July 31, 2024, was generated outside of the United States, compared to 43% in the same period of 2023[127]. Future Outlook - The company anticipates continued growth in customer acquisition and retention, aiming to enhance platform usage and upsell opportunities[6]. - Future strategies include potential international expansion and investments in new product development to capture a larger market share[6]. - The company plans to continue investing in research and development to enhance its platform and expand its channel offerings[128]. - Operating expenses are expected to increase as the company expands its operations and invests in sales and marketing[136]. Stock-Based Compensation - Stock-based compensation increased to $58.756 million in the quarter ending July 31, 2024, up from $49.002 million in the same quarter of 2023, reflecting a growth of about 19.5%[29]. - Total stock-based compensation expense for the three months ended July 31, 2024 was $30.5 million, compared to $25.2 million for the same period in 2023, reflecting a year-over-year increase of 13.1%[82]. - As of July 31, 2024, the company had unrecognized compensation costs of $18.6 million related to stock options and $201.7 million related to RSUs[83]. Acquisitions - The Company acquired North Star Y, Pty Ltd for a total purchase price of $26.9 million, which included cash payments of $17.6 million and $6.1 million in Braze Class A common stock[102][103]. - The fair value of contingent consideration related to the North Star acquisition is $0.1 million, with earn-out payments capped at $10.0 million for the first period and $16.0 million for the second period[103].

Revenue and Growth - Revenue for the fiscal second quarter 2025 was $145.5 million, a 26.4% increase year-over-year from $115.1 million[1] - Subscription revenue was $140.0 million, up from $109.7 million in the same quarter last year[1] - Revenue for the three months ended July 31, 2024, was $145.5 million, a 26.3% increase from $115.1 million in the same period last year[17] - Gross profit for the six months ended July 31, 2024, was $193.0 million, up 29.7% from $148.7 million in the prior year[17] - Total customers increased to 2,163 from 1,958 year-over-year, with 222 customers having ARR of $500,000 or more[1] Financial Performance - Non-GAAP operating income was $4.2 million, compared to a loss of $7.6 million in the same quarter last year[1] - Net cash provided by operating activities was $11.6 million, a significant improvement from a cash used of $17.5 million in the prior year[2] - Free cash flow reached $7.2 million, compared to a negative $18.7 million in the same quarter last year[2] - Net loss attributable to Braze, Inc. for the three months ended July 31, 2024, was $23.0 million, compared to a net loss of $31.7 million in the same period last year[17] - The company reported a net loss per share of $0.23 for the three months ended July 31, 2024, compared to a loss of $0.33 per share in the same period last year[17] Expenses and Margins - Total operating expenses for the three months ended July 31, 2024, were $130.0 million, an increase of 13.0% from $115.0 million in the prior year[17] - Research and development expenses for the three months ended July 31, 2024, were $33.1 million, a 13.9% increase from $29.1 million in the same period last year[17] - Sales and marketing expenses for the six months ended July 31, 2024, were $138.4 million, up 17.6% from $117.7 million in the prior year[17] - GAAP gross margin improved to 70.2% from 69.2% year-over-year, while non-GAAP gross margin increased to 70.9% from 70.0%[1] - Braze's GAAP operating margin improved to (19.2)% for the three months ended July 31, 2024, compared to (30.7)% in the same period of 2023[27] Cash and Assets - Total current assets increased to $606,422,000 as of July 31, 2024, compared to $601,121,000 on January 31, 2024, reflecting a growth of 0.5%[23] - Cash and cash equivalents rose to $79,119,000 from $68,228,000, marking an increase of 15.5%[23] - Cash provided by operating activities was $31,007,000 for the three months ended July 31, 2024, significantly higher than $5,032,000 in the prior year[24] - Total liabilities increased to $371,906,000 as of July 31, 2024, compared to $366,516,000 on January 31, 2024, reflecting a rise of 1.1%[23] - Total stockholders' equity increased to $453,693,000 as of July 31, 2024, from $444,233,000 on January 31, 2024, showing a growth of 2.9%[23] Deferred Revenue and Obligations - Remaining performance obligations as of July 31, 2024, totaled $689.6 million, with $438.3 million classified as current[1] - Deferred revenue as of July 31, 2024, was $212,145,000, up from $204,269,000, reflecting an increase of 3.4%[23] Strategic Focus and Recognition - The company has been recognized as a leader in the 2023 Magic Quadrant for Multichannel Marketing Hubs by Gartner[15] - Braze aims to enhance its platform capabilities to adapt to changing customer needs and market conditions[17] Stock-Based Compensation - Braze's total stock-based compensation expense for the six months ended July 31, 2024, was $58.1 million, an increase from $48.9 million in the prior year[18] - Braze's stock-based compensation expense increased to $29.822 million for the three months ended July 31, 2024, compared to $24.776 million in the same period of 2023, reflecting ongoing investment in talent[28]

Core Viewpoint - Braze, Inc. (BRZE) is expected to report a loss of 3 cents for Q2 fiscal 2025, reflecting a 25% decline year-over-year, while revenue is projected to grow by 22.6% to $141.1 million [1] Financial Performance - The consensus estimate for subscription revenues is $136 million, indicating a year-over-year growth of 23.6%, while professional services and other revenues are expected to remain flat at $5 million [7] - The company has a history of exceeding earnings estimates, with an average surprise of 50.7% over the last four quarters [3] Stock Performance - BRZE shares have increased by 21% over the past three months, although they are down 15.7% year-to-date, indicating a recovery from a correction phase [8] - The stock's performance aligns with competitors like Salesforce and HubSpot, which have seen declines of 3.8% and 14% year-to-date, respectively [8] Strategic Focus - The company aims to expand its customer base across various sectors, including retail, media, and financial services, by leveraging digital transformation trends [10] - BRZE is focused on enhancing its platform through new channels and increased messaging volume, as well as developing AI tools for improved customer data analysis [10]

Braze (BRZE) Growth stocks that trade under $50 per share usually have medium-sized underlying businesses. These tend to be up-and-coming companies that are looking to land contracts and accelerate their growth. Their market caps are often below $10 billion, and they have high top-line growth. Such are the companies I've highlighted below. Now, companies with such characteristics have not done so well in the current market. That goes double for those that are not delivering solid profits. I believe that's e ...

Core Viewpoint - BRZE is positioned for strong growth driven by secular tailwinds in customer engagement solutions, with a projected revenue growth rate exceeding 30% in the coming years, despite macroeconomic challenges [4][10]. Revenue Growth - Total revenue for BRZE grew 33% year-over-year to $135.5 million, with subscription revenue increasing by 34% to $130 million, surpassing consensus expectations by 300 basis points [9]. - The company expects revenue growth to remain robust, supported by strong demand for personalized customer interactions and an expanding sales team [10]. Valuation Metrics - In the base case, BRZE is expected to trade at a forward revenue multiple of 5x, which is its current trading multiple, reflecting a premium compared to peers like HubSpot and Salesforce [3]. - The bull case suggests that BRZE could trade at 8x forward revenue, aligning with its historical average, if it maintains growth above 30% and improves its profit profile [3]. Profitability - Pro forma gross margins improved to 67.9%, a 110 basis point increase from the previous quarter, driven by revenue growth and cost optimizations [9]. - The pro forma EBIT margin improved significantly by over 800 basis points to -7.4%, indicating a positive trend in profitability despite previous losses [9]. Market Position - BRZE operates in a competitive landscape that includes established players like Adobe and Salesforce, as well as newer entrants like Airship and MailChimp [6]. - The company's unique offering allows for multi-channel, real-time customer engagement, differentiating it from traditional marketing solutions that often rely on single-channel approaches [7]. Customer Engagement Trends - There is a growing demand for personalized, real-time customer interactions, driven by advancements in cloud computing and mobile technology [10]. - The shift towards digital brand experiences and the increasing importance of first-party data are key trends that BRZE is well-positioned to capitalize on [10]. Financial Outlook - The dollar-weighted contract length remains above two years, indicating stable demand and customer retention [10]. - The company is expected to continue its growth trajectory, with consensus estimates projecting a significant step down in growth rates that may not materialize given BRZE's current performance [10].

Braze Today The thing to keep in mind is that this most-downgraded stock is still rated a Moderate Buy with ample upside. The downgrades are relative: this stock is also ranked well on the list of Top Rated Stocks. Trading at $36.78 ahead of the Q1 release, the stock was 20% below the lowest analyst target and 65% below the consensus. Because the results include outperformance, momentum is present, and guidance was raised, the analysts should stick to their targets and guide this market higher. New clients ...

Braze, Inc. (NASDAQ:BRZE) Q1 2025 Earnings Conference Call June 6, 2024 4:30 PM ET Company Participants Christopher Ferris - Head of IR Bill Magnuson - Co-Founder and CEO Isabelle Winkles - CFO Conference Call Participants Derrick Wood - TD Cowen D.J. Hynes - Canaccord Ryan MacWilliams - Barclays Arjun Bhatia - William Blair Scott Berg - Needham & Co. Brent Bracelin - Piper Sandler Brian Schwartz - Oppenheimer Michael Berg - Wells Fargo Brian Peterson - Raymond James Pinjalim Bora - JPMorgan Tyler Radke - C ...