Braze, Inc. (NASDAQ:BRZE) Q4 2025 Earnings Conference Call March 27, 2025 4:30 PM ET Company Participants Christopher Ferris - Head of IR William Magnuson - Co-Founder and CEO Isabelle Winkles - CFO Conference Call Participants Ryan MacWilliams - Barclays Arjun Bhatia - William Blair David Hynes - Canaccord Genuity Gabriela Borges - Goldman Sachs Brent Bracelin - Piper Sandler Brian Peterson - Raymond James Derrick Wood - TD Cowen Nick Altmann - Scotiabank Scott Berg - Needham Taylor McGinnis - UBS Michael ...

Core Insights - Braze reported strong fiscal Q4 2025 results, exceeding revenue and earnings expectations, but experienced a decline in its dollar-based net retention rate [2][8]. Financial Performance - Revenue for Q4 2025 was $160.4 million, surpassing analysts' expectations of $155 million, and reflecting a 22.5% increase from $131.0 million in Q4 2024 [3][6]. - Non-GAAP adjusted EPS was $0.12, significantly above the anticipated $0.05, marking a positive surprise of 140% [7]. - Free cash flow turned positive at $15.2 million compared to negative $3.5 million in the previous year [8]. - Non-GAAP gross margin improved to 69.9%, up from 67.9% in the prior year, indicating better cost management [3][8]. Business Overview - Braze operates a leading customer engagement platform that integrates data analysis, personalized messaging, and omnichannel support, enhancing customer interactions [4]. - The company is focusing on improving platform features and expanding AI capabilities [5]. Strategic Developments - Braze announced an agreement to acquire OfferFit to enhance its AI capabilities and improve personalization and cross-channel engagement [9]. - A strategic partnership with Shopify was also announced earlier in the month [9]. Future Guidance - For fiscal 2026, Braze projects revenue between $686 million and $691 million, up from $593.4 million in fiscal 2025, indicating strong growth confidence [10].

Core Viewpoint - Braze, Inc. reported quarterly earnings of $0.12 per share, significantly exceeding the Zacks Consensus Estimate of $0.05 per share, and showing an improvement from a loss of $0.04 per share a year ago, indicating strong performance in the recent quarter [1][2] Financial Performance - The company achieved revenues of $160.4 million for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 3.10% and reflecting a year-over-year increase from $130.96 million [2] - Over the last four quarters, Braze has consistently exceeded consensus EPS estimates, achieving this four times [2] Stock Performance - Braze shares have declined approximately 10.9% since the beginning of the year, contrasting with the S&P 500's decline of 2.9% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future due to unfavorable estimate revisions [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $157.98 million, while for the current fiscal year, the estimate is $0.27 on revenues of $684.84 million [7] - The outlook for the Internet - Software industry, where Braze operates, is currently in the top 30% of Zacks industries, suggesting a favorable environment for potential growth [8]

Q4 Fiscal 2025 Earnings Results March 27, 2025 Braze Financial Highlights $642M QUARTERLY REVENUE RUN RATE 1 22% YoY REVENUE GROWTH 2,296 CUSTOMERS IN OVER 75 COUNTRIES DOLLAR-BASED NET RETENTION 111% RATE 96% SUBSCRIPTION REVENUE $17M GAAP NET LOSS Data as of January 31, 2025 or the three months ended, as applicable 1. Represents quarterly GAAP revenue multiplied by 4 2 Forward Looking Statements and Disclaimer Forward-Looking Statements This presentation contains, and statements made during this presentat ...

Braze (BRZE) Q4 2025 Earnings Call March 27, 2025 04:30 PM ET Company Participants Christopher Ferris - Head - IRBill Magnuson - Co-Founder, Chairman & Chief Executive OfficerIsabelle Winkles - Chief Financial OfficerArjun Bhatia - Co-Group Head - Technology, Media & CommunicationsBrian Peterson - Managing DirectorDerrick Wood - Managing DirectorNicholas Altmann - Director - U.S. Software Equity ResearchScott Berg - Managing DirectorYun Kim - Managing Director Conference Call Participants Ryan MacWilliams - ...

Executive Transition and Termination - Executive will transition duties starting February 1, 2025, with employment terminating on June 1, 2025[4] - During the Transition Period, Executive will continue to receive base salary and participate in employee benefit plans[4] - Executive's termination on June 1, 2025, or earlier, will not entitle him to severance benefits unless specified[5] - Braze will pay Executive a lump sum for accrued but unpaid base salary by the next regular payroll date after the Termination Date[8] - Executive will be eligible for continued participation in the Company's health plan until the end of the month of the Termination Date[8] - Vesting of Executive's equity awards will accelerate if termination occurs due to death or disability before the Termination Date[8] - Effective on the Termination Date, Executive will cease participation in Company benefit plans and is not due any additional compensation beyond what is specified[12] Consulting Agreement - A consulting agreement will be effective from June 2, 2025, contingent on Executive meeting specific conditions[8] - The consulting agreement with Myles Kleeger will commence on June 2, 2025, contingent upon the execution of the Separation Agreement and Second Release[31] - The consultant will provide services as an independent contractor and will not be eligible for employee benefits[31] - Consultant will receive a one-time payment of $17,000 for services rendered[34] - Consultant's equity awards will vest until November 30, 2025, unless terminated earlier[34] - If terminated for cause, Consultant's equity awards will cease vesting immediately[35] - Consultant may be unilaterally terminated with five days' notice, with accelerated vesting of equity awards[35] - Consultant must return all company property upon termination of the agreement[36] Legal and Compliance - Executive waives any claims against Braze and its affiliates related to employment prior to signing the Agreement[7] - Executive agrees not to participate in class action lawsuits against Braze[9] - The Agreement includes a release of claims that will remain effective despite any later discovery of different facts[10] - Executive must comply with restrictive covenants, including non-competition and confidentiality agreements, as a material term of the Agreement[11] - In the event of a material violation of the Restrictive Covenants, Executive shall forfeit benefits described in Section 3(b) and return amounts received, except for $500[11] - Non-competition covenants will remain in effect during the term of the consulting agreement and for one year thereafter[31] - Non-solicitation covenants will remain in effect during the term of the consulting agreement and for 18 months after its termination[31] - The company reserves the right to enforce the terms of the consulting agreement in any appropriate forum[23] - Any breach of specific sections may result in irreparable harm to the company, allowing for injunctions[39] Agreement Execution and Review - Executive has 21 days to review the Agreement and can revoke it within seven days of signing[17] - The Agreement will become effective on the eighth day following its execution unless revoked[17] - The Agreement contains the entire understanding between the Parties regarding the subject matter and cannot be altered except in writing[13] - The agreement is governed by the laws of the State of New York, and disputes will be resolved through binding arbitration[13] - The agreement may be executed in counterparts, constituting one binding agreement[39] Financial Obligations - The company confirms that all amounts due to the consultant, including wages and benefits, have been paid, except for any pending payroll[24] - The company has no obligation to provide additional compensation or benefits beyond the specified payments[34] - Consultant is responsible for reporting and remitting taxes associated with the Consultant Payment[34] - Executive acknowledges that the benefits received under the Agreement exceed any payment or benefit to which Executive would otherwise be entitled[17] - The benefits provided under the agreement exceed any payments or benefits the consultant would otherwise be entitled to[26]

Group 1 - The reverse DCF analysis indicates that Braze (NASDAQ: BRZE) is significantly undervalued using conservative parameters [1] - Braze is focused on enabling and simplifying the trend of personalization, which is becoming increasingly important in the tech industry [1]

Core Insights - The global braze alloys market is experiencing stable growth, driven by increasing applications in various industries such as aerospace, automotive, electronics, and energy [1][2][6] - The market is projected to reach USD 2,899.0 million by 2025 and grow to approximately USD 3,711.0 million by 2035, with a CAGR of 2.5% during the forecast period [2][7] Market Growth Drivers - The demand for lead-free and environmentally friendly brazing materials is rising due to sustainable manufacturing practices and regulatory pressures [2][8] - The growth of electric vehicles (EVs) and renewable energy applications is significantly boosting the demand for braze alloys, particularly in battery technology and power electronics [8] - Intelligent manufacturing and advancements in AI-driven material science are expected to optimize alloy compositions and enhance market growth [5][6] Regional Market Analysis - The United States market is expected to grow at a CAGR of 2.7% from 2025 to 2035, driven by technological advancements and regulatory sustainability initiatives [9][11] - The United Kingdom market is projected to grow at a CAGR of 2.4%, focusing on economic recovery and sustainability [12] - The European Union market is anticipated to grow at a CAGR of 2.6%, supported by strong industrial policies and digitalization efforts [13] Competitive Landscape - Key players in the braze alloys market include Lucas-Milhaupt, Inc., Morgan Advanced Materials, Umicore, Oerlikon Metco, and Harris Products Group, focusing on product innovation and sustainability initiatives [23] - Recent developments include the introduction of next-generation lead-free brazing alloys and increased investments in solutions for electric vehicle battery technology [23]

Market Overview - A fresh rally has overtaken the stock markets in early 2025, but historically high valuations suggest caution is warranted [1] - The focus remains on maintaining exposure to growth stocks, but the field is being narrowed [1] Analyst Background - The analyst has combined experience covering technology companies on Wall Street and working in Silicon Valley [1] - The analyst serves as an outside adviser to several seed-round startups, providing exposure to industry-shaping themes [1] - The analyst has been a regular contributor on Seeking Alpha since 2017 and is quoted in many web publications [1] - The analyst's articles are syndicated to company pages in popular trading apps like Robinhood [1]

Technical Analysis - BRZE's 50-day simple moving average crossed above its 200-day simple moving average, forming a "golden cross," which is a bullish technical signal [1][2] - A golden cross indicates a potential bullish breakout and consists of three stages: price bottoming out, short-term moving average crossing above long-term moving average, and maintaining upward momentum [2][3] - BRZE has rallied 5.1% over the past four weeks, further supporting the bullish technical outlook [4] Earnings Outlook - BRZE has a positive earnings outlook, with no earnings estimate cuts and 7 upward revisions in the past 60 days for the current quarter [4] - The Zacks Consensus Estimate for BRZE has increased, reinforcing the bullish case [4] Investment Potential - The combination of a golden cross, recent price rally, and positive earnings outlook suggests BRZE could be poised for a breakout [4][5] - Investors may want to monitor BRZE for potential gains in the near future [5]