Braze(BRZE) - 2025 Q3 - Quarterly Report

Revenue Growth - Revenue for the three months ended October 31, 2024, was $152.1 million, representing a year-over-year growth of 22.7$124.0 million in the same period in 2023[152] - Revenue for the nine months ended October 31, 2024, was $433.0 million, up from$340.8 million in the same period in 2023[152] - Revenue increased by $28.1 million (22.7$27.9 million (23.6%) increase in subscription revenue, with 52.3% from existing customers and 47.7% from new customers[189] - Revenue increased by $92.2 million (27.0$91.2 million (28.0%) increase in subscription revenue, with 68.4% from existing customers and 31.6% from new customers[199] Net Loss and Profitability - Net losses for the three months ended October 31, 2024, were $28.1 million, compared to$31.0 million in the same period in 2023[152] - Net loss decreased to $28.1 million for the three months ended October 31, 2024, compared to$30.9 million for the same period in 2023[186] - Gross profit increased by $18.6 million (21.2$62.8 million (26.6%) for the nine months ended October 31, 2024, while gross margin decreased by 0.2% to 69.1% due to increased expenses in premium messaging channels[200][201] Cash Flow and Financial Position - Net cash provided by operating activities for the nine months ended October 31, 2024, was $19.6 million, compared to$3.0 million in the same period in 2023[152] - Non-GAAP free cash flow for the nine months ended October 31, 2024, was $4.4 million, compared to$(2.9) million in the same period in 2023[152] - Net cash provided by operating activities was $19.6 million for the nine months ended October 31, 2024, compared to$3.0 million for the same period in 2023[212][213] - Free cash flow for the nine months ended October 31, 2024 increased to $4.427 million from$(2.946) million in the same period in 2023, primarily due to higher collections from new contracts and renewals[222] - As of October 31, 2024, the company had $493.1 million in cash, cash equivalents, and marketable securities, with deferred revenue of$223.8 million[208][211] - The company had cash, cash equivalents, and marketable securities of $493.1 million as of October 31, 2024, with$431.3 million invested in U.S. government securities, foreign securities, and corporate debt securities[233] Customer Metrics - As of October 31, 2024, the company had approximately 6.9 billion monthly active users, up from approximately 6.2 billion as of January 31, 2024[157] - The dollar-based net retention rate for the trailing 12 months ended October 31, 2024, was 113%, compared to 118% in the same period in 2023[161] - As of October 31, 2024, 234 customers had ARR of $500,000 or more, up from 189 customers as of October 31, 2023[163] - Total customers grew to 2,211 as of October 31, 2024, up from 2,011 as of October 31, 2023[189] - Total customers grew to 2,211 as of October 31, 2024, up from 2,011 as of October 31, 2023[199] International Revenue - Approximately 45$14.9 million in the three months ended October 31, 2024, driven by market expansion in Europe and Asia-Pacific[189] - International revenue increased by $46.7 million for the nine months ended October 31, 2024, driven by market expansion in Europe and Asia-Pacific[199] Expenses - Cost of revenue increased by$9.5 million (26.2%) for the three months ended October 31, 2024, primarily due to higher hosting, infrastructure, and third-party messaging fees[190] - Sales and marketing expenses increased by $8.3 million (12.4$3.0 million (10.0%) for the three months ended October 31, 2024, primarily due to higher personnel and software costs[194] - General and administrative expenses increased by $4.8 million (18.0$29.0 million (15.7%) for the nine months ended October 31, 2024, primarily due to higher personnel costs and marketing activities[202][204] - Research and development expenses increased by $11.6 million (13.1$10.4 million (13.7%) for the nine months ended October 31, 2024, primarily due to higher personnel and professional services costs[206] Investments and Commitments - The company continues to invest in artificial intelligence capabilities and channel expansion to enhance its platform and maintain competitive advantage[166] - Non-cancelable purchase commitments for business operations totaled $170.9 million, and operating lease obligations were$121.6 million as of October 31, 2024[224] Financial Risks - A hypothetical 10% change in interest rates would not have had a material impact on the consolidated financial statements as of October 31, 2024[234] - The company's revenue is not currently subject to significant foreign currency risk, with only sales in Japan denominated in Yen[235] - A hypothetical 10% change in the relative value of the U.S. dollar to other currencies would not have had a material effect on realized and unrealized gains (losses) on foreign exchange transactions[238] Other Income and Compensation - Other income, net increased by $0.8 million (16.6$1.3 million increase in investment income from marketable securities[196][197] - Stock-based compensation expense totaled $28.3 million for the three months ended October 31, 2024, up from$24.0 million in the same period in 2023[186]