Financial Data and Key Metrics Changes - The company reported revenue of $191 million for the fiscal third quarter 2026, representing a year-over-year increase of 25.5% and a sequential increase of 6% [7][23] - Non-GAAP operating margins improved by over 400 basis points year-over-year, with non-GAAP operating income of $5 million, or 2.7% of revenue, compared to a non-GAAP operating loss of $2 million in the prior year quarter [7][28] - Free cash flow for the quarter was $18 million, a significant improvement from a negative free cash flow of $14 million in the prior year quarter [7][29] - The total remaining performance obligation (RPO) was $891 million, up 24% year-over-year, while current RPO was $573 million, up 25% year-over-year [26] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 95% of total revenue, with the remaining 5% from professional services and one-time fees [23] - The company added 106 new customers sequentially and 317 year-over-year, bringing the total customer count to 2,528, a 14% increase [8][23] - Large customers (those spending at least $500,000 annually) grew by 29% year-over-year to 303, contributing 63% to total annual recurring revenue (ARR) [24] Market Data and Key Metrics Changes - Revenue outside the U.S. contributed 45% of total revenue, consistent with previous quarters [24] - Dollar-based net retention was 108% overall and 110% for large customers, indicating strong customer retention and expansion [24] Company Strategy and Development Direction - The company aims to position itself as the global standard for omnichannel customer engagement, leveraging AI-driven solutions to enhance customer experiences [7][8] - The introduction of new AI capabilities and the Braze AI Decisioning Studio is expected to drive future growth and customer engagement [19][31] - The company is focused on innovation and product development, particularly in AI, to maintain competitive advantage in the customer engagement landscape [14][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued market demand and strong pipeline generation, indicating a positive outlook for fiscal year 2027 [7][8] - The company anticipates revenue for the fourth quarter to be in the range of $197.5–$198.5 million, representing a year-over-year growth rate of approximately 23% [30] - Management highlighted the importance of first-party data and customer engagement strategies in navigating the evolving market landscape [70][74] Other Important Information - The company achieved a record of 102.5 billion messages delivered during Cyber Week, showcasing the platform's scalability and reliability [10][12] - The integration of Braze with ChatGPT apps is expected to enhance customer engagement and provide new monetization opportunities [20][70] Q&A Session Summary Question: Insights on the Braze healthcare customer using the AI agent - Management highlighted the agility of deploying AI solutions within the Braze Canvas, allowing for enhanced customer interactions and support [35][39] Question: Drivers of improving trends in key metrics - Management attributed improvements to ongoing productivity enhancements, mitigation of downsell activity, and effective sales strategies [40][42] Question: Factors driving momentum in legacy replacement cycles - Management noted that the competitive landscape is shifting, with increased awareness and differentiation for Braze, leading to more enterprise replacements [45][47] Question: Impact of AI on growth strategy - Management discussed the monetization of AI, emphasizing the potential for real-time AI functionalities to enhance customer engagement and operational efficiency [54][56] Question: Customer interest in ChatGPT integration - Management explained that the evolution of app ecosystems will determine the role of Braze in enhancing customer engagement through first-party data [68][70]

Financial Data and Key Metrics Changes - The company reported revenue of $191 million for the fiscal third quarter 2026, representing a year-over-year increase of 25.5% and a sequential increase of 6% [7][23] - Non-GAAP operating margins improved by over 400 basis points year-over-year, with non-GAAP operating income of $5 million, or 2.7% of revenue, compared to a non-GAAP operating loss of $2 million in the prior year quarter [7][28] - Free cash flow for the quarter was $18 million, compared to a negative free cash flow of $14 million in the prior year quarter [29] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 95% of total revenue, with the remaining 5% from professional services and onboarding fees [23] - The Braze AI Decisioning Studio contributed $4.8 million in revenue, indicating a growing impact of AI-driven solutions on overall revenue [23] Market Data and Key Metrics Changes - The total customer count increased by 14% year-over-year to 2,528, with 317 new customers added compared to the same period last year [23][24] - Revenue outside the U.S. contributed 45% of total revenue, consistent with previous quarters [24] Company Strategy and Development Direction - The company aims to position itself as the global standard for omnichannel customer engagement, leveraging AI technology to enhance customer experiences [7][9] - There is a focus on expanding into new customer verticals and enhancing product offerings through AI capabilities [4][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding continued market demand and strong pipeline generation, indicating a positive outlook for fiscal year 2027 [7][8] - The company anticipates a revenue range of $197.5-$198.5 million for the fourth quarter, reflecting a year-over-year growth rate of approximately 23% [30] Other Important Information - The company achieved its strongest quarter of customer additions in three years, with significant growth in large customers spending over $500,000 annually [8][24] - The company reported a total remaining performance obligation of $891 million, up 24% year-over-year, indicating strong future revenue visibility [26] Q&A Session Summary Question: Insights on the Braze healthcare customer using Braze Agent Console - Management highlighted the agility of deploying AI agents within the Canvas environment, allowing for enhanced customer interactions and real-time processing [35][37] Question: Drivers of improving trends in key metrics - Management attributed improvements to ongoing productivity enhancements within the sales organization and effective mitigation of downsell and churn [40][42] Question: Factors driving momentum in legacy replacement cycle - Management noted strong competitive positioning and regional investments as key drivers of momentum in customer acquisition [78] Question: Impact of AI on growth algorithm - Management discussed the monetization of AI, indicating potential upside as AI capabilities are integrated into the platform [54][56] Question: Customer interest in ChatGPT integration - Management emphasized the importance of first-party data and customer engagement strategies in the evolving app ecosystem, highlighting the potential for new channels [68][70]

Financial Data and Key Metrics Changes - The company reported revenue of $191 million for the fiscal third quarter 2026, representing a year-over-year increase of 25.5% and a 6% increase from the prior quarter [6][22] - Non-GAAP operating margins improved by over 400 basis points year-over-year, with non-GAAP operating income of $5 million, or 2.7% of revenue, compared to a non-GAAP operating loss of $2 million in the prior year quarter [6][26] - Free cash flow for the quarter was $18 million, a significant improvement from a negative free cash flow of $14 million in the prior year quarter [6][27] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 95% of total revenue, with the remaining 5% from professional services and onboarding fees [22] - The company added 106 new customers sequentially and 317 year-over-year, bringing the total customer count to 2,528, a 14% increase [6][22] - Large customers, defined as those spending at least $500,000 annually, grew by 29% year-over-year to 303, contributing 63% to total ARR [23] Market Data and Key Metrics Changes - Revenue outside the U.S. contributed 45% of total revenue, consistent with previous quarters [23] - The company achieved a dollar-based net retention rate of 108% across all customers and 110% for large customers [23][24] - The total remaining performance obligation was $891 million, up 24% year-over-year, indicating strong future revenue visibility [24] Company Strategy and Development Direction - The company aims to position itself as the global standard for omnichannel customer engagement, leveraging AI-driven solutions to enhance customer experiences [6][10] - The introduction of new AI capabilities, such as the Braze AI Decisioning Studio, is expected to drive future growth and customer engagement [19][22] - The company is focused on innovation and product development, particularly in AI, to maintain a competitive edge in the customer engagement landscape [10][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued market demand and strong bookings across various verticals and geographies [6] - The company anticipates a revenue range of $197.5-$198.5 million for the fourth quarter, reflecting a year-over-year growth rate of approximately 23% [28] - Management highlighted the importance of first-party data and customer engagement strategies in navigating the evolving market landscape [57] Other Important Information - The company delivered 102.5 billion messages during Cyber Week, showcasing the scalability and reliability of its platform [10] - The integration of AI into customer engagement strategies is seen as a key driver for future growth and operational efficiency [11][12] - The company is committed to maintaining a long-term profitability framework, targeting a non-GAAP operating income margin of 8% for fiscal year 2027 [29] Q&A Session Summary Question: Insights on the Braze healthcare customer using Braze Agent Console - Management highlighted the agility of deploying purpose-built agent frameworks into existing systems, enhancing customer interactions through AI [31][32] Question: Drivers of improving trends in key metrics - Management attributed improvements to ongoing productivity enhancements, effective mitigation of downsell activity, and strong sales organization performance [36] Question: Factors driving momentum in legacy replacement cycle - Management noted that the current market environment is conducive to enterprise replacement cycles, with increased awareness and differentiation for Braze [37][39] Question: Early reception of AI Decisioning Studio - Management reported strong pipeline generation and customer wins, indicating positive early traction for the AI Decisioning Studio [64]