Braze(US:BRZE)2022-03-31 03:21Financial Data and Key Metrics Changes - Braze reported Q4 2022 revenue of $70.4 million, a 64% increase year-over-year and a 10% increase sequentially [11][35] - The dollar-based net retention rate reached a new high of 128%, up 500 basis points year-over-year and 200 basis points sequentially [37] - Non-GAAP gross profit was $47.3 million, with a gross margin of 67.2%, compared to 65% in the same quarter last year [40] Business Line Data and Key Metrics Changes - The total customer count increased by 54% year-over-year to 1,375 customers, with large customers (ARR of $500,000 or more) growing by 51% [36] - Customers with ARR over $1 million grew by 58% year-over-year, contributing 38% to total ARR [36] - The total remaining performance obligation rose 60% year-over-year to $374 million [39] Market Data and Key Metrics Changes - Revenue outside the U.S. contributed 40% of total revenue in both Q4 and the full year [39] - Monthly active user count reached approximately 3.7 billion, with over 9 trillion consumer-generated data points processed [12] Company Strategy and Development Direction - Braze aims to enhance customer engagement through new product offerings, including Braze for Commerce, which focuses on personalized campaigns driven by first-party data [15][16] - The company is expanding its global footprint, with new locations planned in Toronto and Paris, and is focusing on the fast-growing APAC region [22][24] - Braze is committed to investing in its product roadmap to maintain competitive advantages against legacy marketing clouds [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about revenue growth potential, citing a strong pipeline of new business and upsell opportunities [44] - The company is aware of macroeconomic risks but believes its focus on first-party data and customer engagement strategies positions it well during economic slowdowns [61] - For Q1 2023, revenue is expected to be between $72 million and $73 million, representing a year-over-year growth rate of approximately 51% [44] Other Important Information - Braze has launched a social impact department to drive diversity, equity, and inclusion initiatives, including a program for Black-owned startups [32][33] - The company ended the quarter with $518.1 million in cash and cash equivalents, with cash used in operations amounting to $24.5 million [43] Q&A Session Summary Question: What is driving the strength overall? - Management highlighted multiple generational trends, including digitization and the move to first-party data, as key drivers of business strength [49] Question: Can you unpack the dollar-based net retention strength? - Management noted strong renewals and the impact of trailing statistics from previous weaker quarters as contributing factors [51] Question: How sensitive is the business to a macro slowdown? - Management believes that Braze's focus on customer engagement provides a comparative advantage during economic slowdowns [61] Question: Are there signs of a slowdown in monthly active users in specific categories? - Management stated that they do not break out monthly active users by category but emphasized high retention rates among customers using Braze [66] Question: Is landing a seven-figure deal an anomaly? - Management indicated a trend of improvement in landing seven-figure deals, driven by an expanding product portfolio and customer engagement strategies [72] Question: How will the new commerce products drive revenue opportunities? - Management discussed the importance of data integrations and the ability to optimize customer engagement strategies as key to driving revenue from new commerce products [78]