Braze(US:BRZE)2025-03-27 20:30Financial Data and Key Metrics Changes - The company reported Q4 revenue of $160.4 million, representing a 22% year-over-year increase and a 5% increase from the prior quarter [7][19] - Non-GAAP operating income was $8 million, achieving a non-GAAP operating margin of 5%, up from a negative 5.7% in the same quarter last year [7][23] - Non-GAAP net income was $12 million, or $0.12 per share, compared to a loss of $3 million, or a loss of $0.04 per share in the prior year [24] - Free cash flow for the quarter was $15 million, compared to a negative free cash flow of $4 million in the prior year [24] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 96% of total revenue in Q4, with the remaining 4% from professional services and onboarding fees [19] - The total customer count increased by 12% year-over-year to 2,296 customers, with large customers (spending at least $500,000 annually) growing by 22% to 247 [19][20] - Dollar-based net retention was 111%, with large customers showing a retention rate of 114% [20] Market Data and Key Metrics Changes - Revenue from outside the U.S. contributed 45% to total revenue, consistent with the prior quarter and up from 44% in the same quarter last year [20] - The total remaining performance obligation was $793 million, up 24% year-over-year [21] Company Strategy and Development Direction - The company aims to become the leading customer engagement platform globally, focusing on profitable growth while reinvesting in business expansion [8][18] - The acquisition of Offerfit, valued at $325 million, is expected to enhance AI-driven customer engagement capabilities [15][16] - The company is focusing on the retail and consumer goods vertical, which accounts for about 20% of its business, by enhancing e-commerce features and integrations [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing legacy vendor replacement cycle and vendor consolidation trends, which are expected to create more market opportunities [9][10] - The company anticipates continued positive quarterly non-GAAP operating income and free cash flow going forward [8] - Management acknowledged the evolving macroeconomic environment but noted no immediate concerns affecting demand trends [67] Other Important Information - Non-GAAP gross profit for Q4 was $112 million, with a gross margin of 69.9%, up from 67.9% in the prior year [21][22] - The company plans to update guidance post-acquisition of Offerfit, which is expected to be dilutive to non-GAAP operating income margins in the fiscal year [26][28] Q&A Session Summary Question: Insights on Offerfit acquisition and AI agents - Management highlighted that Offerfit's technology excels in generating maximum uplift in marketing performance, which is crucial for high-end market customers [32][34] Question: Adjustments to guidance philosophy due to macro conditions - Management indicated that they have adapted to macro disruptions and will maintain a cautious guidance approach [37][38] Question: Next frontier of personalization - Management discussed the evolution of personalization strategies, emphasizing the importance of automated experimentation and AI-driven decision-making [42][46] Question: Expansion trends from new customer cohorts - Management confirmed that newer customer cohorts are performing better than previous cohorts, indicating positive expansion trends [52] Question: Business outcomes for customers using Offerfit - Management noted that Offerfit enhances message relevance and effectiveness, leading to better customer engagement outcomes [56][59] Question: Mix of cash and stock in the acquisition - The acquisition deal consists of 42% equity and the remainder in cash [61] Question: Demand trends and customer spending - Management reported no significant changes in demand trends despite macroeconomic uncertainties [67]