Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| We remain confident in our ability to grow our top line while maintaining cost discipline and delivering on the financial targets that we have set for fiscal 2025 |
| So as we've said, we've been very happy with our team's execution and the productivity of our sales team is absolutely a part of that |
| Our execution was strong, and we continue to drive operating efficiency in the business, improving non-GAAP gross margin by a 170 basis points year-over-year and non-GAAP operating margin by over 1100 basis points compared to the third quarter of last year |
| We were pleased with the strength of our enterprise business, the continued rapid pace of R&D and the resulting customer excitement about new product launches and announcements, as well as the continued expansion of the global Braze partner and customer ecosystem |
| And so, you know, we're excited and we heard a lot of conversations from, customers that are experiencing with these new Gen AI capabilities to lower cost of production, to speed iteration cycles for new content and creative assets |
| Great to see the CRPO growth improvement |
| Demand for customer engagement solutions is solid, our team's execution has been strong, and our pipeline remains healthy |
| And what we're seeing in terms of bookings so far we've talked about linearity this year, being better than expected |
| I'm excited to keep building on this success with you as we continue on our journey to make Braze the standard for customer engagement |
| We hope that's going to continue to support improvements in velocity and productivity for our sales teams |
| As Bill stated, we reported a strong third quarter with revenue up 33% year-over-year to $124 million, which includes an approximately $3.5 million contribution from our North Star acquisition, which closed on June 1st of this year |
| Enterprise new business was strong as we continued to capitalize on the legacy vendor replacement cycle and the consolidation trend that we've highlighted in prior quarters |
| And I'll just reiterate that while I think that's harder in the early days that it creates more opportunity in the long term, and we're excited about what that means for our enduring differentiation |
| We are excited about our future, meeting customers where they are on their customer journey, and empowering them to achieve world class customer engagement while delivering efficient growth at scale for our shareholders |
| As we look into next year and increasing the size of the sales team, we, as I mentioned before with the highly diversified customer base, we do have an ability to flex new sales capacity and marketing investment into areas where we see strength |
| We are excited by our competitive position amongst the category of customer engagement, especially as we reflect on what hasn't changed in our space |
| We're very happy with the creativity, dedication, innovation from the global Braze team, but we're not anticipating an improvement in the buyer environment |
| And so, we've been really happy with the execution of the team |
| We expect Braze will achieve positive quarterly non-GAAP operating income and positive quarterly free cash flow by the end of fiscal year ended January 31, 2025 |
| The 170 basis point year-over-year margin improvement was driven by ongoing personnel efficiencies and the continued cost optimization of our technology stack |
| However, I do take it as a positive indicator that, the increased usage of Canvas in particular as well as our more advanced features means that, you know, broader and broader, percentage of our customer base is utilizing the parts of Braze that are differentiated and that drive differentiated value |
| At Braze, this year again saw record breaking send volumes as we sent over 37 billion messages in the four day period from Black Friday through Cyber Monday |
| Q4 was guided 5 million above the street, which is stronger than the guidance you gave last quarter |
| We delivered another strong quarter, generating $124 million in revenue, up 33% versus the prior year despite a macroeconomic environment that remains challenging |
| We feel, you know, really good about the very diverse customer base that we have today |
| And to some extent, that's a job that that's never done, but, you know, we've certainly been really happy with, what that has meant from an execution standpoint |
| Extending on our experimentation with custom trained models, we are also very excited by our work in channel specific message content recommendations paired with a growing ability to automatically predict which variants are likely to perform best using custom trained predictive transformer models |
| And so, know, Braze, I think, is well positioned for, those changes in the environment |
| So we're very happy in terms of how we're, behaving and realizing our, reward during the quarter relative to the competitive environment |
| We're excited about the all the you know, from SMB all the way up to the world's largest enterprises, and we're cultivating partnership, re partner relationships across that whole as well, you know, inclusive of, smaller marketing and growth agencies that work through our partner led onboarding program to deliver to, SMBs all the way up to, the global systems integrators, the big marketing, you know, marketing holding companies that or the agency holding companies that work with us in the world's largest enterprise businesses |
| Statement |
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| And we also see many businesses still struggling to adapt to the new macro |
| So I think we're you know, the macro continues to be challenging |
| However, we continue to experience macroeconomic headwinds that manifest in elongated sales cycles, constrained marketing budgets, and slower new business growth |
| And then also some challenges, obviously, from a loss perspective, logo loss in that segment |
| If you look at the MAU growth, actually, it's been more slow than our overall revenue growth |
| But, just given, like, that significant gain, I think that was worse that was bigger than people expected |
| Including the cash impact of capitalized costs, free cash flow was negative $5.9 million compared to negative free cash flow of $28.1 million in the prior year quarter |
| While we're not providing specific gross margin guidance, we expect gross margin will be negatively impacted by higher seasonal activity during the fourth quarter |
| Isabelle, is there a way to think about MBR going forward? Because you are kind of reaching, or will be reaching getting easier comps starting in Q4, but macro continues to be challenging |
| So, I wouldn't point to any specific outliers that that we should be aware of, but there's, there is just continued uncertainty just generally in the market |
| Seems like macro continues to be a bit challenging |
| Because, well, I think we're seeing similarly subdued negative macro conditions all around the world right now |
| The market is really experiencing kind of the toughest environment in terms of access to capital and liquidity, ability to kind of spend out their budgets, and we're seeing more business failures down at that at that level |
| I would also note that while we saw more elevated losses of logos at the SMB level, the dollar level was relatively low in that segment and overall, the dollars of loss in the quarter, was well within our sort of budget tolerances |
| One is that the pace of a lot of businesses slowed a little bit |
| I get budgets remain constrained |
| So we are actually, to some extent, anticipating that could become more of a problem in the venture backed world in the Americas and EMEA, coming into next year as some of those runway start to run out |
| We don't see strong evidence that those factors are going change in the near term |
| Non-GAAP net loss attributable to Braze’s shareholders in the quarter was $4.5 million or a loss of $0.05 per share compared to a loss of $13.8 million or a loss of $0.15 per share in the prior year quarter |
| It's obviously more challenging to start building a business that way than it is to start in a niche and be able to kind of build directly into it |
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