BRZE
$34.47
Braze Inc Cl A
($.78)
(2.21%)
Earnings Details
2nd Quarter July 2022
Monday, September 12, 2022 4:05:00 PM
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Summary

Braze Raises Guidance

Braze Inc Cl A (BRZE) reported a 2nd Quarter July 2022 loss of $0.34 per share on revenue of $86.1 million. The consensus estimate was a loss of $0.37 per share on revenue of $81.1 million.

The company said it expects a third quarter non-GAAP loss of $0.23 to $0.22 per share on revenue of $90.0 million to $91.0 million. The current consensus estimate is a loss of $0.20 per share on revenue of $90.03 million for the quarter ending October 31, 2022. The company also said it expects fiscal a 2023 non-GAAP loss of $0.79 to $0.77 per share on revenue of $347.0 million to $350.0 million. The company’s previous guidance was a loss of $0.82 to $0.78 per share on revenue of $345.0 million to $349.0 million and the current consensus estimate is a loss of $0.80 per share on revenue of $346.83 million for the year ending January 31, 2023.

Braze is a leading comprehensive customer engagement platform that powers interactions between consumers and brands they love.

Results
Reported Earnings
($0.34)
Earnings Whisper
-
Consensus Estimate
($0.37)
Reported Revenue
$86.1 Mil
Revenue Estimate
$81.1 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Braze Reports Fiscal Second Quarter 2023 Results

Second quarter revenue grew 54.5% year-over-year to $86.1 million

Achieved dollar-based net retention of 126% for the trailing 12 months

NEW YORK--(BUSINESS WIRE)--Braze (Nasdaq: BRZE) a leading comprehensive customer engagement platform that powers interactions between consumers and brands they love, today announced results for its fiscal quarter ended July 31, 2022.

“We delivered a strong quarter of 55% revenue growth while continuing to provide best-in-class omni-channel customer engagement for our customers,” said Bill Magnuson, cofounder and CEO of Braze. “We continue to execute on our long-term strategy, introducing new, enhanced and differentiated products, and expanding our engineering and go-to-market presence. Despite macroeconomic headwinds and the challenges they present, we remain confident in the durability of our business and the overall promise of our customer engagement platform and a massive addressable market.”

Fiscal Second Quarter 2023 Financial Highlights

  • Revenue was $86.1 million compared to $55.8 million in the second quarter of the fiscal year ended January 31, 2022, up 54.5% year-over year, driven primarily by new customers, upsells and renewals.
  • Subscription revenue in the quarter was $81.7 million compared to $51.7 million in the second quarter of the fiscal year ended January 31, 2022, and professional services and other revenue was $4.4 million compared to $4.0 million in the second quarter of the fiscal year ended January 31, 2022.
  • Remaining performance obligations as of July 31, 2022 was $410.5 million, of which $274.2 million is current, which we define as less than one year.
  • GAAP Gross Margin was 68.2% compared to 66.4% in the second quarter of the fiscal year ended January 31, 2022.
  • Non-GAAP Gross Margin was 69.3% compared to 66.7% in the second quarter of the fiscal year ended January 31, 2022.
  • Dollar-based net retention for all customers for the trailing 12 months ended July 31, 2022 and July 31, 2021 was 126% and 125%, respectively; dollar-based net retention for customers with annual recurring revenue (ARR) of $500,000 or more was 130% compared to 135% in the second quarter of the fiscal year ended January 31, 2022.
  • Total customers increased to 1,599 as of July 31, 2022 from 1,119 as of July 31, 2021; 139 of our customers had ARR of $500,000 or more as of July 31, 2022, compared to 82 customers as of July 31, 2021.
  • GAAP operating loss was $35.1 million compared to an operating loss of $12.2 million in the second quarter of the fiscal year ended January 31, 2022. Operating loss in the quarter included $17.1 million of stock compensation expense.
  • Non-GAAP operating loss was $17.5 million compared to a loss of $6.5 million in the second quarter of the fiscal year ended January 31, 2022.
  • GAAP net loss per basic and diluted share attributable to Braze common stockholders was $(0.35) compared to $(0.60) in the second quarter of the fiscal year ended January 31, 2022.
  • Non-GAAP net loss per basic and diluted share attributable to Braze common stockholders was $(0.16) compared to $(0.32) in the second quarter of the fiscal year ended January 31, 2022.
  • Net cash used in operating activities was $16.3 million compared to net cash used in operating activities of $4.6 million in the second quarter of the fiscal year ended January 31, 2022.
  • Free cash flow was $(24.7) million compared to $(5.7) million in the second quarter of the fiscal year end January 31, 2022.
  • Total cash and cash equivalents, restricted cash, and marketable securities was $510.7 million as of July 31, 2022 compared to $518.1 million as of January 31, 2022.

Recent Business Highlights

  • Notable new business wins and upsells in the quarter included Roku, TelevisaUnivision, IBM, and Pizza Hut Australia.
  • Launched Canvas Flow, our next generation, best-in-class customer journey builder, strengthening our core product offering.
  • Continued to add talent to the team, increasing headcount nearly 100 employees in Q2 bringing the total Braze team to over 1,350.

Investor Event at Forge 2022

  • At 12:30 pm EDT on the afternoon of October 13, 2022, Braze will host an investor event in tandem with its Forge 2022 Customer Conference at Pier 59, Chelsea Piers in New York City.
  • The event will be video cast live and archived on the company’s Investor site at investors.braze.com.

Financial Outlook

Braze is initiating guidance for the fiscal third quarter ending October 31, 2022 and updating guidance for the fiscal year ending January 31, 2023.

Metric

(in millions, except per share

amounts)

FY 2023 Q3 Guidance

FY 2023 Guidance

Revenue

$90.0 - 91.0

347.0 - 350.0

Non-GAAP operating loss

$(23.0) - (24.0)

$(76.0) - (78.0)

Non-GAAP net loss

$(21.0) - (22.0)

$(74.0) - (76.0)

Non-GAAP net loss per share

$(0.22) - (0.23)

$(0.77) - (0.79)

Weighted average shares outstanding

~97.4

~96.4

Braze has not reconciled its guidance as to non-GAAP operating loss, non-GAAP net loss or non-GAAP net loss per share to their most directly comparable GAAP measure as a result of uncertainty regarding, and the potential variability of, reconciling items such as stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in Braze’s stock price. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to Braze’s results calculated in accordance with GAAP.

Conference Call Information:

What: Braze Second Quarter Fiscal Year 2023 Financial Results Conference Call
When: Monday, September 12th at 5:00 pm EDT / 2:00 pm PDT
Webcast & Supplemental Data: investors.braze.com
Replay: A webcast replay will be available on Braze’s investor site at investors.braze.com.

Supplemental and Other Financial Information

Supplemental information, including an accompanying financial presentation and other information can be accessed through Braze’s investor website at investors.braze.com.

Non-GAAP Financial Measures

This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit and margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share, basic and diluted, and non-GAAP free cash flow. Braze defines non-GAAP gross profit and margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating loss and non-GAAP net loss as the respective GAAP balances, adjusted for stock-based compensation expense, employer taxes related to stock-based compensation and charitable contribution expense. Prior to the first quarter of the fiscal year ended January 31, 2023, Braze did not adjust non-GAAP gross profit and margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating loss or non-GAAP net loss for employer taxes related to stock-based compensation or charitable contribution expense, because these amounts were immaterial in prior periods. Braze defines non-GAAP free cash flow as net cash used in operating activities, minus purchases of property and equipment and minus capitalized internal-use software costs. Investors are encouraged to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.

Braze uses this non-GAAP financial information internally in analyzing its financial results and believes that this non-GAAP financial information, when taken collectively with GAAP financial measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles in the United States (GAAP), and may be different from similarly-titled non-GAAP measures used by other companies.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in Braze’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by Braze’s management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below in the financial statement tables included below in this press release for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.

Braze encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly and fiscal year financial results, including this press release, and not to rely on any single financial measure to evaluate Braze’s business.

Definition of Other Business Metrics

Customer: Braze defines a customer, as of period end, as the separate and distinct, ultimate parent-level entity that has an active subscription with Braze to use its products. A single organization could have multiple distinct contracting divisions or subsidiaries, all of which together would be considered a single customer.

Annual Recurring Revenue (ARR): Braze defines ARR as the annualized value of customer subscription contracts, including certain premium professional services that are subject to contractual subscription terms, as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms (including contracts for which Braze is negotiating a renewal). Braze’s calculation of ARR is not adjusted for the impact of any known or projected future events (such as customer cancellations, expansion or contraction of existing customers relationships or price increases or decreases) that may cause any such contract not to be renewed on its existing terms. ARR may decline or fluctuate as a result of a number of factors, including customers’ satisfaction or dissatisfaction with Braze’s products and professional services, pricing, competitive offerings, economic conditions or overall changes in Braze’s customers’ spending levels. ARR should be viewed independently of revenue and does not represent Braze’s GAAP revenue on an annualized basis or a forecast of revenue, as it is an operating metric that can be impacted by contract start and end dates and renewal rates.

Dollar-Based Net Retention Rate: Braze calculates dollar-based net retention rate as of a period end by starting with the ARR from a cohort of customers as of the as of 12 months prior to such period-end (the Prior Period ARR). Braze then calculates the ARR from the same cohort of customers as of the end of the current period (the Current Period ARR). Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months, but excludes ARR from new customers in the current period. Braze then divides the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time dollar-based net retention rate. Braze then calculates the weighted average point-in-time dollar-based net retention rates as of the last day of each month in the current trailing 12-month period to arrive at the dollar-based net retention rate.

Remaining Performance Obligations: The transaction price allocated to remaining performance obligations represents amounts under non-cancelable contracts expected to be recognized as revenue in future periods, and may be influenced by several factors, including seasonality, the timing of renewals, the timing of service delivery and contract terms. Unbilled portions of the remaining performance obligation are subject to future economic risks including bankruptcies, regulatory changes and other market factors.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding Braze’s financial outlook for the third quarter of and full fiscal year ended January 31, 2023. These forward-looking statements are based on current expectations, estimates, forecasts and projections. Words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “hope,” “intend,” “may,” might,” “potential,” “predict,” “project,” “shall,” “should,” “target,” “will” “and variations of these terms and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on Braze’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Braze’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to, risks and uncertainties related to: (1) unstable market and economic conditions may have serious adverse consequences on Braze’s business, financial condition and share price; (2) Braze’s recent rapid revenue growth may not be indicative of its future revenue growth; (3) Braze’s history of operating losses; (4) Braze’s limited operating history at its current scale; (5) Braze’s ability to successfully manage its growth; (6) the accuracy of estimates of market opportunity and forecasts of market growth and the impact that global macroeconomic uncertainty, including from the ongoing COVID-19 pandemic and ongoing conflict between Russia and Ukraine, and general market, political, economic and business conditions could have on Braze’s or its customers’ businesses, financial condition and results of operations; (7) Braze’s ability and the ability of its platform to adapt and respond to changing customer or consumer needs, requirements or preferences; (8) Braze’s ability to attract new customers and renew existing customers; (9) the competitive markets in which Braze participates and the intense competition that it faces; (10) Braze’s ability to adapt and respond effectively to rapidly changing technology, evolving cybersecurity and data privacy risks, evolving industry standards or changing regulations; and (11) Braze’s reliance on third-party providers of cloud-based infrastructure; as well as other risks and uncertainties discussed in the “Risk Factors” section of Braze’s Annual Report on Form 10-K for the fiscal year ended January 31, 2022, filed with the Securities and Exchange Commission (SEC) on March 31, 2022 and other subsequent filings Braze makes with the SEC from time to time, including Braze’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2022 that will be filed with the SEC. The forward-looking statements included in this press release represent Braze’s views only as of the date of this press release and Braze assumes no obligation, and does not intend to update these forward-looking statements, except as required by law.

About Braze

Braze is a leading comprehensive customer engagement platform that powers interactions between consumers and brands they love. With Braze, global brands can ingest and process customer data in real time, orchestrate and optimize contextually relevant, cross-channel marketing campaigns and continuously evolve their customer engagement strategies. Braze has been recognized as one of Fortune's 2021 Best Workplaces in New York, Fortune's 2021 Best Workplace for Millennials, and 2021 UK Best Workplaces for Women by Great Place to Work. The company is headquartered in New York with offices in Austin, Berlin, Chicago, London, San Francisco, Singapore, and Tokyo. Learn more at braze.com.

Braze uses its Investor website at investors.braze.com as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor its investor relations website in addition to following its press releases, SEC filings and public conference calls and webcasts.

Selected Financial Data

BRAZE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)

 

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Revenue

$

86,131

 

 

$

55,756

 

 

$

163,626

 

 

$

103,633

 

Cost of revenue

 

27,352

 

 

 

18,755

 

 

 

53,258

 

 

 

34,562

 

Gross profit

 

58,779

 

 

 

37,001

 

 

 

110,368

 

 

 

69,071

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

50,007

 

 

 

27,492

 

 

 

96,051

 

 

 

51,843

 

Research and development

 

23,336

 

 

 

11,595

 

 

 

44,956

 

 

 

23,392

 

General and administrative

 

20,543

 

 

 

10,064

 

 

 

44,117

 

 

 

19,011

 

Total operating expenses

 

93,886

 

 

 

49,151

 

 

 

185,124

 

 

 

94,246

 

Loss from operations

 

(35,107

)

 

 

(12,150

)

 

 

(74,756

)

 

 

(25,175

)

Other income (expense), net

 

1,729

 

 

 

(297

)

 

 

1,759

 

 

 

(265

)

Loss before provision for income taxes

 

(33,378

)

 

 

(12,447

)

 

 

(72,997

)

 

 

(25,440

)

Provision for income taxes

 

35

 

 

 

166

 

 

 

49

 

 

 

326

 

Net loss

 

(33,413

)

 

 

(12,613

)

 

 

(73,046

)

 

 

(25,766

)

Net loss attributable to redeemable non-controlling interest

 

(527

)

 

 

(385

)

 

 

(891

)

 

 

(704

)

Net loss attributable to Braze, Inc.

$

(32,886

)

 

$

(12,228

)

 

$

(72,155

)

 

$

(25,062

)

 

 

 

 

 

 

 

 

Net loss per share attributable to Braze, Inc. common stockholders, basic and diluted

$

(0.35

)

 

$

(0.60

)

 

$

(0.77

)

 

$

(1.25

)

Weighted-average shares used to compute net loss per share attributable to Braze, Inc. common stockholders, basic and diluted

 

94,103

 

 

 

20,329

 

 

 

93,668

 

 

 

20,004

 

(1) Includes stock-based compensation as follows:

 

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

Cost of revenue

$

911

 

 

$

177

 

 

$

1,831

 

 

$

367

 

Sales and marketing

 

5,439

 

 

 

1,957

 

 

 

11,106

 

 

 

4,295

 

Research and development

 

6,921

 

 

 

1,571

 

 

 

13,094

 

 

 

4,158

 

General and administrative

 

3,842

 

 

 

1,945

 

 

 

8,053

 

 

 

3,786

 

Total stock-based compensation expense

$

17,113

 

 

$

5,650

 

 

$

34,084

 

 

$

12,606

 

(2) Includes employer taxes related to stock-based compensation as follows:

 

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

Cost of revenue

$

24

 

 

$

 

 

$

40

 

 

$

 

Sales and marketing

 

220

 

 

 

 

 

 

387

 

 

 

 

Research and development

 

124

 

 

 

 

 

 

251

 

 

 

 

General and administrative

 

164

 

 

 

 

 

 

229

 

 

 

 

Total employer taxes related to stock-based compensation

$

532

 

 

$

 

 

$

907

 

 

$

 

(3) Includes charitable donation expense as follows:

 

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

General and administrative

$

 

 

$

 

 

$

4,260

 

 

$

 

BRAZE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share and per share amounts)

 

July 31,

2022

 

January 31,

2022

ASSETS

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

80,881

 

 

$

478,937

 

Accounts receivable, net of allowance of $829 and $743 at July 31, 2022 and January 31, 2022, respectively

 

47,973

 

 

 

64,504

 

Marketable securities

 

425,754

 

 

 

35,156

 

Prepaid expenses and other current assets

 

26,296

 

 

 

29,588

 

Total current assets

 

580,904

 

 

 

608,185

 

Restricted cash, noncurrent

 

4,036

 

 

 

4,036

 

Property and equipment, net

 

16,276

 

 

 

7,393

 

Operating lease right-of-use assets

 

51,276

 

 

 

 

Deferred contract costs

 

45,272

 

 

 

41,689

 

Other assets

 

4,329

 

 

 

4,959

 

TOTAL ASSETS

$

702,093

 

 

$

666,262

 

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

2,889

 

 

$

2,083

 

Accrued expenses and other current liabilities

 

34,981

 

 

 

31,623

 

Deferred revenue

 

135,794

 

 

 

126,260

 

Operating lease liabilities, current

 

10,642

 

 

 

 

Total current liabilities

 

184,306

 

 

 

159,966

 

Operating lease liabilities, noncurrent

 

44,391

 

 

 

 

Other long-term liabilities

 

501

 

 

 

1,478

 

TOTAL LIABILITIES

 

229,198

 

 

 

161,444

 

COMMITMENTS AND CONTINGENCIES (Note 13)

 

 

 

Redeemable non-controlling interest (Note 4)

 

2,344

 

 

 

3,235

 

STOCKHOLDERS’ EQUITY

 

 

 

Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized as of July 31, 2022 and January 31, 2022; 52,069,633 and 18,549,183 shares issued and outstanding as of July 31, 2022 and January 31, 2022, respectively

 

5

 

 

 

1

 

Class B common stock, $0.0001 par value; 110,000,000 shares authorized as of July 31, 2022 and January 31, 2022; 42,647,593 and 74,418,847 shares issued and outstanding as of July 31, 2022 and January 31, 2022, respectively

 

4

 

 

 

8

 

Additional paid-in capital

 

761,412

 

 

 

717,175

 

Accumulated other comprehensive loss

 

(3,754

)

 

 

(640

)

Accumulated deficit

 

(287,116

)

 

 

(214,961

)

TOTAL STOCKHOLDERS’ EQUITY

 

470,551

 

 

 

501,583

 

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY

$

702,093

 

 

$

666,262

 

BRAZE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)

 

Six Months Ended

July 31,

 

2022

 

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net loss (including amounts attributable to redeemable non-controlling interests)

$

(73,046

)

 

$

(25,766

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Stock-based compensation

 

34,253

 

 

 

12,606

 

Amortization of deferred contract costs

 

10,984

 

 

 

7,990

 

Depreciation and amortization

 

1,900

 

 

 

1,373

 

Provision for credit losses

 

(155

)

 

 

(174

)

Value of common stock donated to charity

 

4,260

 

 

 

 

Amortization of discount/premium on marketable securities

 

215

 

 

 

254

 

Non-cash foreign exchange loss

 

295

 

 

 

320

 

Other

 

(36

)

 

 

2

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

16,622

 

 

 

(178

)

Prepaid expenses and other current assets

 

3,110

 

 

 

(2,124

)

Deferred contract costs

 

(14,661

)

 

 

(12,222

)

ROU assets and liabilities

 

2,617

 

 

 

 

Other assets

 

521

 

 

 

(2,095

)

Accounts payable

 

582

 

 

 

1,071

 

Accrued expenses and other current liabilities

 

4,419

 

 

 

(5,812

)

Deferred revenue

 

9,703

 

 

 

16,428

 

Other long-term liabilities

 

17

 

 

 

(87

)

Net cash provided by/(used in) operating activities

 

1,600

 

 

 

(8,414

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Purchases of property and equipment

 

(9,844

)

 

 

(755

)

Capitalized internal-use software costs

 

(783

)

 

 

(1,172

)

Purchases of marketable securities

 

(543,880

)

 

 

(28,496

)

Maturities of marketable securities

 

150,708

 

 

 

49,308

 

Net cash (used in)/provided by investing activities

 

(403,799

)

 

 

18,885

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Proceeds from exercise of common stock options

 

5,411

 

 

 

3,247

 

Payment of deferred offering costs

 

 

 

 

(660

)

Repurchase of shares related to early exercised options

 

 

 

 

(3

)

Net cash provided by financing activities

 

5,411

 

 

 

2,584

 

Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash

 

(1,268

)

 

 

(172

)

Net change in cash, cash equivalents, and restricted cash

 

(398,056

)

 

 

12,883

 

Cash, cash equivalents, and restricted cash, beginning of period

 

482,973

 

 

 

33,018

 

Cash, cash equivalents, and restricted cash, end of period

$

84,917

 

 

$

45,901

 

BRAZE, INC.
U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS
(in thousands, except per share amounts)

The following tables reconcile each non-GAAP financial measure to its most directly comparable GAAP financial measure:

Reconciliation of GAAP to Non-GAAP Gross Margin

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Gross Profit

$

58,779

 

 

$

37,001

 

 

$

110,368

 

 

$

69,071

 

Plus:

 

 

 

 

 

 

 

Stock-based compensation expense

 

911

 

 

 

177

 

 

 

1,831

 

 

 

367

 

Employer taxes related to stock-based compensation

 

24

 

 

 

 

 

 

40

 

 

 

 

Non-GAAP Gross Profit

$

59,714

 

 

$

37,178

 

 

$

112,239

 

 

$

69,438

 

GAAP Gross Margin

 

68.2

%

 

 

66.4

%

 

 

67.5

%

 

 

66.6

%

Non-GAAP Gross Margin

 

69.3

%

 

 

66.7

%

 

 

68.6

%

 

 

67.0

%

Reconciliation of GAAP to Non-GAAP Operating Expenses

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

GAAP sales and marketing expense

$

50,007

 

 

$

27,492

 

 

$

96,051

 

 

$

51,843

 

Less:

 

 

 

 

 

 

 

Stock-based compensation expense

 

5,439

 

 

 

1,957

 

 

 

11,106

 

 

 

4,295

 

Employer taxes related to stock-based compensation expense

 

220

 

 

 

 

 

 

387

 

 

 

 

Non-GAAP sales and marketing expense

$

44,348

 

 

$

25,535

 

 

$

84,558

 

 

$

47,548

 

 

 

 

 

 

 

 

 

GAAP research and development expense

$

23,336

 

 

$

11,595

 

 

$

44,956

 

 

$

23,392

 

Less:

 

 

 

 

 

 

 

Stock-based compensation expense

 

6,921

 

 

 

1,571

 

 

 

13,094

 

 

 

4,158

 

Employer taxes related to stock-based compensation expense

 

124

 

 

 

 

 

 

251

 

 

 

 

Non-GAAP research and development expense

$

16,291

 

 

$

10,024

 

 

$

31,611

 

 

$

19,234

 

 

 

 

 

 

 

 

 

GAAP general and administrative expense

$

20,543

 

 

$

10,064

 

 

$

44,117

 

 

$

19,011

 

Less:

 

 

 

 

 

 

 

Stock-based compensation expense

 

3,842

 

 

 

1,945

 

 

 

8,053

 

 

 

3,786

 

Employer taxes related to stock-based compensation expense

 

164

 

 

 

 

 

 

229

 

 

 

 

Charitable contribution expense

 

 

 

 

 

 

 

4,260

 

 

 

 

Non-GAAP general and administrative expense

$

16,537

 

 

$

8,119

 

 

$

31,575

 

 

$

15,225

 

Reconciliation of GAAP to Non-GAAP Operating Loss

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Loss from operations

$

(35,107

)

 

$

(12,150

)

 

$

(74,756

)

 

$

(25,175

)

Plus:

 

 

 

 

 

 

 

Stock-based compensation expense

 

17,113

 

 

 

5,650

 

 

 

34,084

 

 

 

12,606

 

Employer taxes related to stock-based compensation expense

 

532

 

 

 

 

 

 

907

 

 

 

 

Charitable contribution expense

 

 

 

 

 

 

 

4,260

 

 

 

 

Non-GAAP Operating loss

$

(17,462

)

 

$

(6,500

)

 

$

(35,505

)

 

$

(12,569

)

Reconciliation of GAAP to Non-GAAP Net Loss

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Net loss attributable to Braze, Inc.

$

(32,886

)

 

$

(12,228

)

 

$

(72,155

)

 

$

(25,062

)

Plus:

 

 

 

 

 

 

 

Stock-based compensation expense

 

17,113

 

 

 

5,650

 

 

 

34,084

 

 

 

12,606

 

Employer taxes related to stock-based compensation expense

 

532

 

 

 

 

 

 

907

 

 

 

 

Charitable contribution expense

 

 

 

 

 

 

 

4,260

 

 

 

 

Non-GAAP net loss attributable to Braze, Inc. (1)

$

(15,241

)

 

$

(6,578

)

 

$

(32,904

)

 

$

(12,456

)

 

 

 

 

 

 

 

 

Non-GAAP net loss per share attributable to Braze, Inc. common stockholders, basic and diluted

$

(0.16

)

 

$

(0.32

)

 

$

(0.35

)

 

$

(0.62

)

Weighted-average shares used to compute net loss per share attributable to Braze, Inc. common stockholders, basic and diluted

 

94,103

 

 

 

20,329

 

 

 

93,668

 

 

 

20,004

 

(1) Assumes no tax impact due to the Company’s net loss position and deferred tax assets.

Reconciliation of GAAP Cash Flow from Operating Activities to Non-GAAP Free Cash Flow

Three Months Ended

July 31,

 

Six Months Ended

July 31,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Net cash provided by/(used in) operating activities

$

(16,321

)

 

$

(4,607

)

 

$

1,600

 

 

$

(8,414

)

Less:

 

 

 

 

 

 

 

Purchases of property and equipment

 

(7,884

)

 

 

(457

)

 

 

(9,844

)

 

 

(755

)

Capitalized internal-use software costs

 

(477

)

 

 

(674

)

 

 

(783

)

 

 

(1,172

)

Non-GAAP Free cash flow

$

(24,682

)

 

$

(5,738

)

 

$

(9,027

)

 

$

(10,341

)

Braze is a registered trademark of Braze, Inc.
All product and company names herein may be trademarks of their registered owners.

Investors:
Christopher Ferris
IR@braze.com
(609) 964-0585

Media:
Meghan Halaszynski
Press@braze.com

Source: Braze