Braze (BRZE) Reports 33.1% Revenue Growth in Q1 2025

Braze (NASDAQ: BRZE) has announced its fiscal first quarter 2025 results, showcasing substantial growth and positive performance metrics.

In the first quarter of fiscal year 2025, Braze reported a revenue of $135.5 million, representing a significant increase of 33.1% year-over-year from $101.8 million in the first quarter of the fiscal year ended January 31, 2024. The surge in revenue was primarily driven by new customers, upsells, and renewals. Notably, subscription revenue in the quarter stood at $130.1 million, compared to $97.1 million in the first quarter of the fiscal year ended January 31, 2024. Professional services and other revenue also saw an uptick, reaching $5.4 million, compared to $4.6 million in the same period last year.

The company's remaining performance obligations as of April 30, 2024, were $657.3 million, with $419.8 million classified as current, defined as less than one year. This suggests a strong and promising revenue backlog for Braze.

However, Braze reported a slight decrease in GAAP gross margin, which stood at 67.1% compared to 67.9% in the first quarter of the fiscal year ended January 31, 2024. The non-GAAP gross margin also experienced a decline, down to 67.9% from 68.8% in the same period last year.

Additionally, the dollar-based net retention for all customers for the trailing 12 months ended April 30, 2024, was 117%, down from 122% for the same period in the previous year. For customers with annual recurring revenue (ARR) of $500,000 or more, the dollar-based net retention rate was 119%, down from 124% in the first quarter of the fiscal year ended January 31, 2024.

Braze reported an increase in its total customer base, which grew to 2,102 as of April 30, 2024, from 1,866 as of April 30, 2023. Notably, 212 of the company’s customers had ARR of $500,000 or more as of April 30, 2024, compared to 164 customers as of April 30, 2023.

Despite the positive revenue growth, Braze reported a GAAP operating loss of $40.1 million and a non-GAAP operating loss of $10.0 million, both showing improvements from the previous year's figures. The company also demonstrated an increase in net cash provided by operating activities, reaching $19.4 million, compared to $22.5 million in the first quarter of the fiscal year ended January 31, 2024. However, free cash flow decreased to $11.4 million from $21.7 million in the same period last year.

Braze’s total cash and cash equivalents, restricted cash, and marketable securities as of April 30, 2024, amounted to $487.7 million, compared to $480.0 million as of January 31, 2024.

In terms of business highlights, Braze secured notable new business wins, including Bauer Media Group, Bolt Technology, Country Road Group, Hugo Boss,, Property Finder, and Solaris Bank AG, among others. The company also announced an expansion of its global footprint, with strategic focuses on key regions across Asia-Pacific, Europe, the Middle East, and Africa, and Latin America.

Looking ahead, Braze has initiated guidance for the fiscal second quarter ending July 31, 2024, and updated its guidance for the fiscal year ending January 31, 2025. The company has set revenue expectations of $140.5 * 141.5 million for the second quarter and $577.0 * 581.0 million for the full fiscal year 2025, indicating a positive outlook for future growth.

The financial report showcases Braze's strong momentum in driving revenue growth, expanding its customer base, and enhancing its global presence, despite experiencing some declines in certain performance metrics compared to the previous year. As a result of these announcements, the company's shares have moved 2.0% on the market, and are now trading at a price of $36.78. For more information, read the company's full 8-K submission here.

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