Summary
Braze closed fiscal 2022 with revenue of $70.4 million in the fourth quarter ended January 31, 2022, up 64.1% from $42.9 million in the prior-year quarter. Full-year revenue was $238.0 million, up 58.5% from $150.2 million. The company ended the year with 1,375 customers, up from 890 a year earlier, and roughly 3.7 billion monthly active users, up from about 3.0 billion. About 40% of full-year revenue came from outside the United States.
Gross profit was $45.7 million in the quarter, up 65.1% from $27.7 million. Full-year gross profit was $159.5 million, up 66.7% from $95.7 million. Gross margin improved to 64.8% in the quarter from 64.4%, and to 67.0% for the full year from 63.7%. The bottom line moved the other way. Operating loss widened to $42.6 million in the quarter from $10.5 million in the prior-year quarter. Full-year operating loss widened to $78.2 million from $32.2 million. Net loss widened to $42.9 million from $10.5 million. Operating margin fell to -60.5% in the quarter from -24.5%, and to -32.9% for the full year from -21.4%. Diluted loss per share for the full year widened to $2.20 from $1.77.
Cash flow weakened. Operating cash flow was -$24.5 million in the quarter, down from positive $0.02 million in the prior-year quarter. For the full year, operating cash flow was -$35.4 million, down from -$6.1 million. Capital expenditures were $1.2 million in the quarter, up from $0.4 million. Full-year capital expenditures were $2.3 million, down from $2.5 million. Deferred revenue rose to $126.3 million from $74.8 million. Remaining performance obligations rose to $373.6 million from $234.2 million. Management believes current cash, cash equivalents and marketable securities will be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months.
Operating metrics point to a healthy land-and-expand model. Dollar-based net retention for the trailing 12 months ended January 31, 2022, was 128%, compared with 123% and 126% in the prior two fiscal years. For customers with annual recurring revenue of $500,000 or more, the rate was 136%, compared with 133% and 127%. The company had 107 customers with annual recurring revenue of $500,000 or more, up from 71 and 45. Messaging volume and compute and storage requirements typically peak in the fourth quarter because of holiday season activity. Management expects cost of revenue to increase for the foreseeable future as the business grows. Sales and marketing, research and development, and general and administrative expenses are also expected to rise in absolute dollars, though general and administrative expenses should fall as a percentage of revenue over the long term. Free cash flow is expected to fluctuate with changes in operating expenses and growth investments.
Risks are mounting alongside the growth. The company says COVID-19 has had a modest adverse impact on parts of the business, including a longer sales cycle for some prospective customers, and a modest positive impact from higher messaging volume. Customers hurt by the pandemic may decrease or delay spending, request pricing discounts, request modified payment terms, or reduce commitments when renewing subscriptions. Competition, pricing, customer satisfaction, and renewal rates all affect the company's ability to add customers and expand within existing accounts. Foreign exchange movements can also affect results. The company has non-cancelable purchase commitments and operating lease obligations, and it may need to sell additional equity or issue debt if its estimates prove inaccurate, which could dilute stockholders. The quarter showed strong revenue growth and improving gross margin, but operating losses and negative operating cash flow widened sharply, so the company remains dependent on its balance sheet and continued demand for its platform.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $70.4M | $64.0M | +10.1% | — | — |
| Gross profit | $45.7M | $44.8M | +1.9% | — | — |
| Gross margin | 64.8% | 70.0% | -5.2 pp | — | — |
| Research & development | $22.9M | $12.7M | +79.8% | — | — |
| Sales & marketing | $45.7M | $29.6M | +54.6% | — | — |
| General & administrative | $19.6M | $12.9M | +51.6% | — | — |
| Total operating expenses | $88.2M | $55.2M | +59.7% | — | — |
| Operating income (loss) | -$42.6M | -$10.4M | -307.6% | — | — |
| Operating margin | -60.5% | -16.3% | -44.1 pp | — | — |
| Net income (loss) | -$43.3M | -$9.1M | -378.5% | — | — |
| Net margin | -61.5% | -14.2% | -47.4 pp | — | — |
| Diluted EPS | -$1.24 | -$0.42 | -$0.82 | — | — |
| Customers | 1,300 | 1,247 | +4.3% | — | — |
| Net retention rate | 126.0% | — | — | — | — |
Risks
The company identified three material weaknesses in internal control over financial reporting, including over the financial statement close process, revenue recognition under ASC 606, and IT controls relevant to financial reporting. Remediation is ongoing and has not operated for a sufficient period to demonstrate the weaknesses are remediated, creating risk of material misstatement or delayed reporting.
The company reported consolidated net losses of $78.2 million and $32.0 million for the fiscal years ended January 31, 2022 and 2021, respectively, and had an accumulated deficit of $215.0 million as of January 31, 2022. It expects costs and expenses to increase and may not achieve or sustain profitability.
The sales cycle with large enterprise customers is long and unpredictable, generally three to six months but sometimes extending over 12 months, and COVID-19 has lengthened some sales cycles. Delays can cause expenses to precede revenue and make quarterly results fluctuate.
The company faces intense competition from established companies such as Adobe and Salesforce and point solutions including Airship and Iterable. Larger competitors may bundle products or restrict platform access, potentially causing price reductions, fewer sales, reduced revenue and gross margins, and technology industry M&A could intensify competition.
Lock-up restrictions from the November 2021 IPO are scheduled to end for remaining securities at the commencement of trading on April 4, 2022, after 20% of certain outstanding securities were released on January 5, 2022. A substantial number of shares could become eligible for sale and depress the market price of Class A common stock.
The business depends on third-party providers, including Amazon Web Services for cloud hosting and Apple and Google services for mobile and web notifications. Any disruption, policy change, or cybersecurity event affecting these providers could lead to customer dissatisfaction, liability, and loss of customers.
The company is subject to stringent and changing privacy, data security, and data protection laws and contractual obligations, and the SEC may increase regulatory focus on customer engagement tools in financial services. Noncompliance or perceived noncompliance could reduce demand and impose costs.
The company plans further geographic expansion, including offices in Canada and France, and generated approximately 40% of fiscal year 2022 revenue outside the United States. International operations involve regulatory, labor, tax, currency, and geopolitical risks, including the ongoing conflict between Russia and Ukraine.
With IPO proceeds, the company may pursue larger and more complex acquisitions or strategic investments, which could divert management attention, pose integration challenges, dilute stockholders, or result in impairment charges.
The company depends on senior management, particularly the CEO, and faces intense competition for software engineers and senior sales executives. A large remote workforce and post-IPO turnover may make hiring and retention more difficult.
SaaS KPIs
All quarters →Monthly Active Users
Total Customers
Customers with ARR of $500,000 or more
Summary, forecast, risks and KPIs are extracted from Braze, Inc.'s SEC filings for Q4 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.