Summary
Braze closed fiscal 2023 with revenue of $355.4 million, up 49.3% from the prior fiscal year, according to the 10-K. Fourth-quarter revenue was $98.7 million, up 40.1% from the prior-year quarter. The company ended the year with 1,770 customers, up from 1,375 a year earlier. Its dollar-based net retention rate for the trailing 12 months was 124%, compared with 128% a year earlier. Customers with annual recurring revenue of $500,000 or more totaled 156, up from 107. Monthly active users reached roughly 4.8 billion, up from roughly 3.7 billion. Management said growth came from existing customer expansion and new customers, though it also noted slower growth from new customers in recent quarters. Subscription revenue growth came mostly from existing customers, while the remainder came from new customers. The company said professional services revenue grew at a slower rate as new customers increasingly used third-party partner-led onboarding services.
Profitability remained negative but showed mixed trends. Full-year gross profit was $239.6 million, up 50.2%, and gross margin was 67.4%, up 0.4 percentage points. Fourth-quarter gross profit was $65.25 million, up 42.9%, with gross margin of 66.1%, up 1.3 percentage points. The full-year operating loss was $148.14 million, wider than the prior-year loss. Full-year operating margin was -41.7%, down 8.8 percentage points. In the fourth quarter, the operating loss narrowed to $36.52 million, and operating margin improved to -37.0%, up 23.5 percentage points. The full-year net loss attributable to the company was $138.97 million, wider than the prior-year loss. Fourth-quarter net loss narrowed to $33.45 million. Diluted EPS for the full year was -$1.47, a narrower loss. Operating expenses grew faster than revenue, driven by higher personnel costs, stock-based compensation, and marketing events. Sales and marketing, research and development, and general and administrative expenses all increased in absolute dollars.
Cash generation improved at the operating line. Full-year operating cash flow was negative $22.31 million, an improvement from the prior fiscal year. Fourth-quarter operating cash flow was $0.01 million, up from the prior-year quarter. Capital expenditures for the full year were $15.45 million, up 568.7%. Fourth-quarter capital expenditures were $1.38 million, up 15.1%. Deferred revenue, current portion, was $166.09 million, up 31.5%. Remaining performance obligations were $455.70 million, up 22.0%. The company also reported non-GAAP free cash flow of negative $39.0 million for the full year, compared with negative $39.8 million in the prior fiscal year. Free cash flow is not the same as operating cash flow. The company attributed the full-year operating cash outflow to a net loss adjusted for non-cash charges and changes in working capital. It said deferred revenue increased on higher billings, while deferred contract costs rose on commissions from new bookings and renewals.
Risks remain tied to the macro environment. Management pointed to inflation, interest rate increases, supply chain issues, and declines in consumer confidence as sources of uncertainty. The collapse of Silicon Valley Bank and Signature Bank raised questions about other U.S. banks, and Braze said liquidity problems at customers could delay payments or reduce demand. International expansion may hurt near-term operating results. The company also noted slower growth from new customers, though it did not predict whether that trend would continue. Seasonality affects cost of revenue because messaging volume and compute needs typically peak in the fourth quarter. Braze expects cost of revenue to increase as it invests in platform infrastructure and customer support. It also expects sales and marketing, research and development, and general and administrative expenses to rise in absolute dollars. The company ceased to qualify as an emerging growth company at the end of fiscal 2023, which will require auditor attestation of internal controls and adoption of new accounting standards on public company timelines. The 10-K did not include quantitative guidance for the next quarter or the full fiscal year.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $98.7M | $93.1M | +6.0% | $70.4M | +40.1% |
| Gross profit | $65.3M | $64.0M | +2.0% | $45.7M | +42.9% |
| Gross margin | 66.1% | 68.7% | -2.6 pp | 64.8% | +1.3 pp |
| Research & development | $26.8M | $25.6M | +4.6% | $22.9M | +16.8% |
| Sales & marketing | $52.8M | $52.8M | -0.1% | $45.7M | +15.5% |
| General & administrative | $22.2M | $22.4M | -0.9% | $19.6M | +13.3% |
| Total operating expenses | $101.8M | $100.9M | +0.9% | $88.2M | +15.3% |
| Operating income (loss) | -$36.5M | -$36.9M | +0.9% | -$42.6M | +14.2% |
| Operating margin | -37.0% | -39.6% | +2.6 pp | -60.5% | +23.5 pp |
| Net income (loss) | -$33.8M | -$33.9M | +0.2% | -$43.3M | +22.0% |
| Net margin | -34.3% | -36.4% | +2.1 pp | -61.5% | +27.3 pp |
| Diluted EPS | -$0.36 | -$0.35 | -$0.01 | -$1.24 | +$0.88 |
| Customers | 1,770 | 1,715 | +3.2% | 1,300 | +36.2% |
Risks
Global economic uncertainty, inflation, higher interest rates, and banking sector instability following the collapses of Silicon Valley Bank and Signature Bank may reduce demand for customer engagement technology. MD&A states that in recent quarters the company has seen slower growth from new customers, which may be related to the uncertain macroeconomic environment.
The dollar-based net retention rate for the trailing 12 months ended January 31, 2023 was 124%, down from 128% for the prior year, and for customers with ARR of $500,000 or more it was 126%, down from 136%. The business depends on renewals and expansion within existing customers to grow revenue.
The company had an unremediated material weakness as of January 31, 2023 related to the lack of properly designed controls for revenue recognition under ASC 606. Failure to remediate could result in material misstatements or delayed financial reporting.
Recent major advances in, and the public availability of, generative artificial intelligence are described as likely to be a major disruptor in consumer engagement and marketing strategies. If the platform does not adapt quickly, demand could be harmed.
Sales cycles with large enterprise customers are long and unpredictable, generally three to six months but sometimes over 12 months. A sustained economic downturn could extend these cycles or reduce win rates and delay revenue.
The company depends on its CEO and senior management and faces intense competition for experienced software engineers and senior sales executives. Its hybrid remote work model, The Way Braze Works, adds operational complexity and may affect culture, hiring, and retention.
The market is highly competitive, with legacy marketing clouds such as Adobe and Salesforce and point solutions such as Airship, Iterable, Leanplum (CleverTap), MailChimp (Intuit), and MoEngage. Competitor consolidation and bundling could create pricing pressure and reduce market share.
The company states that rapid historical revenue growth may not be indicative of future growth and expects its annual revenue growth rate to decline as the business matures. Revenue grew 49% in the fiscal year ended January 31, 2023 versus 58% in the prior fiscal year.
The SEC has indicated it may increase regulatory focus on the use of customer engagement tools in the financial services industry. Any regulatory restrictions on these tools could reduce demand for the platform in that market and other markets.
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 FY2023 (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.