Q3 2022 Braze Inc Earnings Call

Our relations. Please go ahead.

Speaker 1: Thank you, operator. Good afternoon and thank you for joining us today to review Braze's results for the fiscal third quarter 2022. I'm joined by our co-founder and chief executive officer Bill Magnussen and our chief financial officer Isabelle Winkles. We announced our results in a press release issued after the market closed.

Thank you operator, good afternoon, and thank you for joining us today to review <unk> results for the fiscal third quarter 2022, I'm joined by our co founder and Chief Executive Officer, Bill Magazine, and our Chief Financial Officer, Isabelle Winkles, We announced our results in our press release issued after the market closed today.

Speaker 1: Please refer to our investor website at investors.phrase.com for more information and a supplemental presentation related to today's earnings announcement.

These refer to our investor website at investors Dot phrase dot com for more information and a supplemental presentation related to todays earnings announcement. During this call. We will make statements related to our business that are forward looking under the federal securities laws and the Safe Harbor provisions of the private Securities Litigation Reform Act of 1095. These may include.

Speaker 1: During this call, we will make statements related to our business that are forward-looking under the federal securities laws and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These may include, but are not limited to, statements regarding our financial outlook for the fourth quarter and full fiscal year ended January 31, 2022, the size of our market opportunity, continued momentum on our ESG and DEI initiatives.

Good but are not limited to statements regarding our financial outlook for the fourth quarter and full fiscal year ended January 31, 2022, the size of our market opportunity continued momentum on our ESG and <unk> initiatives and our expectations regarding our renewal rate near and long term gross margin and free cash flow.

Speaker 1: and our expectations regarding our renewal rate, near and long-term gross margin and free cash flow.

Speaker 1: These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations and reflect our views only as of today. We assume no obligation to update any such forward-looking statement.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations and reflect our views only as of today we.

We assume no obligation to update any such forward looking statements.

Speaker 1: For a discussion of the material risks and uncertainties that could affect our actual results, please refer to the risks identified in today's press release and our SEC filings, both available on the investor section of our website.

For a discussion of the material risks and uncertainties that could affect our actual results. Please refer to the risks identified in today's press release, and our SEC filings both available on the investors section of our website.

Speaker 1: I'd also like to remind you that today's call will include certain non-GAAP financial measures used by management to evaluate our ongoing operations and to aid investors in further understanding the company's fiscal third quarter 2022 performance, in addition to the impact these items have on the financial results.

I'd also like to remind you that today's call will include certain non-GAAP financial measures used by management to evaluate our ongoing operations and to aid investors in further understanding the company's fiscal third quarter 2022 performance. In addition to the impact of these items have on our financial results. Please refer to the reconciliations.

Speaker 1: please refer to the reconciliations of our non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with U.S. GAAP included in our earnings release under the investor relations portion of our website. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with U.S. GAAP. And now I'd like to turn the call over to Bill. Thanks, Chris.

Of our non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with U S. GAAP included in our earnings release under the Investor Relations portion of our website. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with U S GAAP and <unk>.

Now I'd like to turn the call over to Bill.

Thanks, Chris and good afternoon, everyone welcome to our first earnings call as a public company.

Speaker 2: Welcome to our first earnings call as a public company. Today, I'll start by highlighting our third quarter results, then review our business, the customer engagement ecosystem, discuss our market opportunity, and then detail some exciting product use cases and recent announcements before turning it over to Isabel to provide more detail on our financial performance.

Today I'll start by highlighting our third quarter results, then review our business the customer engagement ecosystem discuss our market opportunity and then details some exciting product use cases, and recent announcements before turning it over to Isabella to provide more detail on our financial performance we.

Speaker 2: We are very pleased with our third quarter performance, which we believe demonstrated our ability to deliver high growth at scale.

We are very pleased with our third quarter performance, which we believe demonstrated our ability to deliver high growth at scale.

Speaker 2: In the third quarter, we generated revenue of $64 million, up 63% compared to the same period last year, and 15% sequentially.

In the third quarter, we generated revenue of $64 million up 63% compared to the same period last year and 15% sequentially.

Speaker 2: We saw increased traction with our customer base as dollar-based net retention rose to 126% in the third quarter, reflecting strong renewals and upsells.

We saw increased traction with our customer base as dollar based net retention rose to 126% in the third quarter, reflecting strong renewals and up sells.

Speaker 2: For customers with $500,000 or more in ARR, dollar-based retention increased to 136%, demonstrating our ability to land and expand with traditional enterprises and emerging disruptors across many verticals globally. We continue to expand across numerous growth vectors with our customers, as they realize the positive business outcomes that can be achieved through coordinated, personalized, cross-channel customer engagement strategies enabled by the Braze platform.

For customers with $500000 or more in <unk> dollar based retention increased to 136% demonstrating our ability to land and expand with traditional enterprises and emerging disruptors across many verticals globally. We continue to expand across numerous growth factors with our customers as they realize the positive business outcomes that can be achieved through.

<unk> personalized cross channel customer engagement strategies enabled by the <unk> platform.

Speaker 2: These strong results are a testament to the tireless efforts and dedication of the entire Braze team, our business momentum, recent product releases and upgrades across our software systems and data infrastructure, as well as rising awareness of Braze and our leadership in the customer engagement category. At Braze, our mission is to forge human connections between consumers and the brands they love through relevant and memorable experiences.

These strong results are a testament to the tireless efforts and dedication of the entire base team our business momentum recent product releases and upgrades across our software systems and data infrastructure as well as rising awareness of <unk> and our leadership in the customer engagement category.

At <unk>, our mission is to forge human connections between consumers and the brands they love through relevant and memorable experiences.

Speaker 2: We were founded 10 years ago at the dawn of the modern smartphone era with a dual conviction.

We were founded 10 years ago at the dawn of the modern smartphone era with a dual conviction first the fast growing businesses to be born and built to be mobile first and second that generation both companies would be driven by changing consumer behavior to transform the way they delivered products and services.

Speaker 2: First, the fast growing businesses will be born and built to be mobile first. And second, the generation mold companies would be driven by changing consumer behavior to transform the way they delivered products and services.

Speaker 2: Braze's momentum has accelerated as each of these beliefs prove true.

Fraser's momentum has accelerated as each of these beliefs proved true.

Speaker 2: The resulting evolution has provided brands with greater access to their consumers in a world that is always on, but that opportunity also creates obligations.

The resulting evolution has provided brands with greater access to their consumers in a world that is always on but that opportunity also creates obligation.

Speaker 2: Consumers expect real time personalized communication, seamlessly choreographed across the channels and platforms they prefer in a way that feels relevant and...

Consumers expect real time, personalized communication seamlessly choreograph across the channels and platforms. They prefer in a way that feels relevant and human.

Speaker 2: To be successful, brand strategy must be focused on establishing that personal connection through customer engagement and seamlessly integrating both product and marketing experiences into people's lives.

To be successful brand strategy must be focused on establishing that personal connection through customer engagement and seamlessly integrating both product and marketing experiences into People's lives.

Speaker 2: We believe that great relationships are built on a foundation of shared experience and meaningful experiences.

We believe the great relationships are built on a foundation of shared experience and meaningful exchange.

Speaker 2: Guided by that human lens, we believe that top performing companies must strive to listen to their...

Guided by that human lens, we believe the top performing companies must strive to listen to their consumers understand them deeply and then act by communicating in a way that is human relevant and personal.

Speaker 2: understand them deeply, and then act by communicating in a way that is human, relevant, and personal.

Speaker 2: We further believe that the best results are achieved through an iterative process of creative evolution guided by data, and imagine, create, and evolve loop throughout which we support our clients with Braze's product and strategic service.

We further believe that the best results are achieved through an iterative process of creative evolution guided by data and imagine create and evolve loop throughout which we support our clients with Brazos product and strategic services.

Speaker 2: For those of you who are being introduced to Braze's technology differentiation, I will take a moment to briefly explain our vertically integrated software.

For those of you who are being introduced abrasive technology differentiation I will take a moment to briefly explain our vertically integrated software stack.

Speaker 2: It begins with the ingestion layer. Our SDKs are directly integrated into our customers' native applications and websites.

It begins with the ingestion layer.

Our SDK, our directly integrated into our customers' native applications and websites.

Speaker 2: As a trusted party, we become part of our customers' native product.

As a trusted party, we become part of our customers' native product experience. Our SDK is served to both stream new user activity into our data ingestion layer as well as deliver in product messaging such as brakes content cards are flexible and that message product or surveys directly to the end user.

Speaker 2: Once new data is ingested, it is interpreted and acted upon as it flows through the four remaining layers. classification, orchestration, personalization, and action.

Once new data is ingested it is interpreted and acted upon as it flows through the four remaining layers classification orchestration personalization and action.

Speaker 2: This vertically integrated engagement stack, built on stream processing technology, leverages first party data to enable interactive delivery of personalized messaging in a customer-centric manner, seamlessly transitioning across channels as is appropriate for the use case and the individual. And any action taken by a consumer in response to a message immediately flows back into our...

This vertically integrated engagement stack built on stream processing technology, Leverages first party data to enable interactive delivery, a personalized messaging and a customer centric manner seamlessly transitioning across channels as is appropriate for the use case and the individual and any action taken by our consumer in response to a message immediately flows back.

Speaker 2: creating a real-time, interactive feedback loop of first-party data powering the brand's engagement strategy. And our technology infrastructure can deliver real-time messaging across channels at incredible scale.

Into our system, creating a real time interactive feedback loop of first party data powering the brand's engagement strategy and our technology infrastructure can deliver real time messaging across channels at incredible scale.

Speaker 2: The Brace customer base spans across many verticals, and Cyber Week is increasingly an important time of year for nearly all brands, and we saw that in our processing volumes just a few weeks ago. From Black Friday to Cyber Monday, we executed over 21 billion messages, including 3.7 billion emails, over 3 billion webhooks.

The brace customer base spans across many verticals and cyber week is increasingly an important time of year for nearly all brands and we saw that in our processing volumes just a few weeks ago.

From Black Friday, cyber Monday, we executed over 21 billion messages, including $3 7 billion emails over 3 billion Webhooks.

Speaker 2: nearly 370 million in-app and in-browser messages.

Over 2 billion content card impressions.

Nearly $370 million in App and in browser messages.

Speaker 2: and nearly 12 billion push notifications across iOS, Android, and web. More importantly, despite record high daily volumes, we achieved 100% global uptime through all of Black Friday and Cyber Monday.

And nearly 12 billion push notifications across iOS, Android and web more importantly, despite record high daily volumes, we achieved 100% global uptime through all the Black Friday and cyber Monday.

Speaker 2: These are impressive totals that represent quantitative proof points of our reliability and our ability to deliver personalized targeted customer engagement at scale. And the global market.

These are impressive totals represent quantitative proof points of our reliability and our ability to deliver personalized targeted customer engagement at scale.

And the global market opportunity is substantial.

Speaker 2: With the ability for consumers to transact anywhere at any time, customer engagement is the new battleground for brands. Based on our calculations, our total addressable market is at least $16 billion annually in the US alone.

With the ability for consumers to transact anywhere at any time customer engagement is the new battleground for brands based on our calculations. Our total addressable market is at least $16 billion annually in the U S alone and.

Speaker 2: And given our existing footprint outside the United States, which comprise roughly 40% of our revenue year to date, we feel well positioned to capitalize on the expansive international market as well.

And given our existing footprint outside the United States, which comprise roughly 40% of our revenue year to date, we feel well positioned to capitalize on the expansive international market as well.

Speaker 2: Given the strength of our platform and the opportunity, we are investing to build momentum with brands of all sizes, inclusive of both traditional enterprises and emerging disruptors.

Given the strength of our platform and the opportunity we are investing to build momentum with brands of all sizes inclusive of both traditional enterprises and emerging disruptors.

Speaker 2: Our total customer count at the end of the quarter marked a 48% year-over-year increase, with particular strength across large enterprises and in the disruptor category, as savvy mobile-first startups recognized the imperative of strong customer engagement as a pillar for successful long-term growth. I'd like to briefly walk you through a few third-quarter customer use cases, demonstrating

Our total customer count at the end of the quarter marked a 48% year over year increase with particular strength across large enterprises and in the disruptor category at savvy mobile first startups recognize the imperative of strong customer engagement as a pillar for successful long term growth.

I'd like to briefly walk you through a few third quarter customer use cases, demonstrating how braised delivers meaningful ROI for customers.

Speaker 2: The first is a leading quick service restaurant brand, which use Braze multi-channel capabilities to promote and educate its users on a promotion tied to their loyalty program.

The first is a leading quick service restaurant brand, which use sprays multichannel capabilities to promote and educate its users on a promotion tied to their loyalty program. The brand partnered with a leading financial investment platform to reward customers with crypto currency. After they completed a purchase of $5 or more as a loyalty member by combining the power.

Speaker 2: The brand partnered with the leading financial investment platform to reward customers with cryptocurrency after they completed a purchase of $5 or more as a loyalty.

Speaker 2: By combining the powers of email, SMS, push, and in-app messaging, they effectively reached users across their preferred mediums, driving a substantial increase in app downloads and digital sales, as well as boosting acquisition on their newly launched rewards program.

Words of email SMS push and do that messaging they effectively reached users across their preferred mediums driving a substantial increase in app downloads and digital sales as well as boosting acquisition on their newly launched rewards program.

Speaker 2: One of the major keys to success was connecting the push-based channels that drive people into the app with follow-on messaging to guide them further down the activation funnel. Once in the mobile app, Braille

One of the major keys to success with connecting to push based channels that drive people into the App with follow on messaging to guide them further down the activation funnel.

Once of the mobile App <unk> served as an interactive message experience highlighting the details of the full promotion reward redemption and other high value consumer actions that can be used to drive future retargeting campaigns and inform experimentation.

Speaker 2: highlighting the details of the full promotion, reward redemption, and other high value consumer actions that can be used to drive future retargeting campaigns and inform experiments.

Speaker 2: A second example I'd like to highlight is a wellness brand that effectively promoted their new streaming series via multi-channel canvas.

A second example, I'd like to highlight is a wellness brand that effectively promoted their new streaming series via multichannel canvas journeys.

Speaker 2: The customer needed a way to educate its customers about the program, leveraging the cross-channel power of Braze to optimize awareness and drive engagement.

The customer needed a way to educate customers about the program leveraging the cross channel power brands to optimize awareness and drive engagement.

Speaker 2: By orchestrating multiple canvases to target unique user cohorts across push, email, and in-app, they successfully tailored their messaging strategy to engage users on the launch of the new series. As a result, the brand experienced a significant conversion rate with its targeted subscription users.

By orchestrating multiple campuses to target unique user cohorts across push email and in App. They successfully tailored their messaging strategy to engage users on the launch of the new series as a result, the brand experienced a significant conversion rate with its targeted subscription users.

Speaker 2: The third is a leading European delivery platform, providing takeout and groceries to millions of users who combine several braids, intelligence and customization features to turn their previously static campaigns into personalized experiences for their customers.

The third is a leading European delivery platform, providing takeout and groceries to millions of users who combine several braids intelligence and customization features to turn their previously static campaigns into personalized experiences for their customers.

Speaker 2: First, by employing AudiencePaths, a product launch earlier this year inside our Canvas environment, the company designed a messaging strategy personalized by combining the user's revealed preferences and recent behaviors across multiple channels without incurring the operational complexity that is all too common in competitive tools.

First by employing audience paths a product launch earlier this year inside of our campus environment. The company designed to messaging strategy personalized by combining the user's revealed preferences and recent behaviors across multiple channels without incurring the operational complexity that is all too common in competitive tools.

Speaker 2: As each of their customers navigated those paths and triggered new message actions, the brand then used connected content, our dynamic personalization tool, to layer in additional customization based on the specific path a user had previously entered, including details like their favorite store or recent food purchase.

As each of their customers navigated those paths and triggered new message actions. The brand unused connected content are dynamic personalization tool to layer in additional customization based on the specific path of user had previously entered including details like their favorite store or recent food purchases.

Speaker 2: From there, the Braze intelligent channel feature targeted the individual users through their highest activation probability channel.

From there the Braves intelligent channel feature targeted the individual users through their highest activation probability channel mix.

Speaker 2: The company realized immediate results, boosting impressions and deriving higher orders by sending highly personalized.

The company realized immediate results boosting impressions and driving higher orders by sending highly personalized messages.

Speaker 2: Throughout these customer examples, you have now heard of many of the great features that combine together into the rapidly evolving Brace product.

Throughout these customer examples you've now heard of many of the great features the combined together into the rapidly evolving based product.

Speaker 2: To underscore that pace of evolution, I'd like to highlight a few innovations from the third quarter.

To underscore that pace of evolution I'd like to highlight a few innovations from the third quarter.

Speaker 2: We launched new product solutions, including updates to Canvas. With Action Paths, our newest Canvas component, customers can dynamically send users down different paths based on their behavior.

We launched new product solutions, including updates to canvas with action Paas, our newest campus component customers can dynamically send users down different paths based on their behaviors. This new feature allows customers to automatically segment their users based on the actions they have taken in a given timeframe.

Speaker 2: This new feature allows customers to automatically segment their users based on the actions they have taken in a given time.

Speaker 2: funnel those users into a variety of custom paths, and deliver personalized messages for users within each path at scale.

One of those users into a variety of custom paths and deliver personalized messages for users within each path at scale.

Speaker 2: Our customers are already seeing great results with this product, including a financial services company that has driven a 14% conversion rate by personalizing onboarding journeys for new members, and an on-demand streaming service that saw a 61% conversion rate by sending users down custom paths based on their engagement with emails and live streaming.

Our customers are already seeing great results with this product, including a financial services company that has driven a 14% conversion rate by personalizing Onboarding journeys for new members and an on demand streaming service, that's a 61% conversion rate by sending users down custom paas based on their engagement with emails and live streams.

Speaker 2: This quarter, we also added four new partners to Currents, our continuous customer engagement data streaming product.

This quarter. We also added four new partners the currents are continuous customer engagement data streaming product.

Speaker 2: Amazon EventBridge, Routerstack, Helium, and Treasured Data.

Amazon event bridge router stack helium and treasure data.

Speaker 2: By tapping into one of our new real-time currents connections, customers can break down data silos by streaming granular customer engagement and behavior data to even more technology partners within their data analytics ecosystem.

By tapping into one of our new real time current connections customers can break down data silos by streaming granular customer engagement and behavior data to even more technology partners within their data analytics ecosystem.

Speaker 2: We also enabled brands to build direct integrations themselves with custom currents connectors, giving customers the ability to send braised data to more custom destinations like an in-house CDP or other data.

We also enabled brands to build direct integrations themselves with custom currency connectors, giving customers the ability to send brace data to more custom destinations like an in house CDP or other data store.

Speaker 2: Alongside its launch, we also rolled out new iOS 15 push notification settings, enabling customers to designate the urgency and relevancy of each push notification, ensuring that users receive relevant notifications at the right time. Finally, I'll mention MMS Contact Card Creator, which allows brands to easily create a contact card in Braze to deploy in MMS campaigns.

Alongside its launch we also rolled out new iOS 15 push notification settings, enabling customers to designate the urgency and relevancy of each push notification ensuring that users receive relevant notifications at the right time finally, I'll mentioned MMS contact card creator, which allows brands to easily create a contact card embrace to deploy in that.

M S campaigns building brand recognition.

Speaker 2: Message recipients can quickly save a brand's number to their contact list to distinguish who is texting.

Message recipients can quickly save a branch number to their contact list to distinguish who was texting them.

Speaker 2: Of course, building all these amazing products can't be achieved without talented people.

Of course building all these amazing products can't be achieved without talented people.

Speaker 2: Globally, we've increased headcount by more than 300 this fiscal year across all functions to support our growth, bringing our global headcount to over 1,000 as of the end of the third quarter. As we continue building a best of breed customer engagement platform and capitalize on our substantial market opportunity, it will be essential to acquire talent who can feel our success and live our value.

Globally, we've increased head count by more than 300, this fiscal year across all functions to support our growth, bringing our global head count to over 1000 as of the end of the third quarter.

As we continue building a best of breed customer engagement platform and capitalize on our substantial market opportunity. It will be a central to acquire talent, who can feel our success and live our values.

Speaker 2: and as we deepen our engagements around the world, we hold ourselves to a high cultural.

And as we deepened our engagements around the world, we hold ourselves to a high cultural standard.

Speaker 2: We've recently created a new social impact department inclusive of our diversity, equity and inclusion program and our corporate social responsibility initiatives.

We've recently created a new social impact department inclusive of our diversity equity and inclusion program and our corporate social responsibility initiatives.

Speaker 2: One such initiative that we're very proud of is Tech for Black Founders, which is focused on providing resources and technology for Black-empowered businesses like Plainsight, a new social platform facilitating virtual network.

One such initiative that we're very proud of his tech for Black founders, which is focused on providing resources and technology for black empowered businesses like plain site, a new social platform facilitating virtual networking brace helps plain sight consolidated its personalized communications within one comprehensive platform, allowing them to optimize customer experiences and increase retention.

Speaker 2: Brace helped Plaincite consolidate its personalized communications within one comprehensive platform, allowing them to optimize customer experiences and increase retention.

We are also joining the pledge, 1% movement committing to donating a portion of our class a common stock over the next 10 years to fund, our social impact and ESG initiatives.

Speaker 2: committing to donating a portion of our Class A common stock over the next 10 years to fund our social impact and ESG initiatives.

Speaker 2: These efforts are reflections of our core values, and you should expect further momentum on ESG and DEI initiatives as we continue on our public company journey.

These efforts are reflections of our core values and you should expect further momentum on ESG and E. <unk> initiatives as we continue on our public company journey.

Speaker 2: I'll wrap my remarks by stating that we are committed to our long-term mission to build strong and lasting customer relationships through great customer engagement. With billions of these relationships under our stewardship, our progress toward realizing this mission reaches consumers in nearly every country around the world.

I'll wrap my remarks by stating that we are committed to our long term mission to build strong and lasting customer relationships through great customer engagement with billions of these relationships under our stewardship, our progress toward realizing this mission reaches consumers in nearly every country around the world.

Speaker 2: It's humbling and exciting to be working on this goal with all of our employees, partners, and shareholders. We look forward to continuing on this journey with you and updating you on our progress in the coming quarters.

It's humbling and exciting to be working on the skull with all of our employees partners and shareholders. We look forward to continuing on this journey with you and updating you on our progress in the coming quarters.

Speaker 2: And with that, I'll hand the call over to our Chief Financial Officer, Isabel Winkles. Isabel?

And with that I'll hand, the call over to our Chief Financial Officer, Isabelle Winkles Isabelle.

Speaker 3: Thank you, Bill. And thank you, everyone, for joining us today. We reported a strong third quarter. And as Bill mentioned, third quarter revenue rose 63% year-over-year to $64 million, driven by a combination of customer expansion, new business sales, and a record in-quarter renewal rate. Our subscription revenue remains the primary component of our total top line, contributing nearly 93% of our third quarter revenue.

Thank you Bill and thank you to everyone for joining US today, we reported a strong third quarter and as Bill mentioned third quarter revenue rose, 63% year over year to $64 million driven by a combination of customer expansion, new business sales and a record in quarter renewal rate our subscription revenue remains the primary.

Ari component of our total topline contributing nearly 93% of our third quarter revenue.

Speaker 3: The remaining 7% represents a combination of one-time configuration and onboarding fees, as well as other professional services that are subject to similar annual contractual terms as our subscription-based revenue.

The remaining 7% represents a combination of one time configuration and onboarding fees as well as other professional services that are subject to similar annual contractual terms as our subscription based revenues.

Speaker 3: Customer momentum during the third quarter was solid, with total customer count increasing 48% year over year to 1,247 customers as of October 31.

Customer momentum during the third quarter was solid with total customer count increasing 48% year over year to 247 customers as of October 31.

Speaker 3: Our total number of large customers, which we define as those with ARR of $500,000 or more annually, grew 45% year-over-year to 97%.

Our total number of large customers, which we define as those with <unk> of $500000 or more annually grew 45% year over year to 97, we.

Speaker 3: We continue to execute on our land and expand strategy, improving our dollar-based net retention rate to 126%, up over 200 basis points compared to the prior year, and up almost 100 basis points sequentially compared to the second quarter.

We continue to execute on our land and expand strategy improving our dollar based net retention rate to 126% up over 200 basis points compared to the prior year and up almost 100 basis points sequentially compared to the second quarter.

Speaker 3: Dollar-based net retention for our largest customers was 136%, up nearly 200 basis points compared to the third quarter of last year, and up over 100 basis points compared to the second quarter. As a reminder, our dollar-based net retention represents a 12-month trailing statistic.

Based on that retention for our largest customers was 136% up nearly 200 basis points compared to the third quarter of last year and up over 100 basis points compared to the second quarter.

As a reminder, our dollar based net retention represents a 12 month trailing statistic.

Speaker 3: Our dollar-based net retention rate reflects strength in our third-quarter renewals and upsells to existing customers. Upsells include increases to pre-committed volumes across monthly active users, email, and SMS entitlements, signing new business units within existing parent companies as we continue to further penetrate our existing customer base through both geographic and brand expansion, and the addition of add-on features and professional services.

Our dollar based net retention rate reflects strength in our third quarter renewals and upsells to existing customers.

Cells, including increases to pre committed volumes across monthly active users email and SMS entitlements, signing new business units within existing parent companies as we continue to further penetrate our existing customer base through both geographic and brand expansion and the addition of add on features and professional services.

Speaker 3: This expansion was strong across industries and geographic.

This expansion was strong across industries and geographic regions with revenue outside the U S. Continuing to contribute 40% of our total revenue in the third quarter.

Speaker 3: with revenue outside the U.S. continuing to contribute 40 percent of our total revenue in the third quarter.

Speaker 3: Moving to our remaining performance obligations, as a reminder, the first period in which we began disclosing RPO was the fourth quarter of fiscal 2021, and we will therefore have our first year-over-year RPO comparison when we announce our fourth quarter and full-year fiscal 2022 results in a few months.

Moving to our remaining performance obligation as a reminder, the first period in which we began disclosing our P. O was the fourth quarter of fiscal 2021 and we will therefore have our first year over year. Our P. O comparison, when we announce our fourth quarter and full year fiscal 2022 results in a few months.

Speaker 3: Therefore, my comments on RPO will address only the sequential evolution.

Therefore, my comments on RPM will address only the sequential evolution.

Speaker 3: Our total remaining performance obligation rose 13% sequentially to $304 million in the third quarter. And current RPO rose 10% sequentially to $199 million.

Our total remaining performance obligation rose, 13% sequentially to $304 million in the third quarter and current RPI rose, 10% sequentially to 199 million. These.

Speaker 3: These increases were driven by solid business momentum that included new contracts, contract renewals, and term extension.

These increases were driven by solid business momentum that included new contracts contract renewals and term extensions.

Speaker 3: While our overall dollar-weighted contract length increased versus the end of the second quarter, we still remain in the range of approximately 24 months.

While our overall dollar weighted contract length increased versus the end of the second quarter, we still remain in the range of approximately 24 months.

Speaker 3: Now I'd like to review the income statement in more detail. As a reminder, some of the metrics I will discuss are non-GAAP . We have provided a reconciliation of GAAP to non-GAAP financials in our earnings release and accompanying earnings presentation.

Now I'd like to review the income statement in more detail as a reminder, some of the metrics I will discuss our non-GAAP. We have provided a reconciliation of GAAP to non-GAAP financials in our earnings release and accompanying earnings presentation.

Speaker 3: non-GAAP gross profit in the quarter was $45 million, representing a non-GAAP gross margin of 70.3 percent. This compares to a non-GAAP gross profit of $25.1 million and non-GAAP gross margin of 63.8 percent in the third quarter of last year and 66.7 percent in the second quarter of this

Non-GAAP gross profit in the quarter was $45 million, representing a non-GAAP gross margin of 73%. This compares to a non-GAAP gross profit of $25 1 million and non-GAAP gross margin of 63, 8% in the third quarter of last year and 66, 7% in the second.

Speaker 3: Growth margin improved year over year due to several factors. First, efficiencies realized in our personnel expense as we better align management structures, as well as the roles and responsibilities to cost of revenue action items.

Quarter of this year.

Gross margin improved year over year due to several factors first.

Fishing fees realized in our personnel expense as we better align management structures as well as the roles and responsibilities to cost of revenue action items.

Speaker 3: Second, we continue to achieve economies of scale in our core technology expenses, most notably across our database, hosting, and email vendors through volume discounts and pre-commits. And we note that these benefits have contributed to the improvements in gross margin percent over the last several quarters.

We continue to achieve economies of scale in our core technology expenses, most notably across our database hosting and email vendors through volume discounts and pre Covid and we note that these benefits have contributed to the improvements in gross margin percent over the last several quarters.

Speaker 3: Sequentially, gross margin percent increased 360 basis points, which includes a degree of seasonality with respect to cost of revenue. As a reminder, the third quarter typically experiences lower levels of activity for many of our customers, and we have already seen an increase in overall activity early in the fourth quarter, as Bill indicated, by our Black Friday to Cyber Monday.

Sequentially gross margin percent increased 360 basis points, which includes a degree of seasonality with respect to cost of revenue as.

As a reminder, the third quarter typically experiences lower levels of activity for many of our customers and we have already seen an increase in overall activity early in the fourth quarter as bill indicated by our Black Friday Cyber Monday statistics.

Speaker 3: Turning to operating expenses, non-gap sales and marketing expense was $28 million, or 44% of revenue, compared to $18.2 million, or 46% of revenue, in the prior year quarter.

Turning to operating expenses, non-GAAP sales and marketing expense was $28 million or 44% of revenue compared to $18 $2 million or 46% of revenue in the prior year quarter.

Speaker 3: This reflects our continued investments in sales and marketing headcount to support our solid growth and global expansion against our strong revenue this quarter.

This reflects our continued investments in sales and marketing head count to support our solid growth and global expansion against our strong revenue this quarter.

Speaker 3: non-GAAP R&D expense was $11.1 million, or 17% of revenue, compared to $6.8 million, or 17% of revenue in the prior year quarter, as we continue to invest in R&D to develop new products and features to fuel future growth.

Non-GAAP R&D expense was $11 $1 million or 17% of revenue compared to $6 8 million or 17% of revenue in the prior year quarter as we continue to invest in R&D to develop new products and features to fuel future growth.

Speaker 3: non-GAAP G&A expense was $10.9 million, or 17% of revenue, compared to $6.6 million, or 17% of revenue in the prior year quarter. The dollar increase was driven by investments to support our overall company growth and public market readiness.

Non-GAAP G&A expense was $10 $9 million or 17% of revenue compared to $6 6 million or 17% of revenue in the prior year quarter. The dollar increase was driven by investments to support our overall company growth and public market readiness.

Speaker 3: non-GAAP net loss attributable to Braves shareholders in the quarter was $3.3 million or a loss of 16 cents per share based on 20.7 million weighted average basic shares outstanding during the period.

Non-GAAP net loss attributable to praise shareholders in the quarter was $3 $3 million or a loss of <unk> 16 per share based on 27 million weighted average basic shares outstanding during the period.

Speaker 3: Now turning to the balance sheet and cash flow. We ended the quarter with $80.9 million in cash, cash equivalents, restricted cash, and marketable security.

Now turning to the balance sheet and cash flow, we ended the quarter with $89 million in cash cash equivalents restricted cash and marketable securities.

Speaker 3: Cash used in operations during the quarter was $2.5 million, compared to $5.9 million in the year ago quarter. After taking into consideration capitalized expenditures and capitalized software, free cashflow was a negative $3.5 million, resulting in a free cashflow margin of negative 5.4% in fiscal third quarter 2022.

Cash used in operations during the quarter was $2 $5 million compared to $5 $9 million in a year ago quarter after taking into consideration capitalized expenditures and capitalized software free cash flow was a negative $3 $5 million, resulting in a free cash flow margin of negative five 4% in <unk>.

Speaker 3: In the same period last year, our free cash flow and free cash flow margins were a negative $6.8 million and negative 17.3% respectively.

Fiscal third quarter 2022.

In the same period last year, our free cash flow and free cash flow margins were a negative $6 $8 million and negative 17, 3% respectively.

Speaker 3: The improvement in our free cash flow margins was driven by the increase in deferred revenue year over year, as well as improved earnings adjusted for non-cash expenses such as stock-based compensation and amortization of deferred contract costs.

The improvement in our free cash flow margin was driven by the increase in deferred revenue year over year as well as improved earnings adjusted for noncash expenses, such as stock based compensation and amortization of deferred contract costs.

Speaker 3: Rounding out the cash flow statement with our financing activities, I will note that both the third quarter of this year and third quarter of last year included a $2.5 million cash contribution by our partner, Japan Cloud Computing, to our Japan joint venture.

Rounding out the cash flow statement with our financing activities I will note that both the third quarter of this year and third quarter of last year included a $2 $5 million cash contribution by our partner, Japan cloud computing to our Japan joint venture.

Speaker 3: Now turning to our outlook for the fourth quarter and full fiscal year 2022.

Now turning to our outlook for the fourth quarter and full fiscal year 2022, we continue to feel highly optimistic about our potential for future revenue growth as evidenced by our strong pipeline of both new business and upsell opportunities.

Speaker 3: We continue to feel highly optimistic about our potential for future revenue growth as evidenced by our strong pipeline of both new business and upsell opportunities.

Speaker 3: our fourth quarter revenue guidance includes appropriate risk adjustments for new business and renewals we have yet to close this quarter. For the fourth quarter, we expect revenue to be in the range of $65 to $66 million, which represents a year-over-year growth rate of approximately 53% at the mid-term.

Our fourth quarter revenue guidance includes appropriate risk adjustment for new business and renewals, we have yet to close this quarter.

For the fourth quarter, we expect revenue to be in the range of $65 million to $66 million, which represents a year over year growth rate of approximately 53% at the midpoint.

Speaker 3: fourth quarter non-gap operating loss is expected to be in the range of $15.5 million to $16.5 million.

Fourth quarter non-GAAP operating loss is expected to be in the range of $15 5 million to $16 $5 million.

Speaker 3: fourth quarter non-GAAP net loss is expected to be $15 million to $16 million.

Fourth quarter non-GAAP net loss is expected to be 15 million to $16 million.

Speaker 3: with fourth quarter non-gap net loss per share in the range of $0.19 to $0.20 per share based on approximately 79.8 million weighted average basic shares outstanding during the period.

With fourth quarter non-GAAP net loss per share in the range of 19 to 20 per share based on approximately $79 8 million weighted average basic shares outstanding during the period.

Speaker 3: For the full fiscal year 2022, revenues are expected to be in the range of $232.5 million to $233.5 million, which represents a growth rate of 55% year-over-year at the midpoint.

For the full fiscal year 2022 revenues are expected to be in the range of $232 5 million to $233 5 million, which represents a growth rate of 55% year over year at the midpoint.

Speaker 3: Fiscal year 2022 non-GAAP operating loss is expected to be in the range of a loss of $33.5 million to $34.5 million. non-GAAP net loss for the same period is expected to be in the range of a loss of $31.5 to $32.5 million.

Fiscal year 2022 non-GAAP operating loss is expected to be in the range of a loss of $33 5 million to $34 $5 million.

Non-GAAP net loss for the same period is expected to be in the range of a loss of $31 five to $32 $5 million.

Speaker 3: Fiscal year 2022 non-gap net loss per share is expected to be a loss in the range of $0.90 to $0.93 based on a full year weighted average share count of approximately 35.1 million shares.

Fiscal year 2022 non-GAAP net loss per share is expected to be a loss in the range of 90 to 93.

Based on a full year weighted average share count of approximately $35 1 million shares.

Speaker 3: A few notes on our guidance. While we are not providing specific gross margin guidance, we expect gross margins will be impacted by seasonally higher activity in the fourth quarter. This will likely result in a fourth quarter non-GAAP gross margin percentage in the mid-60s, and we continue to expect our long-term non-GAAP gross margin target to be in the range of 65 to 70%.

A few notes on our guidance.

While we are not providing specific gross margin guidance, we expect gross margins will be impacted by seasonally higher activity in the fourth quarter. This will likely result in a fourth quarter non-GAAP gross margin percentage in the mid Sixty's and we continue to expect our long term non-GAAP gross margin target to be in the range of 65 to 70.

Speaker 3: While we expect to continue to pursue optimizations to achieve scale in both our cost of revenue for personnel and technology costs, we also expect to invest some of these gains back into the business, as we find opportunities to enhance our offering that may increase our computational and storage capacity requirements. Finally, I'll note that while we are not providing free cashflow guidance, free cashflow may vary materially from quarter to quarter based on the timing of when we receive customer payments and when we make vendor payments.

<unk>.

While we expect to continue to pursue optimizations to achieve scale in both our cost of revenue for personnel and technology costs. We also expect to invest some of these gains back into the business as we find opportunities to enhance our offering that may increase our computational and storage capacity requirement. Finally, I'll note that while we are not provide.

Free cash flow guidance free cash flow may vary materially from quarter to quarter based on the timing of when we receive customer payment and when we make vendor payments. For example, we expect the fourth quarter will include some large vendor payment that will impact cash from operations by up to $15 million to $20 million in the quarter.

Speaker 3: For example, we expect the fourth quarter will include some large vendor payments that will impact cash from operations by up to $15 to $20 million in the quarter.

Speaker 3: In summary, we are very pleased with the results of the quarter. New and existing customers are realizing the value of best-in-class customer engagement technology, and our execution remains strong. And with that, we'll now open the call for questions. Operator.

In summary, we are very pleased with the results of the quarter, new and existing customers are realizing the value of best in class customer engagement technology, and our execution remains strong.

And with that we'll now open the call for questions.

Operator, please begin the Q&A.

Speaker 4: Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If for any reason you would like to remove that question, please press star followed by 2. Again, to ask a question, press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly if questions are registered.

Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by two again to ask a question Press Star one as a reminder, if you are using a speaker phone. Please remember to pick up your handset before asking your question, we will pause briefly ask questions.

Speaker 4: The first question is from the line of Gabriela Borges with Goldman Sachs. Your line is open.

I registered.

The first question is from the line of Gabriela Borges with Goldman Sachs. Your line is open.

Speaker 5: Hi, good afternoon. Congrats on the quarter and the IPO. Bill, I'm hoping you can help us talk through some of the competitive noise on other companies that make claims on real-time marketing. We'd love to hear a little bit on what feedback you get on where Bryce stands out when you compete on bake-offs and where maybe the competitors fall short, and then vice versa, in any scenario where you don't want a bake-off, curious what that feedback looks like. Thanks.

Hi, good afternoon, congrats on the quarter on the I P O.

Bill I'm, hoping you can help us talk through some of the competitive noise on all the companies that make claims on a real time marketing, we'd love to hear a little bit on what feedback you get on web price stands out when you can pay them they cough and when maybe the competitors fall short and then vice versa in any scenario, where you don't want a bake off cured.

What that feedback looks like thanks.

Speaker 2: Absolutely. So our competitive environment has definitely always been varied. And as you're aware, Braze has always built ourselves to, you know, deliver value and appeal to the sophisticated and the ambitious amongst the kind of marketer set. So we've always wanted to build Braze to be a platform you graduate to and then never graduate from. And a part of that has been, you know, a lot of these differentiators when it comes to the vertical integration of the product, the differentiation through our streaming architecture, which enables these, you know, not just.

Absolutely so our competitive environment has definitely been varied and as Youre aware <unk> has always built ourselves to deliver value and appeal to the sophisticated and the ambitious amongst the kind of market are set and so we've always wanted to build rates to be a platform you graduate too and then never graduated from.

And part of that has been you know a lot of these differentiators when it comes to the vertical integration of the product.

Differentiation through our streaming architecture, which enables these not just quick but actually interactive and real truly real time use cases, and so when we're in a competitive sales cycle and we're working with.

Speaker 2: quick but actually interactive and truly real-time use cases. And so when we're in a competitive sales cycle and we're working with.

Speaker 2: customers that are in varying points in their journeys, those that have already embraced the interdisciplinary aspect of doing kind of modern customer engagement, where you have the creativity for marketing and growth teams coming to life quickly through collaboration with product engineering, and then having those results being analyzed to kind of drive additional experimentation through collaboration with data science.

Customers that are in varying points in their journeys those that have already embraced the interdisciplinary aspect of doing kind of modern customer engagement, where you have the creativity for marketing and growth teams coming to light quickly through collaboration with product engineering, and then having those results being analyzed to kind of drive additional experimentation through collaboration with data science.

Speaker 2: That those are groups that can look at the differentiation that Brace provides through our vertical integration and through our real-time capabilities, and really vividly understand the ROI that that's going to bring to them. But, you know, the kind of entirety of the addressable market are at varying stages in that journey. And in our go-to-market,

Those are groups that can look at the differentiation that <unk> provides through our vertical integration and through our real estate capabilities and really vividly understand the ROI, but that's going to bring to them, but the the kind of entirety of the addressable market are at varying stages in that journey and in our go to market.

Speaker 2: process and through our sales cycle, you know, we often will take a challenger mentality where, you know, someone comes in with a kind of older.

Processing through our sales cycle, we often will take a challenger mentality, where someone comes in with a kind of older.

Speaker 2: approach to communicating with their customers. Maybe they're used to batch and blast technology. They're sending out things that are undifferentiated or utilizing list-based mail sending or what have you as just some common examples that we run into. That we'll take a trusted advisor approach. We will be consultative with them. We will kind of challenge those preconceived notions about how customer engagement should be done. And in the cases where they come along with us and that we kind of grow with them and can kind of help get them to the point where they're thinking about the customer engagement problem the way that we do and the way that Braze has been built to service, that in those cases, we defend our premium price point and we experience very high win rates against competition. But there are other cases where customers are still thinking about things in a single channel mindset or maybe other parts of their systems are not kind of ready to embrace the new kind of data streaming paradigm. And they just can't get over that hump or they kind of perceive it as a bridge too far to leap over today. But those are places where a product that is maybe built for a less sophisticated audience is gonna have a more appealing, lower price point. And maybe they don't experience the ROI or kind of vividly understand it as much. And so in those cases, we're gonna be patient in those sales cycles. We'll continue to work with those customers over time. We have a saying around here that they always come back. And that's definitely something that we've seen over time and play out many times.

Our approach to communicating with our customers maybe they are used to batch and blast technology. They are sending out things that are undifferentiated or are utilizing less space mail, sending or what have you is just some common examples would be run into them that will take a trusted advisor approach, we will be consultative with them, we will kind of challenge those preconceived notions about how customer.

And should be done and in the cases, where they come along with us and that we kind of grow with them and can kind of help get them to the point, where they're thinking about the customer engagement problem in the way that we do and the way the phrase that's been built to service that in those cases, we need to defend our premium price point and we have we experienced very high win rates against comp.

Petition, but there are other cases, where customers are still thinking about things in a single channel mindset or maybe other parts of their systems are not kind of ready to embrace the new kind of data streaming paradigm and they just can't get over that hump or are they kind of perceive it as a bridge too far to leap over today that those are places where you know a P.

Product that is maybe built for less sophisticated audience is going to have in a more appealing lower price point and maybe they don't experience the the <unk>.

Or kind of vividly understand it as much and so in those cases, we're gonna be patient in those sales cycles will continue to work with those customers over time, and we have a saying around here that they always come back.

And that's definitely something that we see over time and play out many times.

Speaker 5: I appreciate the color. One follow-up for Isabel, we'd love to get a little bit of color on your priorities for sales and marketing investment as we go into the new year and maybe a little bit of commentary on how we should typically expect new productivity to ramp and what that ramp typically looks like for new folks that join the team. Thanks.

I appreciate the color one follow up for Isabel wed love to get a little bit of color on your priorities for sales and marketing investment as we go into the knee and maybe a little bit of commentary on how we should typically expect productivity to ramp and what that ramp typically it looks like for new folks that China team.

Speaker 3: Sure thing, so I'll answer that last question first. Typically, we expect our productivity to achieve full ramp within a year. That's kind of across the board we'll expect within a year. It's obviously faster down at the SMB levels and can take that full year at the more strategic and enterprise levels. But that is the across the board we do expect our ramps to occur within a year. When we think about the investments, we're gonna be adding headcount across our major locations around the world. We're actually looking to enter with feet on the street into new markets next year. So last year we entered the dock region with folks in Germany. We also entered our Japan JV.

Thanks.

Sure thing so I'll ask I'll answer that last question first typically we expect our productivity to achieve full ramp within a year. That's a that's kind of across the board. We will expect you know within a year, it's obviously faster.

Down at the outset at the SMB level and can take that full year at the at the more strategic and enterprise level, but that that is the across the board. We do expect our ramp to occur with within a year.

When we think about the investments, we're going to be adding head count across our major locations around the world. We're actually looking to enter with feet on the street into new markets next year. So last year, we entered the dark region with folks in Germany. We also entered our Japan JV to expand R. R.

Speaker 3: to expand our reach into the Japanese market. We are looking at both Toronto and Paris, France for next year. So there will be some investments as we start to ramp headcount there as well. And then all of our major regions across the West are at the East coast of the US, London and Singapore are our major existing regions. And we will continue to invest across not only those regions but also the classifications of customer type that we're going after. So it's SMB, the commercial area and then up into our enterprise and strategic.

Outreach into the Japanese market, we are looking at both Toronto and Paris, France are for next year.

There will be some investments as they start to ramp head count there as well and then all of our major regions across the west or East coast to the U S. London, and Singapore are our major existing regions and we will continue to invest across not only those regions, but also the classifications of customer type.

That we're going after so SMB the commercial area, and then up into our enterprise and strategic accounts.

Speaker 5: That sounds good. Thank you.

Sounds good thank you.

Speaker 4: The next question is from Mark Murphy with J.P. Morgan. Your line is open.

Thank you Ms Bouygues.

The next question is from Mark Murphy with Jpmorgan. Your line is open.

Speaker 6: Yes, thank you very much. So Bill, when we see the top-line acceleration that you're reporting here in this quarter, I guess I'm curious whether you're seeing any extra type of tailwind

Yeah.

Yeah. Thank you very much so bill when would we see the top line acceleration that you're reporting here in this quarter.

I'm curious, whether you're seeing any extra type of tailwind.

Speaker 6: from some of the large brands that they could be just fundamentally rethinking their whole stance on first-party relationships and maybe pivoting in that direct direction kind of in the wake of Apple's changes to IDFA.

From some of the large brands that they could be just fundamentally rethinking their whole stance on first party relationships and maybe pivoting and that's rich direction I'm kind of in the wake of Apple's changes to the idea of Fei I'm. Just wondering if if if that is something that is tangible to hear that.

Speaker 6: Just wondering if that is something that's tangible to you, that's driving business your way, perhaps more brands seeing Braze as kind of the high ROI solution for living in this first party world.

Driving business your way perhaps.

More brands being breeze as as a kind of the high Rois solution for living in this first party world.

Speaker 2: Yeah, I think we are absolutely seeing that. But I wouldn't say that that trend is isolated to this kind of post the most recent IDFA change. This shift to first party data is something that has been ongoing for several years. And it's not just platform changes like we see in Apple, although this is probably the fourth or fifth generation of changes to the advertising identifiers and other sorts of rules if you look across both Apple and Google. It's also things like GDPR. It's changes to other sorts of permissions and platform sentiment. And then also just broadly customer sentiment around these. And so when we look at that investment in first party data, Braze decided to focus in on being a good listener as opposed to kind of being a creepy detective and have that really be the basis of how we think about understanding a customer in a deep way in order to personalize and tailor the engagement journey that they're on with you as a brand. And so that's been part of our ethos and our product focus for our entire lives. Now, obviously we benefited from being on the right side of history with respect to first party data, but I by no means think that that's a recent mindset shift. You're hearing about it a little bit more in the public markets because it visibly hit people like snatch earnings and some of these other places where you've heard.

Yeah.

Yeah, I think we are absolutely seeing that but I wouldn't say that it's that that trend is isolated to this kind of post the most recent idea if a change this shift of first party data is something that has been ongoing for several years and it's it's not just you know platform changes like we see in Apple. Although this is probably the fourth or fifth.

Generation of changes to the advertising identifiers and other sorts of rules. If you look across both Apple and Apple and Google. It's also also things like GDP or its changes to other sorts of permissions and platform sentiment and then also just broadly customer sentiment around these and so when we look at that investment and first party data.

<unk> decided to focus in on being a good listener as opposed to kind of being a creepy detective and have that really be the basis of how we think about understanding our customer in a deep way in order to personalize and tailor the engagement journey that they're on with you as a brand and so that's been part of our ethos and.

Our product focus for our entire lives now obviously, we benefited from being on the right side of history with respect to first party data, but I by no means think that that's a recent mindset shift youre hearing about it a little bit more in the public markets because visibly you know people like snacks earnings from some of these other places where you've heard.

Speaker 2: you know, warnings like that from the big advertising platforms, but we've been seeing it.

Warnings like that from the big advertising platforms, but we've been seeing it for the last several years and it's just one of many secular trends that I think have been supportive of Brazos growth that focus on first party data. The continued rise of mobile the ongoing transformation of marketing and growth teams to embrace interdisciplinary collaboration as I mentioned on the previous answer and then the digital transformation.

Tailwind that you see from Covid you know these are all kind of in a big in a in a big basket and they're all pushing Braves to have increased momentum and we think that we're still in the early innings of a lot of them.

Speaker 6: Okay, understood. That's very clear. And then, Isabel, just as a quick follow-up, I'm a little surprised on the gross margin improvement to 70 percent. Positively surprised, I mean. I don't think we saw that seasonal aspect of it, or I guess I don't recall that in

Okay understood that's very clear and then Isabelle just as a quick follow up I'm, a little surprised on the gross margin improvement to 70% positively surprised I mean.

I don't think we saw that seasonal aspect of it or I don't I guess I don't recall that in.

Speaker 6: prior years, and you mentioned a couple of factors driving it. I guess I'm just specifically wondering, did you happen to see any lower mix of SMS than email, or is this really more around – is that piece of it relating more to securing lower pricing across?

Prior years, and you mentioned a couple of factors driving it I guess I'm I'm, just specifically wondering did you happen to see any lower mix of SMS and email.

Or is this really more around.

That piece of it relating more to securing lower pricing.

Across some of those channels.

Speaker 3: Yeah, so I think it's a combination. So we've been on a multi-year journey over the last couple of years, certainly since the day I arrived almost two years ago to attack this gross margin, and to make sure that we're optimizing across a number of dimensions, which we have been very successful on over the last seven or eight quarters.

Yes.

Yeah. So I think it's a combination so we've been on a multi year journey over the last couple of years certainly since the day I arrived almost two years ago to attack this gross margin.

And to make sure that we're optimizing across a number of dimensions, which we have been very successful on over the last sort of seven to seven or eight quarters.

Speaker 3: I think on the volumes, sequentially, so there's been, you know, growth across all the major categories of messaging send, but yes, in the third quarter, the sequential change in the

I think on the volumes sequentially. So there's been you know growth across all the major categories of messaging Sun, but yes in the third quarter the sequential change in the.

Speaker 3: portions of our messaging that tends to be a little bit on the lower margin side was a little bit slower and actually we saw higher growth rates in the messaging components that actually tend to be there in-house, you know, proprietary built and that are that are on the higher margin side. So that that definitely was part of the seasonality that I mentioned. We certainly, you know, we have some data for November and Bill obviously ran through this in his prepared remarks as it relates to the Black Friday statistics. We do anticipate that a lot of that messaging volume that was a little lighter on a sequential basis in in Q3 will come back very very much so in Q4 and so we when we talk about the seasonality we wouldn't expect this 70% to persist, you know, through the end of the year.

Portions of our messaging that tends to be a little bit on the lower margin side was a little bit slower and actually we saw higher growth rates in the messaging component that actually tends to be that our in house.

Proprietary built and that are that are on the higher margin side. So that that definitely was part of the seasonality that I mentioned are we certainly you know with some data for November and Bill obviously ran through that in his prepared remarks as it relates to the Black Friday statistics.

Do you anticipate that a lot of that messaging volume that was a little lighter on a sequential basis in Q3 will come back a very very much. So in Q4 and so we when we talk about the seasonality and we wouldn't expect that 70% to persist through the end of the year.

Speaker 6: Understood. Thank you very much.

Understood. Thank you very much.

Thank you Mr Murphy.

Speaker 4: The next question is from the line of Rainbow Link Show with Barclays. Your line is now open.

The next question is from the line of removing show with Barclays. Your line is now open.

Speaker 7: Hey, thank you and congrats for me as well. Bill, can I get back to the differentiation point you started to address in the beginning of Mark's and then to the first question? The messaging architecture that you have, like if you think about it, how difficult is it?

Hey, Thank you and congrats from me as well and then can I get back to the differentiation point you started to address in the beginning remarks I'm going to the first question.

The messaging architecture that you have.

If you think about it how difficult is it to kind of replicate it or build it because from what I've seen most of your competition is kind of still on legacy you have like rebuilt to start completely just can you speak to that.

Speaker 7: to kind of replicate it or build it? Because, you know, from what I've seen, most of your competition is kind of still on legacy, but you have like rebuilt the stack completely. Just, can you speak to that? Like, because it's a, you know, we obviously have like public companies, but Confluence and Snowflake now as well, that are living in this kind of new world, but I'm just trying to understand, you know, how long does it take someone to kind of actually live in this new world? And then I have a follow-up for Isabel.

We obviously have like public companies, the conklin and still take out as well that are living in this kind of new world, but I'm just trying to understand how long does it take some ones you're kind of actually.

In this new World and then I have a follow up for is about.

Speaker 2: Yeah, so I think that there's two major components to this. The first one is the kind of vertical integration inclusive of in-product integrations.

Yeah. So I think that there's two major components of this the first one is the kind of vertical integration inclusive of in product integrations and so when you look at the footprint of our SDK and libraries that have been integrated into the products of our customers and not just doing so in a way where they kind of sit in the back.

Speaker 2: And so when you look at the footprint of our SDKs and libraries that have been integrated into the products of our customers, and not just doing so in a way where they kind of sit in the background, but are actually integrated into the user experience and into the UI and the look and feel of those products, that that's something where we've had to build in a ton of technical sophistication to be really good citizens inside the world's largest

Crowned but are actually integrated into the user experience into the UI and the look and feel of those products.

That's something where we've had to build in a ton of technical sophistication to be really good citizens inside the worlds largest mobile applications across all the different platforms and across the web as well and then be able to kind of both instrument and deliberate messaging in an interactive way through all of those platforms and so that's kind of an aspect that even when you.

Speaker 2: mobile applications across all the different platforms and across the web as well, and then be able to kind of both instrument and deliver messaging in an interactive way through all those platforms. And so that's kind of an aspect that, you know, even when you look at a lot of the multi-channel vendors out there, very few of them have crossed the chasm of being able to deliver interactively both in product and out of product.

Look at a lot of the multichannel vendors out there very few of them have crossed the chasm of being able to deliver interactively both in product and out of products. When we then go from there into the stream processor that underlies our customer engagement stack, which I mentioned during her which I kind of spoke through the layers out during the prepared remarks, you know that's a proprietary stream process.

The architecture that we built over the last 10 years. The demands that are placed on that to be able to do both kind of large kind of volume base, you know things like breaking news alerts and other sorts of kind of just just in time or urgent kind of large volume messaging, while also being able to deliver those interactive in product messages and do so on the base.

Speaker 2: and other sorts of kind of just in time or urgent kind of large volume messaging, while also being able to deliver those interactive in-product messages and do so on the basis of a real-time data platform where everything is always live and able to seamlessly move back and forth across platforms and channels. This is just an immensely hard problem to do at scale. It's something where you can't build this just on top of out of the box software, even if you're sitting on top of something like a Snowflake or a Compliment, which we certainly use for other aspects of.

Speaker 2: data platform where everything is always live and able to seamlessly move back and forth across platforms and channels, this is just an immensely hard problem to do at scale. It's something where you can't build this just on top of out-of-the-box software, even if you're sitting on top of something like a Snowflake or a Compluent, which we certainly use for other aspects of our systems. But the customer engagement engine itself is entirely proprietary, has involved a lot of investment to provide the stability and the performance at scale. And all of that is really also just focused on the infrastructure side, that doesn't even mention a lot of the brazen differentiation that lives higher up in the stack through things like our Canvas environment, where we've created an ability for a business user to intuitively express creativity and sophisticated strategies in a way that we can then execute on with the stream processing engine. So there's a bunch of different dimensions to it, they really interplay with each other, and when you go back to the thing I've mentioned a couple of times already, which is that customer engagement in its modern...

<unk> of our real time.

Data platform, where everything is always live and able to seamlessly move back and forth across platforms and channels. This is an immensely hard problem to do at scale, It's something where you know you can't build this just on top of you know out of the box software, even if youre sitting on top of something like a snowflake are completed which we certainly used for other.

Aspects of our systems, but the customer engagement engine itself is entirely proprietary has involved a lot of investment to provide the stability and the performance of scale and all of that is really also just focused on the infrastructure side, you know that doesn't even mentioned a lot of the brazos differentiation that lives higher up in the stack them through things like our campus environment.

Where we've created an ability for a business user to intuitively express creativity and sophisticated straw.

Strategies in a way that we can then execute on with the stream processing engine. So theres a bunch of different dimensions to it they really interplay with each other and when you go back to the I think I've mentioned, a couple of times already which is that customer engagement and its modern.

Speaker 2: form is best executed on by interdisciplinary.

Form is best executed on by interdisciplinary teams and so there's a layer of collaboration and Intuitiveness and kind of removing friction and controlling complexity, which needs to be designed into these systems to enable those collaborations loops to happen and that's where you start to see really outsized ROI. So you know I I think I.

Speaker 2: And so there's a layer of collaboration and intuitiveness and kind of removing friction and controlling complexity, which needs to be designed into these systems to enable those collaboration loops to happen. And that's where you start to see really outsized ROI. So, you know, I think I could probably, I started this answer by saying there's two main things and, you know, there's obviously a lot more to it there, but we believe that the design and technology that's here has really been purpose built.

Probably I started this answer by saying, there's two main things in and you know, there's obviously a lot more to it there, but we believe that the design and the technology that is here has really been purpose built for more than a decade now and are really focused way for what the modern customer engagement should be and how it should be approach and that has created a pretty enduring.

Speaker 2: for more than a decade now in a really focused way for what the modern customer engagement should be and how it should be approached. And that has created a pretty enduring differentiation.

Speaker 7: Yeah. Okay. Yeah. Super helpful. That's really clear. And then one question is about the, if you look at companies that are coming to the stock market, you know, to, you know, have the IPO, if there's kind of a branding thing that goes with it in terms of, you know, to see as a CFO , you have less calls with prospective customers around like financial stability and stuff like that, because people can see your numbers. But you can also see it in terms of attractiveness to new employees. And we saw the big hiring numbers as well. Can you see some of that already coming through? Sure. What have been your first experiences? Obviously, I'm aware it's only like a couple of days.

Differentiation.

Yes, Okay Super helpful. That's really clear.

And then one question it's about the if you look at companies that are coming through the stock market.

I feel it's kind of a blending thing that goes with it in terms of.

As a CFO you have less kohl's with prospective customers around like financial stability and stuff like that because people can see your numbers, but you can also see it in terms of attractiveness to new employees that we sold to be hiring numbers as well can you see some of that already coming through or what would have been your first experiences. Obviously I'm aware, it's only like a couple of days.

Speaker 3: Yeah, thanks, Raimo. So look, I think we're really, really excited about what that's going to do to us, you know, over the coming weeks and months. I do think it's a little bit early days. We're also kind of, this was all happening in conjunction with the holiday period. So, you know, I know for my group, even specifically, I've had to sort of put off a couple of calls to talk about hiring the next person because they're on holiday and there was the Thanksgiving holiday and all of that. So, so I definitely, we have spoken internally about this and we're really excited. Our, whether it's pipeline of new business that continues to be strong, pipeline of new candidates that.

Yeah.

Thanks, Raimo. So look I think we're really really excited about what that's gonna do to us over the coming weeks and months I do think it's a little bit early days. We're also kind of this is all happening in conjunction with the holiday period.

So I know for my group, even specifically I've had to sort of put off a couple of calls to talk about the hiring the next person because they're on holiday in there was the Thanksgiving holiday and all of that so and.

So I definitely we have spoken internally about this and we're really excited or whether its pipeline of new business that continues to be strong pipeline of new candidates that you need to be really excited there are both in the U S and abroad. So I think it's absolutely a multi dimensional but you know this is in fact, our very first earnings call. The worksite.

Speaker 3: continue to be really excited there, both in the U.S. and abroad. So I think it's absolutely multidimensional. But this is, in fact, our very first earnings call. So we're excited to kind of keep that momentum going and to leverage all of the benefits of the IPO across a number of dimensions for the benefit of the company. Perfect, thank you, congrats again.

To kind of keep that momentum going in to leverage all of the benefits of the IPO across a number of dimensions for benefit the company.

Perfect. Thank you congrats again.

Thanks.

Speaker 4: The next question is from Arjun Bhatia with William Blair. Your line is open.

Thank you Mr Lynch.

Next question is from Arjun Bhatia with William Blair. Your line is open.

Speaker 8: Perfect. Thank you, and I'll end my congrats on a great quarter out of the gate here. One thing I noticed in the metrics, it seems like new customer growth has just been

Perfect. Thank you and I'll add my congrats on a great quarter advocate here.

I noticed in the and the metrics it seems like new customer growth has just been incredibly robust this year and we had another quarter. Another record this quarter rather of net new customers. I was just curious where are you seeing these customers coming from a lot of the legacy vendors a batch process.

Speaker 8: incredibly robust this year. And we hit another quarter, another record this quarter, rather, of net new customers. I'm just curious, where are you seeing these customers?

Speaker 8: coming from, is it a lot of the legacy vendors, the batch processing, marketing clouds that these customers are migrating from? And would you maybe attribute this to execution, or is it just the beginning of the market moving in your direction more and more with the data capabilities, mobile, etc, that we've talked about?

The senior.

Marketing cloud that these customers are migrating from.

And would you maybe it should meet those two execution or is it just the beginning of the market moving in your direction more and more with the data capabilities mobile et cetera that we've talked about.

Speaker 2: And so I think there's a few things at play here. You know, it's all of the things that you've said above that are all these secular tailwinds that I've already enumerated earlier on and some other answers. And we're seeing migrations from the legacy clouds. Certainly we're also seeing migrations from a lot of the point solutions, you know, that we kind of spoke about as we talked through the competitive landscape before. We also are seeing, you know, a lot of new Greenfield use cases that come about as well. You know, when you look at, for instance, like the streaming platforms that have all come about, you know, those were all brands that were working with legacy players before in order to send out messaging. But, you know, as they pivoted their businesses to have more of a direct to consumer focus, the use cases for them and customer engagement have multiplied tremendously. So when you think about the kind of

Okay.

So I think there's a few things at play here. It's all of the things that you said above that or are these secular tailwind that I've already enumerated earlier on and some other answers and we're seeing migration from the legacy cloud certainly we're also seeing migrations from a lot of the point solutions that we kind of spoke about as we talk through the competitive.

Landscape before we also are seeing.

A lot of new Greenfield use cases that come about as well you know when you look at for instance, the like the streaming.

Platforms that have all come about those were all brands that were working with legacy players before in order to send out messaging, but you know as they pivoted their businesses to have more of a direct to consumer focus the use cases for them and customer engagement have multiplied tremendously. So when you think about the kind of migration from the legacy clouds.

Certainly that is happening in the enterprise, but you also need to kind of amplify it by the fact that in so many cases customer engagement is becoming not only more strategically important but it's also has a much larger surface area than it did before and you can further amplify that by looking at the new channels that raises unlock when we look at things like content cards and messages.

And the ability to kind of seamlessly communicate across these channels. So that brands don't need to think about the core properties and their web properties and their email loyalty programs. There in person experiences is living on these different islands. We can bring all of those together and allow for them to kind of coherently communicate with the customer with confidence that theyre always acting on real time data every single thing that you do there helps <unk>.

Speaker 2: every single thing that you do there helps increase the number of use cases that they're running. It creates these kind of new greenfield opportunities for Braze to expand into. So you're seeing all of that. You know, we also

Kris the number of use cases that they're running it creates these kind of new greenfield opportunities for brands to expand into so you're seeing all of that we also.

Speaker 2: of new greenfield opportunities for Braze to expand into. So you're seeing all of that. You know, we also internally have been investing a lot in our, what we call our SMB segment. You know, that is the segment of zero to 200 employees that we're selling into. And we're seeing a lot of really fantastic growth within that category as well. You know, from a go-to-market perspective, we are still selling at a $30,000 annual minimum into that customer segment. And so these are certainly brands that are really focused on kind of pushing for sophisticated customer engagement, even if they are operating at smaller scale. But we're seeing a lot of growth in that category as well. And we're excited about what that means for, you know, continued expansion over time.

Speaker 2: Internally, I've been investing a lot in our, what we call our SMB segment. You know, that is the segment of zero to 200 employees that we're selling into. And we're seeing a lot of really fantastic growth within that category as well. You know, from a go-to-market perspective, we are still selling at a $30,000 annual minimum into that customer segment. And so these are certainly brands that are really focused on kind of pushing for sophisticated customer engagement, even if they are operating at smaller scale, but we're seeing a lot of growth in that category as well. And we're excited about what that means for, you know, continued expansion over time.

Internally have been investing a lot in our what we call. Our SMB segment that is the segment of zero to 200 employees that we're selling into and we're seeing a lot of really fantastic growth within that category as well from a go to market perspective, we are still selling at a $30000 annual minimum into that customer segment and so these are certainly.

<unk> that are really focused on kind of pushing for sophisticated customer engagement. Even if they are operating at smaller scale, but we're seeing a lot of growth in that category as well and we're excited about what that means for continued expansion over time.

Speaker 8: Perfect. That's very helpful. And then, Isabel, one more on gross margin.

Perfect.

Very helpful and then.

One one more on gross margins.

Speaker 8: If I can, I know you mentioned a handful of items that drove gross margins up this quarter, but as we look into next year and beyond, how should we think about maybe just the benefit that is long-lasting from some of the efficiencies and scale improvements that you mentioned versus those that may be fluctuating from quarter to quarter like volume and seasonality?

I can I know you mentioned a handful of items that.

Drove gross margins up this quarter, but as we look into next year and beyond.

What kind of how should we think about maybe just the benefit that is long lasting from some of the.

Efficiencies and scale improvements that you mentioned versus those that may be fluctuating from quarter to quarter like volume and seasonality.

Speaker 3: Yeah, so I would definitely think of the volume and seasonality as being the key driver of quarter over quarter volatility.

Yeah. So I would definitely think of the volume and seasonality is as being the key driver of quarter over quarter volatility.

Obviously, the revenue that we record is pro rata ratably over the course of the contract and the expense is going to be based on you said that youre going to see that that volatility there as.

Speaker 8: based on usage. So you're going to see that that volatility there. As we think about the benefits that have accrued to us as a result of some of the management realignment and roles and responsibilities realignment, that we feel will persist, right? Those are permanent changes that we've made within the organization. I think similarly on the technology cost side, whether it's the prepayment or just cost efficiencies with scale or other optimizations that we've achieved, those similarly will persist. I think what I would say though, is that we will continue to invest in our own technology and our own capabilities in order to improve and enhance our offering. And those improvements are going to come at a cost. And so we provided in the context of the roadshow, a long-term target of 65 to 70% gross margin, and we stand by that. And so we're very proud of what we've achieved over the last many quarters to get to this point, but we stand by that range of 65 to 70% as it relates to the longer term. Great. Thank you very much and congrats again.

As we think about.

The the benefits that have accrued to us as a result of some of the management realignment and roles and responsibilities realignment that we feel will persist right. Those are permanent changes that we've made within the organization I think similarly on the technology cost side.

Whether it's the prepayment or just growth cost efficiencies with scale or or other optimizations that we've achieved those similarly, well will persist I think what I would say, though is that we will continue to invest in.

Our own technology in our own capabilities in order to improve and enhance our offering and those improvements are going to come at a cost and so we provided in the context of the road show a long term target of 65% to 70% gross margin and we stand by that and so we're very proud of what we've achieved over the last.

Many quarters to get to this point, but we standby that range of 65% to 70% as it relates to the longer term.

Speaker 8: Great. Thank you very much and congrats again.

Great. Thank you very much and congrats again.

Speaker 4: Thank you, Mr. Bhatia. The next question is from Brent Braceland with Piper Sandler. Your line is open.

Thank you Mr box here.

The next question is from Brent baseline with Piper Sandler Your line is open.

Speaker 9: Good evening. Thanks for getting the question here. Super impressed by the fourth straight quarter of accelerating top line growth. I guess, Bill, for you, one thing that stood out this quarter was the large...

<unk>. Thanks for taking the question here Super impressed by the fourth straight quarter of accelerated top line growth I guess bill for you.

One thing that stood out this quarter with the large customer cohort 500000, plus customers I think.

Speaker 9: customer cohort, 500,000 plus customers, I think jumped to 97 from 82 last quarter. What's resonating most here with these early adopters?

72 last quarter, what's resonating most with these these early adopters do you.

Speaker 9: Do you think we're seeing a tailwind to net retention from a higher velocity of mobile campaigns and personalization and higher ROI that's just driving higher velocity of marketing campaigns versus, let's say, email campaigns? Or are there other factors, maybe new products, that are contributing to the strong expansion that some of those large early adopter customers think?

Think we're seeing.

<unk> to net retention from from a higher velocity or mobile campaigns, and personalization and higher ROI, but that's just driving higher velocity of marketing Campos versus let's say email shampoos or are there other factors, maybe new products that are contributing to the strong scale some of them.

Large early adopter customers.

Speaker 2: I think there's a there's a few things there, you know, most of them go back to a lot of the use case expansion that I was

Yeah. So.

I think theres a theres a few things there you know most of them go back to a lot of the use case expansion that I was just talking about and the competitive context, but when we look at the growth amongst our especially our larger customers you know that it's a combination of a variety of things. One is that those customers are growing as our product works, we have aligned our pricing too.

Speaker 2: It's a combination of a variety of things. One is that those customers are growing. As our product works, we have aligned our pricing to essentially the largest component of our pricing comes through monthly active users. And so as our customers grow, they're engaged user base, which is obviously something we help them with. And if they're successful with us, that component grows. We also have had a lot of product expansion over the last several years. And so there's been more and more channels and more premium features for our customers to purchase and continue to grow their use of Braze. We also see the teams that are utilizing Braze continue to grow. So whether that's cross-expansion through a large parent company over to other brands, it's starting out with a mobile team and then bringing in a web team and a loyalty team over time. It's expansion through use cases, where maybe we'll start out with just kind of recurring promotional, and then we move into lifecycle, and then we start to add things like transactional messaging as well. So there's just a lot of different dimensions under which Braze customers can grow. I'm not speaking specifically to your velocity point. We are not, we're tied primarily to a monthly...

Essentially the largest component of our pricing come through monthly active users and so as our customers grow their engaged user base, which is obviously something we help them with them and if theyre successful with us that component grows. We also have had a lot of product expansion over the last several years and so there's been more and more channels in more premium features for our customers to purchase.

And continue to grow there their use upraise. We also see the teams that are utilizing <unk> continue to grow so whether that's you know cross expansion through a large parent company over to other brands, it's starting out with a mobile team and then bringing in the web team and our loyalty team overtime. Its expansion through use cases, where maybe it will start out.

With just kind of recurring promotional and then we move into lifecycle and then we start to add things like transactional messaging as well. So there's a there's just a lot of different dimensions under which <unk> customers can grow I'm not speaking specifically to your velocity point.

Speaker 2: You know, we're we we are not.

We're.

Speaker 2: we're tied primarily to a monthly active user. So while certainly higher message volumes do translate into higher levels of revenue over time, you shouldn't model it or think about it in the same way that a kind of strictly usage or strictly consumption-based pricing model would have velocity translate into growth like that. This is really more about the durable expansion of use cases, increased ROI, more teams, more company initiatives, more brands, et cetera.

We are not Ah.

We're tied primarily to a monthly active user so well certainly higher message volumes do translate into higher levels of revenue over time, it's you shouldn't model that or think about it in the same way that it kind of strictly usage or strictly consumption based pricing model would have velocity translate into growth like that.

This is really more about the durable expansion of use cases increase our ROI more teams more more company initiatives more brands et cetera.

Speaker 9: Super helpful there. And then, I guess, Isabel, just a quick follow-up for you as we think about some of the constraints and headwinds to the business. Omicron variants are starting to become more meaningful headline risks, supply chain constraints in the marketplace. How does that impact?

Super helpful. There and then I guess it was adult just quick follow up for you as we think about.

The some of the constraints and headwinds to the business omicron variance starting to become.

More meaningful headline risk supply chain constraints in the marketplace, how does that impact.

Speaker 9: you know, demand for direct-to-consumer. Is there...

<unk> for direct to consumer as their liberal limited impact to that kind of activity around mobile campaigns is there a stimulation of need to go direct to consumer versus in person just trying to think through as we think about some of the headline risk out there have actually been I. Appreciate the color on Black Friday, cyber Monday sounds like things are very strong in this quarter, but.

Speaker 9: little limited impact to kind of activity around mobile campaigns is there.

Speaker 9: a stimulation of need to go direct-to-consumer versus in-person, just trying to think through as we think about some of the headline risks out there, how that impacts the business. I appreciate the color on Black Friday, February Monday, sounds like these are very strong this quarter, but thinking through some of the headline risks out there and how we should think about how that potentially could impact the business should be helpful.

Thinking through some of the the headline risk out there and how we should think about how that potentially can impact the business would be helpful.

Speaker 3: Yeah, yeah. So look, there's a whole host of secular trends that have been at play for some time that have been I would actually not call them headwinds, but, you know, they've been the wind at our back, the shift towards the importance of first party data, the overall shift to a need to ascend to a customer centric engagement strategy. You know, we've been in this sort of COVID world now for the last 22 months.

Yeah, Yeah. So look there's a whole host of secular trends that have been at play for some time that have been I would actually not call them headwinds, but you know that they've been the wind at our back the shift towards the importance of first party data the overall shift to a need to send to our customer centric engagement strategy.

We've been in this sort of Covid world now for the last 22 months.

Speaker 3: And that's been by and large a bit of an accelerant in just sort of pulling forward some of these trends and the necessity to be able to continue to be direct to consumer. But we see a lot of this as kind of a one-way door. And so we don't look at COVID as a particular, it's just another data point on the map of all of the things that have been impacting the business. We have not seen any shift in consumer trends or customer trends over the last several weeks as Omicron has kind of taken hold. So I would just add that to kind of the mosaic behind us, but no particular headwind to speak of there.

And that's been by and large a bit of an accelerant in just sort of pulling forward. Some of these trends and the necessity to be able to continue to be direct to consumer when we see a lot of this is kind of a one way door and so we don't look at Covid as a particular its just another data point on the map of all of the things that have been.

Impacting the business, we have not seen any shift in consumer trends or customer trends.

The last several weeks of the Omicron has kind of taken hold so I would just add that as kind of the the mosaic are behind us, but no no particular headwind to speak of there.

Speaker 9: Very clear, that's all I had, and have a safe and happy holiday.

Very clear, that's all I had and have a safe and happy holidays.

Thank you.

Speaker 4: Thank you, Mr. Braceland. In the interest of time and allowing all participants in queue to ask their questions, please limit your questions to one per participant. Again, please.

Thank you Mr baseline and the interest of time, and allowing all participants in queue to ask their questions. Please limit your questions to one per participant again please.

Speaker 4: ask one question per participant. Our next question is from the line of D.J. Hines with Canaccord. Your line is open.

Ask one question per participant. Our next question is from the line of D. J Hynes with Canaccord. Your line is open.

Speaker 10: Hey guys, thanks for taking the question and congrats on a great start here. I'll keep it to one and actually I'm going to go to Isabel. So Isabel, I'm sure everyone's going to do the calculated billings math and see the really strong results, right? I think it was, you know, 70% growth if our math is right.

Hey, guys. Thanks for taking the question and congrats on a great start here.

I'll keep it to one and actually I'm going to go to Isabel So as I'm sure everyone's going to do the calculated billings math and see the really strong results right I think it was 70% growth if our math is right.

Speaker 10: As you know, right or wrong, investors are going to use that as a proxy for bookings growth, right? The other metric they're going to look at is RPO or CRPO. And I know we're going to get a year-over-year growth rate for RPO for the first time next quarter. I just want to get ahead of any surprises with that metric. Is billings growth in the right ballpark range for what RPO growth might look like? Or is there anything we should be thinking about that drives a divergence there?

As you know right or wrong investors are going to use that as a proxy for bookings growth rate. The other metrics are going to look at is <unk> and I know, we're going to get a year over year growth rate for our appeal for the first time next quarter I just want to get ahead of any surprises with that metric is billings growth in the right ballpark range for what RPM growth might look like or.

Is there anything we should be thinking about that that drives a divergence there.

Speaker 3: Yeah, so when I think about the the billings growth, just remember, obviously, you know, strong revenue this quarter is obviously a contributor to to that 71% or 70% billings growth. But in addition, there's also that change in deferred revenue.

Yeah. So when I think about the billings growth just remember obviously you know a strong revenue. This quarter is obviously, a contributor to that 71% or 70% billings growth.

But in addition, there's also that change in deferred revenue and we've continued to improve the annual upfront the components of our billing or our customer contracts that are annual upfront and so the more cash you collect from your customers upfront the.

Speaker 3: And we've continued to improve the annual upfront, the component of our billing or our customer contracts that are annual upfront.

Speaker 3: And so the more cash you collect from your customers up front, the stronger that metric will be continue to be on a sequential basis. And so that there's an element there as well that is that is adding to that to that.

The stronger that metric will be continue to be honest sequential basis, and so that there is an element there as well.

That is the that is adding to that to that strength.

Speaker 3: Okay, got it. So when we see RPO growth next quarter, don't be surprised if it's a little bit lower because it won't benefit from that, you know, the invoicing benefit you're seeing now from the upfront. Is that the right way to interpret it? So, and on a quarterly basis, the fourth quarter will actually tend to be the highest quarter of change in deferred revenue. So we do, I would just say,

Okay got it so when we see our fuel growth next quarter I don't be surprised if it is a little bit lower because it won't benefit from that you know the invoicing benefit you're seeing now from the upfront is that is that the right way to interpret it.

Yeah.

And on a quarterly basis, the fourth quarter will actually tend to be the highest quarter of change and in in deferred revenue. So so we do.

Speaker 3: caution you to sort of use the billings number as kind of indicative of a future future growth because there is an element in there of just timing of the payments of when we receive them and and how that that plays into that number so you know I would look you'll see in the I don't know how the the RPO number will play out once you know the fourth quarter is fully done and dusted but we'll be you know happy to talk through that at the end of the fourth quarter. Yeah.

I would just.

Caution you to sort of use the billings number as kind of indicative of future future growth because there is an element in there of just timing of the payments of when we receive them and how that plays into that number so.

What you'll see in the I don't know how the.

The RPI number will play out once you know the fourth quarter is fully done and dusted, but we'll be happy to talk through that at the end of the fourth quarter.

Yeah very helpful. Okay, guys congrats.

Speaker 4: Thank you, Mr. Hines. The next question is from Derek Wood with Cowan and Company. Your line is open.

Thank you Mr High.

The next question is from Derrick Wood with Cowen and company. Your line is open.

Speaker 11: Great, thanks and I'll let go. My congratulations. I guess my question for Bill.

Great. Thanks, and I'll Echo my Congratulations I guess my question for Bill you.

Speaker 11: You mentioned partnering with Snowflake and Confluent. You called out new partnerships with Helium and EventBridge. I'm just curious, when you look at integrating into the broader data stack landscape, CDPs, cloud data warehouses, your own capabilities with SDKs.

You mentioned partnering with with Snowflake and Cogs, you called out new partnerships with helium and event bridge I'm just curious when you when you look at integrated into the broader.

Data stack landscape Cdp's cloud data warehouses, you know your own capabilities with SDK.

Speaker 11: Are you seeing the makeup of these architectures change much, particularly when it comes to new architectures being laid out?

Are you seeing the makeup of these architectures changed much particularly when it comes to.

Speaker 11: And then I'd just be curious about what the demand level is on your Snowflake data sharing add-on.

New architectures being laid out.

And then I'd just be curious about what was.

What the demand level is on on your snowflake data sharing add on.

Thanks.

Speaker 2: Yeah, so we're definitely seeing a trend toward, you know, streaming architectures. We're seeing a trend toward, you know, and we kind of broadly before that, we're obviously seeing trends toward the cloud and toward service-oriented architectures and kind of really taking a close look at how the separation of responsibility is between kind of first-party home-built software and then, you know, purchase SaaS software. Broadly, I would also say that Braze occupies this part of the cloud services ecosystem where we want to be able to be both a kind of SaaS product that you buy that can be turnkey used by your business user-heavy teams, but also provide a set of APIs that can be built on top of by product and engineering teams and that, you know, the magic of how Braze connects those APIs to the kind of, you know, the dashboard product, if you will, is also what promotes a lot of the really productive collaboration that I was talking about earlier. And so when you take that point of view and you look at how that's translated into the rest of the technology ecosystem, and just the way that all of these various data players and such work with each other, you know, we're definitely seeing a trend toward more expressive data models, toward higher performance APIs, toward, you know, streaming interfaces, and then also toward interconnects where the brands themselves are actually becoming responsible for maintaining the connections between, you know, their partners. And so that's why you continue to see the expansion of our current.

Yeah. So we're definitely seeing a trend toward streaming architectures, we're seeing a trend towards and we've kind of broadly before that we're obviously seeing trends toward the cloud and towards service oriented architectures and kind of really taking a close look at how the separation of responsibilities between first party homebuilder.

Software and then purchased SaaS software broadly I would also say that Braves occupies this part of the cloud services ecosystem, where we want to be able to be both a kind of SaaS product that you buy that can be turnkey used by your business. These are heavy teams, but also provide a set of API that can be.

Built on top of by product and engineering teams and that the magic of how brace connects as ACI as to the kind of the dashboard product. If you will is also what promotes a lot of the really proactive collaboration that I was talking about earlier and so when you take that point of view when you look at how that's translated into the rest of the technology ecosystem and just the way.

Is that all of these various data players in such work with each other we're definitely seeing a trend toward more expressive data models toward higher performance api's toward streaming interfaces and then also towards the Interconnects, where the brands themselves are actually becoming responsible for maintaining the connections between their partners.

That's why you continue to see the expansion of our current.

Speaker 2: a partner set, and one where we'll continue to build these bi-directional data flows, where we can manage that for our customers. You know, obviously, there's a lot of tooling out there, which allows for engineering teams to manage and build these. You know, we have a vision and a belief that to the extent that product and engineering teams are going to work in the customer engagement space, we want them to be doing, you know, productive, creative things in collaboration with marketing teams. We don't want them to be babysitting, you know, data transfers and kind of dealing with a lot of those.

Our partners at <unk>, and one where we will continue to build these bidirectional data flows where we can manage that for our customers. Obviously theres a lot of tooling out there, which allows for engineering teams to manage and build these.

Have a vision and a belief that to the extent that product and engineering teams are going to work in the customer engagement space, we want them to be doing productive creative things in collaboration with marketing teams, we don't want them to be babysitting data transfers and kind of dealing with a lot of those.

Speaker 2: you know, questions that are more operational or maintenance oriented. We want them to, you know, to be having fun and to be building new things and to be driving differentiated ROI through that. And so, you know, we'll we'll obviously continue to pay attention to how the rest of the technology ecosystem evolves from an architecture standpoint. It's really important for us from a partnership strategy standpoint. And, you know, ultimately, we look at all of that in service to our goals around customer engagement outcomes with our customers.

<unk> that are more operational or maintenance oriented we want them.

It could be having partners to be building, new things and to.

Be driving differentiated ROI through that and so.

Well, obviously, you continue to pay attention to how the rest of the technology ecosystem evolves from an architectural standpoint, it's really important for us from a partnership strategy standpoint, and ultimately we look at all of that and service to our goals around customer engagement outcomes with our customers.

Perfect. Thank you.

Speaker 4: The next question is from Brian Peterson with Raymond James. Your line is open.

Thank you Ms tablet.

The next question is from Brian Peterson with Raymond James Your line is open.

Speaker 9: Thanks for taking the question, and I'll echo my congrats as well. So there were a couple of mentions of strength in the pipeline, and obviously, there's a lot of things that are emerging as tailwinds. I'd be curious, of that pipeline kind of expansion or increase, how much of that is kind of with the existing customer base versus net new? And is there any noticeable impact from the IPO? And I don't know if there's a way to isolate that, but I'd be curious to get your thoughts there. Thank you.

Thanks for taking the question and I'll Echo my congrats as well. So there were a couple mentions of strength in the pipeline and obviously, there's a lot of things that are emerging as tailwind I'd be curious of that pipeline and kind of expansion or increase how much of that is kind of with the existing customer base versus net new and is there any noticeable impact.

From the IPO.

If there's a way to isolate that but I'd be curious to get your thoughts there. Thank you.

Speaker 3: Yep, so the IPO question I think somewhat came up in a prior question. I think it's a little bit early days there, whether it's on the customer side or our employee-based side, particularly since there were a couple of holidays in the interim. But we are very, very pleased with what we're seeing in the pipeline. It's across the board. It is, you know, absolutely across the board from a global perspective. It is across the board in terms of strength, across customer types, industry types.

Yeah. So the idea of a question I think that someone came up in a in a prior question and I think it's a little bit early days there, whether it's on the customer side or our employee base side, particularly since there were a couple of holidays.

In the interim but we are very very pleased with what we're seeing in the pipeline. It's across the board. It is absolutely across the board from a global perspective. It is across the board in terms of strength across.

Customer types industry types customer sizes, and then we continue to be really excited about our new business opportunity for net new parent company is to bring on board.

Speaker 3: customer sizes, and then we continue to be really excited about our new business opportunity, so net new parent companies to bring on board. And you're seeing the trends in our dollar-based net retention. That obviously speaks to our ability to continue to further penetrate our existing customer base. We're excited about the strength there and see opportunity for ongoing strength in that area. So it's really multidimensional. We are, when you think about the level of revenue that we're currently at relative to this $16 billion market opportunity in the U.S. alone, there is just so much opportunity to expand across so many different vectors and so many different dimensions. So we're seeing strength in a number of areas.

And you're seeing the trends in our dollar based net retention that obviously speaks to our ability to continue to further penetrate our existing customer base.

We're excited about the strength, there and the opportunity for ongoing strength in that area. So it's a really multi dimensional. We are you know when you think about the level of revenue that we're currently at relative to the $16 billion market opportunity in the U S alone. There is just so much opportunity to expand across so many different sectors and so many.

Dimension, so where we're seeing strength in a number of areas.

Speaker 12: Good to hear. Thank you.

Speaker 4: Thank you, Mr. Peterson. The next question is from Scott Berg with Needham. Your line is open.

Good to hear thank you.

Thank you Mr Peterson.

The next question is from Scott Berg with Needham Your line is open.

Speaker 13: Hi, Bill. And as well, congrats on the fantastic quarter. I guess the one question I had is you talked about net revenue retention rates that, you know, picked up in the quarter that were super strong. But how about initial land? What are you seeing on new customer sales today versus maybe a year ago? Are you seeing any differences either in the, you know, kind of the solutions, how they're using the product, or a big difference in maybe pricing change? Thank you.

[noise].

Hi, Bill.

Congrats on the fantastic quarter.

I guess the one question I had is you've talked.

About net revenue retention rate ticked up in the quarter that were super strong, but how about initial land. What are you seeing on new customer sales today versus maybe a year ago, if youre seeing any differences either.

The solutions, how they're using the product.

So maybe pricing change.

Speaker 3: So, I'll start with kind of the size of lands and the price and kind of size of contracts, and then I think maybe on the use cases, Bill can kind of dig into some of the elements there. So, if you rewind the clock to about a year ago,

So I guess I'll start with kind of the size of lands in the play and are kind of the size of contracts and then I think maybe on the use cases, bill can kind of dig into some of the elements there.

Rewind the clock too.

Speaker 3: We were definitely still in the depths of COVID. So we are continuing to see expansion in the size of our land.

About a year ago, we were definitely still.

In the depths of Covid. So we are we are continuing to see expansion in the size of our lands.

Speaker 3: um so that that trajectory is is definitely strong um and so and it's

So that that trajectory is is definitely strong.

Speaker 3: whether they're starting with multi-channel, landing multi-channel, certainly at the enterprise and strategic sides of our business. So we're seeing strength certainly in the size of the lands and what it is they're purchasing upfront with the knowledge that there's still.

And so and it's.

Whether they're starting with multichannel landing multichannel.

Certainly at the enterprise and strategic side.

Sides of our business sides of our business.

We're seeing strength certainly in the size of the lands end and what it is they're purchasing upfront.

Speaker 3: lots of room for expansion once we once we've gotten our foot in the door with a new customer.

With the knowledge that you know there's still lots of room for expansion once we once they've gotten our foot in the door with a new customer and Bill can you just talk about that.

Speaker 2: use cases? Yeah, I mean, from a from a use case perspective, you know, I think that there's a good combination of a lot of the tried and true strategies that we enable because the technology shows up and it's differentiated from what people were doing before. You know, we definitely work with our customers to map out the entirety of their crawl, walk, run, you know, journey over time. And we encourage them to set it up in a way that enables experimentation. And so, you know, I don't think there's been a kind of meaningful shift in the starting use cases that you see, because many of these are, you know, the

Use cases, yeah, I mean from a from a use case perspective, you know I think that there's a good combination of a lot of our tried and true strategies that we enable because the technology shows up and it's differentiated from what people were doing before we definitely work with our customers to map out the entirety of their wallet.

I'll walk run journey over time, and we encourage them to set it up in a way that enables experimentation and so that I don't think theres been a kind of meaningful shift in the starting use cases that you see because many of these are you know.

Speaker 10: their straightforward customer engagement use cases. And then over time, we build them into more and more advanced strategies, especially as we start to incorporate more data inputs and signals, and as customers continue to advance their integrations over time.

They're they're straightforward customer engagement use cases and that over time, we build them into more and more advance more.

More and more advanced strategies, especially as we start to incorporate more data inputs and signals and as our customers continue to advance their integrations over time.

Excellent congrats on the strong quarter guys.

Thank you Mr. Byrd absolutely. Thank you.

Speaker 4: The next question is from Yoon Kim with Loop Capital. Your line is open.

The next question is from Yun Kim with loop capital Your line is open.

Speaker 14: Thank you. So my congrats as well to Bill and Isabel. So in the prepared remark, you talked about renewals as one of the key drivers behind the strength in the quarter. And obviously that's reflected in the net expansion rate. Can you just talk about the dynamics around renewals, especially for large customers?

Thank you so my congrats as well to bill and Isabelle.

In the prepared remarks, you talked about renewals as one of the key drivers behind that strength in the quarter and obviously that's reflected in the net expansion rate can you just talk about the dynamics around renewals, especially for large customers for instance, how much of it is driven by expanding deployment to more channels versus just simply increasing more.

Speaker 14: For instance, you know, how much of it is driven by expanding deployment to more channels versus

Speaker 14: it's just simply increasing more volume of existing channels and also are you seeing customers upsizing their deals well before the contract expires? Especially those on multi-year contracts. Thanks.

Some of the existing channels and also are you seeing customers upsizing deals well before the contract expires.

She does on what type of your contracts. Thanks.

Speaker 3: Yeah, sure. So on the last question, yes, we definitely see customers of all sizes engage in what we call early renewals or upsells and increase the volume, either the volume of things they've already purchased, such as email, SMS, monthly active users, or simply decide to purchase additional features or channels that they hadn't yet unlocked in the original contract. So we definitely see midterm upsells and early renewals at larger sizes.

Yeah sure. So so that on the last question, yes, we definitely see customers of all sizes.

<unk> engaged in what we call early renewals or Upsells and increase the volume.

The volume of things they've already purchased such as email SMS mobile monthly active users or simply decide to purchase additional features or channels that they hadn't yet unlocked in the original contract. So we definitely see near term upsells and early renewals at larger sizes.

And then just making sure I caught all of your other questions.

Oh, yes. So then yes, the renewals renewals you know anything about the renewables, yes that was strong across the board. We've made a number of investments over time to really improve that renewal rate.

Not the least of which is the investments that we've made in our F&B sector that historically has had a lower renewal rate.

Relative to company average and we've really been able to improve that over the last few quarters. So we're definitely seeing strength.

Speaker 2: So we're definitely seeing strength there. And then in terms of the larger customers, it's a mix. They're increasing their volumes of what they've already purchased and expanding into new products and features. So it's definitely a mix in terms of what is adding to the dollar-based net retention. Yeah, and I think the theme you're gonna continue to see is that there are just so many different dimensions by which people increase their usage of Braze that the answer to so many of these questions has been all of the above because there's just engagement across multiple teams, multiple use cases, multiple channels, multiple platforms, multiple geographies. And when you kind of expand those together, you have a lot of different ways that you expand use cases. You've got a lot of ways to drive ROI. And as you combine them together, it gets very differentiated. And we certainly benefit from that in terms of...

There.

And then in terms of the larger customers. It's a mix there are they are increasing their volumes of what they've already purchased.

And and and expanding into new products and features so it's it's definitely a mix in terms of what is adding to the dollar based net retention.

Speaker 10: Yeah, and I think the thing we're going to continue to see is that

Yeah, and I think the theme is related to need to see is that there are just so many different dimensions by which people increase their usage of raise that you know the answer to so many of these questions. That's been all of the above because there is theres just engagement across multiple teams multiple use cases multiple channels multiple platforms multiple geographies and when you when you kind of expand those together.

Speaker 2: so many different dimensions by which people increase their usage of Braze that the answer to so many of these questions has been all of the above, because there's just engagement across multiple teams, multiple use cases, multiple channels, multiple platforms, multiple geographies. And when you kind of expand those together, you have a lot of different ways that you expand use cases. You've got a lot of ways to drive ROI. And as you combine them together, it gets very differentiated. And we certainly benefit from that in terms of the accelerating growth rate and the predictability of it. Thank you.

A lot of different ways that you expand use cases, you've got a lot of ways to drive our line as you combine them together it gets very differentiated and we certainly benefit from that in terms of the accelerating growth rate and the predictability of it.

Okay, great. Thank you so much.

Speaker 4: Thank you, Mr. Kim. The last question is from Pat Walburns with JMP Securities. Your line is open.

Thank you Mr. Kim the last question is from Pat Walgreens with JMP Securities. Your line is open.

Speaker 15: team. It's Joe Marincic on for Pat. Thank you so much for the question. Can you talk about your relationship with Twilio and then just give us some more clutter about how you work with TDPs like segments. Thank you so much.

Hi team is getting ready to go.

On for Pat. Thank you so much for the question can you talk about your relationship with Twilio and then just give us some more color about how you work with TTP like Cigna. Thank you so much.

Speaker 10: Yeah, for sure. So, you know, Braze, obviously, we've spoken a lot about our vertical integration and the importance of differentiation there. And we're going to continue to invest heavily in that vision to kind of conquer the modern problem of customer engagement and maintain our leadership in the space. We also, I've spoken a lot about the interdisciplinary lens that we think drives a lot of that. And so when you look at our relationship with Twilio, I think they've always done a great job of building tools for developers. And that's a reason that we're going to continue to have a strong partnership with them, both through go-to-market collaboration as we work on certain deals together. And they're also a CPaaS vendor for us for certain Braze channels, including SMS and email. Also, when you look kind of more broadly across the CDPs and the product analytics companies, you know, these are all places where the kind of the smooth flow of data certainly benefits people being able to do more advanced use cases over time. And so we've remained committed to our customer-centric vision.

Yeah for sure so.

Braves, obviously, we've spoken a lot about our vertical integration and the importance of differentiation there and we're going to continue to invest heavily in that vision to conquer the modern problem of customer engagement and maintain our leadership in the space.

He also I've spoken a lot about the interdisciplinary lens that we think drives a lot of that and so when you look at our relationship with Twilio I think they've always done a great job of building tools for developers and that's the reason that we're going to continue to have a strong partnership with them. Both through go to market collaboration as we work on certain deals together and there are also a C paas vendor for us for certain brace channels, including SMS and email them also.

So when you look kind of more broadly across the C. D piece and the product analytics companies. You know these are all places where I'd be kind of a smooth flow of data certainly benefits people being able to do more advanced use cases over time and so we've remained committed to our customer centric vision.

Speaker 10: and are going to continue to partner with companies that share our vision for how best to breed technology should interact with each other in order to assemble world-class technology ecosystems for our mutual customers. And we also know that customers want to build and buy in ways that are going to vary from place to place, which is why if you go back to the dual purpose that we try to serve with Braze, where we are both going to be that turnkey SaaS solution and be a collection of powerful, robust APIs that product engineering teams can build on top of, all of those are also conducive to our engagement with the rest of the partnership.

And you know we're going to continue to partner with companies that share our vision for how best of breed technologies should interact with each other in order to assemble world class technology ecosystem for our mutual customers and we also know that customers want to build it.

And by our in ways that are going to vary from place to place, which is why if you go back to kind of a dual.

The dual purpose that we tried to serve with raise where we are both going to be that turnkey SaaS solution and be a collection of powerful robust API is the product engineering teams can build on top of all of those are also conducive to our engagement with the rest of the partnership ecosystem as well and so over time, we expect that certain.

Speaker 2: well. And so, you know, over time, we expect that, you know, certain partners that we have today will start to move into the customer engagement space, you know, as they have over our history. We similarly, you know, we will continue to expand our own product and we will continue to work with the partnership ecosystem in a way that is transparent and places where we think that there's mutually beneficial interconnections and integrations that can be built out. We really believe that, you know, the having best of breed focused technology delivers differentiated ROI. And so, we want to stay focused on our customer centric, you know, view for how customer engagement should be done and do that in a way that's vertically integrated. And, you know, that's going to have implications for our own R&D investment and our partnership strategy. And we'll be paying a lot of attention to how that evolves elsewhere in the future.

Partners that we have today, we will start to move into the customer engagement space you know as they have over our history we.

Similarly, we will continue to expand our own product and we will continue to work with the partnership ecosystem in a way that is transparent.

Where we think that there's a mutually beneficial interconnections and integrations that can be built out we really believe that the having best of breed focus technology delivers differentiated ROI and so we want to stay focused on our customer centric view for how customer engage it should be done and do that in a way that's vertically integrated.

And that's going to have implications for our own R&D investment and our partnership strategy and we will be paying a lot of attention to how that evolves elsewhere in the ecosystem.

Speaker 4: Thank you, Mr. Walburn.

Speaker 4: I will now turn the conference over to Bill Magnuson, CEO , for closing remarks.

Thank you Mr Wild brands.

I will now turn the conference over to Bill Magnusson CEO for closing remarks.

Speaker 10: Absolutely. So thank you, everybody, for joining us today. We're super excited to kind of close out our first ever earnings call as a public company. And we're really looking forward to having a regular cadence with all of you. Thank you for all of the insightful questions that we were able to answer today. And I hope that they gave you a good lens into the opportunity that's ahead of Braze and we're going to continue to build into. And with that, I think we'll close it out.

Absolutely. So thank you everybody for joining us today, we're super excited to kind of close out our first ever earnings call as a public company and we're really looking forward to having a regular cadence with all of you. Thank you for all the insightful questions that we were able to answer today and I hope that they gave you a good lens into the opportunity.

Unity, that's ahead of <unk>, and we're going to continue to build into and with that I think we'll close it out.

Speaker 4: That concludes the conference call. Enjoy the rest of your day. You may now disconnect your line.

That concludes the conference call enjoy the rest of your day you may now disconnect your lines.