Q4 2021 Braze Inc Earnings Call
Welcome to the Brave fiscal fourth quarter earnings Conference call. My name is Hannah and I will be your operator for today's call. At this time all participants are in a listen only mode. After the speaker's presentation. We will conduct a question and answer session I will now turn.
The call over to Christopher Ferris head of Braves Investor Relations. Please go ahead.
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Thank you operator, good afternoon, and thank you for joining us today to review braces results for the fiscal fourth quarter 2022.
I hope you enjoy today's hold music, which was composed performed and provided by Franke sex Ana a solutions consultant embraces London office.
For the wonderful music Frankie.
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. Please refer to our Investor Relations website at investors Dot braze dot com for more information and a supplemental presentation related today's earnings announcement.
During this call we will make statements related to our business that are forward looking under the federal Securities laws and Safe Harbor provisions of the private Securities Litigation Reform Act of 1995. These statements include but are not limited to statements regarding our financial outlook for the first quarter and full fiscal year ended January 31 2023.
<unk>, our planned product and feature development our plan social impact initiatives are planned investments to maintain or improve our overall unit economics, including a S. P customer payback period, and overall average revenue per customer and our long term target operating margin.
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.
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.
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 fourth quarter 2022 performance. In addition to the impacts of these items have on the financial results.
These 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.
Chris and good afternoon, everyone.
Before I dive into our results today, let me take a moment to acknowledge the global situation. Our thoughts are with the people of Ukraine, who found themselves forced to fight for the fundamental right to live in peace. When it became apparent that a conflict might begin we analyzed our data to quickly identify affected customers, enabling our customer success team to proactively offer support and arming our six.
Geraghty teams to protect against potential cyber threats are direct business exposure in Russia, and Ukraine is very limited and we currently suspended all new business activity in Russia. We will continued diligent case by case assessments as a customer situations evolve.
While we have no employees in the region. We have tried to do our part by donating to humanitarian relief efforts, increasing our employee donation matched and extending support to employees, who are personally affected by the conflict.
And now let me turn to the quarter. We are very pleased with our fourth quarter performance, which again demonstrated our ability to deliver high growth at scale, we achieved high watermarks for new bookings renewals and net retention in the quarter, we generated $70.4 million of revenue up 64% compared to the same period last year and 10% compared to the.
Third quarter, we are proud of the strength of our customer relationships as dollar based net retention rose to a new high watermark of 128%, reflecting strong renewals and up sells for customers with 500000 or more and are our dollar based net retention was 136% up 300 basis points year over year, demonstrating our ability to land and expand with.
Large enterprises across diverse industry verticals globally. This quarter. We also secured our largest single customer land to date and annual contract value of over $3 million with a European based video game developer and publisher all of this caps an incredible fiscal year 2022 at base in which we grew total customer count by 54% and revenue by.
58%.
To give you a sense of the operational scale of our platform at the end of fiscal 2022, our monthly active user count was approximately 3.7 billion and in fiscal 'twenty 'twenty. Two we processed over nine trillion consumer generated data points and sent over one five trillion messages and all of this happened with nearly 100% global uptime.
A testament to our ability to reliably deliver effective targeted customer engagement programs for our customers at scale customers.
Customers are recognizing the high ROI that can be achieved through personalized cross channel customer engagement enabled by the brace platform and as we look to the future. We are focused on executing on our rapidly growing market opportunity and today I'm proud to announce that we recently passed 300 million in committed annual recurring revenue.
These accomplishments would not have been possible without our amazing and talented team across the globe. Thank you for your tireless efforts and dedication I'm immensely excited to keep building the future of brace together.
At <unk>, our mission is to forge human connections between consumers and the brand say love through relevant and memorable experiences. We were founded over 10 years ago with the dual conviction that new smart businesses, we built to be mobile first and that legacy companies would be driven by changing consumer behavior to transform the way they deliver products in <unk>.
<unk> to.
To help our customers four to those connections and create those experiences we have continued to invest and evolve our product offerings to enable them to deliver better customer engagement as consumers emerge from the pandemic and enter their next normal raises poised to continue to capitalize on their app or a rising expectations for seamless Cross channel brand experiences and that's why our.
Product announcements have focused on helping brands better understand customers and improving platform usability with actionable real time insights better personalization and enhanced audience targeting.
Earlier this week, we announced brace for Commerce, a series of new products and enhancements aimed at allowing retail and ecommerce marketers to create highly personalized campaigns driven by first party data. Most notable in this launch is braced catalog, a new product, which enables marketers to streamline message personalization by seamlessly infusing product data in the message.
<unk> across any campaign on any channel.
Beautifully branded recommendations can be quickly built from catalog data using our newly enhanced sprays content blocks inside our dragon drop E Mail editing experience. This allows brands to quickly pair individual shoppers with the most relevant products offers and updates with clicks not code. Other new features embrace your commerce include our new SMS cooked tracking and <unk>.
Hansman of SMS performance metrics for better re targeting and segment extensions and advanced segmentation tool that helps brands build a deeper understanding of customers based on behavioral data.
As part of the evolution of our overall data strategy. We're also working on expansions to segment extensions that will directly integrate with our customer's data warehouses decreasing the engineering effort required to integrate and manage data pipelines and E. T L processes.
To improve real time insights. We've also been rolling out updates to our report builder, making it easier for brands to quickly gauge campaign performance spot trends and patterns without leaving the base platform and then immediately modify their engagement strategies as needed. This is an important way that we enable brands to tightened the imagine create and evolve loop to upgrade their strategy.
Faster for email specifically, we launched machine opens analytics to help customers understand their email campaign performance by differentiating between user activity and the automatic email open behavior that was introduced in I O S 15.
We also added a number of workflow improvements, including adding inbox vision to our recently overhauled Dragon dropped E mail composition experience.
Finally, I'm excited to share our product condition for our fast growing Japanese market that is also laid important groundwork that we believe will enhance our support for future regional expansion. We began rolling out a translated and localized version of the brace dashboard, allowing Japanese language focused brands to create best in class customer engagement campaigns and their users native language.
Look for us to continue de viewing localized versions of the Braves dashboard as part of our global growth plan.
As we look to the future our product roadmap is both focused and ambitious today's consumers expect highly relevant tailored brand experiences and it's critical that we continually arm our customers with improved functionality within existing channels, while also adding new channels and features.
I can't detail our entire roadmap on this call I can say that our priorities are to drive best in class functionality to compete in any channel with legacy marketing clouds and single point solutions tackling sophisticated use cases in order to empower our customers, while driving time to value.
One area, where we continue to invest is our data ingestion strategy. The data landscape is evolving as customer demands for clean seamless data integrations are increasing.
As most of you know our SDK is our integrated into the mobile sites and applications of almost all of our customers and this vertical integration is an important feature that allows sprays to seamlessly deploy differentiated functionality for our customers as such we will continue focusing on streamlining the ways in which data can flow into and out of <unk>.
This, particularly reinforcing our connections to data systems.
We're advancing our snowflake partnership with more direct connections and snowflakes data cloud as well as investing into partnerships with other companies in the data ecosystem.
In order to execute on our product roadmap and support our customers. We continued to expand our team growing by over 400 people in the last year, bringing our global head count to over 1100 during the quarter. We officially opened both our new Austin, Texas location, and an expanded office space for our Chicago based team.
We also continued to grow our footprint internationally announcing plans for new locations in Toronto, Canada, and Paris, France, where hiring is underway.
With these expansions will have 10 locations across the globe servicing customers in over 60 countries.
France builds on our presence in EMEA and our successful expansion of the dock region, one year ago.
We also look to continue expansion in APAC, our fastest growing region by era with new partner programs in Thailand, and other southeast Asian countries in order to expand our presence in those markets. Finally, I'll note that we are exploring partnerships with additional resellers in Latin America, another fast growing market for us we believe the investment in these new countries will enable brace.
Offer localized support for existing customers as well as capitalize on growing opportunities and strategic partnerships in the region.
Which brings me to our customer base, where we have seen continued momentum with new and existing customers. This quarter, we saw strength across numerous verticals, including health and lifestyle financial services gaming media and Q S. R. We secured new business and large upsell opportunities with Camber course hero ESL gaming.
Shake Shack and flip just to name a few we are excited by the breadth of innovative and creative customer engagement use cases that our expanding base of customers rely on race to deliver in the moments that matter most.
Let me take a few minutes to walk through some recent compelling customer use cases that illustrate the differentiated power abrase customer engagement tools. Each of these stories demonstrates how differentiated brace capabilities such as surveys and content cards are able to live directly inside or alongside our brands products going beyond unit directional messaging.
Power engagement through a seamless in app or in browser experience for the consumer.
The first is a fitness company equinox, who successfully leveraged two of our proprietary tools canvas and content cards to deliver an improved customer experience this quarter using canvas or visual customer journey management tool equinox was able to optimize their new customer welcome journey through a b testing personalized push messages enact messages and content.
Adds to motivate customers to try a fitness assessment with a personal trainer within 30 days of sign up.
With canvas equinox saw a meaningful improvement in the number of new users booking a class compared to their prior onboarding flow, while generating meaningful upsell revenue.
Equinox also leveraged our content cards to feature class offerings to discover the user's fitness preferences, and then provide more personalized offerings.
Further personalization was realized using our audience past feature combining the user's preferences and behaviors across multiple channels with minimal added complexity.
This ability to expand the footprint of an engagement strategy without becoming shackled by the complexity associated with multichannel communication is a direct byproduct of braces customer centric design and is it differentiated advantage that we will continue to invest in.
The second use case I'd like to highlight is Kickstarter, which employed braces recently released and that message survey tool, allowing them to collect user attributes insights and preferences to power their campaign strategies.
Surveys represent a way to deliver more sophisticated functionality for customers and a turnkey fashion again, leveraging our customer centric vertically integrated stack design kicked.
Kickstarter use surveys to assess whether a recent change they made in their checkout flows had improved users his understanding of reward fulfillment. The survey achieved a 74% response rate Kickstarter realize the considerable uptick in users knowledge of fulfillment and it enabled them to continue improving their in App experience based on the results.
Re targeting up a survey results is also a great example of how Braves enables feedback loops to deliver high quality personalization.
We built surveys on top of an overhaul of our in App and in browser messaging system. So look for more message types in the future as we continue to leverage the flexible foundation, we created for in product experience delivery.
The third customer use case I'd like to highlight is Alabama and investment advisory platform designed primarily for women in this case brace utilized its webhooks and rest API to integrate with the company's customer relationship management tool, allowing them to effectively manage E. Mail campaign sent from brace. In addition, Elvis uses currents to send the engagement data to.
Their Google cloud storage as well as our CRM, creating a feedback loop that helps our financial consultants understand their clients and inform future conversations with them. This business was also a competitive takeaway from our legacy marketing cloud and it's a great Testament to the flexibility of race, we look forward to continuing to grow with them.
Before I turn it over to Isabelle I wanted to make a few remarks on our D I and social impact initiatives as I mentioned on our last call. We recently launched a social impact department charged with driving our diversity equity and inclusion program and our corporate social responsibility initiatives, we're making great strides and last month, we put out a call for Apple.
<unk> to accept a new cohort of 15 companies into our tech for Black founders program, which provides black own startups with a free year of brace technology and resources to support their companies early growth.
Through our brace cares initiative, which focuses on our charitable giving and fostering opportunities for our employees to volunteer in their communities. We've made contributions to 567 organizations and our employees have also volunteered with numerous organizations worldwide as part of this program in fiscal 2022.
And as I mentioned last quarter braces also joined the 1% pledge committing a portion of our class a common stock over the next 10 years to fund, our social impact and environmental social and governance initiatives. We have taken action on this initiative signing an agreement with a donor advised fund provider. The funds will be available for grants later this year as a technology leader razor.
Committed to increasing diversity equity and inclusion in our industry and we plan to meaningfully expand our social impact initiatives in the year ahead.
I'll conclude my remarks by reiterating our commitment to helping our customers build strong and lasting customer relationships through great customer engagement. We continue to make progress in this mission around the world and we look forward to continuing this journey with our customers team members and shareholders and updating you on our progress in the coming quarters.
Thank you Bill and thank you everyone for joining US today, we reported a strong fourth quarter and as Bill mentioned fourth quarter revenue rose, 64% year over year to $70.4 million.
This was driven by a combination of customer expansion, new business sales and strengthen our renewal our subscription revenue remains the primary component of our total top line contributing nearly 94% of our fourth quarter revenue.
The remaining 6% represents a combination of one time configuration and onboarding fees as well as other professional services that are subject to similar annual contract term as our subscription based revenue.
Customer momentum during the fourth quarter was strong with total customer count increasing 54% year over year to 1375 customers as of January 31. This.
This represents an increase in customer count of nearly 500 over the last four quarters and 128 during Q4, our total number of large customers, which we define as those with <unk> of $500000 or more grew 51% year over year to 107 and as of January 31, They contributed.
52% to our total <unk>.
This compares to a 50% contribution as of the end of FY 'twenty one.
Customers with <unk> of more than $1 million grew 58% year over year to 49 and as of January 31, They contributed 38% to our total <unk>, which compares to 33% as of a year ago.
As Bill mentioned, we recorded our single largest customer land in Q4 at over $3 million and Q4 was the high watermark for total bookings renewal rate and retention rate our.
Our renewal rate combined with our strong upsell drove the increase to our dollar based net retention rate as we continue to execute on our effective land and expand motion.
For the whole company dollar based net retention rose to 128% up over 500 basis points compared to the prior year and up over 200 basis points sequentially compared to the third quarter.
Dollar based net retention for our large customers those spending at least $500000 annually was 136% up nearly 300 basis points compared to the fourth quarter of last year and up 75 basis points compared to the third quarter.
As a reminder, our dollar based net retention represents a 12 month trailing setback upsells includes increases to pre committed volumes across monthly active users additional messaging entitlements, signing new business units within existing parent companies as we continue to further penetrate our existing customer base through both geographic <unk>.
And brand expansion and the addition of add on features and recurring professional services. This expansion was strong across industries and geographic region with revenue outside of the U S contributing 40% of our total revenue in both the fourth quarter and full year.
Moving to our remaining performance obligation in the fourth quarter. Our total remaining performance obligation rose, 60% year over year, and 23% sequentially to $374 million COO.
Current RPI O rose, 59% year over year, and 19% sequentially to $238 million.
These increases were driven by strong business momentum, including new contracts contract renewals and term extension. Our overall dollar weighted contract lengths increased slightly compared to the end of the third quarter and is now at just over 24 months.
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.
non-GAAP gross profit in the quarter was $47.3 million, representing a non-GAAP gross margin of 67.2%. This compares to a non-GAAP gross profit of $27.9 million and non-GAAP gross margin of 65% in the fourth quarter of last year and 73% in the third.
Third quarter of this year.
Gross margin improved year over year due to the continued economies of scale in our core technology expenses and ongoing efficiencies realized in our personnel expenses.
Sequential gross margin evolution reflects seasonally higher levels of activity for many of our customers during Q4.
Turning to our operating expenses non-GAAP sales and marketing expense was $35.3 million or 50% of revenue compared to $19 $5 million or 46% of revenue in the prior year quarter.
This reflects our continued investments in sales and marketing head count to support our strong growth and global expansion.
Our R&D and G&A expenses illustrate our continued efficiencies at scale non-GAAP R&D expense was $13 $1 million or 19% of revenue compared to $8 $2 million or 19% of revenue in the prior year quarter.
The dollar increase was primarily driven by head count to support the expansion of our existing offerings as well as develop new products and features to fuel growth non-GAAP G&A expense was $12 $4 million or 18% of revenue compared to $8 $1 million or 19% of revenue in the prior year quarter the dog.
The increase was driven by investments to support our overall company growth and public market requirement.
non-GAAP net loss attributable to <unk> shareholders in the quarter was $13.8 million or a loss of 18 cents per share based on $78 4 million weighted average basic shares outstanding during the period. This compares to a loss of $8 million or a loss of 42 per share based on $19.
2 million weighted average basic shares outstanding in the prior year quarter.
Now turning to the balance sheet and cashless statement.
We ended the quarter with $518 $1 million in cash cash equivalents restricted cash and marketable securities.
Cash used in operations during the quarter was $24 $5 million compared to approximately breakeven in the year ago quarter.
This change was driven by a higher net loss and increased cash used for working capital as we indicated during our third quarter call. The fourth quarter included the impact of two significant prepayments related to one of our technology vendors and directors and officers liability insurance combined these two prepayments.
Were approximately $17 million during the fourth quarter.
Now turning to our outlook for the first quarter and full year of fiscal 'twenty 'twenty three we remain very optimistic about our potential for revenue growth as evidenced by our strong pipeline of both new business and upsell opportunities. Our first quarter revenue guidance includes appropriate risk adjustment for new business and renewals.
We have yet to close this quarter for the first quarter, we expect revenue to be in the range of $72 million to $73 million, which represents a year over year growth rate of approximately 51% at the midpoint.
First quarter non-GAAP operating loss is expected to be in the range of 20 million to $21 million.
First quarter non-GAAP net loss is expected to be $19 million to $20 million with first quarter non-GAAP net loss per share in the range of 20 to 21 cents per share based on approximately $93 5 million weighted average basic shares outstanding during the period.
For the full fiscal year 2023 revenues are expected to be in the range of 338 million to $342 million, which represents a growth rate of 43% year over year at the midpoint fiscal year 2023, non-GAAP operating loss is expected to be in the range of a loss of 79 million.
To $83 million non.
non-GAAP net loss for the same period is expected to be in the range of a loss of $76 million to $80 million fiscal.
Fiscal year 'twenty 'twenty three non-GAAP net loss per share is expected to be a loss in the range of 80 to 84 cents per share based on a full year weighted average share count of approximately $95 1 million shares.
As I noted during our IPO Road show as well as during our third quarter conference call fiscal year 2023 is an investment year. However investment spend is deployed with significant levels of discipline and oversight as a result, we reiterate our long term target operating model of 20% operating margin.
In summary, we are very pleased with the results of the quarter, new and existing customers are realizing the value of our best in class customer engagement technology and our execution remains strong with that we'll now open the call for questions. Operator, please begin the Q&A.
Certainly 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.
The first question is from the line of Mark Murphy with J P. Morgan you May proceed.
Oh, Hey, Thank you this is pendulum pay in for Mark.
Thank you for taking our questions.
Congrats on the strong quarter I wanted to ask you just a high level.
What is driving the strength overall I mean, if you think about it I mean your billings growth is seems really strong on top of a very tough comp.
I mean is that is it IP the IPO kind of putting a spotlight on breeze is this just awareness of the category or is this kind of a tailwind from the first party data that that you guys have versus depending on cookies for others. Maybe can you help us understand what's at a high level driving the strengths of the business.
Yeah, I mean first thanks for the compliment on the quarter. We're obviously very pleased with the execution from the team and the response.
Response from our customer base I think that when we analyze the tail winds behind the business. It's really important to keep in mind that we are benefiting from multiple dimensions of generational trends that have been changing in the direction of what we've been building for for over a decade now and when we look at it from the perspective of Digitization trends.
That moved to first party data the moves the continued enhancement and sophistication within customers as they move to more interdisciplinary strategies and customer engagement, we continue to see more and more companies out there that are structuring their teams in ways that they can really take advantage of braces approach to customer engagement, we continue to see the community.
Braves practitioners and customer engagement practitioners that really approach this problem from a more technical and data advanced perspective grows year over year quarter over quarter, our sales team our market presidents all continue to grow and so when we kind of look at it all together, we think we're continuing to grow in the early innings into an enormous total addressable.
Market that we've got a number of generational trends that continue to add together in our favor and we continue to execute at a very high level and we as we look further into the future. We're continuing to invest for that growth and we're continuing to execute at that same high level as our customer base continues to grow and phone and a lot of these trends that you just highlighted you know continue to grow.
As well.
Yeah understood, Okay, and Isabelle just a follow up.
Any way to unpack kind of the metric tension. The dollar based net retention strength I think you said renewals were strong I'm, assuming you're talking about gross dollar retention did that uptick and within expansions is there any one or two major drivers that youre seeing jumping out.
Yeah. So it's a couple of things so certainly yes on the on the renewal front, that's definitely we hit a new high watermark of of grocery holes in the quarter. So that that's fantastic. Another factor that we're seeing is in the quarter. The in quarter specific net retention rate was very strong but also we're seeing some tailwind from the fact that we are.
On a 12 month trailing statistic and we are lagging out of some weaker and weaker.
The quarters from a few quarters ago. So there you're seeing a combination of both things.
But the in quarter results were in and of themselves is very very strong.
Got it thank you.
Thank you Mr Murphy.
The next question is from the line of Ryan Macwilliams with Barclays. You May proceed.
Thanks for taking my question Bill you know how do you think about the interaction between customer data platforms and breathe. It seems like we've seen some customer data platforms trying to add more messaging features.
So a person who is a breeze, replacing cdp's organization, so you're talking about vertically integrating how should we think about partnering along with potential competition from Cdp's for Bruce.
Thanks.
The data landscapes across our customer base continued to be fairly heterogeneous. So certainly youre seeing that in certain customers, we coexist with see PS and other customers. They pursue designs in their architecture that don't require cdp's. There might also be other people that are moving toward new implementations or new.
<unk> with Citi piece that are doing things like river CTO or some of the open source C. P type solutions and are doing hybrid approaches to data management at Bray as we continue to stay focused on our vertical integration strategy and that is going to apply to the generation of user data, which is happening directly inside of Epsilon.
And so in those cases, even when we work with CDP is we're not they're not in the critical path for the data flow and that's been part of our implementation are designed from the very beginning there is a lot of reasons for that but I can get into if you're curious when we look at our own roadmap with respect to the same concepts around data integration. We're also really excited about our own.
I touched on a couple of these in the script, but when we.
When we look at the concept of vertical integration for data generation, we want that to extend beyond the user interfaces and the apps and websites and move into other sources of first party data such as inside a customer's data warehouse and so we're exploring new partnerships as well as building out our own vertical integration in order to make sure that we can co locate with more of those data sources, we can.
Change the nature of the data relationship from one where engineers are going to be responsible for things like babysitting E. T L and making sure data pipelines are healthy and instead have breeze vertically integrated that responsibility, allowing for the marketing teams that utilize us to be able to get access to more data in order to drive deeper personalization and more sophisticated orchestration through.
Through our canvas visual programming language as well as get richer data from Brazos current feature set so we continue to invest heavily across the data ecosystem. The exact right mix of products that is appropriate for a given customer and their own kind of data footprint will continue to evolve and we think that's going to be a heterogeneous landscape, but what has always been.
Really important braised, given where we sit in the value chain with respect to engagement owning the relationship with the customer being integrated into those first party interfaces and being in the user experience and look and the feel of the product in all the end product messaging is that we need to continue to be in control of our own destiny to ensure that our customers can have rapid time to value that they can act.
On their data instantaneously, so that we can power those interactive cross channel use cases, and that's going to require us to continue to invest in our vertical integration, even as we continue to partner with CDP for certain types of data use cases.
Excellent I'll definitely picked up on that offer maybe some time offline and then for Isabelle just looking at your fourth quarter revenue anything to call out there from a seasonality or maybe COVID-19 impacted standpoint, and how should we think about this quarters beat versus guidance as it would be a landmark for <unk> going forward.
Thanks.
Yeah. So were definitely really pleased with where the quarter came in I think seasonally.
It's kind of go back to actually how our April new plays out our booking plays out throughout the year and so the way that plays out is Q1 is typically the lowest at sort of 2019 and 20% and then we sort of edge up in Q2 Q3, and then by the time, we hit Q4, that's the single largest quarter and you know we're about a third will do it.
A third of our bookings in Q4, and so the way that sort of plays into the evolution of revenue is from a sequential perspective, you'll get the strongest sequential revenue growth in Q2, and Q3 and then the smallest sequential growth.
Tend to be a in Q4, and then Q1 and so you know, we're very happy with where we landed this quarter.
Sequentially that that's a little bit of what you're seeing is is kind of that fact pattern around the how the ACB plays out. The other piece is that from a timing perspective, and I mentioned this in the Q3 call Q3's, ACB was fairly evenly distributed a month over month and it were typically we typically book note.
Have it in in the last month of the quarter, but we actually managed to about 60% of it in the first two months of the quarter in Q4, we booked 60% of our Apd in the third month of the quarter and so when youre looking at the sequential revenue growth between those two quarters Theres also that fact pattern of how the ACD distributed within the months of the respective.
Quarters, so with that in mind, we're very pleased with.
The revenue results in this quarter.
I appreciate the color. Thanks, so much.
Thank you Mr Mcwilliams.
The next question is from the line of Gabriela Borges with Goldman Sachs. You May proceed.
Good afternoon, Thanks for taking my question.
First of all on the commentary on appropriate risk adjustment from a guidance. How do you think about the potential risk of a macro slowdown leading collect investment and marketing software and how sensitive do you think your business might be to a pullback in marketing spend.
Real time campaign, and then if you could just remind us how much exposure you have to Europe and if there are any indicators of a slowdown in marketing software spending on specifically thank you.
Yes, thanks, Gabriela, but so a few things there and I've spoken about this before but we think that within the broader marketing landscape and the marketing both spend as well as from the perspective of focus and prioritization within organizations that Lee its first party focus of Brady.
<unk> causes us to actually have a large comparative benefit in times, where there is either a slowdown or there was increased scrutiny on profitability I think both of which are being experienced in the market right. Now so when we look at the kind of the history, where we've seen our individual clients that have maybe experienced certain.
Slowdowns or other sorts of individual issues as an indicator for what may happen in recession like conditions, we see kind of three different things that actually really benefit us where not only are we sticky, but we've grown and prominence within those organizations. The first one is that in many cases that leads to more expensive R&D resources, either being cut or refocused.
They're not growing as quickly in those cases, the flexibility that <unk> provides without the need of a direct engineering team doing customer implementations becomes even more important for teams that want to continue innovating and deploying new engagement strategies. During those times. The second one is that if youre working to stimulate additional demand or drive enduring incremental revenue you're existing customer.
As is often the first place that you go as a marketer because the incremental cost of communicating with those users is low and conversion is high meaning that our library attractive that's exactly where brazos focused and so these would be the overall bucket of marketing spend we have seen ourselves take off actually a larger proportion whenever there is pressure in the way that a recession or other sorts of.
Kind of increased scrutiny on on profitability would drive itself.
And then the third one is that you know even during a period of decreased demand the need to maintain healthy conversations and relationships with your customers remains always on we saw that even for heavily impacted industries like travel and hospitality during the first year of Covid and we believe that no matter what happens with respect to kind of economic headwinds that are that will demonstrate.
Strong growth and just strength within the existing customer base as that need to maintain those relationships remains a priority for all businesses with a long term focus with respect to Europe . You know, we don't break out specific regional.
Breakdowns beyond the 60 40 that we have between the United States and the rest of the World. We are we highlighted actually the continued expansion in Europe as we continue to grow our office in the dark region, and we've just announced our entrance into the French market with the opening of an office in Paris.
And we're actively hiring for today, we think that we're still so early in the addressable market within that region that even if there is a broader slowdown that our ability to continue to execute against our goals will be unhindered at from that perspective, as we just continue to execute with our sales team and with the pipeline generation activities that we have.
In the region.
That's really helpful detail. Thank you.
Roll up on your commentary on the next normal.
That a portion of that account model based on pricing by a monk reacted with the vote.
So maybe talk to us about categories like e-commerce or quick serve restaurant for a really nice acceleration during COVID-19 .
He claims that.
Imagine a slowdown in monthly active users in this particular category.
So we don't break out.
Monthly active users by category. So we can't share specifics on that but what we do see is that there's a number of things that really I I think even out a lot of our growth in our contracts within brands first is that monthly active users and the ability to retain them is very high when customers are utilizing braves and we see that even in.
Kind of broad changes in user behavior that that ability to engage with them. Once a month offer them to remain being a monthly active user is something that all of our customers. You know broadly are capable of doing in especially in growing markets and sell a reversion to the mean in terms of overall activity level I would not necessarily imply that there is.
A reversion to the mean impact in monthly active users and the other is obviously that were not consumption base from a messaging standpoint, as well and so the monthly active user concept itself already has some smoothing in it.
As we spoke about as we IPO you know that does mean that we didn't experience some of the consumption based tailwind from things like Covid that you saw in a lot of other businesses, but we think that it leads to a more predictable revenue model more predictable growth for us as well and we've included a lot of those factors into our models. We also see that the overall.
All trend of continued adoption of mobile devices of continued digitization of our whole industries of the continued move toward investing in direct to consumer relationships and relationship building.
We are more heavily indexed to than any particular category, because we're so well diversified across geographies and across categories and so even if you see general consumer behavior switching from one category to another as we did during COVID-19 . The overall kind of trend towards digitization toward the mood for modern customer engagement strategies.
Toward the building of first party data assets and first party relationship assets you know all of those we continue to see be up into the right and there's really no trend toward mean reversion that we're seeing across network.
Sounds good thank you.
Thank you Ms Georgia.
The next question is from the line of Derrick Wood with Cowen You May proceed.
Hey, guys. Congrats on a really strong quarter Bill Bill you mentioned this $3 million ACB land deal pretty impressive to see such a large net new win I'm. Just curious is landing a seven figure deal out of the gate is that an anomaly or is that a dynamic that could take greater hold in.
And anything else you can share with respect to how you won this deal and was urged you out over the competition.
Yeah. So we've seen continued year over year improvement in seven figure land deals over the last several years I'm not going to put specific numbers to it but that's definitely a trend that we've continued to see happen Theres a few things that drive that one of them is that our product portfolio continues to grow year over year. So as we've added more channels.
Over time as we've added more comprehensive data integrations and as brands in General if you go back to the question that I just walked through are continuing to grow their own direct to consumer audiences and start to embrace new customer engagement strategies that all of those just mean that the overall size of the audiences that we're engaging.
The scope of the services that we're providing and the amount of focus and prioritization that customers are putting on it have grown and all of those multiply together to give us the ability to land larger and larger deals within more and more categories and so I would say I'm very happy with our ability both to land those seven figure deals, but also with the diversity of.
Geographies and verticals that we actually do land seven figure deals in all further underscore that you can see that our dollar based net retention in those customers that are greater than 500, K is higher than the rest of the customer base and so in many ways, even when we land with these big deals Theres still opportunity to continue to grow the footprint of those within a lot of these organizations and.
And we will obviously continue to invest in the product to continue to grow from there. So all of those come together to I think create some really good dynamics for the business that we've been able to take advantage of now that being said, we've also invested very heavily on the F&B side of the business over the last year in particular, and we're seeing really good health metrics and improvements in the <unk>.
<unk> bolt around things like dollar in dollar based net retention and gross retention coming out of that group. So I.
Even though we're obviously super happy on the seven figure side. We're also very happy with the progress that we're seeing on the F&B side and the velocity of that and you see that in the net new customer adds and the continued growth there.
As respect to that specific deal I would just say that it's a it was a great team effort that really went into kind of creating the right levels of confidence around the the work that we're doing from a scale perspective as well as the ROI that we will be able to drive for that business. I've raised has been very focused on making sure that we're able to I live in the <unk>.
Part of the value chain, so that we can value sell over time, we're very confident in the ROI that we can provide the businesses, especially at scale and we've got the testament to be able to deliver from an operations perspective at very large scale and all those come together to give us the confidence to go out and land deals like that.
That's a great color and I guess as a follow up on the announcements you've made around commerce. This week.
Can you just give us a sense in terms of what's incremental from a platform capability standpoint.
And maybe help us think about how to drive how this may drive more revenue opportunity or what the monetization approach is going to be.
Yeah. So.
I think that when you look at the overall product investment trends that you know we're doing a few things and what we're really trying to do is lean into our advantages and also go through and continue to improve time to value and improve just be our ability to control. The complexity. That's inherent in these deployments so that our customers can use more and more our brazos products.
As we continue to grow the portfolio. So when you look at the Commerce side, you know there's a lot of improvement in terms of data integration is making sure that we've got the right data models and reporting capabilities as well as integration into platforms like shopify that we continue to deepen.
Lee I'm, making sure that that's all there so that those customers can get up and running quickly so that as they grow with us overtime. They can bring in more and more interesting data insights to their strategies and we've also continued to really improve and an upgrade in advanced canvas, our visual programming language to allow for customers to achieve those more sophisticated strategies.
As customers go through in many cases, multi touch or long term journey that they're going through when we see a commerce you know there's obviously some specific things there related to product catalogs and recommendation. There is a lot around a recommendation that especially for certain types of retailers involved things like inventory and margin that they want to optimize for when they're looking at.
At different among different customer personas and their ability to kind of pair together their first party engagement strategy with what in many cases also involves heavy acquisition strategies and making sure that there's a really good feedback loop. There you know there's just there's a lot that's specific to that use case that we've been really building for as we've been working with both our large and small commerce cusp.
<unk> over time, and we're really excited to continue to invest heavily in that vertical.
Understood. Thanks for the color congrats.
Yep. Thank you.
Thank you Mr. Wang.
The next question is coming from the line of Arjun Bhatia with William Blair You May proceed.
Perfect. Thank you and I'll add my congrats on the quarter Bill maybe if I could actually follow up on that last point on the <unk>.
On the commerce investments you've made obviously, a very interesting, but I'm curious how you think about the opportunity to vertical is for other industries, where you already have a presence like <unk> or media financial services.
Is there an opportunity to take this commerce playbook and apply it to those verticals or should we think of the commerce investments Youre, making is maybe a little bit more of a one off given the size and <unk>.
Growth in that industry.
And I think you should expect to see us continue to add vertical specific capabilities and vertical specific go to market resources over time, both from a sales and marketing perspective as well as from a post sales perspective, as we start to look at things like our customer success and technical account managers and strategy that's tied to the specific areas, we definitely notice.
Over time that there you know each of the kind of product adoption curves. If you will apply to different verticals and theres a lot of intuitive ways that those verticals apps versus each other so when we look at places that are either highly regulated or capital intensive they've moved a little bit slower, so finance and insurance or health and wellness.
<unk> are great examples of that and we've had tremendous growth amongst the innovative younger companies in those spaces. We've also had early progress in terms of the more traditional parts of the of those very very large industries and we wholly anticipate to kind of lean into taking more of the majority of the technology adoption curve.
Herb within verticals like those over time by making more appointed Verticalizing investments both from a product and a go to market standpoint, I'm. So you're seeing this in the early days of Commerce. There's other categories, where you know I think that the product of raised it because of its flexibility in its sophistication can really go through and is built for purpose in those.
Articles right out of the gate that doesn't mean that we wouldn't approach the those verticals with a go to market that becomes vertical lives overtime and then within the products from our product and R&D perspective, There's other places I mentioned finance and insurance and health and wellness, where there are specific product innovations that will help us unlock even more of that addressable market and that's absolutely.
<unk> going to be part of our strategy over time, I think that we've tackled a very fundamental business problem with braised, where we're focused on trying to invest in customer relationships over the long term doing that through communication and understanding of customers. Those are things that generically apply to all businesses of all shapes and sizes in every vertical over the world. It's why we are.
Such a large addressable market, but we also know that for us to efficiently go to market across especially some of these more specialized verticals that will need to do more than just solve the generic business problem. We're prepared to do that it's really just a question of prioritization for us because there's so much there's so much addressable market and potential out there that when we look at these different ways that we can.
Grow the business and grow our revenue lines, where we're balancing across geographic expansion product expansion and vertical as they say and channel expansion et cetera, and that's that's a good problem to have obviously as we try to optimize across all those dimensions, but vertical ovation is absolutely. One you should expect us to continue to exercise.
Exercise over the next few years.
Awesome, Yeah, no that's a great problem to have.
One more follow up if I can I you know obviously, the gross margins of an improving year over year.
Can you just touch on how much traction you're seeing for some of the in App messaging.
Features that you rolled out content card surveys et cetera, and I'm curious.
Do you see customers adopt these off the bat or should we think of that as something that's.
Further down in the maturity curve further down on the customer journey after they've done push notifications email, etc.
Yes, it's a new customer deployments are actually pretty diverse we actually have a lot of customers, who will start out with just contact cards or start out with just in our messages.
And obviously, they're also then customers that start out with on the email or on the SaaS or only push notifications or any collection of them I think that in many cases, you know when a when a brand has really made the decision that they want to start investing in a sophisticated platform like brands that were pretty adept at finding the first opportunity for them to really get up and running one of the huge benefits of our vertical.
Integration is that when you start with any of those channels. The data integration is always complete at the end of that and so the ability for a customer to start in any channel and then incrementally move into the other ones.
Pretty easy and straightforward from that point, because the vertical integration of the data flow is already complete and so we've been really happy with the traction that we've had from the from the end product messaging types, it's actually a place where we've been able to acquire customers that we probably wouldn't have otherwise been able to do so because we start there we have a focus there and then.
For you know plenty of other customers that are just looking to replace the legacy ESP right out of the gate. We then can work with them over time and bring them into the end product use cases, which are highly differentiated for brands. So we're really happy with how that motion works for us and you definitely see that in the dollar based net retention results that we continue to put up as well as just the diversity of use cases.
Braze deployments represented across the market.
Awesome. Thank you very much and congrats again.
Yes. Thank you.
Thank you Mr about here.
The next question is from the line of Brent Breslin The Piper Sandler you May proceed.
Good afternoon. Thanks for taking the question, maybe I'll start with Isabel and a follow up for Bill Isabel I appreciate the color around the prepayment fees.
Fees, but as we take a step back I know, there's a bit of a hyper sensitivity that investors have just around fully funded models do you have a very large our cash position can you talk a little bit about kind of cash burn on a normalized basis going forward what is the path to kind of more of a a.
Even scenario and as you think about the existing cash you have does that kind of gets you enough leeway.
Leeway to get to.
Our positive free cash flow environment. Thanks.
Yeah. Thanks for the question.
So we we don't currently have any plans to do any further capital raises so it's I think we're comfortable with sort of the level of cash that we have right now and we have reiterated our plan to achieve our target operating model of 20% operating profitability and cash flow will definitely will certainly come a little bit.
Sooner than that and you can see that even in some of our historical data and I think the way to look at it is not to be a sort of focused on any one particular quarter and I think I've said this in the past, it's really better to leave me looking at cash flow on survive a four quarter trailing statistic and there can be anomalies in any given quarter, just given timing of collection.
The payments from customers and then payments that we make as you can see from this particular quarter and so we we believe we are extremely well funded at the at the moment and have no plans to do any further capital raises to fund the business going forward.
Good that's helpful color, there and bill it spent the first two days of this week it shop talk it it just seems like direct to consumer increasing prisoners personalization. This land grab around first party data was kind of all the rage at the event I guess as we think about the business recall.
Orders of accelerating subscription growth how much.
Has idea fae in and she's data privacy changes been a catalyst for the business and a catalyst for larger these larger lands and and how how can that be a potential catalyst for the business kind of going into next year as well. Thanks.
Yes.
I think that from our vantage point, we've seen this as a multiyear trend that has been building over.
At least the last half decade.
And I think that the public markets have woken up to add more recently, because youre starting to see it impact things like the earnings at Facebook are at snap and other places that are more advertising focused but when we really started raise in the early days. We've looked at the first party data is just a more respectful way to work on our relationship over the long term we wanted our COO.
Customers to have a long term focus about how they thought about their own customer relationships and the right way to do that was to focus on opt in consent, a mutual respect having reciprocity if youre going to give me as a brand the right to Buzz your phone no matter where in the World you are what Youre doing I better have something important to tell.
You and I better be basing that off of data that you wanted me to know because I was acting as a good listener and not being like a creepy detective if you will and so those are all trends that we've seen in our space for years now we're really happy to see that the rest of the world is starting to wake up to that more when you look at the regulatory scrutiny that's out there whether.
The regulations are coming from Apple and Google as Theyre, making changes to their their identifiers or other ways of their advertising networks, where when you look at changes that are happening in the regulatory environment. You know these all add compliance costs, but they actually refocus people, where they should be for the long term, which is on respectful relationship building being a good listener.
And focusing on the long term. So you know I think that the we're certainly happy to see the continued awareness. This is been a drumbeat that we've been.
Both beating and marching to for many years, now and I think that being respectful and being a good participant in a relationship is the end game you don't evolve from here and so we're happy that the market is getting to this point and we're going to continue to realize the benefits from that as we grow into this enormous Tam that lies in front of us.
Okay.
For color. Thank you.
Yep.
Thank you Mr very slim.
The next question is from the line of Brian Peterson with Raymond James. Please proceed.
Yeah. Thanks, I'll Echo my congrats on the strong quarter. So just one for me I know you guys talked about some international investments that you're making there was there was clear on the call today I'd just be curious how much of that is a product oriented investment and I guess I'm thinking about data ingestion and things that might take place there and if we think of.
The go to market infrastructure that needs to be built there is that something that you feel like it will be done in fiscal year 'twenty three or is that kind of a multiyear investment. Thank you.
So when you look at the history of our international expansion, we've actually tended to lag customer demand and customer activity in each region that we've gone to and the first focus has been really providing more in time zone in region post sales support for customers, helping activate the communities in those places in order to.
The efficiency of our go to market. So that we can take the early wins in a given market really catalyze that into advocacy and support within those areas. There's other examples where for instance, you know our ability to sell two startups in the dock region remotely was what something that was prevalent you know not necessarily relatively easy, but certainly easier than selling to more traditional.
Trees that are going to have a stronger expectation that we're well established in those areas. So I think that what you should expect to see is that as we continue to crack into more and more verticals and move up that adoption curve that I was referencing earlier to sell into the enterprises are in the kind of the majority part of the curve in these regions that will continue to deploy.
To deploy go to market resources in those places if you look at the history of brain I think that the product investment to be able to sell into new markets is relatively minimal with some exceptions. We did highlight the localization of our dashboard in Japan are into Japanese or support the growth of our Tokyo team.
That has been growing really well you know Japan is obviously unique market for a variety of reasons and we wanted to be able to accelerate the investment that we're making there. We're currently we're currently evaluating what our next steps for localization, we're gonna be you're certainly going to continue to see us, adding new languages over time and you also see us continuing to add more offices overtime. There is.
Other aspects of this for instance, Whatsapp, which is a new message channel that we're working with meta on deploying.
In this year hopefully depending on what their timelines end up being as they continue to mature that product, but that's particularly important in certain markets, where SMS is either less adopted or more cost prohibitive to be able to use for the types of engagement use cases that we're running and so.
In all of those examples there are certainly aspects of it that will require product investment for geographic expansion, we balance those against our penetration into those markets. The nature of those markets and we'll continue to put you know go to market resources closer to lucas's of customers, especially as we see the potential to grow into very large markets are.
There's no particular ways that the traditional industries in those areas work and so for all of those reasons you should expect to see our international expansion continue and not be something that's you know finished in this year, but rather a opportunity that we continue to invest into for years to come.
Thanks Bill.
Yes.
Thank you Mr Peterson.
Due to time constraints, we kindly ask the remaining participants to limit themselves to one question.
The next question is from the line of Ian Kim with Loop capital markets. You May proceed.
Alright. Thank you congrats on a continued strong momentum bill and Isabel. So bill can you just talk about any shift in your vertical mix.
Some of them more so.
Fly chain impacted verticals like auto and consumer goods. While there is still healthy may not have increased our marketing budget as much in the quarter and just curious does certain verticals carry meaningfully different gross margins of over other vertical. Thanks.
Yeah.
Yes, so the so I'll tackle the supply chain side of it first.
We started to get questions like this all the way back in the fall because people are obviously worried about incremental marketing spend in the face of constrained supply.
And actually the best way to think about that is to go back to some of the question. Some of the answers I spoke through with respect to our analysis of the recession impacts or other sorts of slowdowns in Europe , which is that when you are supply chain supply chain constrained. It doesn't mean that your need to communicate with your customers has changed in anyway.
In fact, when you have disruptions in service that is often.
That's often you know some of the most important times to be having ongoing communication and conversation with your customers in order to maintain the relationship with your service might be impacted the other aspect of it is that while certainly we would expect a brand you know in the commerce space to spend less money to instigate or to kind of create marginal demand. If they don't have marginal supply to meet at that.
When you look at engagement with already owned customers and already existing relationships that that has the highest ROI place to be communicating and stimulating demand and so while you might expect to see that broadly across the marketing space you shouldn't expect to see that be a problem in brazos results because of those two primary factors with respect to gross margin.
Across verticals I think that this is something where some of the kind of an intuitive things that you would expect to see where maybe the LTV of a customer in a certain vertical or industry is on average different than other places. We're also Phil just so early in our addressable market that we're able to qualify into the right types of businesses, where we're <unk>.
To maintain and actually improve year over year, our pricing power and the margin profiles of what we're selling at the same thing is true for geographies as well certainly there are developing markets, where if we were trying to push into that more aggressively we might run into pricing pressures, but our addressable market remains so large and we continue to see that.
As markets developing in so we're being patient about that to make sure that we're putting our resources and kind of prioritizing them into the right places we continue to grow the business the way that we want to and in the meantime, we obviously continue to invest in the product to improve the value that we can deliver to customers and be able to maintain those targets and improve them over the long term.
<unk>.
Okay, great. Thank you so much bill.
Thank you Mr. Ken.
The next question is from the line of Patrick Wall Ravens with JMP Securities. Please proceed.
Oh, great. Thank you and let me add my congratulations.
Bill I loved hearing you say that grace focuses on being respectful and a good participant in a relationship.
We don't hear that often enough. That's fabulous Hey, My question is on the relationship with Billy over here.
I will share that with my wife later fill of it but so my question was the can we get an update on the relationship with Twilio. It's been almost six months since twilio gauge came out that they've been a great partner and then they have this product. So just love to hear where where that is all sitting today.
Yeah. So we continue to have a great relationship with Twilio, you know they've always done a great job of building tools for developers and that's the reason that we will continue to have a strong partnership with them and I'll go through go to market collaboration as we work on certain deals together and as a C pass vendor for certain Grays channels like E Mail and SMS as we've spoken about in the past.
You mentioned at the top when the question was asked about CDP is that we are deployed in a in a variety of different data footprints in different types of architectures, we're going to continue to be focused on making sure that we invest in our vertical integration.
There is always space for collaboration with Cdp's as well, depending on the particular customer and so we continue to have great. Great team work with the Twilio team, they're going to be an important multifaceted partner for them.
For the long term and that's something that we'll continue to evolve and develop over time, but.
We're excited about the potential future opportunities as we keep working with them.
Okay. Thank you.
Okay.
Thank you Mr Wall Ravens.
The next question is from the line of Scott Berg with Needham and company you May proceed.
Everyone. This is John <unk> on for Scott Berg, Thanks for taking my question.
Just curious if you've seen any evolution upmarket and the buy versus build conversations, particularly around companies who are trying to do some more interesting things with their data stack just thinking in the context of you know.
Obviously current and some of these other data connectors that you guys are coming out with over the past year. Thank you.
Yeah, I think when we look upmarket, we see brands continuing to be a huge accelerant, regardless of where you land on the build versus buy spectrum, we've been really focused on having our inability for people to build with Grace for a long time now I mentioned at the top of the call that one of the ways that we're thinking about the <unk>.
<unk> integration and our data story is also about the nature of the relationship between marketing or growth teams and the the data science or developer teams that they work with in order to bring new customer engagement ideas to life and so when you kind of look at a lot of the trends in the space right now and a lot of it is about helping data engineers and product engineers really.
Work at the higher value add points, you know getting out of the data pipelines getting out of the U T. L. I'm, making sure that they can use more and more sophisticated API overtime I'm, making it easier for them to collaborate with the people that are closer to the business problems like with the marketing and the growth teams and brave as really being architected to enable all of those so when you look.
At the power of our AP is our continued investment in stability at scale and the ability for developer teams to.
Do use Braves as a more sophisticated primitive within their stack when they need to build certain parts of either the product offering or their engagement strategies. When you look at our canvas tool, which continues to advance from the perspective of being a visual programming language and bringing that ability for more of an organization not just those with computer science.
<unk> to be able to really build sophisticated behaviors. When I look at a lot of the canvas is that our customers are building and you know I I Wonder just you know is a former CTO like what it would have taken to have software engineers go and build these really sophisticated behaviors that are being implemented with clicks by the marketing and growth teams that use brace every.
Day, and not just implemented O'brien, but actually live experimented with over time as they bring in innovative new ideas and they've really sped up that feedback league of being able to look at results iterate on them over time test and experiment, but these are all capabilities that just drive tremendous value at much higher rois than building on top of you know more.
API is across this entire space. So we really look at.
A lot of different dimensions of this and we understand that customer engagement you know in 2022 and beyond as an interdisciplinary sport, we want to make sure that we're accommodating all the different ways that people are going to utilize sprays and depending on whether they're coming from a data engineering product engineering or the marketing or growth backgrounds, and as well as actually taking a step back from that and.
Looking at how we're engaging with creative teams as the nature of the messaging that that gets delivered becomes more and more interactive and and more immersive as well. So there is there's still a lot a lot of room to run there we feel really good about the position that we're in you know I think that when you look at build versus buy it's a false dichotomy, we really want people to be building with grades over time.
And we've been very successful in continuing to lean into that.
Great. Thanks, everyone.
Thank you Mr. Byrd.
There are no additional questions waiting at this time, so I'll pass the call over to Bill Magnuson for closing remarks.
Absolutely. Thank you everybody for joining us for this we're really excited to continue to execute and continue to.
Communicate with everyone as we're pushing ahead and growing brave and thanks for all the great questions.
That concludes today's conference call. Thank you for your participation you may now disconnect your lines.
Uh huh.