Braze, a customer engagement platform, reported its Q2 fiscal-year 2023 (Q2 FY23) financial performance. The firm achieved a revenue of USD 86.1 million (54% YoY growth) for Q1 FY23, 6% above analyst expectations. The performance was driven by growth in subscription revenue (58% YoY growth) accounting for 95% of its revenue for the quarter. The growth was supported by new customer additions during the quarter which include Roku, TelevisaUnivision, and IBM bringing the total count to ~1,600 as of July 2022. In addition, customer upsells and existing customer renewals resulted in dollar-based net retention rising to 126% over the same period.
The firm recorded a non-GAAP operating loss of USD 17.5 million compared to the USD 19.5 million–20.5 million management guidance provided in the previous quarter. This implies a non-GAAP loss per share of USD 0.16 which exceeded analyst expectations by 19%.
The firm also stated that during the quarter it increased its team count by 100, bringing the total to more than 1,350. During the quarter It also introduced Braze Canvas Flow , its customer journey orchestration tool.
The firm revised upwards its revenue guidance for the full fiscal year (FY 2023) and expects to achieve revenue between USD 347 million–350 million (46%–47% YoY growth) and expects its non-GAAP operating loss to narrow further and be between USD 74 million and USD 76 million.
Analyst QuickTake: Braze has continued to report strong topline performance for the past two consecutive quarters ( Q4 FY22 and Q1 FY23 ) supported by new customer growth while its contribution from subscription revenue has grown in tandem (Q2 FY22: 93% | Q2 FY24: 95%). This shift along with higher customer upsells is in line with the management strategy of achieving higher gross margins have supported the narrowing of its operating losses.
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