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Braze continues to maintain growth momentum in Q3 FY23 with performance exceeding analyst estimates
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Braze, a customer engagement platform, reported its Q3 fiscal-year 2023 (Q3 FY23) financial performance. The firm achieved a revenue of USD 93.1 million (46% YoY growth) for Q3 FY23, 3% above analyst expectations. The performance was driven by growth in subscription revenue (50% YoY growth) accounting for 96% of its revenue for the quarter. The growth was supported by new customer additions during the quarter which include FanDuel, Panera, and Vizo bringing the total count to 1,715 as of October 2022. In addition, customer upsells and existing customer renewals supported a dollar-based net retention rate to be maintained at 126%, in line with the previous quarter.
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The firm recorded a non-GAAP operating loss of USD 17.3 million which was significantly lower compared to the USD 23 million–24 million management guidance provided in the previous quarter. This implies a non-GAAP loss per share of USD 0.15 which exceeded analyst expectations by 47%.
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The firm also stated that during the quarter it increased its team count by ~130, bringing the total to nearly 1,500. During the quarter It also introduced a number of product enhancements, including Cloud Data Ingestion, and provided early access to a TikTok Audience Sync feature. The firm also plans to roll out native channel support for WhatsApp in 2023.
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The firm revised upwards its revenue guidance for the full fiscal year (FY 2023) and expects to achieve revenue between USD 352 million–353 million (~48% YoY growth) and expects its non-GAAP operating loss to narrow further and be between USD 71.5 million and USD 72.5 million.
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Analyst QuickTake: It is noteworthy that Braze has continued to maintain its momentum and report strong topline performance for the past three consecutive quarters ( Q4 FY22 , Q1 FY23 , Q2 FY23 ) despite external challenges. This has been supported by new customer growth while its contribution from subscription revenue has continued to trend up every quarter (Q3 FY23: 96% | Q2 FY23: 95% | Q1 FY23: 94%). The increased share of recurring revenue supports the firm in making its revenue more predictable and sustainable and better equipped to weather external challenges.
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