Braze, Inc. (ticker: BRZE), a cloud-based customer engagement platform provider, has reported a significant 31% increase in its total revenue for the first quarter of the fiscal year, amounting to $101.7 million. The company’s revenue by type comprised $97.1 million generated from subscription services and $4.6 million from professional services and other sources. The United States contributed $58.5 million to the revenue, while international sources brought in $43.3 million. This article explores the financial performance, significant accounting policies, revenue structure, and more, based on the company’s latest Sec report.
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Financial Performance
In terms of geography, Braze observed an increase in both domestic and international sources of revenue. Between April 2020 and April 2021, the US saw a 29% increase while the international markets grew by 35%. The substantial YoY growth in total revenue has been attributed to the company’s growing market presence, as well as its focus on delivering customer-centric experiences across multiple channels, like push notifications, email, in-product messaging, and SMS/MMS messages.
For the same period, Braze reported a net loss of $38.8 million, a 2% decrease from the previous year’s net loss of $39.6 million. Despite the net loss, the company’s performance in terms of revenue growth and operational efficiencies has been commendable, reflecting a strong market demand for its product offerings.
It is also noteworthy that Braze managed to collect $409.7 million in deferred revenue for the full fiscal year ending January 31, 2022. The company’s remaining performance obligations, or the amounts under non-cancelable contracts that are expected to be recognized as revenue in future periods, stood at $477.5 million at the end of April 2023.
Operational Highlights
Braze’s SEC report reveals a healthy cash flow from operating activities, amounting to $22.5 million for the three months ended April 30, 2023 – a 26% increase compared to the same period in 2022. The company has also been effective in managing its accounts receivable, with a balance of $66.6 million that is net of allowance, as of April 30, 2023.
Significant Accounting Policies
In terms of significant accounting policies, the company has not made any material changes apart from accounting for the concentration of credit risk arising from cash and cash equivalents, restricted cash, marketable securities, and accounts receivable. Additionally, three of the key estimates used in preparing Braze’s financial statements include the standalone selling price for separate performance obligations within revenue arrangements, the expected period of benefit for deferred contract costs, and the valuation of common stock and stock-based compensation.
Future Outlook
Braze’s successful revenue growth demonstrates how the company has effectively captured the market demand for its personalized engagement platform. With its diverse range of product offerings and strong financial performance, Braze, Inc. remains well-positioned to capitalize on its growth opportunities in the coming years.
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