Braze (NASDAQ:BRZE) Surprises With Q1 Sales, Stock Jumps 14.9%

Anthony Lee /
2024/06/06 4:24 pm EDT

Customer engagement software provider Braze (NASDAQ:BRZE) reported Q1 CY2024 results exceeding Wall Street analysts' expectations, with revenue up 33.1% year on year to $135.5 million. The company also expects next quarter's revenue to be around $141 million, slightly above analysts' estimates. It made a non-GAAP loss of $0.05 per share, improving from its loss of $0.13 per share in the same quarter last year.

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Braze (BRZE) Q1 CY2024 Highlights:

  • Revenue: $135.5 million vs analyst estimates of $131.7 million (2.9% beat)
  • EPS (non-GAAP): -$0.05 vs analyst estimates of -$0.10
  • Revenue Guidance for Q2 CY2024 is $141 million at the midpoint, above analyst estimates of $139.8 million
  • The company lifted its revenue guidance for the full year from $572.5 million to $579 million at the midpoint, a 1.1% increase
  • Gross Margin (GAAP): 67.1%, down from 67.9% in the same quarter last year
  • Free Cash Flow of $11.44 million is up from -$3.54 million in the previous quarter
  • Net Revenue Retention Rate: 117%, in line with the previous quarter
  • Customers: 2,102, up from 2,044 in the previous quarter
  • Billings: $160.7 million at quarter end, up 37.5% year on year
  • Market Capitalization: $3.64 billion

“We are off to a solid start in fiscal 2025, delivering strong results in an uneven macro, driven by returns from our long-term investments and consistent execution,” said Bill Magnuson, cofounder and CEO of Braze.

Founded in 2011 after the co-founders met at NYC Disrupt Hackathon, Braze (NASDAQ:BRZE) is a customer engagement software platform that allows brands to connect with customers through data-driven and contextual marketing campaigns.

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Sales Growth

As you can see below, Braze's revenue growth has been impressive over the last three years, growing from $47.88 million in Q1 2022 to $135.5 million this quarter.

Braze Total Revenue

Unsurprisingly, this was another great quarter for Braze with revenue up 33.1% year on year. However, its growth did slow down compared to last quarter as the company's revenue increased by just $4.50 million in Q1 compared to $7.00 million in Q4 CY2023. While we'd like to see revenue increase by a greater amount each quarter, a one-off fluctuation is usually not concerning.

Next quarter's guidance suggests that Braze is expecting revenue to grow 22.5% year on year to $141 million, slowing down from the 33.6% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 19% over the next 12 months before the earnings results announcement.

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Customer Growth

Braze reported 2,102 customers at the end of the quarter, an increase of 58 from the previous quarter. That's a little better customer growth than last quarter but a bit below what we've typically seen over the last year, suggesting that the company may be reinvigorating growth.

Braze Customers

Key Takeaways from Braze's Q1 Results

We were impressed by how strongly Braze blew past analysts' billings expectations this quarter. We were also glad its customer growth accelerated. Lastly, the company raised its revenue guidance for the year, showing that it is doing better than it had thought internally just last quarter. Overall, we think this was still a really good quarter that should please shareholders. The stock is up 14.9% after reporting and currently trades at $42.29 per share.

Braze may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.