Braze Inc Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ryan MacWilliams - Barclays - Analyst : Hey. Congrats on the quarter and congrats to Myles on a great run. Bill, glad to see the Braze technical brand refresh earlier this week, along with today's announcement of the OfferFit acquisition. I'd love to hear more about what OfferFit could add to your platform. And how do you envision AI agents improving marketing campaign for your customers in the near future? I have a follow-up. Thanks.

Question: Ryan MacWilliams - Barclays - Analyst : Excellent. And then for Isabelle, really tough time for CFOs at this point due to the shifting macro. Any adjustments to your normal guidance philosophy, given the macro? And any color on what in quarter net retention look like for the fourth quarter? Thanks.

Question: Ryan MacWilliams - Barclays - Analyst : Appreciate the color. Thanks so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 27, 2025 / 8:30PM, BRZE.OQ - Q4 2025 Braze Inc Earnings Call

Question: Arjun Bhatia - William Blair - Analyst : Yeah. Perfect. Thank you and congrats on a nice close to the year. Bill, maybe first for you. You mentioned something in your prepared remarks that kind of stuck out. I think you've raised it as the next level of personalization beyond right message, right channel, the right time, I don't know if that was specifically addressed to OfferFit or if that's something Braze does kind of do in general. But what is that next frontier personalization? And how does it maybe change the nature of the messages, if at all, that you're sending to your

Question: Arjun Bhatia - William Blair - Analyst : Okay. That's very helpful. Thank you. And then one quick one just on customer cohorts. I'm curious what you're seeing in terms of just expansion trends from some of the newer customer cohorts that you've won, whether that's greenfield point solution replacements or legacy providers. It seems like new has been pretty strong. But when those customers are coming up for renewal, are you seeing expansion levels so that are better than that served cohort? And has that magnitude kind of changed at all from the 9 points that we talked about at Analyst Day on [that front]

Question: Arjun Bhatia - William Blair - Analyst : All right. Thank you.

Question: DJ Hynes - Canaccord Genuity - Analyst : Hey. Thank you, guys. Bill, maybe we could go back to -- or stick on the thread of OfferFit for a second. Look, you explained the technology and the value prop very clearly. Maybe just speak to the business outcomes a little bit that you see for your customers that are already using OfferFit today. Like do they send more messages? Is it just that the messages are more effective? Can they create content faster? Just help me understand kind of how it translates from a revenue perspective to what Braze might actually see as you kind of push OfferFit more broadly across the customer base.

Question: DJ Hynes - Canaccord Genuity - Analyst : Yeah. Okay. Very clear. And then Isabelle, what is the mix of cash and stock in that $325 million?

Question: DJ Hynes - Canaccord Genuity - Analyst : Okay. Perfect. Thank you, guys.

Question: Gabriela Borges - Goldman Sachs - Analyst : Hi, good afternoon. Thank you. Bill, there's a little bit of a debate in the market right now on the advantages of being a SaaS-native company versus an AI-native company. And you're SaaS-native company acquiring an AI-native company. So help us understand, why could you not build this in-house? And what were the limiting factors to OfferFit being able to scale or being able to scale without agreeing to be acquired by Braze? Thank you.

Question: Gabriela Borges - Goldman Sachs - Analyst : That makes sense. The follow-up is for Isabelle. Specifically on demand trends that you've seen in the last several weeks, there has been so many mixed data points, whether it's on the consumer spending side or more broadly with uncertainty types of the new administration. Have you seen any change in your leading indicators as it pertains to your customers willing to spend in the last several weeks?

Question: Gabriela Borges - Goldman Sachs - Analyst : Thank you, both for the detail.

Question: Brent Bracelin - Piper Sandler - Analyst : Thank you for taking the questions here. I want to stick with the macro. A little surprise given retail and consumer goods are the largest vertical for you. Yet you still have really strong CRPO backlog build in the quarter. I think bookings looks like it actually slightly accelerated. Bill, could you just talk about the feedback from retail and consumer goods companies in light of tariffs and uncertainty there? Is it cost that they're leaning into Braze? Is it rigidity of old legacy platforms and they need to be more flexible? Walk us through what's resonating in an increasingly REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 27, 2025 / 8:30PM, BRZE.OQ - Q4 2025 Braze Inc Earnings Call mixed environment. And then, Isabelle, if you could just touch on net new logo growth here, adds were the highest 1.5 years. What drove that strength? Thanks.

Question: Brent Bracelin - Piper Sandler - Analyst : Helpful color, and I'll echo congrats to Myles on a great run. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 27, 2025 / 8:30PM, BRZE.OQ - Q4 2025 Braze Inc Earnings Call

Question: Brian Peterson - Raymond James - Analyst : Hey, guys. Thanks for taking the questions. So I appreciate all the commentary, and congrats on the OfferFit acquisition. You mentioned that with the deal, fiscal year '26 will be a year that will be a deviation from that growth margin framework you outlined at the Analyst Day. Is that dynamic solely due to OfferFit Or is there any organic investments that you're seeing or making because there's a product or growth opportunity? Would you love to just get the perspective there? Thanks.

Question: Brian Peterson - Raymond James - Analyst : And Isabelle, just on the acquisition, you mentioned a couple of points of revenue. Does that assume kind of the current run rate for OfferFit? Or are there any incremental cross-sell synergies embedded into that?

Question: Brian Peterson - Raymond James - Analyst : Understood. Thank you.

Question: Derrick Wood - TD Cowen - Analyst : Great, thanks. Bill, can you just give us a sense as to what organizational changes have transpired since Myles announced his intention to step down and how we should be thinking about the timeline of bringing on a CRO? And I guess since this is a Q1, are there any notable go-to-market changes that you're making that you would flag? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 27, 2025 / 8:30PM, BRZE.OQ - Q4 2025 Braze Inc Earnings Call

Question: Derrick Wood - TD Cowen - Analyst : Great. If I could squeeze one in, a follow-up. Just on -- a few quarters ago, you talked about Meta potentially changing pricing strategy with WhatsApp. I don't know, is there any update to call out there? I know it could have some impact on kind of the P&L for you guys. Just wondering if you see anything down the pike.

Question: Derrick Wood - TD Cowen - Analyst : Understood. Thanks for the color. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 27, 2025 / 8:30PM, BRZE.OQ - Q4 2025 Braze Inc Earnings Call

Question: Nick Altmann - Scotiabank - Analyst : Awesome. Thank you. It's clear there's still plenty of opportunity for consolidation and replacement activity. But Bill, maybe how should we see this acquisition of OfferFit as well as additional product efforts, whether it's Project Catalyst or future new product features or launches. As we think about kind of the next growth act for Braze, just maybe give us an update on kind of how you envision the platform evolving over the next couple of years and how that can support continued growth durability? Thanks.

Question: Nick Altmann - Scotiabank - Analyst : Great. Thank you.

Question: Scott Berg - Needham & Co - Analyst : Hi, everyone. Really nice quarter. I guess the one for me is, Bill, you talked about the vertical focus in R&D and, of course, the new shop announcement with the integration there. But how do we think about the benefit that your customers are going to get outside of maybe just streamlining the technology side of that integration? Is there -- I guess, how else does it affect, I don't know, product use, sales cycles, all those types of things? How much more efficient will that be for those customers?

Question: Scott Berg - Needham & Co - Analyst : Very helpful. Congrats on this quarter again.

Question: Taylor McGinnis - UBS - Analyst : Okay. Can you guys hear me now?

Question: Taylor McGinnis - UBS - Analyst : Yeah. Okay. Awesome. Thanks so much for taking the question. Perfect. Isabelle, when I hear like an inflection in growth, that sounds like a potential acceleration. So I guess, could you just talk about what you are seeing in terms of either renewal trends or expansion activity that's giving you REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 27, 2025 / 8:30PM, BRZE.OQ - Q4 2025 Braze Inc Earnings Call comfort in that outlook? And now we're a couple of months into this 1Q, I guess any thoughts in terms of timelines and when we could get past some of these more challenged COVID contracts? Thanks.

Question: Taylor McGinnis - UBS - Analyst : Thank you so much.

Question: Michael Berg - Wells Fargo - Analyst : Hey. Congrats on the quarter. Thanks for taking my question. I have another one for Isabelle, but this time in relation to Project Catalyst. You noted that it's likely to come out GA later this or -- later this quarter, next quarter. So I'm curious how to think about what's embedded in the guidance in terms of Project Catalyst contribution. And has that changed? Or how you -- has the way you thought about the product contribution changed post-acquisition there? Thank you.

Question: Michael Berg - Wells Fargo - Analyst : Got it. And then a quick follow-up for Bill here. You know that -- this is the best you felt in the competitive landscape here. Some of your key legacy competitors have talked about their core products, competitive products underperforming. Has that created more discussions or more uptick in top of funnel activity? Or how can we think about the changing competitive landscape taking shape for you guys?

Question: Michael Berg - Wells Fargo - Analyst : Awesome. Thank you.

Question: Brian Schwartz - Oppenheimer - Analyst : Hi. Thanks for taking my question. I wanted to follow up, thinking about the integration with the architecture plans with OfferFit, I think you mentioned that they have a different data model than Braze. As you think about scaling Braze's architecture in the future, is the plan to get back to one tech stack? Or is it faster to scale by adding other type stacks and as you think about your future M&A strategy? Thanks.

Question: Brian Schwartz - Oppenheimer - Analyst : Thanks.

Question: Yun Kim - Loop Capital - Analyst : Okay. Great. Congrats on the solid quarter, Bill and Isabelle. Strength in the new customer adds that you saw in the quarter. Any new bundles or packaging that's driving -- that drove that strength? And if you can update us on how the initial land deal size has been trending?

Question: Yun Kim - Loop Capital - Analyst : Okay, great. Thank you so much.

Question: Patrick Walravens - JMP Securities - Analyst : Okay, good. Thank you. Bill, I'm curious on OfferFit. Why now? Like was there a formal process that they were going through? Were they considering doing a new financing? How long have you been thinking about this? Why did this deal happen now?

Question: Patrick Walravens - JMP Securities - Analyst : All right, great. Thank you.

Question: Tyler Radke - Citi - Analyst : Hi. Thanks for the question. Isabelle, you mentioned that you did a little bit better on logo churn. I was wondering if you could expand on that and share an update on the health of the SMB segment of the market.

Question: Tyler Radke - Citi - Analyst : Thank you.