Braze, Inc. — FY2024 Form 10-K
Reporting period: Fiscal year ended January 31, 2024. This is an annual filing, not a standalone fourth-quarter report. Comparisons below are to the fiscal year ended January 31, 2023 unless noted. Braze provides a cloud-based, cross-channel customer engagement platform, primarily through subscriptions. It had 2,044 customers and supported approximately 6.2 billion monthly active users at fiscal year-end.
Financial performance and liquidity
| Metric | FY2024 | FY2023 |
|---|---|---|
| Revenue | $471.8 million | $355.4 million |
| Subscription revenue | $451.1 million | $338.4 million |
| Gross profit / gross margin | $324.3 million / 68.7% | $239.6 million / 67.4% |
| Operating loss | $144.7 million | $148.1 million |
| Net loss | $130.4 million | $140.7 million |
| Net cash from operating activities | $6.9 million | $(22.3) million |
| Non-GAAP free cash flow | $(6.5) million | $(39.0) million |
Revenue increased 32.7%; subscription revenue growth was 33%. Management attributed approximately 66.8% of subscription growth to expansion among existing customers and 33.2% to new customers. International revenue was $204.6 million, about 43% of total revenue, versus $150.5 million, about 42%, in FY2023. Gross margin improved 1.3 percentage points, which the company attributed to personnel efficiencies, scale, infrastructure-cost optimization, and a one-time vendor charge in the prior year.
Operating expenses were $469.0 million, or 99% of revenue, compared with $387.7 million, or 109%, in FY2023. Stock-based compensation expense was $97.2 million, net of amounts capitalized; the total including capitalized compensation was $99.3 million. Higher investment income contributed to other income of $16.2 million, up from $8.0 million.
At January 31, 2024, cash, cash equivalents, and marketable securities totaled $480.0 million; cash and cash equivalents alone were $68.2 million. The filing reports no borrowings or debt balance. Current liabilities were $289.4 million, including $204.3 million of deferred revenue. The company generated $6.9 million of operating cash, but free cash flow remained negative after capital spending and capitalized software costs. Accumulated deficit was $483.1 million.
Non-cancelable business purchase commitments were $255.1 million and operating lease obligations were $122.9 million undiscounted ($90.6 million recorded as lease liabilities). Management expects available cash, cash equivalents, and marketable securities to cover working capital and capital expenditure needs for at least the next 12 months.
Material changes and notable items
- Dollar-based net retention declined to 117% from 124%; for customers with at least $500,000 ARR, it fell to 120% from 126%. The company reported 202 customers in that higher-ARR group, up from 156.
- Cash from operations improved from a $22.3 million outflow to a $6.9 million inflow. Free cash flow improved by $32.5 million but remained negative, partly reflecting higher collections and billings.
- In June 2023, Braze acquired its Australian and New Zealand reseller, North Star, for adjusted consideration of $27.0 million, including cash, stock, and contingent consideration. North Star’s results were not material to FY2024 operations.
- A May 2023 workforce reduction resulted in approximately $0.6 million of severance and related costs.
- The prior-year material weakness involving revenue-recognition controls was reported as remediated. Management and the auditor concluded internal control over financial reporting was effective as of January 31, 2024; the audit excluded the acquired Australian business from the control assessment.
Outlook, risks, and contingencies
The filing provides no numerical revenue or earnings guidance. Management expects continued investment in product development, AI, infrastructure, sales and marketing, and international expansion; it also expects cost of revenue and operating expenses to increase in absolute dollars. Free cash flow may fluctuate with operating costs and growth investment. Management notes macroeconomic uncertainty has affected customer spending behavior and says the ongoing effects on results, financial condition, and liquidity cannot be estimated clearly.
Key disclosed risks include sustained operating losses and uncertainty about achieving profitability; customer renewal, expansion, and spending sensitivity; competition and pricing pressure; reliance on AWS and third-party messaging channels and mobile operating systems; cybersecurity and privacy regulation; and execution risks from growth and international expansion. Generative AI introduces additional product, regulatory, intellectual-property, and reputational risks. Braze reported no cybersecurity incident identified to date that materially affected, or was reasonably likely to materially affect, the company. It reported no litigation expected to have a material adverse effect and recorded $1.0 million of probable and estimable indirect-tax contingencies.
The company has a dual-class share structure: Class B shares carry ten votes each, and holders collectively had approximately 78.8% of voting power at January 31, 2024. No cash dividends are anticipated in the foreseeable future. The auditor issued an unqualified opinion on the financial statements.
Important facts for investors to verify
- Whether retention and customer expansion stabilize, particularly given the decline in dollar-based net retention.
- Whether operating cash generation translates into sustained positive free cash flow, and how much growth investment is required.
- How stock-based compensation, dilution, and future equity awards affect per-share economics.
- Whether the $480.0 million liquidity position remains adequate alongside purchase commitments, lease obligations, and continued operating losses.
- Whether customer-data regulation, cybersecurity exposure, third-party platform dependence, and competitive pricing affect renewals or margins.