Braze (BRZE) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 FY2025 was $135.5M, up 33.1% year-over-year, driven by new and existing customers, with international revenue comprising 44% of total revenue, despite a $0.8M reserve from an April service outage.

• Customer count grew to 2,102, with $500K+ ARR customers up 29% year-over-year to 212, and notable new business wins and upsells including Bauer Media Group, Hugo Boss, Etsy, and Lime.

• The company is investing in R&D, global expansion, and AI-driven product innovation, with new offices in Brazil, Romania, UAE, South Korea, and a new data center in Indonesia.

• Free cash flow was $11.4M, down from $21.7M last year, mainly due to $5.8M in capital expenditures for a new HQ and increased investment in growth.

• Appointment of Yvonne Wassenaar to the Board of Directors, replacing Doug Pepper.

Financial highlights

• Q1 revenue was $135.5M, up 33% year-over-year; subscription revenue comprised 96% of total, with professional services and onboarding fees making up the rest.

• Non-GAAP gross profit was $91.9M (67.9% margin), down from 68.8% last year; GAAP gross margin was 67.1%, down from 67.9% due to premium channel adoption and the outage.

• Non-GAAP operating loss was $10M (7.4% of revenue), improved from $16M (15.7%) last year; GAAP operating loss was $40.1M, improved from $41.9M.

• Non-GAAP net loss was $5.5M ($0.05/share), improved from $12.6M ($0.13/share); GAAP net loss was $35.6M, improved from $38.8M.

• Net cash from operating activities was $19.4M; total cash, cash equivalents, restricted cash, and marketable securities were $487.7M at quarter end.

Outlook and guidance

• Q2 FY2025 revenue expected at $140.5M–$141.5M; FY2025 revenue guidance is $577M–$581M, with non-GAAP operating loss of $19.5M–$23.5M.

• Q2 FY25 non-GAAP net loss per share expected at $(0.03)–$(0.04); FY25 at $(0.06)–$(0.10).

• On track for positive quarterly non-GAAP operating income and free cash flow in Q4 FY2025.

• Guidance includes negative impact from the $0.8M revenue reserve for the April outage.