Download PDF

1. Company Snapshot

1.a. Company Description

Braze, Inc.operates a customer engagement platform that provides interactions between consumers and brands worldwide.It offers data ingestion products, such as Braze software development kits that automatically manage data ingestion and the delivery of mobile and web notifications, in-application/in-browser interstitial messages, and content cards, as well as can be integrated into a range of digital interfaces and application development frameworks; REST API that can be used to import or export data or to trigger workflows between Braze and brands' existing technology stacks; and partner cohort syncing, which allow brands to sync user cohorts from partners.


The company also offers classification products, including segmentation that can define reusable segments of consumers based upon attributes, events, or predictive propensity scores; segment insights, which allows customers to analyze how segments are performing relative to each other across a set of pre-selected key performance indicators, and helps to understand the factors that determine which consumers belong to a particular segment; and predictive suite that allows customers to identify groups of consumers that are of critical business value.In addition, it provides personalization and action products; and orchestration products, which include Canvas, an orchestration tool that allows customers to create journeys, mapping out multi-steps, and cross-channel messaging experiences, which include onboarding flows, nurture campaigns, win-back strategies, and others; campaigns, which allow customers to send one set of single-channel or multi-channel messages to be delivered to customers in a particular user segment; event and API triggering; frequency capping and rate limiting; intelligent selection; and reporting and analytics.The company was formerly known as Appboy, Inc.


and changed its name to Braze, Inc.in November 2017.Braze, Inc.


was incorporated in 2011 and is headquartered in New York, New York.

Show Full description

1.b. Last Insights on BRZE

Braze's recent performance was negatively impacted by concerns over slowing growth and free cash flow volatility. The company's AI-driven marketing solutions and international expansion, which are expected to drive growth, have yet to materialize in the short term. Additionally, the rise of consumer weakness, as mentioned in a November 21 earnings preview, may threaten Braze's growth trajectory. Furthermore, the company's stock-based compensation expenses are rising, which could negatively impact its bottom line.

1.c. Company Highlights

2. Braze's Q3 Results Exceed Expectations, Driven by Strong AI Adoption

Braze reported revenue of $191 million, a 25.5% year-over-year increase, with non-GAAP gross margin at 69.1%. Non-GAAP operating income was $5 million, or 2.7% of revenue. The company's non-GAAP net income attributable to Braze shareholders was $7 million, or $0.06 per share, slightly below estimates of $0.06227. The actual EPS is a positive sign, demonstrating the company's ability to generate profits. Braze's revenue growth is driven by existing customer contract expansions, renewals, and new business, with the Braze AI decisioning studio contributing $4.8 million of revenue in the quarter.

Publication Date: Dec -20

📋 Highlights
  • Revenue Growth:: Q3 revenue jumped 25.5% YoY to $191M, driven by contract expansions and new customers.
  • AI Product Contribution:: Braze AI Decisioning Studio generated $4.8M in Q3, with 2% projected annual revenue growth contribution.
  • Customer Expansion:: Total customers rose 14% YoY to 2,528, while large customers (+29% YoY to 303) and net customer adds (106 sequential) accelerated.
  • Margin Improvement:: Non-GAAP gross margin hit 69.1%, and non-GAAP operating margin expanded by 400 bps YoY, with $18M free cash flow.

Strong Customer Growth and AI Adoption

The company's total customer count increased 14% year-over-year to 2,528 customers, with large customers growing 29% year-over-year to 303. Braze's CEO, Bill Magnuson, attributed the growing momentum to the company's leadership in the space, investment in R&D, and AI innovation. The AI decisioning product, Decisioning Studio, has received a positive reception from customers, with early traction in various use cases. Braze is optimistic about the growth potential of this product, which is expected to become a more significant part of its story in fiscal '27.

Valuation Metrics

With a P/S Ratio of 5.43 and an EV/EBITDA of -29.28, Braze's valuation appears to be largely driven by its growth prospects. The company's ROE (%) is -21.74, and ROIC (%) is -19.43, indicating that Braze is still in a growth phase and investing heavily in its business. Analysts estimate next year's revenue growth at 24.2%, which is slightly lower than this year's growth rate. The guidance for Q4 2026 and the full fiscal year 2026 indicates continued strength in the business, with revenue expected to grow 23% year-over-year.

Future Growth Prospects

Braze's focus on AI-driven solutions and its decisioning studio is expected to drive further expansion. The company's ability to land and expand within accounts, particularly among larger customers, has been a key driver of growth. With a significant TAM to access, Braze will continue to evaluate opportunities, including potential M&A, to drive its product road map and vision forward.

3. NewsRoom

Card image cap

Braze Highlights ChatGPT SDK, Agent Console and AI Personalization Push at Needham Conference

Jan -16

Source: defenseworld.net

Card image cap

Comparing Braze (NASDAQ:BRZE) & Guidewire Software (NYSE:GWRE)

Jan -13

Source: defenseworld.net

Card image cap

Braze: Continue To Stay Bullish As The Revenue Growth Outlook Gets Better

Dec -25

Source: seekingalpha.com

Card image cap

Braze: The Rebound Is Just Beginning As Revenue Accelerates

Dec -23

Source: seekingalpha.com

Card image cap

Wall Street Analysts Think Braze (BRZE) Could Surge 33.5%: Read This Before Placing a Bet

Dec -12

Source: zacks.com

Card image cap

Braze, Inc. (BRZE) Presents at Barclays 23rd Annual Global Technology Conference Transcript

Dec -11

Source: seekingalpha.com

Card image cap

Missed NVIDIA? Braze Might Be the Next AI Stock Breakout

Dec -11

Source: marketbeat.com

Card image cap

Why Braze Stock Jumped Today

Dec -10

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.02%)

6. Segments

Subscription

Expected Growth: 13.05%

Braze, Inc.'s 13.05% subscription growth is driven by increasing demand for customer engagement and retention solutions, expansion into new industries, and strategic partnerships. Additionally, the company's AI-powered platform and personalized messaging capabilities are key differentiators, attracting new customers and driving upsell opportunities.

Professional Services and Other

Expected Growth: 12.43%

Braze's Professional Services and Other segment growth of 12.43% is driven by increasing demand for personalized customer engagement, expansion of existing client relationships, and growth in new industries such as fintech and healthcare. Additionally, the company's investments in AI-powered technology and strategic partnerships have enhanced its offerings, leading to higher revenue.

7. Detailed Products

Customer Engagement

Braze's customer engagement platform enables businesses to send targeted, personalized messages across multiple channels, including email, push notifications, in-app messages, and more.

Customer Data Platform (CDP)

Braze's CDP collects and unifies customer data from various sources, providing a single customer view and enabling targeted marketing and analytics.

Mobile Marketing Automation

Braze's mobile marketing automation platform enables businesses to automate and optimize mobile marketing campaigns, improving customer engagement and retention.

A/B Testing and Experimentation

Braze's A/B testing and experimentation platform enables businesses to test and optimize marketing campaigns, improving customer engagement and conversion rates.

Customer Journey Mapping

Braze's customer journey mapping platform enables businesses to visualize and optimize customer journeys, improving customer experience and loyalty.

Predictive Analytics

Braze's predictive analytics platform enables businesses to predict customer behavior and identify high-value customers, improving customer retention and revenue.

8. Braze, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Braze, Inc. operates in a niche market, providing a unique customer engagement platform. While there are some substitutes available, they are not as comprehensive as Braze's offerings, reducing the threat of substitutes.

Bargaining Power Of Customers

Braze's customers are typically large enterprises with complex customer engagement needs. While they may have some bargaining power, Braze's customized solutions and high switching costs reduce their bargaining power.

Bargaining Power Of Suppliers

Braze's suppliers are primarily cloud infrastructure providers and data partners. The company's diversified supplier base and lack of dependence on a single supplier reduce the bargaining power of suppliers.

Threat Of New Entrants

The customer engagement platform market is attractive, and new entrants may be drawn to it. However, Braze's established brand, high barriers to entry, and complex technology reduce the threat of new entrants.

Intensity Of Rivalry

The customer engagement platform market is competitive, with several established players. However, Braze's unique value proposition, strong customer relationships, and continuous innovation reduce the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 16.94%
Debt Cost 3.95%
Equity Weight 83.06%
Equity Cost 9.58%
WACC 8.62%
Leverage 20.40%

11. Quality Control: Braze, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Pegasystems

A-Score: 4.9/10

Value: 1.3

Growth: 8.0

Quality: 8.7

Yield: 0.0

Momentum: 8.0

Volatility: 3.3

1-Year Total Return ->

View Full Report
Stock-Card
Dynatrace

A-Score: 4.9/10

Value: 1.8

Growth: 8.9

Quality: 8.6

Yield: 0.0

Momentum: 3.0

Volatility: 7.0

1-Year Total Return ->

View Full Report
Stock-Card
Paycom Software

A-Score: 4.7/10

Value: 3.1

Growth: 8.9

Quality: 8.4

Yield: 1.0

Momentum: 1.5

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
Smartsheet

A-Score: 4.6/10

Value: 2.0

Growth: 7.4

Quality: 5.2

Yield: 0.0

Momentum: 7.0

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
Q2 Holdings

A-Score: 3.4/10

Value: 1.0

Growth: 7.4

Quality: 4.9

Yield: 0.0

Momentum: 2.5

Volatility: 4.7

1-Year Total Return ->

View Full Report
Stock-Card
Braze

A-Score: 3.4/10

Value: 4.6

Growth: 6.0

Quality: 4.6

Yield: 0.0

Momentum: 2.0

Volatility: 3.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.51$

Current Price

17.51$

Potential

-0.00%

Expected Cash-Flows