Braze Inc. (BRZE) FY2024 Analysis Report

Key Metrics

Executive Summary

Braze Inc. demonstrated robust revenue growth in FY2024, reaching USD 471.8 million, representing approximately 32.7% year-over-year increase from FY2023. Despite this growth, the company reported a net loss of USD 130.4 million, consistent with prior fiscal periods, reflecting ongoing investments in sales, R&D, and global expansion. The company’s balance sheet remains healthy with assets totaling USD 810.9 million and maintained cash reserves of USD 68.2 million. Management continues to focus on scaling operations, enhancing platform capabilities, and expanding international footprint, which are expected to support future revenue acceleration despite near-term profitability challenges.

Management Discussion and Analysis (MD&A)

During FY2024, Braze’s strategic investments in global markets and product development resulted in significant revenue uplift. Subscription revenues increased by approximately 33.4%, driven by expanding customer base across North America and international markets. Operating expenses rose substantially, primarily due to increased sales & marketing (USD 247.1M), R&D (USD 119.9M), and G&A (USD 102.0M), supporting long-term growth initiatives. The gross margin improved slightly, reflecting better scale efficiencies. Net losses persisted, mainly impacted by high operating costs and stock-based compensation, which totaled USD 99.3 million for FY2024. The company remains committed to managing operating leverage and optimizing capital deployment to improve profitability metrics over time.

Income Statement Analysis

Revenue for FY2024 grew to USD 471.8 million, up 32.7% from USD 355.4 million in FY2023, driven by increased customer adoption of the platform and upselling efforts. Gross profit increased to USD 324.3 million, representing a gross margin of approximately 68.7%, slightly higher than 67.3% in FY2023. Operating expenses surged to USD 469.0 million, primarily driven by sales & marketing and R&D, leading to a loss from operations of USD 144.7 million. After other income and expenses, the net loss remained high at USD 130.4 million. Earnings per share were negative USD 1.32, consistent with prior periods, reflecting ongoing investment phase rather than operational inefficiency. The revenue mix remains predominantly subscription-based (~95%), with steady growth in professional services.

Balance Sheet Analysis

At FY2024 year-end, total assets increased to USD 810.9 million, primarily from higher cash and marketable securities (USD 407.9 million). Cash and equivalents remained stable at USD 68.2 million, while marketable securities decreased slightly due to strategic investments. Accounts receivable increased to USD 92.3 million, reflecting growth in customer base, with an allowance for credit losses of USD 2.8 million. Total liabilities rose to USD 366.5 million, mainly from increased operating lease liabilities and accrued expenses. Stockholders’ equity held steady at USD 444.2 million, indicating strong capital structure, albeit with accumulated deficits of USD 483.1 million. Liquidity remains healthy, with a current ratio of approximately 2.07, supporting ongoing operations and expansion plans.

Cash Flow Analysis

Operating activities generated USD 6.9 million in FY2024, a notable improvement from negative cash flow of USD 22.3 million in FY2023, driven by better receivables collection and cost controls. Investing activities used USD 20.0 million, primarily for the acquisition of marketable securities and capitalized software costs. Notably, the company paid USD 16.3 million for acquisitions, including North Star Y Pty Ltd, expanding local presence in Australia and New Zealand. Financing activities contributed USD 13.1 million, mainly from stock option exercises and employee stock purchase plans. The company did not pay dividends and continues to prioritize reinvestment in growth initiatives.

Ratios & DuPont Analysis

Net profit margin remains negative at -27.6%, indicating ongoing investment phase. Return on Assets (ROA) stands at -16.1%, reflecting net losses relative to total assets. Return on Equity (ROE) is -29.4%, driven by accumulated deficits. Asset turnover ratio is approximately 0.58, indicating moderate efficiency in asset utilization. Equity multiplier is 1.83, suggesting manageable leverage. The combined DuPont analysis highlights that while revenue growth is robust, profitability metrics are still under development, emphasizing the need for operational efficiencies and margin expansion.

Risk Factors

Major risks include intense market competition from other customer engagement platforms, regulatory challenges surrounding data privacy and security, macroeconomic uncertainties impacting enterprise IT budgets, and rapid technological evolution requiring continuous innovation. Operational risks involve scaling infrastructure and international compliance. Financial risks relate to sustained losses and capital efficiency. Additionally, geopolitical tensions and foreign exchange volatility pose challenges to international expansion. The company’s ability to convert growth into profitability remains a key consideration for investors.

Notes & Additional Commentary

FY2024 results include strategic investments in international markets and product enhancements, which have temporarily suppressed profitability but are expected to yield long-term competitive advantages. Notable one-time expenses include acquisition costs and employee stock-based compensation. No material impairment charges or unusual items were recorded. The company’s deferred tax assets remain fully offset by valuation allowances due to continued losses. Overall, the company’s focus on scalable growth and market penetration is clear, with profitability expected in future periods as operating leverage improves.

Investment Implications

In the short term, Braze presents an opportunity for investors seeking high-growth SaaS plays with expanding customer base and international footprint. However, the persistent net losses and high operating expenses suggest caution until clearer signs of margin expansion emerge. The company’s solid cash reserves and strategic acquisitions support growth trajectory, but execution risks and market competition remain. Long-term investors should monitor ongoing product innovation, international expansion success, and path to profitability. A balanced outlook recognizes the company’s growth potential amid near-term financial pressures, emphasizing the importance of operational efficiencies and cash flow improvement.