Braze, Inc. (NASDAQ:BRZE) Q1 2024 Earnings Call Transcript

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And so when you kind of think about the extensibility there, you continue to pull in more use cases over time. And so just across the board, we’re really thinking about how do we smooth the on-ramp of getting data into Braze, how do we make sure that over time organizations have across the entire set of people, collaborating, have got great perspective on Braze. It’s not just a marketing tool that kind of libs inside of their ecosystem, it’s really something that everyone can get value out of and that kind of gives them a home within it. And then you make it easy for them to bring new use cases in. You let them experiment and drive more value out of moving more and more workloads in the Canvas and give the massive flexibility to be able to deliver outputs, whether those are messages or product delivery or what have you through the flexibility of all of our different channels.

And those combined together to just continue to push vendor consolidation.

Michael Berg: Helpful. Thank you very much.

Operator: Next question comes from Derrick Wood with TD Cowen.

Derrick Wood: Great. Thanks for taking my question. Bill, last quarter you guys talked about kind of relative strength in the enterprise, but seeing more acute headwinds down market. This quarter you had a stronger net new customer generation. Can you just talk about anything you’d flag and what drove that sequential strength and maybe just comment on what you saw across enterprise versus commercial cohorts?

Bill Magnuson: Yes. So I think, as people are generally aware in SaaS, Q4 tends to be a pretty enterprise heavy quarter just because of the way the budget cycles work with a lot of these enterprises, and that definitely drives some Q4 specific behavior. As we got into Q1, I think that — as Isabelle mentioned, we’re continuing to broadly see a lot of the same pressures in the macro. And so a little bit more commercial business coming in, obviously, as you see in the net new customer adds. But I think, I would still characterize in broad strokes the differentiation between relative strength in those customer categories very similarly. I do think as well though, a lot of that — I mean, this is again echoing what Isabelle said earlier, a lot of the work that we’ve done to improve execution, our work against competitor, tactics, and things like that, has all been really bearing fruit and we just continue to see Braze — people across Braze all over the world, rising to the occasion of this difficult macro and making sure that we’re executing during this time where it’s such a great opportunity for us to be separating away from the competition.

I know it’s hard to always see that when the macro has such a tight lid on everybody’s results, but we’re really excited about the opportunity that this period represents, create separation in terms of market momentum, in terms of mindshare, really continuing to blow out the R&D velocity in such a meaningful way and we’re really excited to see things start to improve. I’m not going to speculate on exactly when that’s going to happen. We’re still seeing a pretty similar environment as we have for the last couple of quarters, but we’re excited about it. We’re controlling everything we can and I think we’re doing a great job of it.

Derrick Wood: Got it. Isabelle, one for you. Very strong free cash flow in the quarter. I know as you commented, there tends to be volatility quarter-to-quarter, but any goalposts we should think about keeping in mind for free cash flow for the year versus how you’re guiding operating income?

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