So when you combine that factor with the strong ACV and the linearity, all of that combined together that drives kind of the level of outperformance that you saw. We are continuing — you heard Bill talk about the — where we are in the macro. We’re not anticipating that to improve. And therefore, we’re continuing to have a risk-adjusted posture in our earnings — in our guidance. The only other thing to mention is on a sequential basis, remember that Q1 to Q2 has the number of day count that changes. So Q1 only has 89 days. All the other quarters have 92. And so from a sequential perspective, you end up with a very strong sequential growth between Q1 and Q2. That does not repeat in any other quarter.
Operator: Our next question comes from Arjun Bhatia with William Blair.
Arjun Bhatia: Bill, maybe one for you. It seems like ease of use and kind of maybe [indiscernible] reconfigured data marketing is a big part of the investments that you’re making. How much of a sticking factor, gating factor was that with customers for growth? And as you make these investments, is the goal to expand the [indiscernible] customer segment that you didn’t have access to or maybe just increase the intensity with which customers are even [indiscernible] the data that you’re putting in the platform?
Bill Magnuson: Yes. So it’s definitely both, but they really go hand in hand. If you take, for instance, consumables or CPG as an example, many of those brands don’t have large mobile app audiences. And so the historical way, which was very SDK-centric that we got the vast majority of the data into Braze is not going to be as applicable to a lot of their use cases. But when you look at — to take — to continue with that example, when you look at their paid ad spend, the combination of pulling the growing first-party data sets that they’re creating out of data warehouses through something like cloud data ingestion or using a partner like a CDP or [indiscernible] CTL provider into Braze and then being able to take action with things like our audience sync capability is not what you would think of as a traditional Braze use case of integrating into a mobile app and sending push notifications.
But it’s actually a tremendous ROI when you consider the per user orchestration of data as it’s generated in order to direct marketing actions. And so it’s a combination of both, us expanding into new verticals and into new use cases as well as the expansion of our own channel and platform breadth. So as Braze has more places to interact with customers and more places collect data, that enables us to execute on more use cases. Of course, Canvas has been architected the entire time to be incredibly flexible and to enable customers to be able to take action across all of these different places. And so when you combine those things together, what you get is a greater amount of optionality for our customers to move within the surface area of our product.
And in order to support their movement through that surface area, you need to be able to — we need to be able to make it easy for them to get new data into Braze and into places where we’re going to be able to make sense of it and take action on it quickly.
Arjun Bhatia: Got it. Super helpful. And for Isabelle, I know you have a free cash flow breakeven timeline out there. As we just kind of navigate through the next few quarters of continued macro, what would be some of those factors that maybe get you to push or pull that timeline and some of the investments that you’re making in the business?
Isabelle Winkles: Yes. Thanks for the question. So are you asking specifically only on free cash flow or the operating income as well? So I mean there’s two different sets of answers.
Arjun Bhatia: No. In general…
Isabelle Winkles: Got it. Okay. Great. Yes. So I’m going to reiterate some comments that we’ve been making as we’ve been talking about this path to profitability. Don’t expect us to overachieve on this, because to the extent we generate extra capacity, we are going to look to prudently reinvest that into the business in order to foster overall growth. So I think we’re sticking to the timeline that we have articulated, both for the free cash flow and the operating income. We were very pleased with our performance this quarter. But actually, we are taking some of the savings that we’ve realized on a year-to-date basis, and we are enabling certain parts of the business to redeploy some of those savings through the back half of the year while maintaining a laser focus on our guidance for Q4. So the short answer is don’t expect us to overachieve and we have — we’re consistent in that commentary.
Operator: [Operator Instructions]. Our next question comes from Nick Altmann with Scotiabank.
Nicholas Altmann: Just a quick one for me. As we entered the year, there was sort of this notion that COVID perhaps had a little bit of front office pull forward and then the turbulent macro front office, MarTech initiatives, maybe get put on the back burner. Just given the booking strength in Q1 and 2Q here, is there any way to sort of parse out the strength between the end market holding up a little bit better than maybe you guys had expected versus you guys just executing much better? Because I know that Isabelle, you had called out execution was very strong in 2Q. So just wondering if you could kind of parse out the strength between those two factors?
Bill Magnuson: Yes. I mean I said this at the top, which is that I think that the broad macro that we’re experiencing and that everyone is experiencing together has been pretty consistent throughout the year so far. And so I’ve also been speaking for quarters now on these calls about how we think that a lot of the narratives out there about the front office, about concepts like optimizing spend don’t apply to customer engagement in the same way, because the marginal ROI of customer engagement activities by customers is so much higher than a lot of other marketing spend. We’re not a seat-based model. We’re tied to the activity of the customers. And the fact that you also can’t go through, a lot of the optimization strategies that companies have used for things like data warehouses or other sorts of analysis where you do things like sampling, just simply don’t apply when you need to actually be able to talk to your customers, right?
It’s on responsibility for brands. And so I would present that in two ways. One is that we think we’re seeing a pretty consistent buyer behavior throughout these periods, but I think also a lot of the front-office narratives that have been floating around out there don’t apply to customer engagement in the same way. And then I’ll just reiterate that we have been really happy with execution. It was four quarters ago on this call that we highlighted some of the struggles that we were seeing from a salesforce productivity perspective. And in those last four quarters, we’ve done a tremendous amount of work on this topic, including org structure and leadership changes across both, sales and go-to-market strategy. We’ve enhanced our training and our in-person onboarding, tighter performance management.
And we also had a renewed focus on competitive strategy to make sure that in an environment with less opportunities that we’re winning as many of them as we can. And we’re encouraged by that progress, and we think we’re going to continue to make progress there. I think sales moral is high, and we’re working really well together as the team. We’re actually currently completing what is effectively a midyear global sales kickoff, complete with training, workshops and role playing, all of which have been done in person. It’s actually an example of some of these incremental investments that we’re making right now that Isabelle just alluded to on the last answer. Within that, we’ve been prioritizing things that are not as sticky. So that’s why you’re seeing headcount is still growing in a very tempered way.
