But we are really focused on making sure that we are prepared with extremely solid foundations and continuously improving execution, so that when we do come out of this, that Braze is going to be right there ready to stop on the accelerator and springboard out of it.
Operator: Our next question comes from Matt VanVliet with BTIG.
Matthew VanVliet: As guess as you look at the — somewhat of an acceleration on the $500,000-plus net revenue retention rate, curious if you’re seeing even more sort of cross-sell and new channel adoption there? Or is this just sort of the natural expansion of large customers landing and expanding and already being at that size? Any additional color you can help that particularly at the larger sized customers where you’re clearly gaining market share.
Isabelle Winkles: Yes. So I think it’s really just a combination of existing large customers that are continuing to grow, adopting more channels, more use cases were further penetrating organizations by getting into new geos and new business units that they have, being able to support incremental new use cases, all of that comes with new volume and new monthly active users. So I think there’s existing customers, and we’re also doing well in terms of large net new customers. And so I think when you look at the contribution in our ARR from these large customers, we are built for a broad range of customer sizes, but we’re very well built for the top-tier enterprise. And so that I think you’re seeing the needs across those enterprises for highest level sophistication customer engagement platforms.
And as we continue to improve the product, increase our breadth of channels, we’re just continuing to further penetrate these organizations. In addition, 43% of our revenue earned outside the U.S., that means we already have a solid presence globally. A lot of these organizations, large multinationals, we can continue to support them and increase our exposure with them across the globe. So you’re just seeing us continue to penetrate a very — a great market that we think we have the right to win in.
Operator: Our next question comes from Taylor McGinnis with UBS.
Taylor McGinnis: Isabelle, just one for you. So the sequential cRPO growth was really solid. So aside from just strong execution on linearity, was there any impact from North Star or something onetime in the renewal base to keep in mind? And the reason why I ask, because as we look ahead, if the environment is stabilizing, could we start to see stronger growth quarter-over-quarter adjusting for seasonality, of course, throughout the year versus maybe what we saw last year?
Isabelle Winkles: Yes. Thanks for the question. So North Star did have an impact. And actually, if you — we’re not going to quantify it specifically. But if you remove the impact of North Star, Q2 of this year looks a little bit more like Q2 of last year. If you want to look at sort of sequential percentage growth in RPO, cRPO. So it looks a little bit closer to that. So that’s one way to think about the impact of North Star.
Operator: Our next question comes from Brent Bracelin with Piper Sandler.
Brent Bracelin: Great to see the change in the business. Even if Isabelle, even if I back out North Star, it looks like it’s the highest dollar change in subscription revenue and overall revenue ever. You got the acceleration in U.S., accelerating growth internationally, accelerating RPO growth. It just feels like something’s changed here. The strength, is it one area? It feels pretty broad-based. So my question here, does it feel the environment year-end or your ability to execute in this environment, the new normal, is it different now? Or again, I know one quarter doesn’t want to make it a trend, but it does — outside looking in, it feels like there was a change here and maybe I didn’t appreciate it going into the quarter that changes and just trying to understand to make sure if we fully do appreciate what it looks like to be a little healthier environment, your ability to at least execute in this environment has changed. So what do we think about that?
Isabelle Winkles: I think we’re very pleased with our execution results in the context of the macro that we continue to live in. So we’ve been talking about investments that we’ve made across our sales organization over the last several quarters, and Bill talked about some that continue on today. And we’re very pleased to see some of the results of that in Q2. That said, the environment continues to be challenged. And so while we are going to continue to invest in this improved execution across our sales organization, I think it is too soon to declare that we really feel like things are different on a persistent basis.
Brent Bracelin: Well, you’re certainly surprised us this quarter. Hopefully, we’ll get more surprises in the next few quarters.
Operator: Next question comes from Brian Schwartz with Oppenheimer.
Brian Schwartz: Following up on that last question, for you, Bill. The commentary is that the macro is unchanged and still challenging out there. So I wanted to ask you, what are you looking for to help you decide when to underwrite a higher level of new investments for the business for whenever the macro does turn?
Bill Magnuson: Yes. So first of all, we are actually still carrying some excess sales capacity, and we’ve spoken about this in past as well that we think we have the ability to grow into. And we’re similarly investing on the demand generation side to make sure that we can have our salesforce be as productive as possible. And all of that is about remaining in a forward posture, so that as things start to improve, we’re able to pick them up immediately. We believe that we have a right to win across this market and that, as I mentioned at the very top of the call, I think there’s been a lot of really exciting product innovation that we haven’t seen the full potential of from a revenue generation perspective, simply due to the realities of a lot of frozen or declining budgets that marketers have been living through in this year.
And so part of it is going to be the conditions and confidence improving, looking at brands extending their planning horizons. I think it’s why we have seen a bit more relative strength in the enterprise and we have across the SMB sector, simply because those businesses are more able to quickly shift back to planning on a multiyear time horizon. And that’s exactly where you’re going to invest in a premium product like Braze in order to set you up for your future. Some of the other things to that end that we would look at are going to be the venture activity. And we’re starting to see some green shoots there but continuing to see just more investment flowing into more promising and businesses, so that they can scale quickly. Part of it is going to be the calendar as well, getting into the next budget year, so that businesses are ready to be back on an investment footing as they start to look ahead into next calendar year, next fiscal year as we get to the end here.
And in the meantime, we’re going to continue to execute as well as we can and stay in control of everything that we can.
Operator: Our next question comes from Rob Morelli with Needham.
Robert Morelli: Congrats on the quarter, [indiscernible]. As customers look to expand on the platform in the current macro. Are you guys able to touch on where they’re expanding now compared to 1 year or 2 ago? Is it in different channels of capabilities, just still looking to understand where the incremental expansion dollar is going?
