Braze, Inc. (NASDAQ:BRZE) Q3 2023 Earnings Call Transcript

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And so when you’re looking to optimize ROI, that’s an easy place to start. Another important aspect of it is the vendor consolidation, which I just talked about through — when I talk through the way that a renewal often runs as well as continued use case expansion. And then there are a lot of businesses out there that are also still growing. You’ll we actually had in this quarter the sequential messaging and MAU growth from the prior quarter to this one, were both higher this year than they were last year. And so we are seeing robust growth in terms of the amount of just digital activity happening out there amongst our customer base. And so even though there is pressure on spend, and we are seeing certain areas where there are headwinds and growth for certain categories.

Remember that BRACE is a highly diversified product that sells across all different verticals, all different company sizes and all the geographies around the world, and there are a lot of areas where growth is still robust, and we’re seeing great upsell motions through those.

Operator: Next question comes from Pinjalim Bora from JPMorgan. Please go ahead.

Pinjalim Bora: Congrats on the quarter. One quick one for you, Bill. What are you hearing from customers when you’re talking about marketing budgets and customer engagement budgets for next year what are you hearing? Are they thinking about resetting them lower? Is it — does it seem to be more resilient from their point of view? Any color would be helpful.

Bill Magnuson: Yes. I think we’re seeing broad-based sentiment where businesses are just trying to become more efficient in the spending that they’re doing — we’re seeing technology leaders getting involved in a lot of the kind of marketing decisions as well and helping to rationalize the footprint of products that are out there. I think there’s probably been a lot of shelf were purchased across people’s environments over the last couple of years. It’s one of the reasons that — we’ve always been really focused on time to value, making sure that no integration gets left behind and that we are getting all of our customers up and running early in their annual contract life cycles. But we’re definitely hearing from a lot of brands that they’re kind of cleaning out the craft, if you will, from a lot of their software spend.

We also are seeing that sentiment obviously shift or varying a lot by market, by industry and by geography. And I don’t think that I could say that there’s a broad-based like we want this to be higher or lower or the same as last year. It’s really a focus on efficiency and making sure that when they’re making new investments that those are delivering value to them quickly.

Operator: Next question comes from Pat Walravens from JMP. Please go ahead.

Pat Walravens: Great. Isabelle, can we go back to the earlier question about sequential growth, as you probably followed, investors just went through this with the Zoom Info. So I’m just wondering, is sequential growth that you guided to a good starting point for how to think about next year. And if not, why would sequential growth not be a good indicator.

Isabelle Winkles: Thanks for the question. So again, I’m not going to answer specifically how to think about how sequential growth going into Q4 relates next year. I think there’s enough uncertainty out there. We are extremely confident with our long-term prospects. And right now, we are continuing to see the dislocation associated with the challenging and uncertain macroeconomic environment. What I will say about Q4 and the guide is we continue to approach this with a similar methodology to prior quarters and embed an appropriate amount of risk adjustment. And so as we continue to navigate this uncertain environment, that type of risk adjustment is appropriate and necessary. And we look forward to having more clarity coming out of Q4 and being part of the way through Q1 to give more specific guidance for FY ’24.

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