Braze, Inc. (NASDAQ:BRZE) Q4 2024 Earnings Call Transcript

With respect to the conversations and what we’re seeing in terms of, customer excitement and trends, I think that AI continues to be the center point of a lot of that. And as I mentioned in the prepared remarks, in addition to working with OpenAI’s proprietary models, we’ve also been doing our own training number of models, including on various sizes of LAMA 2. And we’ve been really excited to see the results of those tests so far. We’re excited about, what that means both for copilots as well as around automated decision making. We’ve shared a little bit, we shared a bit at Forge, and we’ve shared some of the constituent components of Sage AI that we’re ready to talk about right now, both with our customers as well as, with all of you, through these, through this earnings call, but there’s a lot more that’s underway across our teams.

On the copilot side of the house, I think that the whole community is excited for this near term future where Gen AI and Braze is going to make it feel less like you’re using a tool and more like you’re working with, frankly, a whole team of specialists and consultants to help you tackle your business challenges. We’re thinking about this as being like having a brand strategist, a copy strategist, a developer, and data analyst all close at hand and ready to improve and accelerate customer engagement initiatives for our customers. When we talk to a lot of people at Forge, there’s a lot about operational efficiency. There’s a lot about helping marketers do, more with less. And I think that copilot features like this are particularly helpful in a platform Braze where we can deliver differentiated capability to people, but only when they have certain technical and data skills, you know, when we’re talking about various parts of the feature set.

And when we can lower the barrier to entry to leverage those capabilities, people get really excited about that because it means that they can compound the kind of skills that they’re acquiring, in their own role along with new features that Braze continues to roll out. You know, I think similarly continued progress on Gen AI in the creative production realm is make it easier to leverage Braze’s experimentation capabilities. One of the key competitive differentiators about Braze versus many of our less sophisticated or lower cost competitors has always been That we enable agility, and we enable experimentation across all the different strategies that a marketer, right, might run. But that’s unfortunately not a way of working that, You know, all teams and businesses are resource to take advantage of today.

And so, you know, we’re excited and we heard a lot of conversations from, customers that are experiencing with these new Gen AI capabilities to lower cost of production, to speed iteration cycles for new content and creative assets. And in doing so, you know, we’re excited that more companies are going to be able to work in a way that they find the advanced capabilities of Braze to be indispensable. And going back to the conversation on, you know, Black Friday, Cyber Monday and seeing more advanced features being used there, what that means is that there’s more realized for Braze across a larger community of marketers because more of them are able to use our more sophisticated capabilities.

Unidentified Analyst: That’s great. Thanks, Bill.

Bill Magnuson: Yep. Absolutely.

Operator: Our next question comes from Michael Berg with Wells Fargo. Please unmute yourself and ask your question.

Michael Berg : Hi. Thanks for taking my questions and congrats on the quarter. I wanted to ask, something more philosophically in the market. You guys are very well positioned to leverage first party data. And given the current macro and budgets being constrained, it seems that there is an ongoing shift from paid advertising to platforms such as Braze. Can you talk about that trend is that’s something that’s real, and how does Braze, potentially benefit from something like that? Thank you.

Bill Magnuson: Yeah. So this is something we’ve been talking about for a long time, which is that, I think a lot of the focus and the dollars in marketing organizations were primarily on acquisition, which meant in a lot of cases, performance marketing and advertising, and over time, we’ve seen that, you know, even as there’s been a capability to use first party to make those strategies more efficient and more effective, that the internal silos that existed in a lot of marketing teams between the performance marketing and the CRM or the customer engagement teams, just kept them from being able to utilize those. And so, going back to some of the analysis I just gave about what’s driving vendor consolidation, I think part of this is a mindset, which is that, you know, in the in the kind of quest to get additional efficiency when there’s more scrutiny and when these businesses are able to Slow down a little bit and rethink the way that they’ve been working.

They realize that actually there’s been this low hanging fruit there, for years now for them to be able to incorporate first party data and to be able to incorporate, first party, you know, channels into their acquisition and their performance marketing in order to drive additional efficiency. And so, you know, we’ve responded to that by increasing investment, especially over the last 12 to 18 months to make those, integrations that we have into that ecosystem, more comprehensive and make them easier to use, that in turn has been, then driving additional collaboration between the CRM and customer engagement teams, with their performance marketing or their acquisition teams. We think that that’s, that those are teams that should work in harmony over the long term, and it was really just, needed to have a catalyst in order to make that happen.