Braze, Inc. Class A Common StockBRZE
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Braze, Inc. Class A Common Stock Citi’s 2026 Global TMT Conference

Review the key takeaways and the transcript of this earnings call.

Period 2026Duration35 minParticipants2

Transcript

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Tyler RadkeCo-Head of U.S. Software Equity Research

Morning, everybody. I am Tyler Radke, Citi's Co-head of U.S. Software. We are joined by Braze Co-founder, CEO, Bill Magnuson. Bill, thank you for joining Citi's Tech Conference, I think the third or fourth year in a row, and shortly after earnings.

Tyler RadkeCo-Head of U.S. Software Equity Research

Yep. Absolutely. Always appreciate it.

Tyler RadkeCo-Head of U.S. Software Equity Research

There has been a lot of noise in the market, and maybe we can just sit on the earnings topic for a moment. To kick off, could you just walk us through how the quarter played out? I think there were a lot of questions on the dynamics specifically around CRPO growth. So maybe we could hit that just with how you are seeing underlying growth versus some of those metrics.

Bill MagnusonCo-Founder and CEO

Yeah, absolutely. So yeah, I mean, overall, great quarter. As we mentioned, bookings was strong within the quarter, and it was also one of the most consistent global results that we have seen probably in the last five years, with all of our major regions contributing at a high level. Similarly, trends around our competitive win rates and sales force productivity all continued into the quarter, and so great to see that. The organic CRPO did take two percentage point downstep to 23% in the quarter. Part of that also contributed to by just seasonality of Q4 and Q1 of this year were really big.

Bill MagnusonCo-Founder and CEO

Yeah renewals quarters, which is great to get through more of the renewals for the year a little bit earlier on.

Bill MagnusonCo-Founder and CEO

Some seasonality contributing there. Overall, we were really happy with the continued bookings momentum from Q4 into Q1 into Q2, and looking at the pipeline and the setup for the second half. So, happy to flow through the beat and put a raise into the revenue forecast as well for the full year. We are looking forward to Forge here in a couple of weeks, which historically has always been a big accelerator pipeline for us. I think that our competitive positioning also continues to be in a really strong space, especially vis-à-vis the legacy marketing clouds.

Bill MagnusonCo-Founder and CEO

The continuation of share gain within that part of the, primarily in the enterprise space, is something that certainly my sales leaders are looking forward to here through the end of the year and into the next few quarters. Our AI roadmap is really resonating out there in the market.

Bill MagnusonCo-Founder and CEO

Yeah. When you look at the pace at which we have been able to bring products to market, the acceleration of the roadmap this year, the fact that Agent Console and Operator got put into people's hands months ahead of schedule and now we have done the same with a lot of our work around our remote MCP server, our Headless Operator, and other work around things like Decisioning Studio Go, all of which you are going to hear a lot more about at Forge.

Bill MagnusonCo-Founder and CEO

All of those things have accelerated, and one of the really exciting things about a lot of the Forge updates this year is just how much of it is already in beta or already moving into general availability. This is definitely not a year where there is a bunch of slideware and future promises.

Bill MagnusonCo-Founder and CEO

The build is all happening in real time, and that means that we are putting capabilities in customers' hands faster. It also means it is driving contributions to our growth more quickly as well. It is enhancing our competitiveness, too, because frankly, in the competitive landscape, I think that we are sprinting and everyone else is still standing still.

Tyler RadkeCo-Head of U.S. Software Equity Research

Yeah. It is great to hear. I definitely want to hit on some of the BrazeAI product stuff, but just a few more financial questions because they have been topical.

Tyler RadkeCo-Head of U.S. Software Equity Research

Yep. How would you characterize just this reclassification of revenue from subscription into Professional Services?

Tyler RadkeCo-Head of U.S. Software Equity Research

I think you had talked about maybe that dynamic allowing you to progress through renewals faster. Just what happened, how should investors kind of think about that PS versus subscription mix Yeah going forward?

Bill MagnusonCo-Founder and CEO

Yeah. First of all, I will just take a step back. The motivation for the pricing and packaging change that is now playing out in the numbers, which I will explain in a bit more detail. But the motivation actually was to do a better job of aligning the Professional Services delivery with exactly where customers had a distinct willingness to pay for the different types of advisory services that we provide. You actually, if you go look at our post-sales headcount, you will see that our post-sales headcount is not swelling at this rate that the Professional Services revenue, obviously, it appears to be growing. That is because while there is this kind of accounting shift in terms of how this revenue is labeled, it is not like there has been a shift in business strategy towards services. In fact, actually, the relative proportion of post-sales headcount is shrinking.

Bill MagnusonCo-Founder and CEO

in the business because we are achieving efficiency gains through Operator doing things like delivering technical support and customer success advisory and things like that. One thing that is happening, I mentioned this on the call, is that there are forms of advanced advisory services that we are seeing increased demand for because of some of the increases in the adversarial environment. Deliverability is harder than ever, and everyone in this room with an email inbox probably understands why. When you look at the amount of agentic marketing messaging and mail traffic that is out there right now, for brands that actually are trying to play this game the right way, with the right levels of consent and engaging with their loyalty programs and loyal audiences and things like that, simply getting that signal through all the noise is harder than it has ever been.

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