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What changed in Braze, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Braze, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+262 added−239 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-01)

Top changes in Braze, Inc.'s 2025 10-K

262 paragraphs added · 239 removed · 212 edited across 7 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

140 edited+42 added−20 removed377 unchanged
Biggest changeAn inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration. 42 Table of Contents Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.
Biggest changeAnti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock. 43 Table of Contents Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, each as currently in effect, may have the effect of delaying or preventing a change of control or changes in our management.
Further, some of our contracts limit the amount we can increase prices from period to period or include pricing guarantees. Accordingly, these pricing restrictions may cause the revenue generated from these contracts to not keep pace with our costs, particularly if we are adversely affected increasing costs caused by inflation, including labor and employee benefit costs.
Further, some of our contracts limit the amount we can increase prices from period to period or include pricing guarantees. Accordingly, these pricing restrictions may cause the revenue generated from these contracts to not keep pace with our costs, particularly if we are adversely affected by increasing costs caused by inflation, including labor and employee benefit costs.
We cannot guarantee that any change in strategy will be successful and such changes may cause our revenue to decline, which may inhibit our ability to scale our business and prevent us from achieving and maintaining profitability over the long term.
We cannot guarantee that any change in strategy will be successful and such changes may cause our revenue to decline, which may inhibit our ability to scale our business and prevent us from achieving and maintaining profitability over the long term.
While we have taken steps to mitigate the impact on us, such as implementing the European Commission’s updated standard contractual clauses, or the SCCs, and the U.K.’s international Data Transfer Agreement (or the U.K.’s international data transfer addendum that can be used with the SCCs), the validity of relying on the SCCs as a transfer mechanism has been, and is expected to continue to be, the subject of further litigation in the EU.
While we have taken additional steps to mitigate the impact on us, such as implementing the European Commission’s updated standard contractual clauses, or the SCCs, and the U.K.’s international Data Transfer Agreement (or the U.K.’s international data transfer addendum that can be used with the SCCs), the validity of relying on the SCCs as a transfer mechanism has been, and is expected to continue to be, the subject of further litigation in the EU.
We may also experience decreases or decreased growth rates in sales of new subscriptions to some of our customers, which would adversely affect our business, financial condition and results of operations. Natural catastrophic events and human-made problems such as climate change, power disruptions, computer viruses, global pandemics, data security breaches and terrorism may disrupt our business.
We may also continue to experience decreases or decreased growth rates in sales of new subscriptions to some of our customers, which would adversely affect our business, financial condition and results of operations. Natural catastrophic events and human-made problems such as climate change, power disruptions, computer viruses, global pandemics, data security breaches and terrorism may disrupt our business.
Our results of operations may fluctuate significantly from period to period due to many factors, many of which are outside of our control, including: • failure to execute on our growth strategies; • the level of demand for our platform; • the rate of renewal of subscriptions with, and extent of sales of additional subscriptions to, existing customers; • the size, timing, duration and pricing, and other terms of our subscription agreements with existing and new customers; • the introduction of new products and product enhancements by existing competitors or new entrants into our market, and changes in pricing for products offered by our competitors; • network outages, security breaches and other cyber-attacks, technical difficulties with or interruptions to our platform; • customers delaying purchasing decisions in anticipation of new developments or enhancements by us or our competitors or otherwise; • changes in customers’ budgets; 18 Table of Contents • seasonal variations related to sales and marketing and other activities, such as expenses related to our customers’ increased usage of our platform and products during the fourth quarter; • our ability to increase, retain and incentivize the strategic partners that market and sell our platform; • the timing of growth of our business, in particular through our hiring of new employees and international expansion; • our ability to control our operating expenses and other costs; • our ability to hire, train and maintain our direct sales team; • unforeseen litigation and inability to enforce, protect or defend our intellectual property, or claims of infringement by third parties; • the timing of our adoption of new or revised accounting pronouncements applicable to us and the impact on our results of operations; • fluctuations in our effective tax rate; and • general economic and political conditions, as well as economic conditions specifically affecting industries in which our customers operate.
Our results of operations may fluctuate significantly from period to period due to many factors, many of which are outside of our control, including: • failure to execute on our growth strategies; • the level of demand for our platform; • the rate of renewal of subscriptions with, and extent of sales of additional subscriptions to, existing customers; • the size, timing, duration and pricing, and other terms of our subscription agreements with existing and new customers; • the introduction of new products and product enhancements by existing competitors or new entrants into our market, and changes in pricing for products offered by our competitors; • network outages, security breaches and other cyber-attacks, technical difficulties with or interruptions to our platform; • customers delaying purchasing decisions in anticipation of new developments or enhancements by us or our competitors or otherwise; • changes in customers’ budgets; • seasonal variations related to sales and marketing and other activities, such as expenses related to our customers’ increased usage of our platform and products during the fourth quarter; • our ability to increase, retain and incentivize the strategic partners that market and sell our platform; • the timing of growth of our business, in particular through our hiring of new employees and international expansion; • our ability to control our operating expenses and other costs; • our ability to hire, train and maintain our direct sales team; • unforeseen litigation and inability to enforce, protect or defend our intellectual property, or claims of infringement by third parties; • the timing of our adoption of new or revised accounting pronouncements applicable to us and the impact on our results of operations; • fluctuations in our effective tax rate; and • general economic and political conditions, as well as economic conditions specifically affecting industries in which our customers operate.
The market for customer engagement products is evolving and highly competitive. There are several established and emerging competitors that address specific aspects of customer engagement. We face intense competition from software companies that offer marketing solutions, such as legacy marketing clouds like Adobe and Salesforce, and point solutions like Airship, Iterable, Klaviyo, CleverTap (Leanplum) and MoEngage.
The market for customer engagement products is evolving and highly competitive. There are several established and emerging competitors that address specific aspects of customer engagement. We face intense competition from software companies that offer marketing solutions, such as legacy marketing clouds like Adobe and Salesforce, and point solutions like Airship, Iterable, Klaviyo, CleverTap and MoEngage.
We may not be able to easily switch our AWS operations to another cloud or other data center provider if there are disruptions or interference with our use of any third-party provider’s services, and even if we do switch our operations, the process can require significant time and expense and other cloud and data center providers are subject to the same risks.
We may not be able to easily switch our AWS or Rackspace operations to another cloud or other data center provider if there are disruptions or interference with our use of any third-party provider’s services, and even if we do switch our operations, the process can require significant time and expense and other cloud and data center providers are subject to the same risks.
If we were unable to enhance our platform offerings to keep pace with rapid technological and regulatory change, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, more conveniently or more securely than our platform, our business, financial condition and results of operations may be adversely affected.
If we are unable to enhance our platform offerings to keep pace with rapid technological and regulatory change, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, more conveniently or more securely than our platform, our business, financial condition and results of operations may be adversely affected.
Our platform engages with consumers through a number of channels and integrations, and we are dependent on third-party providers for delivery of content in many of these channels and integrations, including, among others, emails, SMS/MMS, third-party messaging services and audience sync advertising campaigns. We are also dependent on Apple services and Google services for delivery of mobile and web notifications.
Our platform engages with consumers through a number of channels and integrations, and we are dependent on third-party providers for delivery of content in many of these channels and integrations, including, among others, emails, SMS/MMS/RCS, third-party messaging services and audience sync advertising campaigns. We are also dependent on Apple services and Google services for delivery of mobile and web notifications.
In the event that AWS’s or any other third-party provider’s systems or service abilities are hindered by any of the events discussed above, our ability to operate our platform may be impaired, our customers may be impacted, we may be subject to claims for refunds or terminations under our contracts, and our reputation and brand may be harmed.
In the event that AWS’s, Rackspace’s or any other third-party provider’s systems or service abilities are hindered by any of the events discussed above, our ability to operate our platform may be impaired, our customers may be impacted, we may be subject to claims for refunds or terminations under our contracts, and our reputation and brand may be harmed.
Additionally, AWS or other cloud providers may experience threats, attacks or security breaches from computer malware, ransomware, viruses, social engineering (including phishing attacks), denial-of-service or other attacks, employee error, theft or misuse and general hacking, including from state-sponsored or criminal hacking groups, which have become more prevalent in our industry.
Additionally, AWS, Rackspace or other cloud providers may experience threats, attacks or security breaches from computer malware, ransomware, viruses, social engineering (including phishing attacks), denial-of-service or other attacks, employee error, theft or misuse and general hacking, including from state-sponsored or criminal hacking groups, which have become more prevalent in our industry.
If we, our customers or our third-party service providers suffer, or are perceived to have suffered, a security breach or other security incident, we may experience adverse consequences. Applicable data privacy and security obligations may require us to notify relevant stakeholders or regulators of security incidents.
If we, our customers or our third-party service providers or vendors suffer, or are perceived to have suffered, a security breach or other security incident, we may experience adverse consequences. Applicable data privacy and security obligations may require us to notify relevant stakeholders or regulators of security incidents.
While the EU GDPR and the U.K. GDPR remain substantially similar for the time being, the U.K. government has announced that it will seek to chart its own path on data protection and reform its relevant laws, including in ways that may differ from the EU GDPR.
GDPR remain substantially similar for the time being, the U.K. government has announced that it will seek to chart its own path on data protection and reform its relevant laws, including in ways that may differ from the EU GDPR.
We may be subject to a variety of evolving threats, including, but not limited to, social-engineering attacks (including through phishing, vishing and hybrid phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), personnel misconduct or error by us or third-party service providers, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
We may be subject to a variety of evolving threats, including, but not limited to, social-engineering attacks (including through phishing, vishing and hybrid phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), personnel misconduct or error by us or third-party service providers or vendors, ransomware attacks, supply-chain attacks, service outages, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
While we cap all other liabilities, in some instances, the cap may represent a significant amount of potential liability, and such large indemnity payments could harm our business, financial condition and results of operations.
While we generally cap all other liabilities, in some instances, the cap may represent a significant amount of potential liability, and such large indemnity payments could harm our business, financial condition and results of operations.
If we are not able to grow in an efficient manner, our business, financial condition and results of operations could be harmed. • Failure to effectively develop our sales and marketing capabilities could harm our ability to expand our customer base and achieve broader market adoption of our platform and products. • We are dependent on a single platform, and the failure to achieve continued market acceptance of our platform could cause our results of operations to suffer. • If our platform fails to perform properly or there are defects or disruptions in the rollout of our platform updates or enhancements, our reputation could be adversely affected, our market share could decline, and we could be subject to liability claims. • We may need to reduce prices or change our pricing model to remain competitive. • Our business depends on our ability to send consumer engagement messages over a number of different channels and any significant disruption in service with our third-party providers or on mobile operating systems could result in a loss of customers or less effective consumer-brand engagement, which could harm our business, financial condition and results of operations. 16 Table of Contents • We rely upon third-party providers of cloud-based infrastructure, including Amazon Web Services, to host our products.
If we are not able to grow in an efficient manner, our business, financial condition and results of operations could be harmed. • Failure to effectively develop our sales and marketing capabilities could harm our ability to expand our customer base and achieve broader market adoption of our platform and products. • We are dependent on a single platform, and the failure to achieve continued market acceptance of our platform could cause our results of operations to suffer. • If our platform fails to perform properly or there are defects or disruptions in the rollout of our platform updates or enhancements, our reputation could be adversely affected, our market share could decline, and we could be subject to liability claims. • We may need to reduce prices or change our pricing model to remain competitive. • Our business depends on our ability to send consumer engagement messages over a number of different channels and any significant disruption in service with our third-party providers or on mobile operating systems could result in a loss of customers or less effective consumer-brand engagement, which could harm our business, financial condition and results of operations. • We rely upon third-party providers of cloud-based infrastructure, including Amazon Web Services and Rackspace, to host our products.
As a result, our results of operations could suffer due to: • any decline in demand for our platform, including as a result of reductions or delays in general customer engagement technology spending by our customers and potential customers in connection with a sustained general economic downturn; • the failure of our platform to achieve continued market acceptance; • the market for our platform not continuing to grow, or growing more slowly than we expect; • the introduction of products and technologies that serve as a replacement or substitute for, or represent an improvement over, our platform; • technological innovations or new standards that our platform does not address; • incidents or interruptions with third-party service providers, including Apple or Google services, that affect the ability of our customers to use our platform; • sensitivity to current or future prices offered by us or our competitors; • our inability to release enhanced versions of our platform on a timely basis; • the development of new communication channels with which we are not able to adequately integrate our platform; and • changes to mobile devices and platforms that prevent or degrade the functionality of our platform, or our inability to maintain interoperability of our platform with such mobile devices and platforms.
As a result, our results of operations could suffer due to: • any decline in demand for our platform, including as a result of reductions or delays in general customer engagement technology spending by our customers and potential customers in connection with a sustained general economic downturn; • the failure of our platform to achieve continued market acceptance; • the market for our platform not continuing to grow, or growing more slowly than we expect; • the introduction of products and technologies that serve as a replacement or substitute for, or represent an improvement over, our platform; • technological innovations or new standards that our platform does not address; 23 Table of Contents • incidents or interruptions with third-party service providers or vendors, including Apple or Google services, that affect the ability of our customers to use our platform; • sensitivity to current or future prices offered by us or our competitors; • our inability to release enhanced versions of our platform on a timely basis; • the development of new communication channels with which we are not able to adequately integrate our platform; and • changes to mobile devices and platforms that prevent or degrade the functionality of our platform, or our inability to maintain interoperability of our platform with such mobile devices and platforms.
Our rapid revenue growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. • We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all. • We have a limited history operating at our current scale, and our future results of operations may fluctuate significantly due to a wide range of factors, which make it difficult to forecast our future results of operations. • We have a history of operating losses and may not achieve or sustain profitability in the future. • The estimates of market opportunity and forecasts of market growth may prove to be inaccurate.
Our rapid revenue growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. • We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all. • We have a limited history operating at our current scale, and our future results of operations may fluctuate significantly due to a wide range of factors, which make it difficult to forecast our future results of operations. 16 Table of Contents • We have a history of operating losses and may not achieve or sustain profitability in the future. • The estimates of market opportunity and forecasts of market growth may prove to be inaccurate.
Any of these security incidents could result in unauthorized access or damage to, or the disablement, encryption, use or misuse, disclosure, modification, destruction or loss of our data or our partners’ data, including personal data, or disrupt our ability to provide our platform or services. Our platform’s continuing and uninterrupted performance is critical to our success.
Any of these security incidents could result in unauthorized access or damage to, or the disablement, encryption, use or misuse, disclosure, modification, destruction or loss of our data or our customers’ data, including personal data, or disrupt our ability to provide our platform or services. Our platform’s continuing and uninterrupted performance is critical to our success.
Operating our business and platform involves the collection, storage, transmission and other processing of sensitive, regulated, proprietary and confidential information, including personal data of our customers, their users and our personnel and our customers’ proprietary and confidential information. We may rely upon third parties (such as service providers) for our data storage- and data processing–related activities.
Operating our business and platform involves the collection, storage, transmission and other processing of sensitive, regulated, proprietary and confidential information, including personal data of our customers, their users and our personnel and our customers’ proprietary and confidential information. We may rely upon third parties (such as service providers or vendors) for our data storage and data processing–related activities.
Additional factors that may influence the length and variability of our sales cycle include: • the effectiveness of our sales team as we hire and train our new salespeople to sell to large enterprise customers; • our ability to meet with customers in person during a sales cycle; 24 Table of Contents • the discretionary nature of purchasing and budget cycles and decisions; • the obstacles placed by customers’ procurement process; • economic conditions and other factors impacting customer budgets; • customers’ familiarity with our products; • customers’ evaluation of competing products during the purchasing process; and • evolving customer demands.
Additional factors that may influence the length and variability of our sales cycle include: • the effectiveness of our sales team as we hire and train our new salespeople to sell to large enterprise customers; • our ability to meet with customers in person during a sales cycle; • the discretionary nature of purchasing and budget cycles and decisions; • the obstacles placed by customers’ procurement process; • economic conditions and other factors impacting customer budgets; • customers’ familiarity with our products; • customers’ evaluation of competing products during the purchasing process; and • evolving customer demands.
These consequences may include, but are not limited to, government enforcement actions 33 Table of Contents (for example, investigations, fines, penalties, audits, and inspections), additional reporting requirements or oversight, restrictions on processing data (including personal data), litigation (including class action claims), indemnification obligations, negative publicity, reputational harm, monetary fund diversions, interruptions in our operations (including availability of data to us and our customers), financial loss and other similar harms.
These consequences may include, but are not limited to, government enforcement actions (for example, investigations, fines, penalties, audits, and inspections), additional reporting requirements or oversight, restrictions on processing data (including personal data), litigation (including class action claims), indemnification obligations, negative publicity, reputational harm, monetary fund diversions, interruptions in our operations (including availability of data to us and our customers), financial loss and other similar harms.
In general, under Section 382 of the Internal Revenue Code of 1986, as amended, the IRC or the Code, a corporation that undergoes an “ownership change” (which generally is defined under Section 382 of the Code and applicable Treasury Regulations as a greater than 50% change, by value, in its equity ownership over a three-year period) is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income.
In general, 36 Table of Contents under Section 382 of the Internal Revenue Code of 1986, as amended, the IRC or the Code, a corporation that undergoes an “ownership change” (which generally is defined under Section 382 of the Code and applicable Treasury Regulations as a greater than 50% change, by value, in its equity ownership over a three-year period) is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income.
We track certain operational metrics, including the number of customers, monthly active users, platform enabled interactions, consumer generated data points, customer messages, annual recurring revenue, dollar-based net retention rate and Non-GAAP free cash flow.
We track certain operational metrics, including, among others, the number of customers, monthly active users, platform enabled interactions, consumer generated data points, customer messages, annual recurring revenue, dollar-based net retention rate and Non-GAAP free cash flow.
The market in which we compete is relatively new and subject to rapid technological change, evolving industry standards and changing regulations, as well as changing customer and consumer needs, requirements and preferences, including changes in the use of channels through which consumers desire to communicate with brands.
The market in which we compete is subject to rapid technological change, evolving industry standards and changing regulations, as well as changing customer and consumer needs, requirements and preferences, including changes in the use of channels through which consumers desire to communicate with brands.
In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products and platform capabilities, personnel or operations of any acquired companies, particularly if the key personnel of an acquired company choose not to work for us, their software is not easily adapted to work with our platform or we have difficulty retaining the customers of any acquired business due to changes in ownership, management or otherwise.
In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products and platform capabilities, personnel or operations of any acquired companies, including those of OfferFit, particularly if the key personnel of an acquired company choose not to work for us, their software is not easily adapted to work with our platform or we have difficulty retaining the customers of any acquired business due to changes in ownership, management or otherwise.
Our current international operations and future initiatives involve a variety of risks, including: • changes in a country’s or region’s political or economic conditions; • the need to adapt and localize our platform for specific countries; • greater difficulty collecting accounts receivable and longer payment cycles; • unexpected changes in laws, regulatory requirements, taxes or trade laws; • more stringent regulations relating to privacy, data security and data protection and the collection, transmission, use or other processing of, or access to, sensitive, proprietary, confidential, regulated and personal data, particularly in Europe; • differing labor regulations, especially in regions where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in some of these locations; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems and regulatory systems; 27 Table of Contents • increased travel, real estate, infrastructure and legal compliance costs associated with international operations; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses and the cost and risk of entering into hedging transactions if we chose to do so in the future; • laws and business practices favoring local competitors or general preferences for local vendors; • limited or insufficient intellectual property protection or difficulties enforcing our intellectual property; • political instability, economic sanctions, terrorist activities, or international conflicts, including the ongoing conflicts between Israel and Hamas and between Russia and Ukraine, which may impact the operations of our business or the businesses of our customers; • risks related to global health epidemics and related restrictions on our ability and our customers’ ability to travel; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
Our current international operations and future initiatives involve a variety of risks, including: • changes in a country’s or region’s political or economic conditions; • the need to adapt and localize our platform for specific countries; • greater difficulty collecting accounts receivable and longer payment cycles; • unexpected changes in laws, regulatory requirements, taxes or trade laws; • more stringent regulations relating to privacy, data security and data protection and the collection, transmission, use or other processing of, or access to, sensitive, proprietary, confidential, regulated and personal data, particularly in Europe; • differing labor regulations, especially in regions where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in some of these locations; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems and regulatory systems; • increased travel, real estate, infrastructure and legal compliance costs associated with international operations; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses and the cost and risk of entering into hedging transactions if we chose to do so in the future; • laws and business practices favoring local competitors or general preferences for local vendors; • limited or insufficient intellectual property protection or difficulties enforcing our intellectual property; • political instability, economic sanctions, terrorist activities, or international conflicts, may impact the operations of our business or the businesses of our customers; • risks related to global health epidemics and related restrictions on our ability and our customers’ ability to travel; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
As a result of our limited history operating at our current scale, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth, particularly in a softening economic environment.
As a result of our limited history operating at our current scale, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth, particularly in a volatile economic environment.
Sustained or repeated system failures would reduce the attractiveness of our platform to our partners, thereby reducing revenue. Moreover, negative publicity arising from these types of disruptions could damage our reputation and may adversely impact use of our platform.
Sustained or repeated system failures would reduce the attractiveness of our platform to our customers, thereby reducing revenue. Moreover, negative publicity arising from these types of disruptions could damage our reputation and may adversely impact use of our platform.
Our use of generative artificial intelligence, or AI, and machine learning, including generative AI, in our platform and our business, as well as our potential failure to effectively implement, use, and market these technologies, may result in reputational harm or liability, or could otherwise adversely affect our business.
Our use of artificial intelligence, or AI, and machine learning in our platform and our business, as well as our potential failure to effectively implement, use, and market these technologies, may result in reputational harm or liability, or could otherwise adversely affect our business.
In addition, if the resulting business from such a transaction fails to meet our expectations, our business, financial condition and results of operations may be adversely affected, or we may be exposed to unknown risks or liabilities.
In addition, if the resulting business from such a transaction, including OfferFit, fails to meet our expectations, our business, financial condition and results of operations may be adversely affected, or we may be exposed to unknown risks or liabilities.
We are highly dependent upon our relationship with the developer platforms, web browsers and operating systems provided by third-party technology companies such as Apple and Google. Changes to mobile device operating systems may diminish the usefulness of marketing providers or require significant modifications or demands on our business to continue supporting those operating systems.
We are highly dependent upon our relationship with the developer platforms, web browsers and operating systems provided by third-party technology companies such as Apple and Google. Changes to mobile device operating systems may diminish the usefulness of marketing providers or require significant modifications or demands on our business to continue 31 Table of Contents supporting those operating systems.
Large indemnity payments, defense costs or damage claims from contractual breach could adversely affect our business, financial condition and results of operations. Any intellectual property claims, with or without merit, could be very time-consuming, could be expensive to settle or litigate, could divert our management’s attention and other resources and could result in adverse publicity.
Large indemnity payments, defense costs or damage claims from contractual breach could adversely affect our business, financial condition and results of operations. 39 Table of Contents Any intellectual property claims, with or without merit, could be very time-consuming, could be expensive to settle or litigate, could divert our management’s attention and other resources and could result in adverse publicity.
If we invest substantial time and resources to expand our international operations and are unable to do so successfully, our business, financial condition and results of operations may be adversely affected. We have a limited history of operating with a substantial remote workforce and the long-term impact of this workplace arrangement on our financial results and business operations is uncertain.
If we invest substantial time and resources to expand our international operations and are unable to do so successfully, our business, financial condition and results of operations may be adversely affected. 28 Table of Contents We have a limited history of operating with a substantial remote workforce and the long-term impact of this workplace arrangement on our financial results and business operations is uncertain.
The occurrence of any of these events could result in an increase in our bad debt expense, an increase in collection cycles for accounts receivable or a decrease in future revenue and earnings, or could cause us to incur the risk or expense of litigation. We may need to reduce prices or change our pricing model to remain competitive.
The occurrence of any of these events could result in an increase in our bad debt expense, an increase in collection cycles for accounts receivable or a decrease in future revenue and earnings, or could cause us to incur the risk or expense of litigation. 24 Table of Contents We may need to reduce prices or change our pricing model to remain competitive.
Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our 38 Table of Contents management’s attention and resources, could delay further sales or the implementation of our platform, impair the functionality of our platform, delay introductions of new functionality to our platform, result in our substituting inferior or more costly technologies into our platform or injure our reputation.
Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further sales or the implementation of our platform, impair the functionality of our platform, delay introductions of new functionality to our platform, result in our substituting inferior or more costly technologies into our platform or injure our reputation.
As a result, we may be forced to reduce the prices we charge for our subscriptions and may be required to offer terms less favorable to us for new and renewal agreements, particularly for mid- to large-size enterprises that may demand substantial price discounts as part of the negotiation of subscription contracts.
As a result, we may be forced to reduce the prices we charge for our 22 Table of Contents subscriptions and may be required to offer terms less favorable to us for new and renewal agreements, particularly for mid- to large-size enterprises that may demand substantial price discounts as part of the negotiation of subscription contracts.
If any of these third-party providers change their policies regarding the delivery of certain messages or content, or if our customers do not comply with these third-party providers’ current policies or procedures, some of our customers may no longer be able to use the applicable channels and integrations through our platform.
If any of these third-party 29 Table of Contents providers change their policies regarding the delivery of certain messages or content, or if our customers do not comply with these third-party providers’ current policies or procedures, some of our customers may no longer be able to use the applicable channels and integrations through our platform.
If we are unable to manage this complexity, our business, financial condition and results of operations may be adversely affected. As our customer base continues to grow, we will need to expand our services and other personnel, and maintain and enhance our partnerships, to provide a high level of customer service.
If we are unable to manage this complexity, our business, financial condition and results of operations may be adversely affected. 26 Table of Contents As our customer base continues to grow, we will need to expand our services and other personnel, and maintain and enhance our partnerships, to provide a high level of customer service.
In addition, government agencies or private organizations may begin to impose taxes, fees or other charges for accessing the internet or commerce conducted via the internet. These laws or charges could limit the growth of internet-related commerce or communications generally, resulting in reductions in the demand for internet-based solutions such as ours.
In addition, government agencies or private organizations may begin to impose taxes, fees or other charges for accessing the internet or commerce conducted via the internet. These laws or 34 Table of Contents charges could limit the growth of internet-related commerce or communications generally, resulting in reductions in the demand for internet-based solutions such as ours.
Users may become dissatisfied by any system failure that interrupts our ability to provide our platform to them and could make claims for refunds or terminations under our contracts.
Customers may become dissatisfied by any system failure that interrupts our ability to provide our platform to them and could make claims for refunds or terminations under our contracts.
We will require significant capital 25 Table of Contents expenditures and valuable management resources to grow without undermining our culture of innovation, teamwork and attention to customer success, which has been central to our growth so far. We intend to continue to expand our international operations in the future.
We will require significant capital expenditures and valuable management resources to grow without undermining our culture of innovation, teamwork and attention to customer success, which has been central to our growth so far. We intend to continue to expand our international operations in the future.
A catastrophic event that results in the destruction or disruption of our data centers, or our network infrastructure, or information technology systems, including any errors, defects, or failures in third-party hardware, could affect our ability to conduct normal business operations and adversely affect our results of operations.
A catastrophic event that results in the destruction or disruption of our data centers, or our network infrastructure, or information technology systems, including any errors, defects, or failures in third-party hardware, 41 Table of Contents could affect our ability to conduct normal business operations and adversely affect our results of operations.
It is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our currently effective amended and restated certificate of incorporation to be inapplicable or unenforceable in such action.
It is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our 44 Table of Contents currently effective amended and restated certificate of incorporation to be inapplicable or unenforceable in such action.
Our success will depend to a substantial extent on the widespread adoption of our platform and products as an alternative to existing products in which many enterprises have invested substantial personnel and financial resources and, therefore, may be reluctant or unwilling to abandon.
Our success will depend to a substantial extent on the widespread adoption of our platform and products as an alternative to existing products in which many enterprises have invested substantial personnel and financial resources and, 21 Table of Contents therefore, may be reluctant or unwilling to abandon.
Accordingly, $316.0 million of our NOLs may be carried forward indefinitely for federal tax purposes and various states have enacted tax policies or rules that conform to federal tax laws. A lack of future taxable income would adversely affect our ability to utilize NOLs incurred in tax years beginning on or before December 31, 2017, before they expire.
Accordingly, $352.9 million of our NOLs may be carried forward indefinitely for federal tax purposes and various states have enacted tax policies or rules that conform to federal tax laws. A lack of future taxable income would adversely affect our ability to utilize NOLs incurred in tax years beginning on or before December 31, 2017, before they expire.
Factors that may affect the market price of our Class A common stock include: • actual or anticipated fluctuations in our financial condition and results of operations; • variance in our financial performance from expectations of securities analysts; • changes in the prices of our products and services; • changes in our projected financial condition and results of operations; • changes in laws or regulations applicable to the provision of our products and services; • announcements by us or our competitors of significant business developments, acquisitions or new offerings; • security breaches impacting us or similar companies; • our involvement in any material litigation; • future sales of our Class A common stock by us or our stockholders or our sales of other securities in the future; • changes in senior management or key personnel; • the trading volume of our Class A common stock; • changes in the anticipated future size and growth rate of our market; • general economic, regulatory and market conditions; and • technical factors in the public trading market for our Class A common stock that may produce price movements that may or may not comport with macro, industry, or company-specific fundamentals, including, without limitation, the sentiment of retail investors, the amount and status of short interest in our securities, access to margin debt, trading in options and other derivatives on our Class A common stock and other technical trading factors.
Factors that may affect the market price of our Class A common stock include: • actual or anticipated fluctuations in our financial condition and results of operations; • variance in our financial performance from expectations of securities analysts; • changes in the prices of our products and services; • changes in our projected financial condition and results of operations; • changes in laws or regulations applicable to the provision of our products and services or changes that may cause us to incur, among other elements, additional or unforeseen expenses associated with regulatory compliance; • announcements by us or our competitors of significant business developments, acquisitions or new offerings; • security breaches impacting us or similar companies; • our involvement in any material litigation; • future sales of our Class A common stock by us or our stockholders or our sales of other securities in the future; • changes in senior management or key personnel; • the trading volume of our Class A common stock; • changes in the anticipated future size and growth rate of our market; • general economic, regulatory and market conditions; and • technical factors in the public trading market for our Class A common stock that may produce price movements that may or may not comport with macro, industry, or company-specific fundamentals, including, without limitation, the sentiment of retail investors, the amount and status of short interest in our securities, access to margin debt, trading in options and other derivatives on our Class A common stock and other technical trading factors.
If AWS or other infrastructure providers increase the costs of their services, our business, financial condition and results of operations could be adversely affected. 30 Table of Contents Our growth depends in part on the success of our strategic relationships with third parties.
If AWS or other infrastructure providers increase the costs of their services, our business, financial condition and results of operations could be adversely affected. Our growth depends in part on the success of our strategic relationships with third parties.
Additionally, while we maintain insurance related to these matters, this insurance might not cover all such claims, provide sufficient payments to cover all the costs to resolve one or more of such claims or continue to be available on terms acceptable to us.
Additionally, while we maintain insurance related to these matters, this insurance might not cover all such claims, 27 Table of Contents provide sufficient payments to cover all the costs to resolve one or more of such claims or continue to be available on terms acceptable to us.
Since our customers are able to upload data into our platform, we may be hosting or otherwise processing substantial amounts of personal data. Our cloud platform has completed the SOC 2 Type 2 examination for security, is ISO 27001 certified and is designed to comply, in all material respects, with various HIPAA standards.
Since our customers are able to upload data into our platform, we may be hosting or otherwise processing substantial amounts of personal data. Our cloud platform has completed a SOC 2 Type 2 audit for security, is ISO 27001 certified and is designed to comply, in all material respects, with various HIPAA standards.
Although we believe these provisions benefit us by providing increased consistency in the application of applicable law in the types of lawsuits to which they apply, the provisions may have the effect of discouraging lawsuits against our directors 43 Table of Contents and officers.
Although we believe these provisions benefit us by providing increased consistency in the application of applicable law in the types of lawsuits to which they apply, the provisions may have the effect of discouraging lawsuits against our directors and officers.
These consequences may include, but are not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar actions), litigation 32 Table of Contents (including class-related claims), additional reporting requirements or oversight, bans on processing personal data and orders to delete or not use personal data.
These consequences may include, but are not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar actions), litigation (including class-related claims), additional reporting requirements or oversight, bans on processing personal data and orders to delete or not use personal data.
Any failure to protect our proprietary technology and intellectual property rights could substantially harm our business, financial condition and results of operations. 37 Table of Contents Our success and ability to compete depend in part on our ability to protect our proprietary technology and intellectual property.
Any failure to protect our proprietary technology and intellectual property rights could substantially harm our business, financial condition and results of operations. Our success and ability to compete depend in part on our ability to protect our proprietary technology and intellectual property.
The activities of our customers or the content of our customers’ messages may lead us to experience adverse political, business and reputational consequences, especially if such use is high 39 Table of Contents profile.
The activities of our customers or the content of our customers’ messages may lead us to experience adverse political, business and reputational consequences, especially if such use is high profile.
Some of our larger competitors also have substantially broader product 20 Table of Contents lines and market focus and therefore may not be as susceptible to downturns in a particular market.
Some of our larger competitors also have substantially broader product lines and market focus and therefore may not be as susceptible to downturns in a particular market.
Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all. 19 Table of Contents Market estimates and growth forecasts are uncertain and based on assumptions and estimates that may be inaccurate.
Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all. Market estimates and growth forecasts are uncertain and based on assumptions and estimates that may be inaccurate.
We also engage with 22 Table of Contents industry analysts, consulting firms, marketing service providers, data and technology partners, marketing agencies and other solution partners, business and trade press, and other industry experts who exert considerable influence in our market to promote our platform and our brand.
We also engage with industry analysts, consulting firms, marketing service providers, data and technology partners, marketing agencies and other solution partners, business and trade press, and other industry experts who exert considerable influence in our market to promote our platform and our brand.
We may become subject to legal proceedings and claims that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes or employment claims made by our current or former employees.
We have in the past, and may continue in the future to, become subject to legal proceedings and claims that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes or employment claims made by our current or former employees.
We may also be required to publicly disclose certain cybersecurity incidents pursuant to the rules and regulations adopted by the SEC. Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.
We may also be required to publicly disclose certain cybersecurity incidents pursuant to the rules and regulations adopted by the SEC. The repercussions of such disclosures can be costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.
These transactions 28 Table of Contents may also disrupt our business, divert our resources and require significant management attention that would otherwise be available for development of our existing business.
These transactions may also disrupt our business, divert our resources and require significant management attention that would otherwise be available for development of our existing business.
Risks Related to Socioeconomic Factors Our future revenue and results of operations could be harmed if the increases in demand we have seen from certain industries as a result of the COVID-19 pandemic fail to continue after the pandemic ends.
Risks Related to Socioeconomic Factors Our future revenue and results of operations could be harmed if the increases in demand we have seen from certain industries as a result of the COVID-19 pandemic fail to continue over the long term.
The restrictions and costs imposed by these requirements and our actual or perceived failure to comply with them, could harm our business. • If we or our third-party service providers experience a security breach or unauthorized parties otherwise obtain access to our customers’ data, our data or our platform, our solution may be perceived as not being secure, our reputation may be harmed, demand for our platform and products may be reduced and we may incur significant liabilities. • Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our platform and could have a negative impact on our business. • We employ third-party licensed software for use in or with our platform, and the inability to maintain these licenses or errors or vulnerabilities in the software we license could result in increased costs, or reduced service levels, which would adversely affect our business. • The dual class structure of our common stock has the effect of concentrating voting control with our executive officers, directors and significant holders of our capital stock, which limits the ability of holders of our Class A common stock to influence the outcome of important transactions.
The restrictions and costs imposed by these requirements and our actual or perceived failure to comply with them, could harm our business. • If we or our third-party service providers or vendors experience a security breach or unauthorized parties otherwise obtain access to our customers’ data, our data or our platform, our solution may be perceived as not being secure, our reputation may be harmed, demand for our platform and products may be reduced and we may incur significant liabilities. • Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our platform and could have a negative impact on our business. • We employ third-party licensed software for use in or with our platform, and the inability to maintain these licenses or errors or vulnerabilities in the software we license could result in increased costs, or reduced service levels, which would adversely affect our business. • We have identified one material weakness in our internal control over financial reporting, and if we are unable to achieve and maintain effective internal control over financial reporting, the accuracy and timing of our financial reporting may be adversely affected. • The dual class structure of our common stock has the effect of concentrating voting control with our executive officers, directors and significant holders of our capital stock, which limits the ability of holders of our Class A common stock to influence the outcome of important transactions.
We may not be able to anticipate how to respond to rapidly evolving legal frameworks, and we 40 Table of Contents may have to expend resources to adjust our offerings in certain jurisdictions if the legal frameworks on AI and machine learning products are not consistent across jurisdictions.
We may not be able to anticipate how to respond to rapidly evolving legal and regulatory frameworks, and we may have to expend resources to adjust our offerings in certain jurisdictions if the legal and regulatory frameworks on AI and machine learning products are not consistent across jurisdictions.
We have a history of operating losses and may not achieve or sustain profitability in the future. We have experienced net losses in each of our last several fiscal years. We generated a net loss of $130.4 million and $140.7 million for the fiscal years ended January 31, 2024 and 2023, respectively.
We have a history of operating losses and may not achieve or sustain profitability in the future. 19 Table of Contents We have experienced net losses in each of our last several fiscal years. We generated a net loss of $104.0 million, $130.4 million, and $140.7 million for the fiscal years ended January 31, 2025, 2024, and 2023 , respectively.
In September 2022, we implemented our hybrid work model, called “The Way Braze Works,” pursuant to which each department may choose to have its employees function primarily as in-person, remote or hybrid workers. We have also hired a large number of employees who are permanently remote, regardless of their department’s determination.
In September 2022, we implemented our hybrid work model, pursuant to which each department may choose to have its employees function primarily as in-person, remote or hybrid workers. We have also hired a large number of employees who are permanently remote, regardless of their department’s determination.
We may share or receive sensitive data with or from third parties. Cyberattacks, malicious internet-based activity, and online and offline fraud are prevalent and continue to increase in frequency and severity. These threats are becoming increasingly difficult to detect. These threats come from a variety of sources.
We may share or receive sensitive, regulated, proprietary and confidential information, including personal data, with or from third parties. Cyberattacks, malicious internet-based activity, and online and offline fraud are prevalent and continue to increase in frequency and severity. These threats are becoming increasingly difficult to detect, and these threats come from a variety of sources.
As of January 31, 2024, we owned 25 granted patents related to our platform and its technology and two patent applications pending for examination in the United States and no non-U.S. patents or patent applications pending. Our patent applications may not result in the issuance of a patent, or the examination process may require us to narrow our claims.
As of January 31, 2025, we owned 26 granted patents related to our platform and its technology and four patent applications pending for examination in the United States and no non-U.S. patents or patent applications pending. Our patent applications may not result in the issuance of a patent, or the examination process may require us to narrow our claims.
Despite our penetration in these industries that have benefited from increased demand during the COVID-19 pandemic, this trend may not continue. As the COVID-19 pandemic continues to abate, some of our customers may experience decreases or decreased growth rates in transactions, which would negatively affect our business, financial condition and results of operations.
Despite our penetration in these industries that benefited from increased demand during the COVID-19 pandemic, this trend may not continue over the long term. Some of our customers have experienced, and may continue to experience, decreases or decreased growth rates in transactions, which would negatively affect our business, financial condition and results of operations.
Various governmental agencies have proposed additional regulation of 35 Table of Contents encryption technology, including the escrow and government recovery of private encryption keys.
Various governmental agencies have proposed additional regulation of encryption technology, including the escrow and government recovery of private encryption keys.
However, we have a limited history of operating with a large remote workforce and, while we anticipate that implementing The Way Braze Works will have a long-term positive impact on our financial results and business operations, the impact remains uncertain, particularly in the near term.
However, we have a limited history of operating with a large remote workforce and, while we anticipate that implementing our hybrid work model will have a long-term positive impact on our financial results and business operations, the impact remains uncertain, particularly in the near term.
These unfavorable conditions have been, and may continue to be, exacerbated in the United States and abroad by global and domestic socioeconomic conditions, including the failure of high-profile banking and other financial institutions, the Federal Reserve’s attempts to combat inflation through interest rate increases, unrest in international trade relations, domestic and foreign political turmoil, natural catastrophes, pandemics related to highly infectious diseases, warfare and terrorist attacks on the United States, Europe, the Asia Pacific region or elsewhere, and international military conflicts and the related political and economic responses, such as the conflicts between Israel and Hamas and between Russia and Ukraine and the resulting sanctions on Russia.
These unfavorable conditions have been, and may continue to be, exacerbated in the United States and abroad by global and domestic socioeconomic conditions, including the failure of high-profile banking and other financial institutions, the Federal Reserve’s attempts to combat inflation through interest rate increases, unrest in international trade relations, domestic and foreign political turmoil, natural catastrophes, pandemics related to highly infectious diseases, warfare and terrorist attacks on the United States, Europe, the Asia Pacific region or elsewhere, and international military conflicts and the related political and 17 Table of Contents economic responses.
AI and machine learning technologies are the subject of ongoing review by various federal, state and foreign governments and regulators, which are applying, or are considering applying, their platform moderation, privacy, data security and data protection laws and regulations to such technologies or are considering general legal frameworks for the appropriate use of AI and machine learning.
AI and machine learning technologies are the subject of ongoing review by various federal, state and foreign governments and regulators, which are applying, or are considering applying, their platform moderation, privacy, data security and data protection laws and regulations to such technologies.
Our rapid revenue growth may not be indicative of our future revenue growth. Our rapid revenue growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. 17 Table of Contents Our revenue was $471.8 million and $355.4 million for the fiscal years ended January 31, 2024 and 2023, respectively.
Our rapid revenue growth may not be indicative of our future revenue growth. Our rapid revenue growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. Our revenue was $593.4 million and $471.8 million for the fiscal years ended January 31, 2025 and 2024, respectively.
Acquisitions, strategic investments, partnerships or alliances could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value and adversely affect our business, financial condition and results of operations.
Acquisitions, strategic investments, partnerships or alliances pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value and adversely affect our business, financial condition and results of operations.
Although we normally contractually limit our liability with respect to these obligations, we may still incur substantial liability related to them and we may be required to cease use of certain functions of our platform or products as a result of any such claims.
Although we normally contractually limit our liability with respect to these obligations, we may still incur substantial liability related to them and we may be required to cease use of certain functionalities offered by our platform as a result of any such claims.
In addition, others may independently discover our trade secrets. Further, the contractual provisions that we enter into may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual property rights.
Further, the contractual provisions that we enter into may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual property rights.
As of January 31, 2024, we had net operating loss, or NOL, carryforwards for federal and state income tax purposes of approximately $355.4 million and $248.4 million, respectively, some of which may be available to offset taxable income in the future, and which expire in various years beginning in 2035 for federal purposes and 2026 for state purposes if not utilized.
As of January 31, 2025, we had net operating loss, or NOL, carryforwards for federal and state income tax purposes of approximately $392.3 million and $284.2 million, respectively, some of which may be available to offset taxable income in the future, and which expire in various years beginning in 2035 for federal purposes and 2026 for state purposes if not utilized.
We rely upon third-party providers of cloud-based infrastructure, including Amazon Web Services, to host our products. Any disruption in the operations of these third-party providers or limitations on capacity or interference with our use could adversely affect our business, financial condition and results of operations. We outsource substantially all the infrastructure relating to our cloud-based platform to third-party hosting providers.
Any disruption in the operations of these third-party providers or limitations on capacity or interference with our use could adversely affect our business, financial condition and results of operations. We outsource substantially all the infrastructure relating to our cloud-based platform to third-party hosting providers.
As a result, as of January 31, 2024, holders of our Class B common stock collectively beneficially owned, in the aggregate, shares representing approximately 78.8% of the voting power of our outstanding capital stock, and our executive officers, directors and holders of 5% or more of our common stock (by voting power) collectively beneficially owned, in the aggregate, outstanding shares representing approximately 84.2% of the total voting power of our outstanding capital stock.
As a result, as of January 31, 2025, holders of our Class B common stock collectively beneficially owned, in the aggregate, shares representing approximately 64.6% of the voting power of our outstanding capital stock, and our executive officers, directors and holders of 5% or more of our common stock (by voting power) collectively beneficially owned, in the aggregate, outstanding shares representing approximately 69.2% of the total voting power of our outstanding capital stock.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information on these risks, see “Risk Factors—If we or our third-party service providers experience a security breach or unauthorized parties otherwise obtain access to our customers’ data, our data or our platform, our solution may be perceived as not being secure, our reputation may be harmed, demand for our platform and products may be reduced and we may incur significant liabilities.”
Biggest changeFor more information on these risks, see “Risk Factors—If we or our third-party service providers or vendors experience a security breach or unauthorized parties otherwise obtain access to our customers’ data, our data or our platform, our solution may be perceived as not being secure, our reputation may be harmed, demand for our platform and products may be reduced and we may incur significant liabilities.”
In addition to our bug bounty program, we also engage third parties to provide independent penetration testing, to support internal security audits and 45 Table of Contents to provide external security audits. We also regularly report on the results of our assessments and security testing to our audit committee.
In addition to our bug bounty program, we also engage third parties to provide independent penetration testing, to support internal security audits and 46 Table of Contents to provide external security audits. We also regularly report on the results of our assessments and security testing to our audit committee.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our headquarters is located in New York City, where we lease approximately 84,000 square feet pursuant to two leases that expire in April 2024. We have also leased approximately 92,300 square feet of general office space in New York City to act as our headquarters once these leases expire.
Biggest changeItem 2. Properties Our headquarters is located in New York City, where we lease approximately 92,300 square feet pursuant to a lease that expires in January 2034. We also lease additional office space in over 10 cities across North America, South America, Europe, the Asia-Pacific region, and the Middle East.
We believe that our current facilities are generally suitable to meet our needs for the foreseeable future. In addition, to the extent we require additional space in the future, we believe that it would be readily available on commercially reasonable terms.
These offices are leased, and we do not own any real property. We believe that our current facilities are generally suitable to meet our needs for the foreseeable future. In addition, to the extent we require additional space in the future, we believe that it would be readily available on commercially reasonable terms.
Removed
This new lease commenced in October 2023 and will terminate in January 2034. We also lease additional office space in Austin, Berlin, Chicago, Jakarta, London, Paris, San Francisco, Singapore, Sydney, and Tokyo. These offices are leased, and we do not own any real property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. 46 Table of Contents PART II
Biggest changeMine Safety Disclosures Not applicable. 47 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnregistered Sales of Equity Securities The following sets forth information regarding all of our unregistered securities sold in the fiscal quarter ended January 31, 2024: • On November 1, 2023, we issued 32,155 shares of our Class A common stock to a charitable donor-advised fund for no consideration in connection with our Pledge 1% commitment pursuant to Section 4(a)(2) of the Securities Act as this issuance did not involve a public offering.
Biggest changeUnregistered Sales of Equity Securities The following sets forth information regarding all of our unregistered securities sold in the fiscal quarter ended January 31, 2025: • On November 1, 2024, we issued 32,155 shares of our Class A common stock to a charitable donor-advised fund for no consideration in connection with our Pledge 1% commitment pursuant to Section 4(a)(2) of the Securities Act as this issuance did not involve a public offering.
As of March 20, 2024, there were approximately 25 stockholders of record of our Class B common stock. Dividend Policy We have never declared or paid any dividends on our Class A common stock or Class B common stock. We currently intend to retain all available funds and any future earnings for the operation and expansion of our business.
As of March 20, 2025, there were approximately 19 stockholders of record of our Class B common stock. Dividend Policy We have never declared or paid any dividends on our Class A common stock or Class B common stock. We currently intend to retain all available funds and any future earnings for the operation and expansion of our business.
Holders of Record As of March 20, 2024, there were 14 stockholders of record of our Class A common stock.
Holders of Record As of March 20, 2025, there were 7 stockholders of record of our Class A common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe maintain a full valuation allowance in jurisdictions where we had net deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized. 51 Table of Contents Results of Operations The following table sets forth our consolidated statements of operations data for each of the periods indicated: Fiscal Year Ended January 31, 2024 2023 2022 (in thousands) Revenue $ 471,800 $ 355,426 $ 238,035 Cost of revenue (1) 147,527 115,818 78,511 Gross profit 324,273 239,608 159,524 Operating expenses: Sales and marketing (1) 247,125 201,684 127,137 Research and development (1) 119,863 97,293 59,034 General and administrative (1) 101,977 88,771 51,564 Total operating expenses 468,965 387,748 237,735 Loss from operations (144,692) (148,140) (78,211) Other income (expense), net 16,220 7,977 (121) Loss before provision for income taxes (128,472) (140,163) (78,332) Provision for (benefit from) income taxes 1,957 583 (165) Net loss $ (130,429) $ (140,746) $ (78,167) (1) Includes stock-based compensation expense, net of amounts capitalized as follows: Fiscal Year Ended January 31, 2024 2023 2022 (in thousands) Cost of revenue $ 3,585 $ 3,616 $ 2,185 Sales and marketing 31,198 23,871 16,281 Research and development 38,962 28,897 15,613 General and administrative 23,432 15,833 13,101 Total $ 97,177 $ 72,217 $ 47,180 The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for each of the periods indicated: 52 Table of Contents Fiscal Year Ended January 31, 2024 2023 2022 (as a percentage of revenue) Revenue 100 % 100 % 100 % Cost of revenue 31 % 33 % 33 % Gross profit 69 % 67 % 67 % Operating expenses: Sales and marketing 52 % 57 % 53 % Research and development 25 % 27 % 25 % General and administrative 22 % 25 % 22 % Total operating expenses 99 % 109 % 100 % Loss from operations (30) % (42) % (33) % Other income (expense), net 3 % 2 % — % Loss before provision for income taxes (27) % (40) % (33) % Provision for (benefit from) income taxes — % — % — % Net loss (27) % (40) % (33) % Comparison of the Fiscal Years Ended January 31, 2024 and January 31, 2023 Revenue Fiscal Year Ended January 31, 2024 2023 Change % Change ($ in thousands) Revenue $ 471,800 $ 355,426 $ 116,374 32.7 % The increase in revenue of $116.4 million, or 32.7%, for the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023 was primarily driven by an $112.7 million, or 33%, increase in subscription revenue.
Biggest changeResults of Operations The following table sets forth our consolidated statements of operations data for each of the periods indicated: Fiscal Year Ended January 31, 2025 2024 2023 (in thousands) Revenue $ 593,410 $ 471,800 $ 355,426 Cost of revenue (1) 183,191 147,527 115,818 Gross profit 410,219 324,273 239,608 Operating expenses: Sales and marketing (1) 282,316 247,125 201,684 Research and development (1) 133,969 119,863 97,293 General and administrative (1) 116,093 101,977 88,771 Total operating expenses 532,378 468,965 387,748 Loss from operations (122,159) (144,692) (148,140) Other income, net 21,557 16,220 7,977 Loss before provision for income taxes (100,602) (128,472) (140,163) Provision for income taxes 3,445 1,957 583 Net loss $ (104,047) $ (130,429) $ (140,746) (1) Includes stock-based compensation expense, net of amounts capitalized as follows: Fiscal Year Ended January 31, 2025 2024 2023 (in thousands) Cost of revenue $ 4,022 $ 3,585 $ 3,616 Sales and marketing 38,168 31,198 23,871 Research and development 43,004 38,962 28,897 General and administrative 29,067 23,432 15,833 Total $ 114,261 $ 97,177 $ 72,217 The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for each of the periods indicated: 53 Table of Contents Fiscal Year Ended January 31, 2025 2024 2023 (as a percentage of revenue) Revenue 100 % 100 % 100 % Cost of revenue 31 % 31 % 33 % Gross profit 69 % 69 % 67 % Operating expenses: Sales and marketing 48 % 52 % 57 % Research and development 23 % 25 % 27 % General and administrative 19 % 22 % 25 % Total operating expenses 90 % 99 % 109 % Loss from operations (21) % (30) % (42) % Other income, net 4 % 3 % 2 % Loss before provision for income taxes (17) % (27) % (40) % Provision for income taxes 1 % — % — % Net loss (18) % (27) % (40) % Comparison of the Fiscal Years Ended January 31, 2025 and January 31, 2024 Revenue Fiscal Year Ended January 31, 2025 2024 Change % Change ($ in thousands) Revenue $ 593,410 $ 471,800 $ 121,610 25.8 % The increase in revenue of $121.6 million, or 25.8%, for the fiscal year ended January 31, 2025 compared to the fiscal year ended January 31, 2024 was primarily driven by an $119.2 million, or 26.4%, increase in subscription revenue.
Financing Activities Net cash provided by financing activities was $13.1 million for the fiscal year ended January 31, 2024, primarily consisting of proceeds from the exercise of common stock options of $7.3 million and proceeds from stock purchases associated with our employee stock purchase plan of $6.0 million, offset by payments of deferred purchase considerations related to the acquisition of North Star of $0.2 million.
Net cash provided by financing activities was $13.1 million for the fiscal year ended January 31, 2024, primarily consisting of proceeds from the exercise of common stock options of $7.3 million and proceeds from stock purchases associated with our employee stock purchase plan of $6.0 million, offset by payments of deferred purchase considerations related to the acquisition of North Star of $0.2 million.
General macroeconomic and socioeconomic conditions such as, among others, instability in the banking and financial services sector, international and domestic supply chain risks, inflationary pressure, interest rate increases, declines in consumer confidence, international conflicts, and domestic and foreign political unrest have recently led to increased economic uncertainty.
General macroeconomic and socioeconomic conditions such as, among others, instability in the banking and financial services sector, international and domestic supply chain risks, inflationary pressure, interest rate increases, declines in consumer confidence, international conflicts and domestic and foreign political unrest have led to increased economic uncertainty.
As of January 31, 2024, we recorded a full valuation allowance in jurisdictions where we had net deferred tax assets, which consist of net operating loss carryforwards and other basis differences, as we have concluded that it is more likely than not that our deferred tax assets will not be realized. Recently Adopted Accounting Pronouncements Refer t o Note 2.
As of January 31, 2025, we recorded a full valuation allowance in jurisdictions where we had net deferred tax assets, which consist of net operating loss carryforwards and other basis differences, as we have concluded that it is more likely than not that our deferred tax assets will not be realized. Recently Adopted Accounting Pronouncements Refer t o Note 2.
While our future capital requirements will depend on many factors, including revenue growth and costs incurred to support customer usage and growth in our customer base, increased research and development expenses to support the growth of our business and related infrastructure, and increased general and administrative expenses to support being a publicly-traded company, we believe our current cash, cash equivalents and marketable securities will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months.
While our future capital requirements will depend on many factors, including revenue growth and costs incurred to support customer usage and growth in our customer base, increased research 57 Table of Contents and development expenses to support the growth of our business and related infrastructure, and increased general and administrative expenses to support being a publicly-traded company, we believe our current cash, cash equivalents and marketable securities will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months.
These costs primarily include payments to third-party cloud infrastructure providers for hosting software solutions, costs associated with application service providers utilized to deliver the platform, personnel-related costs, including salaries, cash-based performance compensation, benefits and stock-based compensation, and overhead cost allocations, including rent, utilities, depreciation, information technology costs, amortization of internal use software and certain administrative personnel costs.
These costs primarily include payments to third-party cloud infrastructure providers for hosting software solutions, costs associated with application service providers utilized to deliver the platform, personnel-related costs, including salaries, cash-based performance compensation, benefits and stock-based 51 Table of Contents compensation, and overhead cost allocations, including rent, utilities, depreciation, information technology costs, amortization of internal use software and certain administrative personnel costs.
The cash inflows from changes in our operating assets and liabilities were primarily due to an increase in deferred revenue of $39.9 million as a result of increased billings driven by timing of subscriptions and renewals.
The cash inflows from changes in our operating assets and liabilities were primarily due to an increase in deferred revenue of $35.9 million as a result of increased billings driven by timing of subscriptions and renewals.
We expand the use of our platform by existing customers by, among others, adding new channels and increasing the messaging volume we sell to our customers as their businesses and needs continue to grow and as they connect directly with additional consumers, which in 48 Table of Contents turn leads to a need for greater messaging capacity.
We expand the use of our platform by existing customers by, among others, adding new channels and increasing the messaging volume we sell to our customers as their businesses and needs continue to grow and as they connect directly with additional consumers, which in turn leads to a need for greater messaging capacity.
In addition, we had an increase in personnel and overhead costs of $2.0 million. The increased infrastructure, messaging, and personnel costs were incurred to support overall revenue growth.
In addition, we had an increase in personnel and overhead costs of $3.2 million. The increased infrastructure, messaging, and personnel costs were incurred to support overall revenue growth.
See the section titled “— Non-GAAP Free Cash Flow” for additional information about how we calculate free cash flow, a non-GAAP financial metric, and a reconciliation to net cash us ed in operating activities, the most directly comparable measure calculated in accordance with accounting principles generally accepted in the United States, or U.S. GAAP.
See the section titled “— Non-GAAP Free Cash Flow” for additional information about how we calculate free cash flow, a non-GAAP financial metric, and a reconciliation to net cash provided by operating activities, the most directly comparable measure calculated in accordance with accounting principles generally accepted in the United States, or U.S. GAAP.
For the fiscal years ended January 31, 2024, 2023, and 2022, approximately 43%, 42%, and 40%, of our revenue was generated outside of the United States, respectively. We expect to increase market penetration in regions including Europe and Asia-Pacific and to further capitalize on the greenfield opportunity in regions such as Latin America.
For the fiscal years ended January 31, 2025, 2024, and 2023, approximately 45%, 43%, and 42%, of our revenue was generated outside of the United States, respectively. We expect to increase market penetration in regions including Europe and Asia-Pacific and to further capitalize on the greenfield opportunity in regions such as Latin America.
A single organization could have multiple distinct contracting divisions or subsidiaries, all of which together would be considered a single customer. Expanding Within Our Existing Customer Base We believe we can achieve significant growth by expanding sales within our existing customer base.
A single organization could have multiple distinct contracting divisions or subsidiaries, all of which together would be considered a single customer. Expanding Within Our Existing Customer Base 49 Table of Contents We believe we can achieve significant growth by expanding sales within our existing customer base.
We review the estimated standalone selling price for our performance obligations periodically and update, if needed, to ensure that the methodology 57 Table of Contents utilized reflects our current pricing practices. The transaction price allocated to each performance obligation is recognized as revenue when or as the products or services are transferred to the customer.
We review the estimated standalone selling price for our performance obligations periodically and update, if needed, to ensure that the methodology utilized reflects our current pricing practices. The transaction price allocated to each performance obligation is recognized as revenue when or as the products or services are transferred to the customer.
Through our sales and marketing efforts, we also plan to capitalize on industries subject to ongoing digital transformation and where direct-to-consumer relationships are accelerating, to further propel adoption of our technology. As of January 31, 2024, we had 2,044 customers across a broad range of sizes and industries.
Through our sales and marketing efforts, we also plan to capitalize on industries subject to ongoing digital transformation and where direct-to-consumer relationships are accelerating, to further propel adoption of our technology. As of January 31, 2025, we had 2,296 customers across a broad range of sizes and industries.
Although these investments in geographic regions may negatively affect our operating results in the near term, we believe that they will contribute to our long-term growth. 49 Table of Contents Sustaining Innovation and Technology Leadership Our success is dependent on our ability to sustain innovation and technology leadership in order to maintain our competitive advantage.
Although these investments in geographic regions may negatively affect our operating results in the near term, we believe that they will contribute to our long-term growth. Sustaining Innovation and Technology Leadership Our success is dependent on our ability to sustain innovation and technology leadership in order to maintain our competitive advantage.
We expect our cost of revenue to increase for the foreseeable future as we continue to grow our business. Gross Profit and Gross Margin 50 Table of Contents Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue.
We expect our cost of revenue to increase for the foreseeable future as we continue to grow our business. Gross Profit and Gross Margin Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue.
Professional services revenue increased $3.6 million, or 21%, due to an increase in deliverability services, technical account management, and support engagement services. These increases were partially offset by the decline in onboarding revenue as a result of the continued engagement of new customers with third-party partner-led onboarding.
Professional services revenue increased $2.4 million, or 11.6%, due to an increase in deliverability services, technical account management, and support engagement services. These increases were partially offset by the decline in onboarding revenue as a result of the continued engagement of new customers with third-party partner-led onboarding.
To supplement our consolidated financial statements, we provide investors with the amount of free cash flow, which is a non-GAAP financial measure. Our management uses free cash flow to assess our operating performance and our progress towards our goal of positive free cash flow.
Non-GAAP Free Cash Flow We report our financial results in accordance with GAAP. To supplement our consolidated financial statements, we provide investors with the amount of free cash flow, which is a non-GAAP financial measure. Our management uses free cash flow to assess our operating performance and our progress towards our goal of positive free cash flow.
As of January 31, 2024, we had approximately 6.2 billion monthly active users, up from approximately 4.8 billion monthly active users as of January 31, 2023. Braze supports interactions across a broad range of both in-product and out-of-product messaging channels.
As of January 31, 2025, we had approximately 7.2 billion monthly active users, up from approximately 6.2 billion monthly active users as of January 31, 2024. Braze supports interactions across a broad range of both in-product and out-of-product messaging channels.
Other Income (Expense), Net Other income (expense), net, primarily consists of net exchange gains or losses on foreign currency transactions and investment income consists primarily of income earned on our investments, cash and cash equivalents, and restricted cash.
Other Income, Net 52 Table of Contents Other income, net, primarily consists of net exchange gains or losses on foreign currency transactions and investment income consists primarily of income earned on our investments, cash and cash equivalents, and restricted cash.
Our dollar-based net retention rate for the trailing 12 months ended January 31, 2024, 2023, and 2022, was 117%, 124%, and 128% respectively, for all our customers, and 120%, 126%, and 136%, respectively, for our customers with ARR of $500,000 or more.
Our dollar-based net retention rate for the trailing 12 months ended January 31, 2025, 2024, and 2023, was 111%, 117%, and 124% respectively, for all our customers, and 114%, 120%, and 126%, respectively, for our customers with ARR of $500,000 or more.
Purchase commitments for business operations are primarily related to cloud hosting, infrastructure, and other software-based services. Our future funding requirements to settle our obligations in foreign jurisdictions are subject to fluctuations due to changes in foreign exchange rates.
Purchase commitments for business operations are predominately related to cloud hosting, infrastructure, and other software-based services and due primarily over the next three years. Our future funding requirements to settle our obligations in foreign jurisdictions are subject to fluctuations due to changes in foreign exchange rates.
For a discussion regarding our financial condition and results of operations for the fiscal year ended January 31, 2023 compared to the fiscal year ended January 31, 2022, refer to “Management's Discussion and Analysis of Financial Condition 47 Table of Contents and Results of Operations” in our Annual Report on Form 10-K for our fiscal year ended January 31, 2023, filed with the SEC on March 31, 2023.
For a discussion regarding our financial condition and results of operations for the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023, refer to “Management's Discussion and Analysis of Financial Condition 48 Table of Contents and Results of Operations” in our Annual Report on Form 10-K for our fiscal year ended January 31, 2024, filed with the SEC on April 1, 2024.
Liquidity and Capital Resources Sources of Funds As of January 31, 2024, our principal source of liquidity was cash, cash equivalents, and marketable securities of $480.0 million . Our cas h and cash equivalents consist of deposit accounts, interest-bearing money market accounts, and U.S. government securities that are stated at fair value.
Liquidity and Capital Resources Sources of Funds As of January 31, 2025, our principal source of liquidity was cash, cash equivalents, and marketable securities of $514.0 million. Our cash and cash equivalents consist of deposit accounts, interest-bearing money market accounts, U.S. government, and corporate securities that are stated at fair value.
The following table presents a reconciliation of free cash flow to net cash provided by/(used in) operating activities, the most directly comparable measure calculated in accordance with GAAP, for the periods presented: Fiscal Year Ended January 31, 2024 2023 2022 (in thousands) Net cash provided by/(used in) operating activities $ 6,850 $ (22,308) $ (35,398) Less: Purchases of property and equipment (9,761) (15,447) (2,310) Capitalized internal-use software costs (3,574) (1,258) (2,065) Non-GAAP Free cash flow $ (6,485) $ (39,013) $ (39,773) Net cash (used in)/provided by investing activities $ (19,976) $ (398,519) $ 18,040 Net cash provided by financing activities $ 13,109 $ 11,332 $ 467,910 Our free cash flow increased for the fiscal year ended January 31, 2024 from the fiscal year ended January 31, 2023, primarily due to higher collections as a result of an increase in billings that are aligned with new contracts and contract renewals.
The following table presents a reconciliation of free cash flow to net cash provided by/(used in) operating activities, the most directly comparable measure calculated in accordance with GAAP, for the periods presented: Fiscal Year Ended January 31, 2025 2024 2023 (in thousands) Net cash provided by/(used in) operating activities $ 36,680 $ 6,850 $ (22,308) Less: Purchases of property and equipment (13,234) (9,761) (15,447) Capitalized internal-use software costs (3,814) (3,574) (1,258) Non-GAAP free cash flow $ 19,632 $ (6,485) $ (39,013) Net cash used in investing activities $ (36,470) $ (19,976) $ (398,519) Net cash provided by financing activities $ 11,695 $ 13,109 $ 11,332 Our free cash flow increased for the fiscal year ended January 31, 2025 from the fiscal year ended January 31, 2024, primarily due to higher collections as a result of an increase in billings that are aligned with new contracts and contract renewals.
The cash inflows were offset by cash outflows primarily from an increase in deferred contract costs of $30.5 million as a result of commissions on new bookings and renewals.
The cash inflows were offset by cash outflows primarily from an increase in accounts receivable of $5.4 million and an increase in deferred contract costs of $48.2 million as a result of commissions on new bookings and renewals.
Investing Activities Net cash used in investing activities was $20.0 million for the fiscal year ended January 31, 2024, primarily consisting of purchases of marketable securities of $248.1 million, cash paid for the acquisition of North Star of $16.3 million, purchases of property and equipment of $9.8 million, and capitalization of internal-use software costs of $3.6 million, partially offset by maturities of marketable securities of $257.7 million.
Investing Activities Net cash used in investing activities was $36.5 million for the fiscal year ended January 31, 2025, primarily consisting of purchases of marketable securities of $218.0 million,, purchases of property and equipment of $13.2 million, and capitalization of internal-use software costs of $3.8 million, partially offset by maturities of marketable securities of $195.4 million. 56 Table of Contents Net cash used in investing activities was $20.0 million for the fiscal year ended January 31, 2024, primarily consisting of purchases of marketable securities of $248.1 million, cash paid for the acquisition of North Star of $16.3 million, purchases of property and equipment of $9.8 million, and capitalization of internal-use software costs of $3.6 million, partially offset by maturities of marketable securities of 257.7 million.
Approximately 66.8% of the increase in subscription revenue was attributable to the growth from existing customers increase in monthly active users, expansion across channels and committed entitlements and features, and the remaining 33.2% was attributable to new customers. Total customers grew to 2,044 as of January 31, 2024 from 1,770 as of January 31, 2023.
Approximately 73.8% of the increase in subscription revenue was attributable to the growth from existing customers increase in monthly active users, expansion across channels and committed entitlements and features, and the remaining 26.2% was attributable to new customers. Total customers grew to 2,296 as of January 31, 2025 from 2,044 as of January 31, 2024.
Additionally, in the fiscal year ended January 31, 2024, our international revenue increased by $54.1 million as we continued to expand market penetration in regions such as Europe and Asia-Pacific.
Additionally, in the fiscal year ended January 31, 2025, our international revenue increased by $62.4 million as we continued to expand market penetration in regions such as Europe and the Asia-Pacific region.
Our subscription fees are principally based on an upfront commitment by our customers for messaging volumes, a specific number of monthly active users, platform access and/or support and certain add-on products.
We primarily generate revenue from the sale of subscriptions to customers for the use of our platform. Our subscription fees are principally based on an upfront commitment by our customers for messaging volumes, a specific number of monthly active users, platform access and/or support and certain add-on products.
Cash Flow Overview The following table summarizes our cash flows for the periods presented: Fiscal Year Ended January 31, 2024 2023 2022 (in thousands) Net cash provided by/(used in) operating activities $ 6,850 $ (22,308) $ (35,398) Net cash (used in)/provided by investing activities $ (19,976) $ (398,519) $ 18,040 Net cash provided by financing activities $ 13,109 $ 11,332 $ 467,910 Operating Activities For the fiscal year ended January 31, 2024, net cash provided by operating activities was $6.9 million, primarily due to a net loss of $130.4 million adjusted for non-cash charges of $136.2 million and net changes in our operating assets and liabilities of $1.1 million.
Cash Flow Overview The following table summarizes our cash flows for the periods presented: Fiscal Year Ended January 31, 2025 2024 2023 (in thousands) Net cash provided by/(used in) operating activities $ 36,680 $ 6,850 $ (22,308) Net cash used in investing activities $ (36,470) $ (19,976) $ (398,519) Net cash provided by financing activities $ 11,695 $ 13,109 $ 11,332 Operating Activities For the fiscal year ended January 31, 2025, net cash provided by operating activities was $36.7 million, primarily due to a net loss of $104.0 million adjusted for non-cash charges of $163.4 million and net changes in our operating assets and liabilities of $22.7 million.
We generated revenue of $471.8 million, $355.4 million, and $238.0 million in the fiscal years ended January 31, 2024, 2023, and 2022, respectively, representing year-over-year growth of 33% from the fiscal years ended January 31, 2023 to January 31, 2024 and 49% from the fiscal year ended January 31, 2022 to January 31, 2023.
We generated revenue of $593.4 million, $471.8 million, and $355.4 million in the fiscal years ended January 31, 2025, 2024, and 2023, respectively, representing year-over-year growth of 25.8% from the fiscal years ended January 31, 2024 to January 31, 2025 and 32.7% from the fiscal year ended January 31, 2023 to January 31, 2024.
We intend to continue to expand our customer base in verticals where we already have a strong presence, such as retail, media and entertainment, on-demand services, gaming, health and lifestyle, and financial services — and to increase our presence in verticals where we are not yet strongly represented.
We intend to continue to expand our customer base in verticals where we already have a strong presence, such as retail and consumer goods, media and entertainment, telecommunications, restaurants and on-demand services, healthcare and life sciences, technology, manufacturing, education, government and public services, and financial services — and to increase our presence in verticals where we are not yet strongly represented.
These increases were due primarily to improved personnel efficiencies, 53 Table of Contents economies of scale, a one-time vendor charge recorded in the fiscal year ended January 31, 2023, and the optimization of costs of our tech stack as our infrastructure costs to support our revenue growth did not increase at the same pace as our revenue.
These increases were due primarily to improved personnel efficiencies, 54 Table of Contents economies of scale, and the optimization of costs of our tech stack as our infrastructure costs to support our revenue growth did not increase at the same pace as our revenue.
Since our inception, we have financed our operations primarily through the net proceeds received from the sales of equity securities and cash generated from the sale of subscriptions to our platform.
Since our inception, we have financed our operations primarily through the net proceeds received from the sales of equity securities and cash generated from the sale of subscriptions to our platform. We have generated losses from our operations as reflected in our accumulated deficit of $586.8 million as of January 31, 2025.
Our gross profit increased $84.7 million, or 35.3%, in the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023, and our gross margin increased by 1.3% to 68.7% in the fiscal year ended January 31, 2024 from 67.4% in the fiscal year ended January 31, 2023.
Our gross profit increased $85.9 million, or 26.5%, in the fiscal year ended January 31, 2025 compared to the fiscal year ended January 31, 2024, and our gross margin increased by 0.4% to 69.1% in the fiscal year ended January 31, 2025 from 68.7% in the fiscal year ended January 31, 2024.
The non-cash adjustments primarily relate to stock-based compensation of $72.2 million, amortization of deferred contract costs of $23.6 million, depreciation and amortization expense of $4.6 million, and expense associated with the donation of our Class A common stock to a charitable donor-advised fund of $4.3 million as part of our Pledge 1% 55 Table of Contents commitment.
The non-cash adjustments primarily relate to stock-based compensation of $115.1 million, amortization of deferred contract costs of $35.0 million, depreciation and amortization expense of $10.1 million, and expense associated with the donation of our Class A common stock to a charitable donor-advised fund of $3.8 million.
For the fiscal year ended January 31, 2023, net cash used in operating activities was $22.3 million, primarily due to a net loss of $140.7 million adjusted for non-cash charges of $109.0 million and net changes in our operating assets and liabilities of $9.4 million.
For the fiscal year ended January 31, 2024, net cash provided by operating activities was $6.9 million, primarily due to a net loss of $130.4 million adjusted for non-cash charges of $136.2 million and net changes in our operating assets and liabilities of $1.1 million.
Our most significant funding requirements are principally comprised of employee compensation and related taxes and benefits, non-cancelable purchase commitments, and operating lease obligations. Non-cancelable purchase commitments for business operations and operating lease obligations total $255.1 million and $122.9 million, respectively, as of January 31, 2024, due primarily over the next three years.
Our most significant funding requirements are principally comprised of employee compensation and related taxes and benefits, non-cancelable purchase commitments, and operating lease obligations. Non-cancelable purchase commitments for business operations and operating lease obligations total $224.4 million and $114.8 million, respectively, as of January 31, 2025.
Cost to Obtain a Contract with a Customer We capitalize incremental costs of obtaining revenue contracts, which primarily consist of internal sales commissions and agent commissions. We amortize these commissions on a systematic basis, consistent with the pattern of transfer of the expected benefit period or services to which the contract relates, generally up to four years.
We amortize these commissions on a systematic basis, consistent with the pattern of transfer of the expected benefit period or services to which the contract relates, generally up to four years.
We had net cash provided by operating activities of $6.9 million in the fiscal year ended January 31, 2024 and net cash used in operating activities of $22.3 million and $35.4 million in the fiscal years ended January 31, 2023 and 2022, respectively.
We had net cash provided by operating activities of $6.9 million and net cash used in operating activities of $22.3 million in the fiscal years ended January 31, 2024 and 2023, respectively. Our Non-GAAP free cash flow was $19.6 million, $(6.5) million and $(39.0) million in the fiscal years ended January 31, 2025, 2024, and 2023, respectively.
General and Administrative Expense Fiscal Year Ended January 31, 2024 2023 Change % Change ($ in thousands) General and administrative $ 101,977 $ 88,771 $ 13,206 14.9 % The increase in general and administrative expenses of $13.2 million, or 14.9%, for the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023 was primarily driven by an increase in personnel and overhead costs of $13.8 million , which included $7.6 million of stock-based compensation costs, and an increase in s oftware costs of $1.0 million .
General and Administrative Expense Fiscal Year Ended January 31, 2025 2024 Change % Change ($ in thousands) General and administrative $ 116,093 $ 101,977 $ 14,116 13.8 % The increase in general and administrative expenses of $14.1 million, or 13.8%, for the fiscal year ended January 31, 2025 compared to the fiscal year ended January 31, 2024 was primarily driven by an increase in personnel and overhead costs of $13.2 million, which included $5.6 million of stock-based compensation costs and $2.3 million of depreciation expense, primarily related to the winding down of our old office as we moved to our new headquarters in the fiscal year.
We had net losses of $130.4 million, $140.7 million and $78.2 million, in the fiscal years ended January 31, 2024, 2023, and 2022, respectively.
We had net losses of $104.0 million, $130.4 million and $140.7 million, in the fiscal years ended January 31, 2025, 2024, and 2023, respectively. We had net cash provided by operating activities of $36.7 million in the fiscal year ended January 31, 2025.
We expect our free cash flow to fluctuate in future periods with changes in our operating expenses and as we continue to invest in our growth. 56 Table of Contents Liquidity Outlook We assess our liquidity primarily through our cash on hand as well as the projected timing of billings under contracts with our paying customers and related collection cycles.
Liquidity Outlook We assess our liquidity primarily through our cash on hand as well as the projected timing of billings under contracts with our paying customers and related collection cycles.
Cost of Revenue, Gross Profit and Gross Margin Fiscal Year Ended January 31, 2024 2023 Change % Change ($ in thousands) Cost of revenue $ 147,527 $ 115,818 $ 31,709 27.4 % Gross profit $ 324,273 $ 239,608 $ 84,665 35.3 % Gross margin 68.7 % 67.4 % T he increase in cost of revenue of $31.7 million, or 27.4%, for the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023 was primarily driven by an increase of $15.8 million in hosting, infrastructure, and other third-party fees associated with delivering our platform and a $13.2 million increase in third-party messaging fees associated with growth in channel utilization.
Cost of Revenue, Gross Profit and Gross Margin Fiscal Year Ended January 31, 2025 2024 Change % Change ($ in thousands) Cost of revenue $ 183,191 $ 147,527 $ 35,664 24.2 % Gross profit $ 410,219 $ 324,273 $ 85,946 26.5 % Gross margin 69.1 % 68.7 % T he increase in co st of revenue of $35.7 million, or 24.2%, for the fiscal year ended January 31, 2025 compared to the fiscal year ended January 31, 2024 was primarily driven by an increase of $7.5 million in hosting, infrastructure, and other third-party fees associated with delivering our platform and a $24.0 million increase in third-party messaging fees associated with growth in premium messaging channels.
Operating Expenses Sales and Marketing Expense Fiscal Year Ended January 31, 2024 2023 Change % Change ($ in thousands) Sales and marketing $ 247,125 $ 201,684 $ 45,441 22.5 % The increase in sales and marketing expense of $45.4 million, or 22.5%, for the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023, was primarily driven by an increase in personnel and overhead costs of $34.8 million, which included $7.3 million of stock-based compensation costs, as a result of the expansion of equity award grants for existing and new employees.
Operating Expenses Sales and Marketing Expense Fiscal Year Ended January 31, 2025 2024 Change % Change ($ in thousands) Sales and marketing $ 282,316 $ 247,125 $ 35,191 14.2 % The increase in sales and marketing expense of $35.2 million, or 14.2%, for the fiscal year ended January 31, 2025 compared to the fiscal year ended January 31, 2024, was primarily driven by an increase in personnel and overhead costs of $22.9 million, which included $7.0 million of stock-based compensation costs.
Research and Development Expense Fiscal Year Ended January 31, 2024 2023 Change % Change ($ in thousands) Research and development $ 119,863 $ 97,293 $ 22,570 23.2 % Th e increase in research and development expense of $22.6 million, or 23.2%, for the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023, was primarily driven by an increase of personnel and overhead costs of $22.9 million , which included $10.1 million of stock-based compensation costs , to support our continued investment in the features and functionality of our platform.
Research and Development Expense Fiscal Year Ended January 31, 2025 2024 Change % Change ($ in thousands) Research and development $ 133,969 $ 119,863 $ 14,106 11.8 % The increase in research and development expense of $14.1 million, or 11.8%, for the fiscal year ended January 31, 2025 compared to the fiscal year ended January 31, 2024, was primarily driven by an increase in personnel and overhead costs of $11.7 million, which included $4.0 million of stock-based compensation costs, an increase of $1.6 million in software costs, and an increase in professional services of $0.7 million.
Additionally, the increase was driven in part by an increase of $4.0 million in promotional and product marketing, primarily related to the hosting of regional customer events. Further, there was a $2.4 million increase in professional services substantially related to sales team training.
Additionally, the increase was driven in part by an increase of $6.4 million in promotional and product marketing, primarily related to the hosting of regional customer events, our annual customer conference, and other sales related events, an increase of $3.7 million in software costs, and an increase of $2.5 million in deferred contract costs as a result of sales growth.
Our customers include many established global enterprises and leading technology innovators, and span a wide variety of sizes and industries, including retail, media, entertainment, on-demand services, gaming, health and lifestyle, and financial services. We primarily generate revenue from the sale of subscriptions to customers for the use of our platform.
Our customers include many established global enterprises and leading technology innovators, and span a wide variety of sizes and industries, including retail and consumer goods, media and entertainment, telecommunications, restaurants and on-demand services, healthcare and life sciences, technology, manufacturing, education, government and public services, and financial services.
A substantial source of our cash provided by operating activities is our deferred revenue, which is included on our consolidated balance sheets as a liability. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is recorded as revenue over the term of the subscription agreement.
We had cash flows provided by operating activities for the fiscal year ended January 31, 2025 of $36.7 million. A substantial source of our cash provided by operating activities is our deferred revenue, which is included on our consolidated balance sheets as a liability.
As of January 31, 2024, we had total deferred revenue of $204.7 million, of which $204.3 million was recorded as a current liability. Deferred revenue will be recognized as revenue when all of the revenue recognition criteria are met.
Deferred revenue will be recognized as revenue when all of the revenue recognition criteria are met.
The increase in personnel costs was primarily due to a year-over-year increase in headcount. Increases in expenses were partially offset by a decrease of $1.2 million in professional services costs.
The increases in expenses were partially offset by a decrease in professional services costs of $0.5 million related to the acquisition of North Star in the fiscal year ended January 31, 2024.
Net cash provided by financing activities was $11.3 million for the fiscal year ended January 31, 2023, consisting solely of proceeds from the exercise of common stock options. Non-GAAP Free Cash Flow We report our financial results in accordance with GAAP.
Financing Activities Net cash provided by financing activities was $11.7 million for the fiscal year ended January 31, 2025, primarily consisting of proceeds from the exercise of common stock options of $6.9 million and proceeds from stock purchases associated with our employee stock purchase plan of $7.7 million, offset by payments of deferred purchase considerations related to the acquisition of North Star of $2.9 million.
Provision for Income Taxes Provision for income taxes consists of state income taxes and income taxes in certain foreign jurisdictions in which we conduct business.
Provision for Income Taxes Provision for income taxes consists of state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We maintain a full valuation allowance in jurisdictions where we had net deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.
The investment income increase was driven primarily by the strengthening of interest rates related to the graded maturation of the portfolio positions and the reinvestment of proceeds in a rising interest rate environment.
Other Income, Net Fiscal Year Ended January 31, 2025 2024 Change % Change ($ in thousands) Other income, net $ 21,557 $ 16,220 $ 5,337 32.9 % The increase in other income, net of $5.3 million, or 32.9%, for the fiscal year ended January 31, 2025, compared to the fiscal year ended January 31, 2024, was attributable to a $5.2 million increase in investment income from marketable securities. 55 Table of Contents The investment income increase was driven primarily by the graded maturation of the portfolio positions at higher interest rates and the reinvestment of proceeds in a high interest rate environment.
In addition, 202, 156, and 107 of our customers had ARR of $500,000 or more as of January 31, 2024, 2023, and 2022, respectively. Expanding Geographically We believe there is a significant opportunity to continue to expand our presence in international markets we have already penetrated and by entering markets we have not yet penetrated.
In addition, 247, 202, and 156 of our customers had ARR of $500,000 or more as of January 31, 2025, 2024, and 2023, respectively. Our dollar-based net retention rate is influenced by macroeconomic factors that impact our customers’ purchasing decisions, which may impact the revenue attributable to such customers.
Removed
Our Non-GAAP free cash flow was $(6.5) million, $(39.0) million and $(39.8) million in the fiscal years ended January 31, 2024, 2023, and 2022, respectively.
Added
The decline in our trailing 12-month dollar-based net retention rate was primarily due to customer turnover and renewals at lower subscription levels.
Removed
These increases were offset by a decrease in the fair value measurement of the contingent consideration related to the acquisition of North Star Y, Pty Ltd, or North Star, of $1.6 million as a result of developments in significant inputs, notably new and incremental actual and forecasted deal closings from the Australia-New Zealand region.
Added
In particular, we have observed that customer renewals in the current uncertain macroeconomic environment and high interest rate climate have led customers to renew their contracts at levels more closely aligned with their current needs, rather than opting for larger commitments based on anticipated future demand. 50 Table of Contents Expanding Geographically We believe there is a significant opportunity to continue to expand our presence in international markets we have already penetrated and by entering markets we have not yet penetrated.
Removed
Additionally, increases were offset by a $0.5 million reduction in value of the shares of Class A common stock donated to a charitable donor-advised fund in connection with our Pledge 1% commitment.
Added
These increases were primarily due to a period-over-period increase in headcount to support our continued investment in the features and functionality of our platform.
Removed
The reduction in value is a result of fluctuations in our stock price on the date of grant. 54 Table of Contents Other Income (Expense), Net Fiscal Year Ended January 31, 2024 2023 Change % Change ($ in thousands) Other income (expense), net $ 16,220 $ 7,977 $ 8,243 103.3 % The increase in other income (expense), net was primarily driven by investment income in marketable securities.
Added
Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is recorded as revenue over the term of the subscription agreement. As of January 31, 2025, we had total deferred revenue of $240.3 million, of which $240.0 million was recorded as a current liability.
Removed
We have generated losses from our operations as reflected in our accumulated deficit of $483.1 million as of January 31, 2024, and cash flows provided by operating activities for the fiscal year ended January 31, 2024 of $6.9 million.
Added
We expect our free cash flow to fluctuate in future periods with changes in our operating expenses and as we continue to invest in our growth. Additionally, our free cash flow may be influenced by macroeconomic factors that impact our collection efforts for customer payments.
Removed
Net cash used in investing activities was $398.5 million for the fiscal year ended January 31, 2023, primarily consisting of purchases of marketable securities of $638.2 million, partially offset by maturities of marketable securities of $256.4 million.
Added
If we experience collection pressure it may lengthen the time to collect on accounts receivable and increase our bad debt expense, either of which could negatively impact our free cash flow.
Added
Cost to Obtain a Contract with a Customer 58 Table of Contents We capitalize incremental costs of obtaining revenue contracts, which primarily consist of internal sales commissions and agent commissions.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−0 removed6 unchanged
Biggest changeForeign Currency Exchange Rate Risk Our reporting and functional currency is the U.S. dollar, and the functional currency of our foreign subsidiaries is primarily the respective local currency. Substantially all of our sales are denominated in U.S. dollars. Our only sales denominated in a currency other than the U.S. dollars are our sales in Japan, which are denominated in Yen.
Biggest changeForeign Currency Exchange Rate Risk 59 Table of Contents Our reporting and functional currency is the U.S. dollar, and the functional currency of our foreign subsidiaries is primarily the respective local currency. Substantially all of our sales are denominated in U.S. dollars.
Our consolidated results of operations and cash flows are therefore subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates.
The consolidated results of operations and cash flows are therefore subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates.
A hypothetical 10% change in the relative value of the U.S. dollar to other currencies during any of the periods presented would not have had a material effect on our realized and unrealized gains (losses) on foreign exchange transactions. 59 Table of Contents
A hypothetical 10% change in the relative value of the U.S. dollar to other currencies during any of the periods presented would not have had a material effect on our realized and unrealized gains (losses) on foreign exchange transactions. 60 Table of Contents
Gains or losses due to transactions in foreign currencies are included in interest and other income (expense), net in our consolidated statements of operations. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
Gains or losses due to transactions in foreign currencies are included in interest and other income, net in the consolidated statements of operations. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
Fixed rate securities may have their market value adversely affected due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. As of January 31, 2024, a hypothetical 10% change in interest rates would not have had a material impact on our consolidated financial statements.
Fixed rate securities may have their market value adversely affected due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. As of January 31, 2025, a hypothetical 10% change in interest rates would not have had a material impact on the consolidated financial statements.
Because we classify our debt securities as 58 Table of Contents “available for sale,” no gains or losses are recognized due to changes in interest rates unless such securities are sold prior to maturity or unless declines in fair value are determined to be non-temporary.
Because we classify our debt securities as “available for sale,” no gains or losses are recognized due to changes in interest rates unless such securities are sold prior to maturity or unless declines in fair value are determined to be non-temporary.
Our inability or failure to do so could harm our business, financial condition, and results of operations. Interest Rate Risk and Market Risk We had cash, cash equivalents, and marketable securities of $480.0 million as of January 31, 2024, of which $407.9 million was invested in government securities, foreign securities, and corporate debt securities.
Our inability or failure to do so could harm our business, financial condition, and results of operations. Interest Rate Risk and Market Risk We had cash, cash equivalents, and marketable securities of $514.0 million as of January 31, 2025, of which $430.5 million was invested in U.S. government securities, foreign securities, and corporate debt securities.
Therefore, our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily the United States, United Kingdom, Singapore, and Japan.
Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily the United States, United Kingdom, Singapore and Japan.
Added
Our only sales denominated in a currency other than the U.S. dollars are our sales in Japan, which are denominated in Yen. Therefore, our revenue is not currently subject to significant foreign currency risk.

Other BRZE 10-K year-over-year comparisons