Braze, Inc.

Welcome to the BRAZE Fiscal Fourth Quarter 2026 Earnings Conference Call. My name is Layla, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. After the speaker's presentation, we will conduct a question-and-answer session. I'll now turn the call over to Christopher Ferris, Vice President of BRAZE Investor Relations.

Thank you, Operator. Good afternoon, and thank you for joining us today to review BRAZE's results for the Fiscal Fourth Quarter 2026. I'm joined by our co-founder and chief executive officer, Bill Magnuson, and our chief financial officer, Isabel Winkles. We announced our results in a press release issued after the market closed today. Please refer to the investor relations section of our website at investors.braze.com for more information and a supplemental presentation related to today's earnings announcement. During this call, we will make statements related to our business that are forward-looking under federal securities laws and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding our financial outlook for the first quarter and the fiscal year ended January 31, 2027, the anticipated benefits from and product advancements due to the combination of Braze and ongoing developments in Braze AI technology, our expectations concerning new customer verticals, our anticipated customer behaviors, including vendor consolidation and replacement trends and their impact on Braze, our potential market opportunity and our ability to effectively execute on such opportunity, the execution and anticipated benefits of our share repurchase program, and our long-term financial targets and goals, including our expectations regarding our profitability framework. Thank you. I'd also like to remind you that today's call will include certain non-GAAP financial measures used by management to evaluate our ongoing operations and to aid investors in further understanding the company's fiscal fourth quarter 2026 performance in addition to the impact these items have on the financial results. Please refer to the reconciliations of our non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with U.S. GAAP included in our earnings release under the Investor Relations section of our website. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the financial measures of financial performance prepared in accordance with U.S. GAAP. And now, I'd like to turn the call over to Bill.

Thank you, Chris, and good afternoon, everyone. Today, we reported outstanding fourth quarter results that further validate our product leadership, go-to-market approach, and financial strategy. In Q4, we generated $205 million of revenue, up 28% year-over-year and 8% from the prior quarter. Organic revenue growth accelerated year-over-year for the third straight quarter, while we continued to drive operating efficiency in our business. Trailing 12-month dollar-based net retention showed strength as well, inflecting positively during the quarter to reach 109%. Two milestones underscored this momentum in our business. During the quarter, we surpassed $1 billion in remaining performance obligations as customers increasingly commit to Braze for their long-term customer engagement needs. And early in fiscal 2027, we passed $800 million in annual recurring revenue, demonstrating continued strong demand for the high ROI delivered by our platform. We are incredibly proud of these achievements, and I think our team across the world for their tireless efforts over the past year. For the full fiscal year 2026 we delivered 24% year over year revenue growth and $28 million of non gap operating income with operating margins expanding nearly 400 basis points over the prior year. This performance demonstrates our ability to deliver on our profitability framework, even while accelerating our investments in Braze AI and completing the successful transformation of last summer's acquisition of OfferFit into the rapidly growing Braze Decisioning Studio. We also realized $42 million of non-gap net income in FY26, up from $18 million last year, and generated $58 million of free cash flow, providing us with the financial flexibility to invest thoughtfully in shaping the future of customer engagement. Our financial strength has also enabled Braze to initiate its first share repurchase program, a milestone that reflects our high conviction in our long-term growth opportunity. Isabel will provide more details on this program later in the call. Our business momentum accelerated in the fourth quarter as brands look to transform their businesses with AI and further leverage their ongoing investments in first-party data and direct-to-consumer relationships. Q4 bookings rose over 50% year-over-year, as we established a new high-water mark for average sales price and saw particular strength in the enterprise. Net customer additions increased by 81% sequentially, up 14% year-over-year, while $500,000-plus customers increased by 30% sequentially, up 35% year-over-year. Additionally, million-dollar-plus customers rose 28% year-over-year, up from 18% year-over-year growth in Q4 of last year. Large deal velocity was also impressive, as we signed 29 deals in excess of $500,000 this quarter, including $7 million-plus deals and an expansion that increased our eight-figure customer count to four. Notable new business wins and existing customer expansions include Dischem, GoodNotes, ID.me, King, Life360, MyTeresa, PowerUs, RealEstate.co.nz, Shell Mobility & Convenience, and ThriftBooks, along with many others. While new logo wins were strong, upsells also showed strength as existing customers expanded across channels, adopted new Braze AI capabilities, and deepened their integrations with the Braze data platform. This expansion of our land and expand strategy to include growth in data integrations and AI workloads is a testament to both Braze's composable design and our position as mission critical infrastructure for our diverse and demanding global customer base. Competitive takeaways from the legacy marketing clouds in the fourth quarter continue to validate the market's preference for Braze's AI-driven omnichannel approach to deliver on modern customer engagement use cases at scale. This quarter, brands across diverse industries and geographies migrated from legacy platforms to Braze, including a global heritage footwear brand, a global genealogy company, a leading American cybersecurity company, an American department store chain, an American financial solutions company, a European travel insurance provider, a European national lottery, a luxury hotel group based in APAC, and a large Latin American bank. Looking ahead, we are well positioned to capitalize on the momentum we've been building over the past several quarters. Our go-to-market motion, under the leadership of Chief Revenue Officer Ed McDonnell, who joined in late Q2, is operating at a high level, delivering a meaningful improvement in sales productivity. Pipeline generation was also strong in the fourth quarter, indicating robust market demand for our AI-driven solutions, particularly in the enterprise. The field of customer engagement is moving faster now than it has in years, and Braze continues to be perfectly positioned to turn AI disruption into opportunity. By driving platform innovation in tandem with the evolving craft of customer engagement, Braze has been actively redefining the front door to marketing technology for most of the last decade. This innovative leadership continues to drive share gain in the enterprise, and it's why both our customer community and broader partner ecosystem continue to compound with ambition and optimism. Our competitive position rests on four foundational strengths that position us to capitalize on AI-driven disruption. First, the Braze data platform and customer engagement stack serve as critical infrastructure for our customers, delivering secure and reliable performance at massive scale. Unlike applications that manage workflows and tasks that are ultimately executed by humans, Braze has always been a platform wielded by small teams of builders to directly execute massive, complex workloads. During calendar year 2025 alone, we powered 4.5 trillion messages and canvas actions, processed over 25 trillion data points, executed 3.1 trillion AI decisioning inferences, and made 8.7 trillion updates to our user profile system of record. This execution capability provides brands with confidence to deploy business-critical programs for entire global audiences, confidence that no point solution can match. Second, our vertically integrated data and decisioning architecture allows for capabilities that no one else can replicate. The Braze data platform feeds real-time context into control planes like Canvas and Decisioning Studio, which then serve as the substrate for agentic AI execution. This tight integration between data infrastructure and AI decisioning, combined with the most comprehensive set of marketing, conversational and product channels on the market, delivers differentiated outcomes rooted in real customer data, not just generic LLM outputs. Third, our composable AI architecture is compounding the value of our deep infrastructure and comprehensive platform. At our Forge customer conference in September, we announced the upcoming betas for both Braze AI Operator and the Agent Console to be available in Q1 and Q2 respectively. Last month, we beat those delivery timelines by months and launched both Operator and Agent Console into general availability. Leveraging the flexibility of composable data and the power of composable intelligence, these products have been able to quickly spread their wings in capability because they wield the differentiated power, performance, and scale that Braze has delivered to the market for years. The excitement from customers and partners around both launches has been palpable. Agent Console is seeing rapid uptake across a wide array of use cases, and Braze AI Operator is accelerating and evolving workflows for thousands of Braze Dashboard users every week, automating campaign, canvas, and agent creation, deepening quality assurance checks, and uncovering data insights through simple conversational prompts. Operator is first trained with Braze's documentation, use case libraries, and source code, and then enhanced by a comprehensive knowledge of each customer's data models, brand strategy, and integration details, enabling each Braze user's operator to answer difficult questions and execute complex tasks as it navigates the dashboard in front of their eyes. Operator also integrates with Snowflake's Cortex code to drive analytics insights that feed back into campaign strategies, and its skills continue to advance rapidly, including the recently trained capability to build directly inside the agent console. While eager beta testers of the agent console repeatedly asked us for more templates, we leaped over their request for faster horses and instead delivered a powerful prompt to agent capability that turned simple inspiration into sophisticated agents, each specifically configured according to a customer's Braze integration and existing marketing programs. These agents are already being deployed to enhance customer journeys in Canvas, and to drive data enrichment workloads in the Braze Data Platform's catalog feature. And all of this works in tandem with Braze AI Decisioning Studio, which harnesses modern reinforcement learning to achieve maximum performance in the most important parts of the user journey. Just as we delivered the most comprehensive solution for cross-channel marketing in the age of deterministic automation, we're building Braze AI to combine the flexibility of a composable architecture with the power of frontier AI across multiple fields of research to deliver a comprehensive solution for AI-driven customer engagement. Fourth, we believe Braze occupies a unique position in the software landscape as a rare hybrid of a revenue driving engine and mission-critical operational capability. Whether it's the urgency of responding to an evolving emergency, the pressure of publishing a message that will be read by hundreds of millions of people, or the criticality of executing deeply optimized marketing programs that drive a business's most important quarterly results, Brands trust Braze with their most important workloads because we provide the agility, observability, and reliability that business-critical infrastructure demands. In an environment where companies must maximize every dollar of uplift, this proven ability to deliver measurable ROI at scale makes Braze an essential and highly optimized component of the modern enterprise stack, not a discretionary tool. As we look ahead, Braze will continue to invest with focus to remain at the frontier of consumer and technological change, turning disruption into opportunity as our customers transform their jobs, their businesses, and the experiences that they deliver to consumers. We are rapidly advancing our platform and enhancing our global customer community. to scale agentic use cases across marketing programs, customer conversations, product experiences, and data workloads, enabling brands to turn context into connection and achieve in the AI era what they have been striving for all along, stronger business performance built on durable customer relationships. I'll wrap my remarks by emphasizing what a great position we are in as we enter our next phase of growth in fiscal 2027 and beyond. Thank you for your interest and support. And now I'll turn the call over to Isabel.