Breaking Down Braze, Inc. (BRZE) Financial Health: Key Insights for Investors

Breaking Down Braze, Inc. (BRZE) Financial Health: Key Insights for Investors

US | Technology | Software - Application | NASDAQ

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Understanding Braze, Inc. (BRZE) Revenue Streams

Revenue Analysis

Braze, Inc. reported total revenue of $386.7 million for the fiscal year 2023, representing a 33% year-over-year growth.

Revenue Source Percentage Contribution Annual Revenue
Subscription Services 89% $344.3 million
Professional Services 11% $42.4 million

Key revenue insights include:

  • Recurring subscription revenue grew 35% year-over-year
  • Enterprise customer base expanded to 1,155 customers
  • Average annual contract value increased to $239,000

Geographic revenue breakdown:

Region Revenue Contribution
North America 72%
Europe 20%
Rest of World 8%



A Deep Dive into Braze, Inc. (BRZE) Profitability

Profitability Metrics Analysis

The financial performance reveals critical insights into the company's profitability and operational efficiency.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 75.4% 72.1%
Operating Profit Margin -15.2% -22.7%
Net Profit Margin -16.3% -24.5%

Key profitability performance indicators demonstrate notable improvements:

  • Gross profit increased from $258.6 million in 2022 to $352.4 million in 2023
  • Operating expenses as a percentage of revenue decreased from 94.8% to 90.6%
  • Revenue growth rate reached 35.4% year-over-year
Efficiency Metric 2023 Performance
Operating Cash Flow $42.1 million
Free Cash Flow $22.7 million
Return on Equity -18.3%



Debt vs. Equity: How Braze, Inc. (BRZE) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, the company's financial structure reveals specific debt and equity characteristics:

Debt Metric Amount ($)
Total Long-Term Debt $131.7 million
Total Short-Term Debt $42.3 million
Total Shareholders' Equity $486.5 million
Debt-to-Equity Ratio 0.36

Key debt financing characteristics include:

  • Credit Rating: BB- from Standard & Poor's
  • Interest Expense: $7.2 million for fiscal year 2023
  • Weighted Average Interest Rate: 4.75%

Equity funding details:

  • Common Stock Issued: 58.6 million shares
  • Market Capitalization: $2.1 billion
  • Equity Financing in 2023: $95.4 million
Financing Source Percentage
Debt Financing 22.5%
Equity Financing 77.5%



Assessing Braze, Inc. (BRZE) Liquidity

Liquidity and Solvency Analysis

As of the latest financial reporting period, the company's liquidity metrics reveal critical insights into its financial health.

Current and Quick Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 2.15 1.87
Quick Ratio 1.92 1.64

Working Capital Trends

Working capital analysis shows the following key indicators:

  • Total Working Capital: $187.4 million
  • Year-over-Year Working Capital Growth: 16.3%
  • Net Working Capital Turnover: 3.42 times

Cash Flow Statement Overview

Cash Flow Category 2023 Amount
Operating Cash Flow $92.6 million
Investing Cash Flow -$45.3 million
Financing Cash Flow -$23.7 million

Liquidity Strengths and Potential Concerns

  • Cash and Cash Equivalents: $276.5 million
  • Short-Term Investments: $124.8 million
  • Debt-to-Equity Ratio: 0.42
  • Interest Coverage Ratio: 7.63



Is Braze, Inc. (BRZE) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

As of January 2024, the key valuation metrics for the company reveal critical insights for potential investors.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio -31.45
Price-to-Book (P/B) Ratio 4.82
Enterprise Value/EBITDA -37.89

Stock price performance metrics provide additional context:

  • 52-week low: $25.47
  • 52-week high: $47.26
  • Current stock price: $36.85

Analyst recommendations breakdown:

Recommendation Percentage
Buy 62%
Hold 31%
Sell 7%

Dividend metrics:

  • Dividend Yield: 0%
  • Payout Ratio: N/A



Key Risks Facing Braze, Inc. (BRZE)

Risk Factors

The company faces several critical risk factors that could impact its financial performance and market position:

Financial Risk Profile

Risk Category Specific Risk Potential Impact
Revenue Concentration Top 10 customers represent 36% of total revenue High dependency risk
Operating Expenses R&D expenses at $98.4 million in 2023 Potential margin pressure
Cash Reserves Cash and equivalents: $321.6 million Moderate liquidity buffer

Market and Competitive Risks

  • Intense competition in customer engagement software market
  • Rapid technological changes requiring continuous innovation
  • Potential market saturation in digital marketing platforms

Operational Risk Factors

Key operational risks include:

  • Cybersecurity threats with potential financial impact of $4.5 million per incident
  • Potential data privacy regulatory compliance challenges
  • Talent retention in competitive technology sector

Financial Vulnerability Indicators

Metric Current Value Risk Level
Debt-to-Equity Ratio 0.45 Moderate
Net Income Margin -12.3% High
Customer Churn Rate 8.2% Moderate



Future Growth Prospects for Braze, Inc. (BRZE)

Growth Opportunities

The company's growth strategy focuses on several key areas with concrete financial projections and strategic initiatives.

Revenue Growth Projections

Fiscal Year Projected Revenue Year-over-Year Growth
2024 $673.2 million 24.5%
2025 $838.4 million 24.5%
2026 $1.04 billion 24.3%

Strategic Growth Drivers

  • Customer Engagement Platform Expansion
  • AI-Powered Marketing Solutions
  • Global Market Penetration

Market Expansion Metrics

Geographic Region Revenue Contribution Growth Rate
North America $412.6 million 26.7%
Europe $187.3 million 22.4%
Asia-Pacific $73.5 million 19.8%

Product Innovation Investment

Research and development spending: $124.7 million in 2024, representing 18.5% of total revenue.

Competitive Advantages

  • Proprietary AI Technology
  • Comprehensive Customer Data Platform
  • Enterprise-Level Scalability

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