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目录
美国
证券交易委员会
华盛顿特区 20549
______________________________________________________________
表格10-Q
______________________________________________________________
(选择一个)
根据1934年证券交易法第13或15(d)条的季度报告
截至季度期2024年10月31日
根据1934年证券交易法第13条或15(d)条的转变报告
过渡期从     到     
委员会档案编号:001-41065
______________________________________________________________
Braze公司
(注册者的确切名称,如其章程所示)
______________________________________________________________
特拉华州45-2505271
(州或其他辖区的
成立或组织)
(I.R.S. 雇主
识别编号)
麦迪逊大厦63号
东28街28号, 12层
纽约纽约 10016
(主要经营办公室的地址,包括邮政编码) 
(609964-0585
(注册公司电话号码,包括区号)
______________________________________________________________
根据《证券法》第12(b)节注册的证券:
每一类股票的名称交易代号注册的每个交易所名称
A类普通股,面值每股$0.0001BRZE纳斯达克股票市场有限责任公司
请勾选是否注册人(1)在过去12个月内(或注册人需要提交这些报告的更短时间内)已提交证券交易法1934年第13条或第15(d)条所要求提交的所有报告,以及(2)在过去90天内是否受到了此类提交要求的约束。  x      o 
请勾选注册人是否在过去12个月内(或注册人被要求提交这些文件的较短期限内)根据S-t规则405(本章第232.405条)提交了每个互动数据文件。  x     o 
请用勾选标示登记者是否为大型加速报告人、加速报告人、非加速报告人、小型报告公司或新兴成长公司。请参见交易所法规第120亿2条对于「大型加速报告人」、「加速报告人」、「小型报告公司」及「新兴成长公司」的定义。
大型加速报告公司加速报告公司
非加速报告公司小型报告公司
新兴增长公司
如果是新兴成长公司,则应勾选此方框,以表明申报人已选择不使用《交易所法》第13(a)条所提供的任何新的或修订财务会计准则的延迟实施期。 ☐
请在方框内打勾,以指示公司是否为壳公司(按照交易所法规第120亿2条定义)。 是        ☒
截至2024年12月2日, 87,467,590 注册人A类股份的16,017,314 注册人B类普通股的每股面值为0.0001美元的流通股数量。


目录
Braze公司
10-Q表季度报告
截至2024年10月31日的季度期间
目录
页码
2

目录
关于前瞻性陈述的特别说明

本10-Q表季度报告包含有关我们和我们行业的前瞻性陈述,涉及重大风险和不确定性。除本10-Q表季度报告中包含的历史事实陈述外,所有陈述,包括有关我们未来的经营业绩或财务状况、业务战略以及未来运营管理计划和目标的陈述,均为前瞻性陈述。在某些情况下,您可以识别前瞻性陈述,因为它们包含 “预测”、“相信”、“考虑”、“继续”、“可能”、“估计”、“预期”、“打算”、“可能”、“计划”、“潜在”、“预测”、“项目”、“应该”、“目标”、“将来” 等词语,” 或 “会,” 或这些词语或其他类似术语或表述的否定词。这些前瞻性陈述包括但不限于有关以下内容的陈述:

不稳定的市场和经济状况可能对我们的业务、财务状况和股票价格产生严重的不利影响的预期效果;
我们对我们的营业收入的预期以及我们客户合同下营业收入确认的时机,费用和其他经营成果;
我们获得新客户的能力以及成功留住现有客户的能力;
我们提高平台使用率以及追加销售和交叉销售其他产品的能力;
我们实现或维持盈利能力的能力;
未来在我们业务上的投资、我们预计的资本支出以及我们对资本需求的估算;
我们营销工作的成本和成功,以及我们推广品牌的能力;
我们对关键人员的依赖以及我们识别、招聘和留住技能人才的能力;
我们针对平台的增长策略以及有效管理我们增长的能力,包括任何国际扩展;
我们平台的估计可服务市场机会;
我们保护和执行知识产权的能力以及与之相关的任何成本;
国内和全球货币经济事件对我们业务的预期影响;
我们与现有竞争者和新市场进入者有效竞争的能力;
我们竞争的市场的规模和增长率;以及
任何已完成或未来的收购或国际扩展所期望的好处或影响。

您不应该依赖前瞻性声明作为对未来事件的预测。我们在本季度报告10-Q表格中所包含的前瞻性声明主要基于我们目前的期望和对可能影响我们业务、财务状况和经营结果的未来事件及趋势的预测。这些前瞻性声明中所描述事件的结果受到标题为“风险因素”的部分及本季度报告10-Q表格其他地方所述的风险、不确定性和其他因素的影响。此外,我们在一个竞争激烈且快速变化的环境中运营。新的风险和不确定性随时可能出现,因此我们无法预测所有可能对本报告中包含的前瞻性声明产生影响的风险和不确定性。这些前瞻性声明中反映的结果、事件和情况可能无法实现或发生,实际结果、事件或情况可能与这些前瞻性声明中描述的有重大不同。

此外,诸如“我们认为”等表述反映了我们对相关主题的信念和观点。这些表述基于截至本季度报告10-Q表格日期时可获得的信息,具有固有的不确定性。虽然我们认为这些信息为这些表述提供了合理的基础,但该信息可能有限或不完整。我们的声明不应被解读为我们对所有相关信息进行了全面的调查或审查。

本季度报告(表格10-Q)中的前瞻性声明仅与声明所作日期的事件相关。我们没有义务更新本季度报告(表格10-Q)中所做的任何前瞻性声明,以反映本季度报告(表格10-Q)日期之后的事件或情况,或者反映新的信息或意外事件的发生,法律另有规定的情况除外。我们可能无法实际实现我们在前瞻性声明中披露的计划、意图或预期,因此您不应过分依赖我们的前瞻性声明。我们的前瞻性声明不反映任何未来收购、合并、处置、合资或投资的潜在影响。

除非上下文另有说明,否则本10-Q表季度报告中提及了 “Braze”、“公司”、“我们”、“我们的” 等术语,” 和 “我们,” 指 Braze, Inc. 及其子公司。

商标

“Braze”、“完全吸引人”等出现在本季度10-Q表格中的其他商标和商号都是我们的财产。本季度10-Q表格中包含其他公司的商号和商标,
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这些商标是其各自所有者的财产。我们并不意图通过使用或展示其他公司的交易名称或商标来暗示这些公司对我们的认可或赞助,或者与这些公司之间的任何关系。

您可以找到更多信息的地方

我们通过多种方式向公众发布重要信息,包括向美国证券交易委员会(SEC)提交的文件、新闻稿、公开网络广播和电话会议、我们网站(braze.com)上的博客文章,以及我们网站(www.investors.braze.com)上的投资者关系部分。因此,我们鼓励投资者和其他对Braze感兴趣的人士查看我们在网站上提供的信息,此外还要关注我们向SEC提交的文件、新闻稿、网络广播和电话会议。网站上包含的信息或可以通过网站访问的信息并未纳入本季度报告(10-Q表格)中,您不应将网站上的信息视为本季度报告(10-Q表格)的一部分。
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第1部分 – 财务信息
项目1。财务报表
BRAZE公司
简明合并资产负债表(未经审计)
(以千为单位,除每股和每份股金额外)
10月31日,
2024
1月31日,
2024
资产
流动资产:
现金及现金等价物$61,312 $68,228 
受限现金,流动资产 3,373 
应收账款,扣除$的账龄准备2,696 和 $2,772截至2024年10月31日和2024年1月31日,分别
90,299 92,256 
可售证券431,258 407,898 
预付款项及其他流动资产30,452 29,366 
总流动资产613,321 601,121 
受限现金,非流动530 530 
物业及设备(净额)39,910 29,358 
经营租赁使用权资产80,352 81,163 
递延合同成本72,388 63,661 
商誉28,448 28,448 
无形资产,净值3,231 3,690 
其他资产3,832 2,970 
总资产$842,012 $810,941 
负债、可赎回非控股权益和股东权益
流动负债:
应付账款$2,912 $6,321 
应计费用和其他流动负债63,322 63,264 
递延收入223,682 204,269 
经营租赁负债,流动18,315 15,585 
总流动负债308,231 289,439 
经营租赁负债,非流动73,768 75,027 
其他长期负债2,200 2,050 
总负债384,199 366,516 
承诺与或有事项(注释13)
可赎回非控制性权益(注释4)(240)192 
股东权益
A类普通股,$0.0001 面值; 2,000,000,0002,000,000,000 截至2024年10月31日和2024年1月31日,授权股份分别为; 82,534,44973,037,015 截至2024年10月31日和2024年1月31日,已发行和流通的股份分别为;
8 7 
B类普通股,$0.0001 面值; 110,000,000110,000,000 截至2024年10月31日和2024年1月31日,授权的股份数量分别为; 20,296,27427,173,408 截至2024年10月31日和2024年1月31日,已发行和流通的股份数量分别为
2 3 
额外实收资本1,027,339 928,494 
累计其他综合损失348 (1,178)
累计亏损(569,644)(483,093)
股东权益总额458,053 444,233 
总负债、可赎回非控制性权益及股东权益$842,012 $810,941 
附带的说明是这些未经审计的简明合并基本报表的一个不可或缺的部分。
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BRAZE公司
压缩合并经营报表(未经审计)
(以千为单位,除每股金额外)
截至三个月
10月31日,
截至九个月
10月31日,
2024202320242023
营业收入$152,052 $123,956 $433,010 $340,843 
营收成本45,910 36,374 133,878 104,535 
毛利润106,142 87,582 299,132 236,308 
营业费用:
销售和市场营销74,658 66,395 213,054 184,074 
研究和开发32,855 29,872 100,369 88,749 
一般管理费用31,199 26,448 86,309 75,884 
总营业费用138,712 122,715 399,732 348,707 
运营损失(32,570)(35,133)(100,600)(112,399)
其他收入,净额5,294 4,542 15,968 11,866 
税前损失(27,276)(30,591)(84,632)(100,533)
所得税准备851 385 2,351 1,318 
净损失(28,127)(30,976)(86,983)(101,851)
归属于可赎回非控股权益的净损失(216)(235)(432)(962)
归属于Braze, Inc.的净损失$(27,911)$(30,741)$(86,551)$(100,889)
归属于Braze, Inc.普通股股东的每股净损失,基本和稀释$(0.27)$(0.31)$(0.85)$(1.03)
用于计算归属于Braze, Inc.普通股股东每股净损失的加权平均股份,基本和稀释102,146 97,880 101,714 97,615 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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BRAZE公司
简明合并综合亏损表(未经审计)
(以千为单位)
截至三个月
10月31日,
截至九个月
10月31日,
2024202320242023
净损失$(28,127)$(30,976)$(86,983)$(101,851)
其他综合收益:
外汇翻译调整的变化165 (368)230 (172)
未实现的可变现证券收益
436 1,060 1,296 1,811 
其他综合收益,净额
601 692 1,526 1,639 
综合亏损,净额(27,526)(30,284)(85,457)(100,212)
减:因可赎回非控股权益而产生的综合亏损,净额(216)(235)(432)(962)
归属于Braze, Inc.的综合亏损$(27,310)$(30,049)$(85,025)$(99,250)
附带的说明是这些未经审计的简明合并基本报表的一个不可或缺的部分。
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BRAZE公司
可赎回非控股权益和股东权益的简明合并报表(未经审计)
(以千为单位)
可赎回的非控制性权益A类和B类普通股额外
实收资本
资本
累计
赤字
累计
其他
综合的
收入(损失)
股东权益总额
股份金额
2024年7月31日的余额
$(24)101,957 $10 $995,669 $(541,733)$(253)$453,693 
为行使期权而发行普通股票— 189 — 1,477 — — 1,477 
限制性股票单位兑现— 653 —  — —  
基于股票的补偿—  — 28,776 — — 28,776 
其他综合收益— — —  — 601 601 
归属于可赎回非控股权益的净损失(216)— — — — — — 
股票慈善捐赠— 32 — 1,417 — — 1,417 
归属于Braze Inc.的净亏损— — — — (27,911)— (27,911)
截至2024年10月31日的余额
$(240)102,831 $10 $1,027,339 $(569,644)$348 $458,053 
可赎回的非控制性权益A类和B类普通股额外
实收资本
资本
累计
赤字
累计
其他
综合的
收入(损失)
股东权益总额
股份金额
2023年7月31日的余额
$728 98,230 $10 $870,313 $(424,075)$(5,877)$440,371 
行使期权发行普通股— 415 — 1,838 — — 1,838 
限制性股票单位兑现— 533 — — — — — 
基于股票的补偿— — — 24,530 — — 24,530 
其他综合收益— — — — — 692 692 
归属于可赎回非控股权益的净损失(235)— — — — — — 
股票的慈善捐赠— 32 — 1,427 — — 1,427 
因收购而发行普通股—  — 121 — — 121 
归属于Braze, Inc.的净损失— — — — (30,741)— (30,741)
截至2023年10月31日的余额
$493 99,210 10 898,229 (454,816)(5,185)438,238 

附带的说明是这些未经审计的简明合并基本报表的一个不可或缺的部分。








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BRAZE公司
可赎回非控股权益和股东权益的简明合并报表(未经审计)
(续)(以千为单位)
可赎回的非控制性权益A级和B级普通股额外
实收资本
资本
累计
赤字
累计
其他
综合的
收入(损失)
股东权益总额
股份金额
截至2024年1月31日的余额
$192 100,210 $10 $928,494 $(483,093)$(1,178)$444,233 
为行使期权而发行普通股— 590 — 3,682 — — 3,682 
根据员工股票购买计划发行普通股— 149 — 4,752 — — 4,752 
限制性股票单位兑现— 1,818 — — — — — 
基于股票的补偿— — — 87,647 — — 87,647 
其他综合收益— — — — — 1,526 1,526 
归属于可赎回非控股权益的净损失(432)— — — — — — 
股票的慈善捐赠— 64 — 2,764 — — 2,764 
归属于Braze, Inc.的净损失— — — — (86,551)— (86,551)
截至2024年10月31日的余额
$(240)102,831 $10 $1,027,339 $(569,644)$348 $458,053 

可赎回的非控制性权益A类和B类普通股额外
实收资本
资本
累计
赤字
累计
其他
综合的
收入(损失)
股东权益总额
股份金额
截至2023年1月31日的余额
$1,455 95,975 $10 $806,044 $(353,927)$(6,824)$445,303 
因行使期权而发行普通股— 1,664 — 5,949 — — 5,949 
根据员工股票购买计划发行普通股— 128 — 3,222 — — 3,222 
限制性股票单位兑现— 1,189 — — — — — 
基于股票的补偿— — — 74,502 — — 74,502 
其他综合收益— — — — — 1,639 1,639 
归属于可赎回非控股权益的净损失(962)— — — — — — 
股票的慈善捐赠— 64 — 2,391 — — 2,391 
通过收购发行普通股— 190 — 6,121 — — 6,121 
归属于Braze, Inc.的净损失— — — — (100,889)— (100,889)
截至2023年10月31日的余额
$493 99,210 $10 $898,229 $(454,816)$(5,185)$438,238 

附带的说明是这些未经审计的简明合并基本报表的一个不可或缺的部分。
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BRAZE公司
简明合并现金流量表
(未经审计)
(以千为单位)
截至九个月
10月31日,
20242023
来自营业活动的现金流:
净亏损(包括可赎回非控股权益分配的金额)$(86,983)$(101,851)
调整净亏损与经营活动提供的净现金的 reconciliate:
基于股票的补偿87,184 72,961 
递延合同成本的摊销26,004 21,684 
折旧和摊销7,368 5,082 
信用损失准备金2,157 1,717 
捐赠给慈善机构的普通股价值2,764 2,391 
(增值) 市场证券的折扣或溢价摊销(1,605)1,579 
非现金汇率损失(802)473 
有条件对价的公允价值调整(223) 
固定资产注销436 128 
其他1 8 
经营资产和负债的变动:
应收账款(227)7,269 
预付款项及其他流动资产(1,365)1,946 
递延合同成本(34,764)(32,609)
ROU 资产和负债2,123 1,903 
其他资产(506)(324)
应付账款(3,326)2,859 
应计费用和其他流动负债2,105 9,321 
递延收入19,517 8,363 
其他长期负债(261)129 
经营活动提供的净现金19,597 3,029 
投资活动的现金流量:
支付的现金用于收购,减去所获得的现金 (16,319)
购买房产和设备(12,147)(3,439)
资本化的内部使用软件成本(3,023)(2,536)
购买可市场证券(179,545)(191,922)
可交易证券的到期日159,086 194,737 
投资活动中使用的净现金(35,629)(19,479)
融资活动的现金流量:
行使普通股期权所获得的收益3,682 5,949 
与员工股票购买计划相关的股票收益4,752 3,222 
递延购买对价的支付(2,916)(165)
融资活动提供的净现金5,518 9,006 
货币兑换对现金、现金及现金等价物和受限现金变动的影响225 (806)
现金、现金等价物和限制性现金的净变动(10,289)(8,250)
现金、现金等价物和受限现金,期初余额72,131 72,623 
现金、现金及现金等价物和受限现金,期末$61,842 $64,373 
附带的说明是这些未经审计的简明合并基本报表的一个不可或缺的部分。
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BRAZE公司
简明合并现金流量表(未经审核)
补充现金流量披露
(以千计)
截至九个月
10月31日,
20242023
补充现金流量披露:
支付的所得税现金,扣除退款后$2,518 $182 
非现金投资及融资活动:
计入内部使用软件的股票报酬$1,776 $1,516 
未实现的市场投资证券净收益(损失)$1,296 $(1,811)
财产和设备的净变动(包括在应付账款/应计负债中)
$727 $(8)
资产养老义务$9 $17 
普通股发行,收购$ $(6,121)
或有对价,收购$ $(1,795)
赔偿保留,收购$ $(2,965)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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BRAZE公司
简要合并基本报表的附注(未经审计)
1. 公司资料
业务描述

Braze, Inc.及其子公司(统称为“公司”、“我们”、“我们”、“我们的”或“Braze”)是一个基于云的客户互动平台,通过推送通知、电子邮件、产品内消息、短信和多媒体信息等提供以客户为中心的体验。客户使用Braze平台以更真实和人性化的方式促进品牌与客户之间的实时互动。

我们于2011年开始运营,并在特拉华州注册。我们的总部位于纽约市。截止到2024年10月31日,我们在北美、南美、欧洲和亚洲-太平洋地区还租赁了超过10个城市的额外办公空间。
2. 重要会计政策概述

财务报表的基础

伴随的未经审计的简明合并基本报表已按照美国通用会计准则(“U.S. GAAP”)编制。伴随的未经审计的简明合并基本报表包括公司及其全资子公司以及我们是主要受益人的可变利益实体(“VIE”)。在合并中,内部公司余额和交易已被消除。

重新分类

已对之前的基本报表进行了某些重新分类和不重要的变更,以符合当前期间的呈现。
估计的使用

依据美国通用会计准则编制基本报表,管理层需对资产和负债的报告金额、财务报表日期的资产和负债披露以及报告期间的营业收入和费用报告金额做出影响性估计和假设。我们基于历史和预期结果、趋势及其他各种假设来评估这些估计。这样的估计和假设所涉及的重要项目,包括但不限于我们收入安排中单独履行义务的单一销售价格、延期合同成本的预期收益期、普通股和基于股票的补偿的评估、间接费用在营业收入和营业费用之间的分配、无形资产和可折旧资产的估计使用寿命、从业务合并中获得的资产和假定负债的公允价值、长期资产及其可回收性的评估,包括商誉、增量借款利率、递延税资产和负债的评估以及其他税务估计,包括我们利用净营业亏损的能力。

管理层持续评估其估计和假设,使用历史经验和其他因素,包括当前经济环境,并根据事实和情况的变化进行调整。由于未来事件及其影响,包括快速变化的市场和经济条件中存在的不确定性,如,银行和金融服务板块的不稳定性、国际和国内供应链风险、通货膨胀压力、利率上升、消费信心下降、国际冲突以及国内外政治动荡等,可能会影响我们和我们的客户,因此实际结果可能与这些估计不同,并且我们的许多估计和假设需要更高的判断,并具有更高的变异性和波动性。
重要的会计政策
我们重要的会计政策详细列在2024财年截至2024年1月31日的审计合并基本报表的“附注2. 重要会计政策概要”中,该报表已包含在2024年4月1日向SEC提交的公司的10-K年度报告中(“年度报告”)。T我们的重要会计政策没有重大变化。.
信贷风险集中度

12

目录
可能使我们面临信用风险集中风险的金融工具主要包括现金及现金等价物、限制性现金、可交易证券和应收账款。限制性现金包括与我们租赁物业相关的信用证。对于现金、现金等价物、限制性现金和可交易证券,如果金融机构违约,我们将面临信用风险,风险程度以在合并资产负债表上记录的超过联邦存款保险公司(“FDIC”)限额的金额为准。现金、现金等价物、限制性现金和可交易证券的余额保存在管理层认为信用程度高的金融机构中,这些金融机构的存款在某些情况下超过FDIC限额。

重要客户是指在报告期内占我们总营业收入10%或更多的客户,或者在资产负债表日期的应收账款。至2024年10月31日和2023年10月31日结束的三个月和九个月内,没有客户占我们总营业收入的10%或更多。

对于应收账款,如果客户未付款,我们将面临信用风险,风险程度与合并资产负债表上记录的金额相符。 截至2024年10月31日,没有客户占我们应收账款总额的10%或更多。截至2024年1月31日,某客户的应收账款大约占 11% 的应收账款。

尚未采用的最近发布的会计公告

在2023年11月,财务会计准则委员会发布了会计准则更新第2023-07号《分部报告(主题280):可报告分部披露的改进》("ASU 2023-07"),该准则要求披露定期提供给首席运营决策者("CODM")的重大分部费用、其他分部项目的金额及其组成的描述,以及CODM的职务和职位。ASU 2023-07将在2023年12月15日之后开始的年度期间生效。, 以及在2024年12月15日之后开始的财政年度内的季度期间允许提前采用,且该更新应追溯适用于财务报表中所呈现的每个期间。公司目前正在评估新标准对合并基本报表及相关披露的影响。

在2023年12月,财务会计准则委员会发布了会计准则更新第2023-09号《所得税(主题740):所得税披露的改进》(“ASU 2023-09”),要求公众业务实体每年在表格形式的税率调节表中披露特定类别,并提供符合五个百分点量化标准的调节项目的额外信息。此外,ASU还要求所有实体披露按联邦、州和外国税收分解的所得税支付金额,以及在所得税支付金额等于或大于总所得税支付的五个百分点的各个法域。ASU 2023-09适用于2024年12月15日后开始的年度期间。允许提前采用,并且应按前瞻性基础进行更新,同时在基本报表中允许追溯适用。公司目前正在评估新标准对其合并基本报表及相关披露的影响。

在2024年11月,财务会计准则委员会发布了会计准则更新第2024-03号,涵盖收入表 - 报告综合收益 - 费用分解披露(子主题220-40),即收入表费用的分解(“ASU 2024-03”),旨在提高对费用性质的透明度,并要求在收入表中列示的某些费用标题下提供关于特定费用类别的更详细信息。ASU 2024-03自2026年12月15日之后开始的年度报告期间生效,并自2027年12月15日之后开始的中期报告期间生效。允许提前采用。该标准可以选择以下两种方式适用:(1) 前瞻性适用,或(2) 追溯适用到合并基本报表中列示的所有期间。公司目前正在评估新标准对合并基本报表及相关披露的影响。

在本财政年度内,没有其他新的会计公告发布或生效,对合并基本报表或披露产生或预计会产生重大影响。
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3. 来自客户合同的营业收入

分解的营业收入来源

以下的细分展示了与客户合同相关的主要营业收入类型的现金流的性质、数量、时间和不确定性。

下表列出了按类型划分的总营业收入(单位:千):

截至三个月
10月31日,
截至九个月
10月31日,
2024202320242023
订阅$146,256 $118,345 $416,364 $325,202 
专业服务和其他5,796 5,611 16,646 15,641 
总计$152,052 $123,956 $433,010 $340,843 

下表展示了按地区划分的总营业收入(以千为单位):

截至三个月
10月31日,
截至九个月
10月31日,
2024202320242023
美国$82,938 $69,724 $238,810 $193,341 
国际69,114 54,232 194,200 147,502 
总计$152,052 $123,956 $433,010 $340,843 

按地理位置计算的营业收入是基于用户的位置。除了美国之外,没有任何其他单独国家在所呈现的任何期间内的总营业收入中占比达到10%或以上。

未开票应收账款

应收账款中未开票的部分包括在交易应收账款中,净额通常源于我们根据合同生效日期,提前向客户开具账单的合同权利,总额为$1.1 百万和$1.5 截至2024年10月31日和2024年1月31日,分别为百万。

合同余额

合同资产

截至2024年10月31日和2024年1月31日的合同资产为$0.2 百万和$0.9 百万。所有报告期间合同资产的变化主要反映了确认的营业收入超过账单收入,部分被期间内获得的合同资产抵消。

递延收入

所提供期间内递延营业收入的变动主要反映了在该期间内收到的现金付款,这些付款在期末之前并未满足履行义务,部分被期间内确认的收入所抵消。2024年10月31日结束的三个月和九个月内,从2024年1月31日的递延收入中确认的营业收入为$33.5 百万和$191.8 百万,相应地。2023年10月31日结束的三个月和九个月内,从2023年1月31日的递延收入中确认的营业收入为$27.0 百万和$155.3 百万,分别为。
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信用损失

下表呈现了应收账款信用损失准备的调节(单位:千美元):

信用损失准备金
截至2024年1月31日的余额
$2,772 
储备:
信用损失2,157 
递延收入1,805 
核销(4,332)
回收294 
截至2024年10月31日的余额
$2,696 

剩余履行义务

分配给剩余履约义务的交易价格代表在不可取消合同下预计将在未来期间确认的营业收入金额,并可能受到多种因素的影响,包括季节性、续约时间、服务交付时间和合同条款。未开票的剩余履约义务部分面临包括破产、监管变化和其他市场因素在内的未来经济风险。

下表显示了截至下面所示日期的剩余履约义务(以百万计):
总计少于1年1-5年
2023年10月31日$560.1 $369.9 $190.2 
2024年1月31日639.2 409.1 230.1 
2024年4月30日657.3 419.8 237.5 
2024年7月31日689.6 438.3 251.3 
2024年10月31日716.8 458.2 258.6 
4. 变动利息实体和可赎回非控制性权益

2020年9月14日,我们与日本云计算有限公司和M30有限责任公司(“投资者”)签订了一份协议,投资者同意以总购买价格$购买Braze株式会社(“Braze KK”和“Braze KK股份”)的普通股。10.0 百万,分为两个批次,每批次$5.0 百万,旨在参与Braze KK的投资、组织、管理和事件控件,专注于在日本分销我们的产品。 2021年9月这一安排的目的是进一步扩展我们在日本市场的业务。

在2022年3月,我们同意定期向Braze KK的某些员工发行购买Braze KK股票的期权。这些期权的持有者在下文更详细描述的看涨或看跌期权被行使之前,无法行使这些期权。公司认为,股票期权属于实质性的股权类别,按其他长期负债在合并资产负债表中分类。截至2024年10月31日,负债余额为$0.9 百万。股票期权的发行并不会影响我们在Braze KK的控股权,因为截至资产负债日,期权的归属条件均未满足。股票期权的发行没有导致重新考虑事件,因此Braze KK仍满足作为变量利益实体的标准,因为Braze KK没有足够的股本风险来支持其活动。因此,我们继续将Braze KK作为子公司运作,这使我们面临业务和汇率期货风险。我们合并Braze KK,并在合并资产负债表、合并经营报表和合并现金流量表中呈现结果。

投资者持有的普通股在某些特定事件发生时可以被我们看涨或由投资者看跌。如果行使看涨或看跌期权,赎回价值将基于一个规定的公式来确定,该公式源自Braze KK和公司的离散收入,并可以根据我们的选择以股票或现金结算。由于投资者在未来可用的看跌权,Braze KK的非控股权益被归类为可赎回非控股权益,且此事件并不完全在我们的控制之下。非控股权益没有累积到赎回价值,因为目前并不可能非控股权益会变得可赎回。
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下表总结了在以下所示期间内可赎回非控股权益的活动(以千为单位):

截至2024年1月31日的余额
$192
归属于可赎回非控股权益的净损失(432)
截至2024年10月31日的余额
$(240)
5. 公允价值计量

下表列出了我们在以下指定期间内按公允价值层次结构(以千为单位)重复计量的金融工具。
2024年10月31日
一级二级第三级总计
金融资产:
现金等价物
货币市场基金$20,169 $ $ $20,169 
现金等价物总额20,169   20,169 
可售证券
美国政府证券$321,448 $ $ $321,448 
外国证券 5,034  5,034 
企业债务证券 104,776  104,776 
可交易证券总额321,448 109,810  431,258 
负债
或有对价$ $ $ $ 
总负债    
金融资产总额$341,617 $109,810 $ $451,427 
2024年1月31日
一级二级第三级总计
金融资产:
现金等价物
货币市场基金$20,758 $ $ $20,758 
美国政府证券6,996   6,996 
现金等价物总额27,754   27,754 
可售证券
美国政府证券$318,957 $ $ $318,957 
外国证券 6,367  6,367 
企业债务证券 82,574  82,574 
可交易证券总额318,957 88,941  407,898 
负债
或有对价$ $ $223 $223 
总负债  223 223 
金融资产总额$346,711 $88,941 $223 $435,875 

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我们的货币市场基金和在公允价值层次结构中被归类为一级的金融工具,因为它们的估值是基于2024年10月31日和2024年1月31日活跃市场中的报价。 在我们的公允价值层次结构中,被归类为二级的金融工具是根据公认经销商或定价服务提供的市场参与者之间的有序交易价格进行估值的。这些证券的价格通过独立的第三方定价服务获得,并包括可能包含可观察输入和不可观察输入的市场报价。在确定特定投资的价值时,定价服务可能会使用有关这些投资的交易、经销商报价、定价矩阵以及类似投资的市场交易和各类投资之间的关系等特定信息。

我们对或有对价的公平价值的估计是基于第三级不可观察输入。公平价值的估计是基于被认为合理但不确定的假设,并涉及管理层的重大判断。我们将在每季度重新评估或有对价的公平价值,直到不确定因素得到解决。该负债记录在合并资产负债表的其他长期负债中。公平价值的变动记录在合并利润表的营业收入中。

在所呈现的期间内,一级、二级和三级之间没有金融工具的转移。

下表总结了与收购北星Y有限公司(以千计)相关的或有对价负债的公允价值变动:

截至三个月
10月31日,
截至九个月
10月31日,
2024202320242023
期初公允价值 $86 $1,593 $223 $ 
本期的增加/调整
(86)202 (223)1,795 
期末公允价值$ $1,795 $ $1,795 
6. 可交易证券

可交易证券在所呈现的期间内如下(单位:千元):
2024年10月31日
成本或摊销成本未实现毛利未实现毛损总估计公允价值
美国政府证券$320,950 $914 $(416)$321,448 
外国证券5,008 26  5,034 
企业债务证券104,166 663 (53)104,776 
总计$430,124 $1,603 $(469)$431,258 
January 31, 2024
Cost or Amortized CostGross Unrealized GainsGross Unrealized LossesTotal Estimated Fair Value
U.S. government securities$319,343 $782 $(1,168)$318,957 
Foreign securities6,349 31 (13)6,367 
Corporate debt securities82,368 340 (134)82,574 
Total$408,060 $1,153 $(1,315)$407,898 

截至2024年10月31日,相关于我们可供出售证券的应计利息应收款为$4.0 百万,以及截至2024年1月31日的$3.4 百万被包含在合并资产负债表的预付费用和其他流动资产中。

公司的开空投资由可供出售的债务证券和定期存款组成。定期存款按成本计算,与公允价值相近。公司投资组合的加权平均剩余期限截至所示期间约为一年。

下表总结了按类别汇总的公允价值和超过12个月持续亏损的单个证券的总未实现损失(单位:千元):
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目录

2024年10月31日
连续未实现损失超过12个月
预计公允价值未实现毛损
美国政府证券$67,264 $(98)
企业债务证券7,189 (2)
总计$74,453 $(100)

2024年1月31日
持续未实现损失超过12个月
预计公允价值未实现毛损
美国政府证券$99,613 $(741)
外国证券1,325 (11)
企业债务证券28,858 (113)
总计$129,796 $(865)

公司购买符合投资等级的可流通债务证券,这些证券是由国家认可的统计信用评级机构根据其投资政策进行评级。该政策旨在将公司面临的信用损失降到最低。截至2024年10月31日,公司可流通的可供出售债务证券的信用质量保持稳定。截至2024年10月31日,确认的可流通可供出售债务证券的未实现损失主要与当前利率环境下市场预期相关的市场波动性持续有关。这些投资的合同条款不允许发行人在低于投资的摊余成本基础的价格结算证券,并且预计这些投资不会以低于其摊余成本基础的价格结算。公司不打算出售这些投资,并且在其摊余成本基础恢复之前,公司不太可能被要求出售这些投资。公司不知道任何特定事件或情况会要求公司在2024年10月31日对任何可流通可供出售债务证券的信用损失进行重新评估。这些估计可能会有所变化,因为新事件的发生和附加信息的获取,并将尽快在合并基本报表中确认。 截至2024年10月31日,公司已确认可流通债务证券的信用损失。

按可供出售市场证券分类的投资合同到期日如下(单位:千元):
2024年10月31日
摊销成本预计公允价值
在1年内到期$217,354 $217,833 
到期时间为1年至5年212,770 213,425 
总计$430,124 $431,258 
January 31, 2024
Amortized CostEstimated Fair Value
Due within 1 year$173,481 $172,520 
Due in 1 year through 5 years234,579 235,378 
Total$408,060 $407,898 

Investment Income

Investment income consists of interest income and accretion income/amortization expense on our cash, cash equivalents, restricted cash, and marketable securities. Investment income is included within other income, net on the consolidated
18

目录
经营报表。 可流通证券投资收入的主要元件如下(单位:千):
截至三个月
10月31日,
截至九个月
10月31日,
2024202320242023
利息收入$4,719 $3,532 $13,334 $9,705 
折价/溢价的累积/摊销,净值
562 588 1,605 1,579 
投资收入$5,281 $4,120 $14,939 $11,284 
7. 净资产和设备

物业和设备净值,包括以下内容(单位:千元):
10月31日,
2024
1月31日,
2024
资本化内部使用的软件$17,870 $13,071 
计算机设备、办公设备和软件10,405 7,411 
租赁改善21,438 18,789 
家具和固定装置8,493 4,223 
总物业及设备58,206 43,494 
减:累计折旧和摊销(18,296)(14,136)
总物业及设备,净值$39,910 $29,358 

During the three months ended October 31, 2024, the total depreciation expense and amortization expense for property and equipment was $2.7 million. During the three months ended October 31, 2024, the Company wrote off $0.4 million of fixed assets consisting of computer equipment, office equipment, and software, that was largely depreciated from property and equipment, gross and accumulated depreciation, which had minimal net impact on the Company’s consolidated financial results.

During the nine months ended October 31, 2024, the total depreciation expense and amortization expense for property and equipment was $7.3 million, inclusive of $0.4 million net book value for fixed assets written off during the fiscal year to date. During the nine months ended October 31, 2024, the Company wrote off $2.7 million of fixed assets consisting of computer equipment, office equipment, and software, that was largely depreciated from property and equipment, gross and accumulated depreciation.

During the three and nine months ended October 31, 2023, total depreciation and amortization expense for property and equipment was $1.1 million and $3.8 million, respectively. During the three and nine months ended October 31, 2023, the Company removed $0.6 million and $1.1 million, respectively, of fixed assets consisting of computer equipment, office equipment, and software, that was largely depreciated from property and equipment, gross and accumulated depreciation, which had minimal net impact on the Company’s consolidated financial results.

We capitalized internal-use software of $1.5 million and $1.5 million during the three months ended October 31, 2024 and 2023, respectively, and $4.8 million and $4.0 million during the nine months ended October 31, 2024 and 2023, respectively. Amortization for capitalized internal-use software costs recognized within cost of revenue on the consolidated statements of operations was $0.8 million and $0.5 million for the three months ended October 31, 2024 and 2023, respectively, and $2.3 million and $1.6 million during the nine months ended October 31, 2024 and 2023, respectively.


8. Prepaid Expenses and Other Current Assets
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目录

预付费用和其他流动资产包括以下内容(单位:千):
10月31日,
2024
1月31日,
2024
预付软件订阅$14,773 $14,864 
预付广告费1,574 918 
预付保险294 1,881 
应收投资利息4,033 3,426 
应收消费税2,640 1,606 
预付员工福利1,257 902 
其他5,881 5,769 
总预付费用和其他流动资产$30,452 $29,366 
9. 应计费用和其他当前负债

应计费用及其他流动负债包括以下内容(以千为单位):
10月31日,
2024
1月31日,
2024
应计薪酬成本$20,227 $26,912 
应计软件订阅费用16,943 10,956 
应计佣金7,134 7,440 
应计专业服务费用2,047 1,555 
应计广告费用2,713 1,662 
应计税款负债7,202 9,048 
员工股票购买计划应付3,490 594 
其他3,566 5,097 
总应计费用及其他流动负债$63,322 $63,264 
10. 员工福利计划

我们赞助一个涵盖所有符合条件的美国员工的401(k)定义贡献计划。对401(k)计划的贡献是自愿的。该计划的匹配贡献为$0.6 百万和$0.7 百万美元,截止2024年和2023年10月31日的三个月,分别为$4.3 百万和$4.3 百万美元,截止2024年和2023年10月31日的九个月,分别为。

11. 股东权益

A级和B级普通股

The Company has two classes of common stock, Class A and Class B. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting, conversion and transfer rights. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to ten votes and may be converted at the option of the holder into one share of Class A common stock. In addition, all shares of Class B common stock will automatically convert into shares of Class A common stock in certain circumstances, including on the earlier of (i) the last trading day of the fiscal quarter during which the number of shares of Class B common stock then outstanding represents less than 10% of the aggregate number of shares of Class A common stock and Class B common stock then outstanding, or (ii) the last trading day of the fiscal quarter immediately following the fifth anniversary of the initial public offering. All shares of the Company’s capital stock outstanding immediately prior to our initial public offering, including all shares held by its executive officers, directors and their respective affiliates, and all shares issuable upon the conversion of our then outstanding convertible preferred stock, were reclassified into shares of Class B common stock immediately prior to the completion of the initial public offering.

Charitable Contributions

In connection with our Pledge 1% commitment, we donated 32,155 and 32,155 and shares of our Class A common stock to a charitable donor-advised fund that resulted in the recognition of $1.4 million and $1.4 million of expense within general
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and administrative in the consolidated statements of operations during the three months ended October 31, 2024 and 2023, respectively.

We donated 64,310 and 64,310 shares of our Class A common stock that resulted in the recognition of $2.7 million and $2.4 million of expense within general and administrative in the consolidated statements of operations during the nine months ended October 31, 2024 and 2023, respectively.
12. Employee Stock Plans

We have historically issued equity awards under our Amended and Restated 2011 Equity Incentive Plan (the “2011 Plan”) and our 2021 Equity Incentive Plan (the “2021 Plan”).

Amended and Restated 2011 Equity Incentive Plan

Our 2011 Plan provides for the award of stock options and restricted stock units (“RSUs”) to employees, officers, directors, advisors and other service providers of Braze. The terms of each award and the exercise price of awards under the 2011 Plan are determined by our board of directors. Following effectiveness of the 2021 Plan in connection with our initial public offering, no further awards were made under the 2011 Plan.

2021 Equity Incentive Plan

In November 2021, our board of directors and our stockholders approved the 2021 Plan, which became effective on November 16, 2021. No grants were made under the 2021 Plan prior to its effectiveness. No further grants will be made under the 2011 Plan. At effectiveness, we reserved 25,660,249 shares of our Class A common stock to be issued under the 2021 Plan. In addition, the number of shares of our Class A common stock reserved for issuance under the 2021 Plan will automatically increase on February 1 of each year for a period of ten years, beginning on February 1, 2022 and continuing through February 1, 2031, in an amount equal to (1) 5% of the total number of shares of our common stock (both Class A and Class B) outstanding on the preceding January 31, or (2) a lesser number of shares determined by our board of directors no later than the February 1 increase. On February 1, 2024, the number of shares of our Class A common stock reserved for issuance under our 2021 Plan increased by an additional 5,010,520 shares.

Restricted Stock Units

The following table summarizes unvested RSU award activity and related information:
SharesWeighted-Average Grant Date Fair Value
Balance as of January 31, 2024
6,263,739
Granted2,473,496$48.65 
Vested(1,817,811)$39.46 
Forfeited(469,910)$37.74 
Balance as of October 31, 2024
6,449,514

截至2024年10月31日的九个月内授予的限制性股票单位包含一个基于服务的控件,最多约为一个 四年的 的周期。 一年 限制性股票单位通常按季度归属,或者有一个 后续季度归属的控件期。

基于股票的补偿费用

下表总结了基于股票的薪酬费用,这些费用已包含在合并损益表中,如下所示(单位:千美元):
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Three Months Ended
October 31,
Nine Months Ended
October 31,
2024202320242023
Cost of revenue$1,003 $900 $3,045 $2,690 
Sales and marketing9,608 7,899 28,945 23,554 
Research and development10,343 9,479 32,623 29,251 
General and administrative7,364 5,761 21,805 17,466 
Stock-based compensation, net of amounts capitalized$28,318 $24,039 $86,418 $72,961 
Capitalized stock-based compensation expense534 582 1,776 1,516 
Total stock-based compensation expense$28,852 $24,621 $88,194 $74,477 

As of October 31, 2024, total compensation cost not yet recognized related to unvested equity awards and the weighted-average remaining period over which these costs are expected to be realized were as follows:

股票期权RSUs
未识别的补偿成本(以千计)$14,699$189,655
加权平均剩余确认期限(年)1.192.57

员工股票购买计划

2021 年 11 月,我们董事会和股东批准了 2021 年员工股票购买计划(“ESPP”),该计划于 2021 年 11 月 16 日生效。我们的首次公开募股完成后,ESPP授权发行 1,825,000 根据向我们的员工或我们任何指定关联公司的员工授予购买权的A类普通股股份。我们预留发行的A类普通股数量将在每年2月1日自动增加,期限为 十年,从 2022 年 2 月 1 日开始,一直持续到 2031 年 2 月 1 日,按 (i) 中的较小值 1占去年1月31日已发行普通股(A类和B类)总股数的百分比;以及(ii) 2,737,000 股票,除非在任何此类上涨之日之前,否则我们的董事会可能会决定此类增幅将低于上文 (i) 和 (ii) 条款中规定的金额。2024年2月1日,我们在ESPP下预留发行的A类普通股数量又增加了一倍 1,002,104 股份。

员工股票购买计划(ESPP)通过一系列的发行进行实施,符合条件的员工在这些发行的指定日期被授予购买公司的A类普通股的购买权。在ESPP下,我们的董事会将被允许指定最长不超过27个月的发行,并可以在每次发行中指定较短的购买期限。每次发行将有一个或多个购买日期,在这些日期,参加发行的员工将购买公司的A类普通股。在每个购买日期,符合条件的员工将以每股等于的价格购买股票, 85% 为 (1) 发行期间第一交易日公司A类普通股的公平市场价值或 (2) 发行期间最后一天公司A类普通股的公平市场价值,按ESPP的定义。

The Company recognized $0.4 million and $0.5 million of stock-based compensation expense related to the ESPP in the three months ended October 31, 2024 and 2023, respectively, and $1.7 million and $1.9 million during the nine months ended October 31, 2024 and 2023, respectively.

As of October 31, 2024, $3.5 million has been withheld on behalf of our employees for a future purchase and is classified as accrued expenses and other current liabilities on the consolidated balance sheets.

There were no issuances of Class A common stock under the ESPP in the three months ended October 31, 2024. As of October 31, 2024, there are 4,208,260 shares of Class A common stock that remain available for issuance under the ESPP.
13. Commitments and Contingencies

Indirect Taxes

We are subject to indirect taxation in some, but not all, of the various U.S. states and foreign jurisdictions in which we conduct business. Therefore, we have an obligation to charge, collect and remit Value Added Tax (“VAT”) or Goods and Services Tax (“GST”) in connection with certain of our foreign sales transactions and sales and use tax in connection with
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向美国某些州的订阅者进行符合条件的销售。2018年6月21日,美国最高法院在南达科他州诉Wayfair案中发表了意见。南达科他州声称,应修订美国宪法,允许南达科他州要求远程卖家根据南达科他州的销售税法规在南达科他州征收和汇出销售税。根据美国最高法院的裁决,长期存在的Quill Corp诉北达科他州销售税案被驳回,各州现在可能要求远程卖家在某些情况下征收销售税。我们开始在截至2019年1月31日的财政年度在相关司法管辖区征收销售税。该裁决的结果是,鉴于我们的业务范围,税务机关继续提供法规,这些法规增加了遵守此类法律的复杂性和风险,并可能导致前景和追溯性的巨额负债。根据现有信息,我们将继续评估和评估存在间接税关系的司法管辖区,并认为间接税负债是充分和合理的。由于税务机关适用这些规则的复杂性和不确定性,结果可能与预期存在重大差异,我们已经确认了与州销售和使用税、增值税和商品及服务税相关的意外开支的负债,总额为美元1.9百万和美元1.0截至2024年10月31日和2024年1月31日,分别为百万美元,这已包含在合并资产负债表上的应计费用和其他流动负债中。截至2024年1月31日,我们已在多个司法管辖区提交了前期申报表,以弥补这一潜在风险,公司将继续持续评估潜在风险。

法律风险

在我们正常的业务过程中,偶尔会涉及各种法律或监管程序、索赔或所谓的集体诉讼,涉及的内容包括对第三方专利和其他知识产权的侵权、商业、劳动和就业、工资和工时等其他索赔。我们已经并将可能在未来收到通知或被第三方起诉,声称侵犯其专有权利,包括专利侵权。当我们认为负债发生的可能性高且损失金额可以合理估计时,我们会确认一项负债。我们相信我们已经为任何此类事项记录了足够的准备,截至2024年10月31日,我们认为不会发生超过我们基本报表中确认金额的重大损失。
14. Leases

租赁

公司的租赁组合仅包括办公空间,租期大约从 一个十年某些租赁协议包括续租或终止租赁的期权,但这些期权并不一定会被合理地行使,因此不计入租赁付款的确定中。

合并运营报表中反映的租赁成本元件如下(以千计):

截至三个月
10月31日,
截至九个月
10月31日,
2024202320242023
运营租赁成本$4,519 $4,492 $14,355 $12,005 
变量租赁成本898 847 1,768 2,297 
短期租赁成本239 39 470 424 
总净租赁成本$5,656 $5,378 $16,593 $14,726 


截至2023年10月,公司经营租赁负债的未来到期年限按财务年度如下(单位:千元):

金额
2025年剩余部分$3,761 
202619,536 
202717,946 
202814,055 
202913,551 
之后52,116 
未来未折现的租赁支付总额$120,965 
减:隐含利息(28,882)
总报告租赁负债$92,083 
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The Company's lease terms and discount rates are as follows:
October 31,
20242023
Weighted-average remaining lease term (years)7.48.1
Weighted-average discount rate7.3 %7.1 %

Other information for the Company's leases is as follows (in thousands):
Nine Months Ended
October 31,
20242023
Cash paid for amounts included in the measurement of lease liabilities$12,124$9,190
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities$8,713$45,267
15. Income Taxes

The Company computes its provision for interim periods by applying an estimated annual effective tax rate to anticipated annual pretax income or loss as directed by ASC 740. The estimated annual effective tax rate is applied to the Company’s year to date income or loss, and is adjusted for discrete items recorded in the period. The Company recorded an income tax expense of $0.9 million and $0.4 million for the three months ended October 31, 2024 and 2023, respectively. The effective tax rate for the three months ended October 31, 2024 and 2023 was (3.1)% and (1.3)%, respectively. The Company recorded an income tax provision of $2.4 million and $1.3 million for the nine months ended October 31, 2024 and 2023, respectively. The effective tax rate for the nine months ended October 31, 2024 and 2023 was (2.8)% and (1.3)%, respectively.

The provision for income taxes recorded for the three and nine months ended October 31, 2024 consists of income taxes in state jurisdictions and foreign jurisdictions in which the Company conducts business. The primary difference between the effective tax rate and the statutory rate is the change in the valuation allowance recorded. The Company continues to maintain a full valuation allowance against its net deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized. When the Company determines that it will be able to realize some portion or all of its deferred tax assets, an adjustment to its valuation allowance on its deferred tax assets would have the effect of increasing net income in the period such determination is made.
16. Net Loss per Share
We compute the basic and diluted net loss per share of our Class A common stock and Class B common stock. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, other than voting rights. Accordingly, the Class A common stock and Class B common stock share in the Company’s net loss.

The following table sets forth the computation of basic and diluted net loss per share attributable to Braze, Inc. common stockholders during the periods presented (in thousands, except per share amounts):
截至三个月
10月31日,
截至九个月
10月31日,
2024202320242023
分子:
归属于Braze, Inc.的净损失$(27,911)$(30,741)$(86,551)$(100,889)
分母:
Braze, Inc. 普通股的加权平均在外流通股数102,146 97,880 101,714 97,619 
减:Braze, Inc.的加权平均未归属股份,受回购限制   (4)
用于计算归属于Braze, Inc.普通股东每股净亏损的加权平均股份,基础和稀释后102,146 97,880 101,714 97,615 
归属于Braze, Inc.普通股股东的每股净损失,基本和稀释$(0.27)$(0.31)$(0.85)$(1.03)
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以下潜在稀释证券的未发行股份已从归属于Braze, Inc.普通股股东的稀释每股净损失中排除,因为它们的纳入将具有反稀释效果(以千为单位):
Three Months Ended
October 31,
Nine Months Ended
October 31,
2024202320242023
Options to purchase common stock5,486 6,419 5,486 6,419 
Restricted stock units6,450 6,739 6,450 6,739 
ESPP shares estimated to be purchased70 109 70 109 
Total12,006 13,267 12,006 13,267 

17. Related Party Transactions

In May 2021, the Chief Financial Officer of Datadog, Inc., one of our vendors, joined our board of directors. We have purchased services from Datadog, Inc. in the aggregate amount of approximately $0.4 million and $0.4 million during the three months ended October 31, 2024 and 2023, respectively, and $2.2 million and $1.6 million during the nine months ended October 31, 2024 and 2023, respectively.

18. Restructuring

在2023年5月,公司实施了一项裁员计划,旨在重新调整人才,以更好地满足客户需求并实现业务优先事项。在截至2024年10月31日的三个月和九个月期间,未确认重组成本。

截至2023年10月31日的三个月和九个月期间,$0.0百万 和$0.6百万的重组成本分别被确认。

19. 业务合并

收购北科创板Y有限公司

在2023年6月1日,公司收购了North Star Y Pty Ltd(“North Star”)的所有流通股票,此前North Star是Braze在澳洲和新西兰的独家经销商。这项交易使Braze在澳洲和新西兰拥有了直接的市场存在,并获得了North Star团队的当地市场专业知识。

调整后的总购买价格为 $26.8 百万由现金支付 $20.6 百万,$6.1 百万以Braze A类普通股的形式发行,以及或有对价支付,公允价值为 $1.8 百万截至收购日期。卖方有资格根据收购完成后两个独立的12个月期间的合格营业收入表现指标计算现金收益支付。收益支付在第一次收益期间最高为 $10.0 百万,第二次收益期间最高为 $16.0 百万。或有对价负债的公允价值计量受到对该计算的重大输入的发展影响,特别是来自澳洲-新西兰地域板块的新增的实际和预测的交易关闭情况。因此,在截至2024年10月31日的季度内,公司将或有对价负债减少至 因为已确定卖方满足资格的可能性很小。

经过调整的初步购买价格被分配到无形资产的金额为$3.8 百万和商誉的金额为$28.4 百万,基于各自的估计公允价值。结果产生的商誉在所得税方面不可扣除。

一个由 $ 形成的赔偿保留金2.8 之前记录在合并资产负债表中应计费用和其他当前负债中的100万美元的赔偿保留金在截至2024年4月30日的三个月内被解除。赔偿保留金代表对卖方潜在赔偿索赔的安防-半导体。赔偿保留金已全部释放。

初始的$0.5 百万的营运资金保留,$0.3 百万美元已根据完成的后关闭调整程序释放。

北科创板的运营结果并不重大,已计入公司截至2024年和2023年10月31日止九个月的合并运营报表中。
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20. 无形资产,净额

无形资产净额,包括以下内容(以千计):

2024年10月31日
账面总额累计摊销净账面价值摊销期
可摊销的无形资产
客户关系$3,119 $(442)$2,677 10
限制性契约关系186 (132)54 2
商标465 (465) 1
总可摊销无形资产3,770 (1,039)2,731 
不可摊销的无形资产
科技许可证$500 $— $500 不适用
总无形资产净额$4,270 $(1,039)$3,231 

January 31, 2024
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountAmortization Period
Amortizable intangible assets
Customer relationships$3,119 $(208)$2,911 10 years
Restrictive covenant relationships186 (62)124 2 years
Trademark465 (310)155 1 year
Total amortizable intangible assets3,770 (580)3,190 
Non-amortizable intangible assets
Technology licenses$500 $— $500 n/a
Total intangible assets, net$4,270 $(580)$3,690 

Intangible amortization expense was approximately $0.1 million and $0.2 million for the three months ended October 31, 2024 and 2023, respectively, and $0.4 million and $0.4 million during the nine months ended October 31, 2024 and 2023, respectively.

The future intangible amortization expense by fiscal year is as follows (in thousands):
Amount
Remainder of 2025$101 
2026343 
2027312 
2028312 
2029312 
Thereafter1,351 
Total$2,731 

21. Goodwill

The changes in the carrying amounts of goodwill were as follows (in thousands):
Amount
Balance at January 31, 2024
$28,448 
Acquisition related adjustments
 
Balance at October 31, 2024
$28,448 

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22. Subsequent Events

In November 2024, in connection with our Pledge 1% commitment, the Company donated 32,155 shares of Class A common stock to a charitable donor-advised fund that resulted in the recognition of approximately $1.0 million of operating expense.

In November 2024, the Company granted RSUs for a total of 159,113 shares of Class A common stock to employees pursuant to the 2021 Plan. The RSUs vest over a service period of approximately four years. The grant date fair value of these awards was $6.0 million

In December 2024, the Company granted RSUs for a total of 14,262 shares of Class A common stock to employees pursuant to the 2021 Plan. The RSUs vest over a service period of approximately four years. The grant date fair value of these awards was $0.4 million.
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项目2。管理层对财务控件和运营结果的讨论与分析

以下关于我们财务状况和经营成果的讨论与分析应与我们在本季度报告10-Q表格中包含的未经审计的简明合并基本报表及相关注释结合阅读,以及我们截至2024年1月31日的审计年度合并基本报表及相关注释一起阅读, 该报表包含在我们的年度报告10-K表格中,或称年度报告,该报告于2024年4月1日向美国证券交易委员会(SEC)提交。除了历史财务信息外,以下讨论还包含基于当前计划、预期和信念的前瞻性陈述,这些陈述涉及风险和不确定性。我们的实际结果可能因各种因素而与这些前瞻性陈述中的预期有重大差异,包括但不限于季度报告10-Q中第二部分第1A项下标题为“风险因素”的部分中列出的因素。请参见本季度报告10-Q中的“关于前瞻性陈述的特别说明”。
概述
Braze是一个领先的客户互动平台,使品牌能够实现绝对吸引力™。我们的平台使品牌更好地倾听客户,更深刻地理解客户,并以人性化和个性化的方式采取行动。通过我们的平台,品牌实时获取和处理客户数据,协调和优化跨多个渠道的上下文相关营销活动。我们的平台旨在使品牌与消费者之间的互动具有与人类互动相同的相关性和跨渠道的连续性。

我们的客户包括许多知名的全球企业和领先的科技创新者,涵盖了各种规模和行业,包括零售和消费品、媒体和娱乐、餐厅、按需医疗与生命科学、金融服务、旅行、运输和酒店业。

我们的营业收入主要来自客户购买我们平台订阅的费用。我们的订阅费用主要基于客户对于消息量的前期承诺、特定数量的月活跃用户数、平台访问和/或压力位,以及某些附加产品。此外,我们还提供专业服务,以更好地帮助客户成功上手并使用我们的平台,包括某些高级专业服务,如电子邮件投递支持和专门的技术支持人员。

我们采用一种以土地获取和扩展为中心的业务模式,专注于提供易于采用且快速获得价值的产品。当客户新增渠道、购买额外的订阅产品、实施新的参与策略或引入新的业务单元和地区时,我们会在现有客户中扩大我们的覆盖范围。随着客户的增长,我们也会增长,因为我们的定价在很大程度上基于客户所接触的消费者数量和客户发送的消息成交量。因此,随着客户越来越多地使用我们的平台,并通过我们的平台接触到更多的终端用户,我们与这些客户的合同价值也会增加。

最近一段时间,我们取得了长足的发展。在截至2024年10月31日和2023年10月31日的三个月中,我们分别创造了1.521亿美元和1.24亿美元的收入,同比增长22.7%,在截至2024年10月31日和2023年10月31日的九个月中,分别创造了4.33亿美元和3.408亿美元。在截至2024年10月31日和2023年10月31日的三个月中,我们的净亏损分别为2810万美元和3,100万美元,在截至2024年10月31日和2023年10月31日的九个月中,我们的净亏损分别为8,700万美元和1.019亿美元。在截至2024年10月31日的九个月中,我们的经营活动提供的净现金为1,960万美元,在截至2023年10月31日的九个月中,经营活动提供的净现金分别为300万美元。在截至2024年10月31日和2023年10月31日的九个月中,我们的非公认会计准则自由现金流分别为440万美元和290万美元。有关我们如何计算自由现金流、非公认会计准则财务指标以及与经营活动提供的净现金对账的更多信息,请参阅标题为 “——非公认会计准则自由现金流” 的部分,这是根据相应计算的最直接可比的衡量标准ce 采用美国普遍接受的会计原则,即美国公认会计原则。
影响我们表现的因素

获取新客户

我们相信在继续扩大我们的客户基础方面有巨大的机会。我们打算继续扩大我们在已有强大影响力的行业中的客户基础,如零售、媒体和娱乐、按需服务、ARVR游戏、健康和生活方式以及金融服务 — 并在我们尚未强劲代表的行业中增加我们的影响力。通过我们的销售和营销工作,我们还计划在持续进行数字化转型的行业中抓住机遇,这些行业中直接面向消费的关系正在加速,以进一步推动我们科技的采纳。截止到2024年10月31日,我们在各类规模和行业中拥有2211名客户。我们吸引新客户的能力将取决于多个因素,包括我们产品的质量和定价、竞争对手的产品以及我们营销工作的效果。
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我们将客户定义为与我们有活跃订阅的单独和独特的最终母公司实体。一个组织可能拥有多个独立的合同部门或子公司,这些部门或子公司合在一起被视为一个客户。

在我们现有客户基础上扩展

我们相信,通过在现有客户群中扩展销售,我们可以实现显著增长。我们通过多个渠道扩大现有客户对我们平台的使用,并随着他们的业务和需求不断增长,以及与更多消费者直接联系,增加向客户出售的消息成交量,从而需要更大的消息容量。我们打算继续投资开发和提升我们的产品和功能。我们向现有客户增加销售的能力将取决于多个因素,包括客户对我们解决方案的满意度、客户吸引新终端用户的能力、竞争、定价以及客户支出水平的整体变化。

历史上,一旦我们的平台部署,我们在客户的业务上经历了显著的扩张,客户通常会增加月活跃用户数、渠道和使用案例,并购买更多的产品。月活跃用户数是指在过去三十天内与客户的应用程序和网站进行过互动的最终用户。我们在计算月活跃用户数时,包括每个可区分的最终用户,尽管一些用户可能使用多个设备访问我们客户的应用程序和网站,同时多个用户可以使用同一个设备访问。截至2024年10月31日,我们的月活跃用户数约为69亿,较2024年1月31日的62亿月活跃用户数有所增加。

Braze支持在广泛的产品内和产品外消息渠道之间进行互动。我们平台的灵活性也使我们能够快速有效地添加新的渠道,以便在它们变得对客户相关时使用。我们提供的渠道广度,以及有效扩展我们渠道产品的能力,使我们能够在现有客户中扩展我们的覆盖范围,因为他们从我们这里购买额外的渠道。

除了月活跃用户数,我们还有一段不断增加的年度经常性营业收入(ARR)历史。我们将ARR定义为客户订阅合同的年度化价值,包括某些受合同订阅条款约束的高级专业服务,按测量日期计算,假设在接下来的12个月内到期的任何合同将按现有条款续签(包括我们正在谈判续签的合同)。我们的ARR计算不考虑任何已知或预测的未来事件(例如客户取消、现有客户关系的扩展或收缩、价格上涨或下降)对续签现有条款的合同可能产生的影响。我们的ARR可能会因多种因素而下降或波动,包括客户对我们产品和专业服务的满意或不满意、定价、竞争性产品、经济状况或客户支出水平的整体变化。ARR应独立于营业收入来看,并不代表我们的GAAP营业收入的年度化基础或营业收入的预测,因为它是一个运营指标,可能会受到合同开始和结束日期以及续签率的影响。

为清楚起见,我们使用客户订阅合同的年化开票金额,包括某些受合同订阅条款限制的高级专业服务,以此来计算我们的年度经常性收入(ARR),这与根据公认会计原则(GAAP)计算的营业收入进行比较。我们的开票金额与相关订阅合同和高级专业服务义务的履行义务并不匹配,而这在我们的GAAP营业收入方面则是匹配的。这可能导致我们GAAP营业收入和ARR计算之间存在时间差异。对于根据GAAP计算的营业收入,我们确认与客户合同有关的营业收入,其金额反映了我们预计能够在订阅和专业服务方面获得的对价。有关我们如何根据GAAP确认营业收入的其他信息,请参见我们年报中标题为“— 关键会计政策和估计”以及“管理层对财务状况和经营成果的讨论与分析”的部分。投资者不应过度依赖ARR作为我们未来或预期结果的指标。此外,ARR可能与其他公司提供的类似指标有所不同,并且可能与这些其他指标不可比拟。

我们客户关系随时间扩展的进一步指标是我们的基于美元的净保留率。我们在期末计算基于美元的净保留率,方法是以12个月前的所有客户的年度经常性收入(ARR)作为起点,即上期ARR。然后,我们计算这些相同客户在当前期末的ARR,即当前期ARR。当前期ARR包括任何扩展,并且净值是过去12个月的收缩或流失,但不包括当前期新客户的ARR。然后,我们将当前期的总ARR除以上期的总ARR,以得出基于美元的净保留率的时点数值。接着,我们计算在当前追溯的12个月期间每个月最后一天的加权平均时点基于美元的净保留率,以得到基于美元的净保留率。对于截至2024年10月31日和2023年10月31日的追溯12个月,我们所有客户的基于美元的净保留率分别为113%和118%,而116%和
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截至2024年10月31日和2023年10月31日,分别有121%的客户年经常性收入(ARR)达到或超过500,000美元。此外,234和189位客户的年经常性收入达到或超过500,000美元。

我们的美元基础净留存率受到影响客户购买决策的宏观经济因素的影响,这可能影响这些客户的营业收入。我们过去12个月的美元基础净留存率下降主要是由于客户流失和以较低订阅水平续约。特别是,我们观察到在当前不确定的宏观经济环境和高利率的情况下,客户在续订合同时倾向于根据他们当前的需求更新合同,而不是基于预期的未来需求选择更大的承诺。

地理扩展

我们相信在我们已经进入的国际市场以及尚未进入的市场中,继续扩展我们的存在具有重大机会。在截至2024年和2023年10月31日的九个月期间,约45%和43%的营业收入分别来自美国以外的地区。我们预计将增加在包括欧洲和亚太地区的市场渗透,并进一步利用拉丁美洲等地区的绿地机会。尽管这些对地理区域的投资可能在短期内对我们的经营结果产生负面影响,但我们相信它们将促进我们的长期增长。

持续创新和科技领导力

我们的成功取决于我们在保持创新和科技领导力方面的能力,以维持我们的竞争优势。我们专注于投资于研发,以继续增强我们的平台。例如,我们持续开发我们的人工智能能力,以使品牌能够更好地分析和利用客户数据,并扩展我们的渠道产品。我们相信,市场驱动的产品开发方法最大限度地提高了新功能开发和渠道扩展的回报。我们的客户持续自愿参与新产品的测试,这表明他们对新的创新功能有强烈的需求。我们相信,我们的持续创新将为增长提供新的途径,通过这些途径,我们将继续为客户提供差异化的成果。我们打算继续投资于构建其他产品,以扩展我们的能力并促进我们的平台扩展到新的渠道和用例。

宏观经济条件对我们的业务

美国及海外经济的不利控件可能会对我们的业务增长和运营结果产生负面影响。一般宏观经济和社会经济控件,如银行和金融服务板块的不稳定、国际和国内供应链风险、通货膨胀压力、利率上升、消费者信心下降、国际冲突以及国内外政治动荡,导致经济不确定性加大。我们无法预测这些趋势是否会持续,因此,我们无法估计这些宏观经济因素对我们的运营结果、财务状况或流动性的持续影响。有关更多详细信息,请参阅本季度10-Q表格第II部分第1A项中标题为“风险因素”的部分。

业绩组成要素

营业收入

营业收入来自两个主要来源: (1) 订阅服务和 (2) 专业服务及其他。

订阅服务主要包括访问我们的客户参与平台及相关的客户支持。我们的客户签订了一个订阅协议,以获得承诺的合同权益。如果客户的使用量超过了他们订阅计划下的承诺合同权益,他们将被收取超额使用费,或者他们可以选择购买额外的承诺合同权益的成交量级别。与平台订阅相关的营业收入在合同期限内按比例确认,这与向客户提供服务的期间是一致的。与超额使用和额外成交量相关的费用也被视为订阅收入。到目前为止,与超额使用相关的费用尚未产生重大影响。

Professional services and other revenue consists of fees for distinct services rendered in training and assisting our customers to configure our platform for their use at the onset of their initial contract or when a new product is purchased. Such revenue is generally recognized over a period of up to six months from providing access to the platform. We also provide additional platform and feature enhancement and optimization services which are generally recognized ratably over the contract term.

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Deferred revenue consists of customer billings in advance of revenue being recognized. We generally invoice our customers for subscription services arrangements annually in advance and for professional services upfront.

Cost of Revenue

Cost of revenue consists of direct costs related to providing platform access to our customers and to performing onboarding and professional services including consulting services. 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.

We intend to continue to invest additional resources in our platform infrastructure and our customer support and success organizations to expand the capabilities of our platform. The level, timing and relative investment in our infrastructure could affect our cost of revenue in the future. 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. Our gross margin may fluctuate from period to period as our revenue and cost of revenue fluctuates, including as a result of the timing and amount of resources we dedicate to improving our platform and expanding our products.

Operating Expenses

Our operating expenses consist of sales and marketing, research and development and general and administrative expenses. Personnel costs, including salaries, cash-based performance compensation, benefits and stock-based compensation, are the most significant component of operating expenses. Operating expenses also include allocated overhead costs, which include rent, utilities, depreciation, information technology costs and certain administrative personnel costs. As we continue to expand our operations, we expect an increase in personnel headcount and expansion of our global footprint.

Sales and Marketing

Sales and marketing expenses consist primarily of personnel costs for our sales and marketing organization, sales commissions, costs related to brand awareness, sponsorships, customer marketing events and advertising, agency costs, travel-related expenses and allocated overhead costs.

We intend to continue to invest in sales and marketing to help drive the growth of our business. We expect our sales and marketing expenses will increase in absolute dollars as we continue to invest in sales and marketing activities to acquire new customers and increase sales to existing customers.

Research and Development

Research and development expenses consist primarily of personnel costs for our engineering, service, design and information technology teams. Additionally, research and development expenses include allocated overhead costs and contractor fees. Research and development costs are expensed as incurred. Capitalized internal-use software development costs are excluded from research and development expenses as they are capitalized as a component of property and equipment, net and amortized to cost of revenue over the software’s expected useful life, which is generally three years.

We expect to continue our investment in research and development to enhance the user experience of our current customers and attract new customers. We expect research and development expenses to increase in absolute dollars as we continue to invest in enhancing our platform.

General and Administrative

General and administrative expenses consist primarily of personnel costs for finance, legal, human resources and other administrative functions, as well as non-personnel costs such as legal, accounting and other professional service fees, software costs, certain tax, license and insurance-related expenses and allocated overhead costs. Additionally, from time to time general and administrative expenses may include expenses associated with our donation of shares of Class A common stock to a charitable donor-advised fund in connection with our Pledge 1% commitment.

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We expect that general and administrative expenses will increase in absolute dollars and vary from period to period as a percentage of revenue for the foreseeable future but decrease as a percentage of revenue over the long term, as we focus on processes, systems, and controls to enable our internal support functions to scale with the growth of our business. We have incurred, and expect to continue to incur, additional expenses as a result of operating as a public company, including expenses to comply with the rules and regulations applicable to companies listed on The Nasdaq Stock Market LLC, expenses related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, and higher expenses for insurance, investor relations and professional services.

Other Income, Net

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.

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.
Results of Operations
The following table sets forth the unaudited condensed consolidated statements of operations data for each of the periods indicated:
Three Months Ended
October 31,
Nine Months Ended
October 31,
2024202320242023
(in thousands)(in thousands)
Revenue$152,052 $123,956 $433,010 $340,843 
Cost of revenue (1)
45,910 36,374 133,878 104,535 
Gross profit106,142 87,582 299,132 236,308 
Operating expenses:
Sales and marketing (1)
74,658 66,395 213,054 184,074 
Research and development (1)
32,855 29,872 100,369 88,749 
General and administrative (1)
31,199 26,448 86,309 75,884 
Total operating expenses138,712 122,715 399,732 348,707 
Loss from operations(32,570)(35,133)(100,600)(112,399)
Other income, net5,294 4,542 15,968 11,866 
Loss before provision for income taxes(27,276)(30,591)(84,632)(100,533)
Provision for income taxes851 385 2,351 1,318 
Net loss$(28,127)$(30,976)$(86,983)$(101,851)
(1) Includes stock-based compensation expense, net of amounts capitalized as follows:
Three Months Ended
October 31,
Nine Months Ended
October 31,
2024202320242023
(in thousands)(in thousands)
Cost of revenue$1,003 $900 $3,045 $2,690 
Sales and marketing9,608 7,899 28,945 23,554 
Research and development10,343 9,479 32,623 29,251 
General and administrative7,364 5,761 21,805 17,466 
Total stock-based compensation expense$28,318 $24,039 $86,418 $72,961 

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The following table sets forth the unaudited condensed consolidated statements of operations data expressed as a percentage of revenue for each of the periods indicated:

Three Months Ended
October 31,
Nine Months Ended
October 31,
2024202320242023
(as a percentage of revenue)(as a percentage of revenue)
Revenue100 %100 %100 %100 %
Cost of revenue30 %29 %31 %31 %
Gross profit70 %71 %69 %69 %
Operating expenses:
Sales and marketing49 %54 %49 %54 %
Research and development22 %24 %23 %26 %
General and administrative20 %21 %20 %22 %
Total operating expenses91 %99 %92 %102 %
Loss from operations(21)%(28)%(23)%(33)%
Other income, net%%%%
Loss before provision for income taxes(18)%(25)%(19)%(30)%
Provision for income taxes%— %%— %
Net loss(19)%(25)%(20)%(30)%

Comparison of the Three Months Ended October 31, 2024 and October 31, 2023
Revenue
Three Months Ended
October 31,
20242023Change% Change
($ in thousands)
Revenue$152,052 $123,956 $28,096 22.7 %
The increase in revenue of $28.1 million, or 22.7%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023, was primarily driven by a $27.9 million, or 23.6%, increase in subscription revenue. Approximately 52.3% of this increase in subscription revenue was attributable to the growth from existing customers, an increase in monthly active users, expansion across channels, and committed entitlements and features, and the remaining 47.7% was attributable to new customers. Total customers grew to 2,211 as of October 31, 2024 from 2,011 as of October 31, 2023. Professional services revenue increased $0.2 million, or 3.3%, 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. Additionally, in the three months ended October 31, 2024, our international revenue increased by $14.9 million as we continued to expand market penetration in regions such as Europe and Asia-Pacific.
Cost of Revenue, Gross Profit and Gross Margin
Three Months Ended
October 31,
20242023Change% Change
($ in thousands)
Cost of revenue$45,910$36,374$9,536 26.2 %
Gross profit$106,142$87,582$18,560 21.2 %
Gross margin69.8 %70.7 %
The increase in cost of revenue of $9.5 million, or 26.2%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023, was primarily driven by an increase of $1.5 million in hosting, infrastructure, and other third-party fees associated with delivering our platform and a $6.8 million increase in third-party messaging fees associated with growth in premium messaging channels. In addition, we had an increase in personnel costs and overhead costs of $1.0 million. The increased infrastructure, messaging, and personnel costs were incurred to support overall revenue growth.
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Our gross profit increased $18.6 million, or 21.2%, in the three months ended October 31, 2024, compared to the three months ended October 31, 2023, and our gross margin decreased 0.9% to 69.8% in the three months ended October 31, 2024 from 70.7% in the three months ended October 31, 2023. The margin decrease was due primarily to increased expenses associated with the increased adoption of premium messaging channels.
Operating Expenses

Sales and Marketing Expense
Three Months Ended
October 31,
20242023Change% Change
($ in thousands)
Sales and marketing$74,658 $66,395 $8,263 12.4 %
The increase in sales and marketing expense of $8.3 million, or 12.4%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023, was primarily driven by an increase in personnel costs and overhead costs of $6.5 million, which included $1.7 million of stock-based compensation costs. Additionally, the increase was driven in part by an increase of $1.3 million in promotional and product marketing, primarily related to the hosting of regional customer events, our annual customer conference, and other sales related events, and an increase of $0.2 million in software costs.
Research and Development Expense
Three Months Ended
October 31,
20242023Change% Change
($ in thousands)
Research and development$32,855 $29,872 $2,983 10.0 %

The increase in research and development expense of $3.0 million or 10.0%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023, was primarily driven by an increase of personnel and overhead costs of $2.4 million, which included $0.9 million of stock-based compensation costs, an increase in software costs of $0.2 million, and an increase in professional services of $0.2 million 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.

General and Administrative Expense
Three Months Ended
October 31,
20242023Change% Change
($ in thousands)
General and administrative$31,199 $26,448 $4,751 18.0 %

The increase in general and administrative expenses of $4.8 million, or 18.0%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023, was primarily driven by an increase of personnel and overhead costs of $3.4 million, which included $1.6 million of stock-based compensation costs. The increases were primarily due to investments in our finance and administrative functions to continue to scale our processes, systems, and controls, to enable our ongoing compliance with public company legal and regulatory requirements. Additionally, the increase was driven in part by an increase in bad debt expense and professional services costs.

Other Income, Net
Three Months Ended
October 31,
20242023Change% Change
($ in thousands)
Other income, net$5,294 $4,542 $752 16.6 %

The increase in other income, net of $0.8 million, or 16.6%, for the three months ended October 31, 2024, compared to the three months ended October 31, 2023, was attributable to a $1.3 million increase in investment income from marketable
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securities. 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. The investment income increase was partially offset by $0.5 million of unrealized losses related to foreign currency fluctuations.

Comparison of the Nine Months Ended October 31, 2024 and October 31, 2023
Revenue
Nine Months Ended
October 31,
20242023Change% Change
($ in thousands)
Revenue$433,010 $340,843 $92,167 27.0 %
The increase in revenue of $92.2 million, or 27.0%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023, was primarily driven by a $91.2 million, or 28.0%, increase in subscription revenue. Approximately 68.4% 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 31.6% was attributable to new customers. Total customers grew to 2,211 as of October 31, 2024 from 2,011 as of October 31, 2023. Professional services revenue increased $1.0 million, or 6.4%, 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. Additionally, in the nine months ended October 31, 2024, our international revenue increased by $46.7 million, as we continued to expand market penetration in regions such as Europe and Asia-Pacific.
Cost of Revenue, Gross Profit and Gross Margin
Nine Months Ended
October 31,
20242023Change% Change
($ in thousands)
Cost of revenue$133,878$104,535$29,343 28.1 %
Gross profit$299,132$236,308$62,824 26.6 %
Gross margin69.1 %69.3 %

The increase in cost of revenue of $29.3 million, or 28.1%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023, was primarily driven by an increase of $7.3 million in hosting, infrastructure and other third-party fees associated with delivering our platform and a $18.3 million increase in third-party messaging fees associated with growth in premium messaging channels. In addition, we had an increase in personnel costs and overhead costs of $2.8 million. The increased infrastructure, messaging, and personnel costs were incurred to support overall revenue growth.

Our gross profit increased $62.8 million, or 26.6%, in the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023, and our gross margin decreased 0.2% to 69.1% in the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023. The margin decrease was primarily due to increased expenses associated with the increased adoption of premium messaging channels and service disruption related charges to revenue.
Operating Expenses

Sales and Marketing Expense
Nine Months Ended
October 31,
20242023Change% Change
($ in thousands)
Sales and marketing$213,054 $184,074 $28,980 15.7 %
The increase in sales and marketing expense of $29.0 million, or 15.7%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023, was primarily driven by an increase in personnel costs and overhead costs of $18.6 million, which included $5.4 million of stock-based compensation costs, as a result of a period-over-period increase in headcount. Additionally, the increase was primarily due to an increase in net amortization of deferred contract costs of $1.4 million as a result of sales growth, an increase of $1.8 million related to software costs, and an increase of $6.9 million
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in travel, entertainment, and marketing expenses primarily related to the hosting of regional customer events, our annual customer conference, and other sales related events.

Research and Development Expense
Nine Months Ended
October 31,
20242023Change% Change
($ in thousands)
Research and development$100,369 $88,749 $11,620 13.1 %

The increase in research and development expense of $11.6 million, or 13.1%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023, was primarily driven by an increase of personnel and overhead costs of $10.1 million, which included $3.4 million of stock-based compensation costs, and an increase in software costs of $0.9 million. The increase in personnel costs and software costs were primarily due to a period-over-period increase in headcount to support out continued investment in the features and functionality of our platform.

General and Administrative Expense
Nine Months Ended
October 31,
20242023Change% Change
($ in thousands)
General and administrative$86,309 $75,884 $10,425 13.7 %

The increase in general and administrative expenses of $10.4 million, or 13.7%, for the nine months ended October 31, 2024, compared to the nine months ended October 31, 2023, was primarily driven by an increase in personnel and overhead costs of $10.2 million, which included $1.6 million of stock-based compensation costs. Further, there were increases in bad debt expense and professional services costs throughout the period.

Other Income, Net
Nine Months Ended
October 31,
20242023Change% Change
($ in thousands)
Other income, net$15,968 $11,866 $4,102 34.6 %

The increase in other income, net of $4.1 million, or 34.6%, for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, was primarily driven by a $4.4 million increase in investment income from marketable securities. 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. The investment income increase was partially offset by $0.3 million of unrealized losses related to foreign currency fluctuations.
Liquidity and Capital Resources
Sources of Funds
As of October 31, 2024, our principal source of liquidity was cash, cash equivalents, and marketable securities of $493.1 million. Our cash and cash equivalents consist of deposit accounts, interest-bearing money market accounts, and U.S. government securities that are stated at fair value. Our marketable securities positions consist mostly of highly liquid short-term investments. The investment income that we generate on these investments is not material to our overall cash balance, but may be adversely affected due to volatility in interest rates.

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 $569.6 million as of October 31, 2024, and cash flows provided by operating activities for the nine months ended October 31, 2024 of $19.6 million.

A substantial source of our cash provided by operating activities is our deferred revenue, which is included on the 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. As of October 31, 2024, we had total deferred
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revenue of $223.8 million, of which, $223.7 million was recorded as a current liability. Deferred revenue will be recognized as revenue when all of the revenue recognition criteria are met.
Cash Flow Overview
The following table summarizes our cash flows for the periods presented:
Nine Months Ended
October 31,
20242023
(in thousands)
Net cash provided by operating activities$19,597 $3,029 
Net cash used in investing activities$(35,629)$(19,479)
Net cash provided by financing activities$5,518 $9,006 
Operating Activities
For the nine months ended October 31, 2024, net cash provided by operating activities was $19.6 million, primarily due to a net loss of $87.0 million, adjusted for non-cash charges of $123.3 million, and net changes in our operating assets and liabilities of $16.7 million. The non-cash adjustments primarily relate to stock-based compensation of $87.2 million and amortization of deferred contract costs of $26.0 million. The cash inflow from changes in our operating assets and liabilities were primarily due to an increase in deferred revenue of $19.5 million as a result of billings for new bookings and renewals. The cash inflow was offset by cash outflows primarily from an increase in deferred contract costs of $34.8 million as a result of commissions on new bookings and renewals.

For the nine months ended October 31, 2023, net cash provided by operating activities was $3.0 million, primarily due to a net loss of $101.9 million, adjusted for non-cash charges of $106.0 million, and net changes in our operating assets and liabilities of $1.1 million. The non-cash adjustments primarily relate to stock-based compensation of $73.0 million, amortization of deferred contract costs of $21.7 million. The cash inflow from changes in our operating assets and liabilities were primarily due to a decrease in accounts receivable of $7.3 million and increase in deferred revenue of $8.4 million as a result of billings for new bookings and renewals. The cash inflow was offset by cash outflows primarily from an increase in deferred contract costs of $32.6 million as a result of commissions on new bookings and renewals.
Investing Activities
Net cash used in investing activities was $35.6 million for the nine months ended October 31, 2024, primarily consisting of purchases of marketable securities of $179.5 million, purchases of property and equipment of $12.1 million, and capitalization of internal-use software costs of $3.0 million, partially offset by maturities of marketable securities of $159.1 million.
Net cash used in investing activities was $19.5 million for the nine months ended October 31, 2023, primarily consisting of purchases of marketable securities of $191.9 million, cash paid for the acquisition of North Star of $16.3 million, purchases of property and equipment of $3.4 million, and capitalization of internal-use software costs of $2.5 million, partially offset by maturities of marketable securities of $194.7 million.
Financing Activities
Net cash provided by financing activities was $5.5 million for the nine months ended October 31, 2024, primarily consisting of proceeds from the exercise of common stock options of $3.7 million and proceeds from stock purchases associated with the employee stock purchase plan of $4.8 million, partially offset by payments of deferred purchase consideration related to the acquisition of North Star of $2.9 million.

Net cash provided by financing activities was $9.0 million for the nine months ended October 31, 2023, primarily consisting of proceeds from the exercise of common stock options of $5.9 million and proceeds from stock purchases associated with the employee stock purchase plan of $3.2 million, offset by payments of deferred purchase consideration related to the acquisition of North Star of $0.1 million.

Non-GAAP Free Cash Flow
We report our financial results in accordance with GAAP. To supplement our unaudited condensed 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. We define free cash flow as net cash used in operating activities less cash used for purchases of property and equipment and amounts capitalized for internal-use software development costs. We believe that free cash flow is a useful indicator of
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liquidity as it measures our ability to generate cash, or our need to access additional sources of cash, to fund operations and investments.

Free cash flow has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are (1) it is not a substitute for net cash provided by/(used in) operating activities, (2) other companies may calculate free cash flow or similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a tool for comparison, and (3) the utility of free cash flow is further limited as it does not reflect our future contractual commitments and does not represent the total increase or decrease in our cash balance for any given period.

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:
Nine Months Ended
October 31,
20242023
(in thousands)
Net cash provided by operating activities$19,597 $3,029 
Less:
Purchases of property and equipment(12,147)(3,439)
Capitalized internal-use software costs(3,023)(2,536)
Non-GAAP free cash flow$4,427 $(2,946)
Net cash used in investing activities$(35,629)$(19,479)
Net cash provided by financing activities$5,518 $9,006 
Our free cash flow increased for the nine months ended October 31, 2024 from the nine months ended October 31, 2023, primarily due to higher collections as a result of an increase in billings that are aligned with new contracts and contract renewals. 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. 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.

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. 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.

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 $170.9 million and $121.6 million, respectively, as of October 31, 2024. 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.

While we anticipate being able to satisfy our commitments through a combination of our available current cash, cash equivalents, and marketable securities, and cash generated from the sale of subscriptions to our platform, if our estimates prove to be inaccurate we may seek to sell additional equity or other securities that may result in dilution to our stockholders, issue debt or seek other third-party funding, in order to satisfy our future funding requirements.

Seasonality

We have experienced seasonality in our cost of revenue as a result of our customers’ increased usage of our platform based on their business demands. We typically experience the highest sequential increase in overall messaging volume and
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compute and storage requirements during the fourth quarter due to the increased activity related to the holiday season and general customer engagement efforts around the end of the calendar year.

Critical Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

There have been no material changes to our critical accounting policies and estimates from those previously reported and disclosed in our Annual Report other than those referenced in Note 2. Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q. The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report provides a more complete discussion of our critical accounting policies and estimates.

Recently Adopted Accounting Pronouncements

Refer to Note 2. Summary of Significant Accounting Policies, to the unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements, if applicable.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition, or results of operations, other than its impact on the general economy. Nonetheless, if our costs were to become subject to inflationary pressures, we might not be able to fully offset such higher costs through price increases. 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 $493.1 million as of October 31, 2024, of which $431.3 million was invested in U.S. government securities, foreign securities, and corporate debt securities. Our cash and cash equivalents are held for working capital and general corporate purposes. Our investments in marketable securities are made for capital preservation purposes. We do not enter into investments for trading or speculative purposes.

Our cash equivalents and our portfolio of marketable securities are subject to market risk due to changes in interest rates. 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 October 31, 2024, 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 “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.

Foreign 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. 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. 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. The assets and liabilities of each of our foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at each balance sheet date. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a
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separate component on the consolidated statements of comprehensive loss. 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. We have experienced and will continue to experience fluctuations in foreign exchange gains and losses related to changes in foreign currency exchange rates. In the event our foreign currency denominated assets, liabilities, revenue, or expenses increase, our results of operations may be more greatly affected by fluctuations in the exchange rates of the currencies in which we do business. To date we have not engaged in the hedging of foreign currency transactions, although we may choose to do so in the future. 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.
Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of October 31, 2024, the end of the period covered by this Quarterly Report on Form 10-Q. Our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of October 31, 2024.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, and not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings

From time to time, we may become involved in various legal proceedings arising from the normal course of business activities. As of the date of this Quarterly Report on Form 10-Q, we are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. Defending such proceedings can be costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors
Our operations and financial results are subject to various risks and uncertainties, including those described below. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our unaudited condensed consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risk and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. If any of the events or circumstances described in the following risk factors is realized, our business, operating results, financial condition, cash flows, and prospects could be materially and adversely affected. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment.

Risk Factors Summary

Our business operations are subject to numerous risks, factors and uncertainties, including those outside of our control, that could cause our actual results to be harmed, including risks regarding the following:

Unstable market and economic conditions may have serious adverse consequences on our business, financial condition, and share price.
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.
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. Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.
We face intense competition, including from well-established companies that offer products that compete with ours.
We may lack sufficient financial or other resources to maintain or improve our competitive position, which may harm our ability to add new customers, retain existing customers, and grow our business.
If we are unable to attract new customers and renew existing customers, our business, financial condition and results of operations will be adversely affected.
If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, or changing regulations, or to changing customer or consumer needs, requirements or preferences, our platform may become less competitive.
We are substantially dependent upon customers renewing their subscriptions to, and expanding their use of, our platform to maintain and grow our revenue, which requires us to scale our platform infrastructure and business quickly enough to meet our customers’ growing needs. 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
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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. 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 are subject to stringent and changing laws and regulations, industry standards and contractual obligations related to privacy, data security and data protection. 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.
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.

Risks Related to Our Growth and Capital Requirements

Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and share price.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates, higher interest rates and uncertainty about economic stability. 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. Continued volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the financial, equity or credit markets further deteriorate, including as a result of the measures taken to combat inflation, volatility in the banking and financial services sector, political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefits costs. In addition, higher inflation and macroeconomic turmoil and uncertainty could also adversely affect our customers, which could reduce demand for our products and services. For instance, we were founded in 2011, but our business and revenue have grown rapidly over the last several years. 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. Recent increases in inflation, economic volatility and related increases in interest rates have affected customer spending behavior. Significant continued increases in inflation, continued economic volatility and related increases in interest rates could have a material adverse effect on our business, financial condition and results of operations. To the extent there is a sustained general economic downturn and our customer engagement platform is perceived by customers and potential customers as too costly, or too difficult to deploy or migrate to, our revenue may be disproportionately affected by delays or reductions in general customer engagement technology spending. This perception has previously, and may continue to, result in an extension of our sales cycle with potential customers, thus increasing the time and cost associated with our sales process. Further, even if our customers choose to use our platform, they may nonetheless reduce their customer engagement technology spending and elect not to purchase additional products and services in the future due to budget limitations. Additionally, our dollar-based net retention rate is influenced by macroeconomic factors that impact our customers’ purchasing decisions, who may choose to renew their contracts at levels more closely aligned with their current needs, rather than opting for larger commitments based on anticipated future demand. Macroeconomic factors may also impact our collection efforts for customer payments. If we experience collection pressure it may lengthen the time to collect on accounts receivable and increase in our bad debt expense, either of which could negatively impact our free cash flow. Also, competitors may respond to market conditions by lowering prices and attempting to lure away our current and potential customers. In addition, macroeconomic uncertainty may result in an increased pace of consolidation in certain industries in which our customers operate. If this were to occur it may result in reduced overall spending on our services, particularly if our customers are acquired by organizations that do not use our services. We cannot predict the timing, strength or duration of any economic slowdown, instability or recovery, generally or within any particular industry. If the economic conditions of the
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general economy or the markets in which we operate worsen from present levels, our business, results of operations and financial condition could be materially and adversely affected.

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 $433.0 million and $340.8 million for the nine months ended October 31, 2024 and 2023, respectively. You should not rely on our historical revenue growth as an indication of our future performance. Even if our revenue continues to increase, we expect that our annual revenue growth rate will decline in the future as a result of a variety of factors, including the maturation of our business. Overall growth of our revenue depends on several factors, including our ability to:

expand subscriptions for additional functionality within our platform to our existing customers;
expand the products for and functionality of our platform and achieve market acceptance for them;
attract new customers, particularly in verticals and organizations where we have already experienced revenue growth;
succeed in selling our products outside the United States;
continue to partner with existing customers to improve our platform and its products and functionality;
keep pace with technological developments;
price our platform subscriptions effectively;
provide our customers with support that meets their needs;
successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our platform; and
increase awareness of our brand on a global basis and successfully compete with other companies.

We may not successfully accomplish any of these objectives and, as a result, it is difficult for us to forecast our future results of operations. If the assumptions that we use to plan our business are incorrect or change in reaction to changes in our market or as a result of macroeconomic pressures on us or our customers, or if we are unable to maintain revenue growth, our stock price could be volatile, it may be difficult to achieve and maintain profitability, and our business, financial condition and results of operations may be adversely affected. The adverse effect on our results of operations resulting from a failure to achieve our revenue expectations may be particularly acute because of the significant research, development, marketing, sales and other expenses we expect to incur.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

We have funded our operations since inception primarily through equity financings, including through the public markets in our initial public offering, and sales of subscriptions to our platform. We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments to support our business and may require additional funds to respond to business challenges, including the need to develop new features or enhance our platform, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. Additional financing may not be available on terms favorable to us, including as a result of inflationary pressure and a higher interest rate environment, if at all. If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, financial condition and results of operations. If we incur debt, the debt holders would have rights senior to holders of our Class A and Class B common stock to make claims on our assets, and the terms of any debt could include restrictive covenants relating to our capital raising activities and other financial and operational matters, any of which may make it more difficult for us to obtain additional capital and to pursue business opportunities. Furthermore, if we issue equity securities, our stockholders will experience dilution, and the new equity securities could have rights senior to those of our Class A common stock and Class B common stock. Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities. As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our Class A common stock and diluting their interests.

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.

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;
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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.

Any one of these or other risks or uncertainties discussed elsewhere in this report or the cumulative effect of some of these factors may result in fluctuations in our revenue, results of operations and cash flows, meaning that quarter-to-quarter comparisons of our revenue, results of operations and cash flows may not necessarily be indicative of our future performance, may cause us to miss our guidance and analyst expectations and may cause the price of our Class A common stock to decline. Additionally, if our assumptions regarding these risks and uncertainties are incorrect or change, including as a result of global or domestic 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, that impact us and our customers, or if we do not address these risks successfully, our revenue and results of operations could differ materially from our expectations, and our business, financial condition and results of operations may be adversely affected.

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 $87.0 million and $101.9 million for the nine months ended October 31, 2024 and 2023, respectively. As of October 31, 2024, we had an accumulated deficit of $569.6 million. While we have experienced significant revenue growth in recent periods, we cannot guarantee whether or when we will achieve or maintain profitability in the future. We also expect our costs and expenses to increase in future periods, which could negatively affect our future results of operations if our revenue does not continue to increase. In particular, we intend to continue to expend substantial financial and other resources on:

our technology infrastructure and operations, including systems architecture, scalability, availability, performance and security;
our sales and marketing organization, to engage our existing and prospective customers, increase brand awareness and drive adoption of our products;
platform development, including investments in our platform development team and the development of new products and functionality for our platform, as well as investments in further improving our existing platform and infrastructure;
acquisitions or strategic investments;
international expansion; and
general administration, including increased insurance, legal and accounting expenses associated with being a public company.

These investments may not result in increased revenue. If we are unable to maintain or increase our revenue at a rate sufficient to offset the expected increase in our costs, our business, financial condition and results of operations will be adversely affected, and we may not be able to achieve or maintain profitability over the long term.

Our customers may face challenges to their businesses as a result of macroeconomic pressures or changes in the interest rate environment. We have in the past, and may in the future, adapt our strategy to address these market dynamics. 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. Our customers may also terminate their contracts, renew their agreements on terms less favorable to us, or fail to purchase additional product subscriptions. Our historical data and operating experience may also be insufficient to adequately inform our future pricing and
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contracting strategies in changing market environments. Any reduction in our prices or an increase in our discounting could adversely affect our revenue, gross margin, profitability, financial position, and cash flow.

The estimates of market opportunity and forecasts of market growth may prove to 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. Our addressable market depends on a number of factors, including businesses’ desire to differentiate themselves through digital customer engagement, partnership opportunities, changes in the competitive landscape, technological changes, data security or privacy concerns, customer budgetary constraints, changes in business practices, changes in the regulatory environment and changes in economic conditions. Our estimates and forecasts relating to the size and expected growth of our market may prove to be inaccurate, and our ability to produce accurate estimates and forecasts may be impacted by economic uncertainty that is outside our control, including as a result of global or domestic 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, that impact us and our customers. Any of these risks could have a significant impact on our business or the business of our customers, either of which could result in a material adverse effect on our results and operations and cause our current estimates and projections to be inaccurate. Even if the market in which we compete meets the size estimates and growth rates we forecast, our business could fail to grow at similar rates, if at all.

We track certain operational metrics with internal systems and tools and do not independently verify such metrics. Certain of our operational metrics are subject to inherent challenges in measurement, and any real or perceived inaccuracies in such metrics may adversely affect our business and reputation.

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. Our operational metrics are tracked with internal systems and tools that are not independently verified by any third party and which may differ from estimates or similar metrics published by third parties due to differences in sources, methodologies, or the assumptions on which we rely. Our internal systems and tools have a number of limitations, and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including the metrics we publicly disclose. If the internal systems and tools we use to track these metrics undercount or overcount performance or contain algorithmic or other technical errors, the data we report may not be accurate. While these numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring how our platform is used across large populations. In addition, limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which could affect our long-term strategies. If our operating metrics are not accurate representations of our business, if investors do not perceive our operating metrics to be accurate, or if we discover material inaccuracies with respect to these figures, we expect that our business, reputation, financial condition, and results of operations would be adversely affected.

Risks Related to Our Business and Our Brand

We face intense competition, including from well-established companies that offer products that compete with ours. We may lack sufficient financial or other resources to maintain or improve our competitive position, which may harm our ability to add new customers, retain existing customers, and grow our business.

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. Many of our existing competitors have, and our potential competitors could have, substantial competitive advantages, such as greater name recognition, longer operating histories, larger sales and marketing budgets and resources, greater customer support resources, lower labor and development costs, larger and more mature intellectual property portfolios and substantially greater financial, technical and other resources than we do. In addition, our competitors may have an advantage in markets where our policies regarding the use of customer data are more restrictive than local laws, regulations, policies and standards. For example, competitors willing to sell customer data in markets where such activity is permissible may have a pricing advantage over us in such markets. Any such pricing advantages that our competitors have may negatively affect our ability to gain new customers and retain existing customers. Additionally, to the extent there is a sustained general economic downturn, our customers and potential customers may experience delays and reductions in general customer engagement technology spending. As a result, our competitors have in the past responded, and may continue in the future to respond, to market conditions by lowering prices and attempting to lure away our current and potential customers. With the introduction of new technologies and the entry of new competitors into the market, we expect competition to persist and intensify in the future. In addition, in recent years, there has been significant merger and acquisition
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activity among our competitors, including the acquisition of Leanplum by CleverTap. Continued merger and acquisition activity in the technology industry could further increase the likelihood that we compete with other large technology companies. This could harm our ability to increase sales, maintain or increase subscription renewals, and maintain our prices.

Conditions in our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation. 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. New start-up companies that innovate, and large companies that are making significant investments in research and development, may invent similar or superior products and technologies that compete with one or more of our platform offerings. In addition, some of our competitors may enter into new alliances with each other or may establish or strengthen cooperative relationships with agency partners, technology and application providers in complementary categories, or other parties. Competitors may also consolidate with existing service providers or strategic partners that we rely on, and as a result we could lose partnerships that are difficult to replace. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure, a loss of market share or a smaller addressable share of the market and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability to compete.

Some of our larger competitors may use their broader product offerings to compete with us, including by bundling their competitive products with other products being purchased from that company by a customer or by restricting access to their technology platforms thereby making it more difficult for customers to integrate the use of our platform with other competitor products. Potential customers may prefer to purchase from their existing suppliers rather than a new supplier regardless of product performance or features. Furthermore, potential customers may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existing infrastructure with our platform and products. These competitive pressures in our market, or our failure to compete effectively, may result in price reductions, fewer sales, reduced revenue and gross margins, increased net losses and loss of, or failure to expand, our market share. Any failure to address these challenges could harm our business, financial condition and results of operations.

If we are unable to attract new customers and renew existing customers, our business, financial condition and results of operations will be adversely affected.

To increase our revenue, we must continue to attract new customers and retain, and sell more products to, existing customers. 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. In addition, as our market matures, our products evolve and competitors introduce lower cost or differentiated products that are perceived to compete with our platform, products and services, our ability to sell subscriptions for our products could be impaired. Similarly, our subscription sales could be adversely affected if customers or users within these organizations perceive that features incorporated into competitive products reduce the need for our products or if they prefer to purchase other products that are bundled with products offered by other companies that operate in adjacent markets and compete with our products. In addition, the value of our products and services to our customers depends, in part, on our customers’ ability to use them as part of an overall effective marketing strategy. To the extent our customers’ marketing strategies are not effective, they may reduce the use of our products and services or fail to renew their existing contracts. Further, to the extent there is a sustained general economic downturn and our customers and potential customers experience delays or reductions in general customer engagement technology spending, potential customers may be unwilling to take on the additional cost associated with adopting our platform as an alternative to their existing products or service providers, and if they choose to adopt our platform, they may not purchase additional products and services in the future due to budget limitations. As a result of these and other factors, we may be unable to attract new customers, which may have an adverse effect on our business, financial condition and results of operations.

If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, or changing regulations, or to changing customer or consumer needs, requirements or preferences, our platform may become less competitive.

Our ability to attract new customers and increase revenue from existing customers depends in large part on our ability to enhance and improve our platform and its products and functionality, increase adoption and usage of our platform, and introduce new products and functionality. 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. Additionally, we cannot predict what, if any, actions regulators will take regarding the use and sale of customer engagement software or in our key markets in the future. Any regulatory restrictions on the use of customer engagement tools from domestic or foreign regulators could reduce demand for our platform in the United States and foreign markets. Further, recent advances in, and the public availability of, generative artificial intelligence may be a significant disruptor in consumer engagement and marketing strategies. The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis. If we are unable to enhance our platform offerings to keep pace with rapid technological and regulatory change, or
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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. Further as we develop, acquire, and introduce new services and technologies, including those that may incorporate artificial intelligence and machine learning, we may be subject to new or heightened legal, ethical, and other challenges.

The success of our platform depends, in part, on our ability to continuously modify and enhance our platform to adapt to changes and innovation in existing and new technologies to maintain and grow our integrations. We expect that the number of integrations with our customers’ infrastructure that we will need to support will continue to expand as developers adopt new software solutions, and we will have to develop new versions of our platform to work with those new solutions. This development effort may require significant engineering, sales and marketing resources, all of which could adversely affect our business. Any failure of our platform to operate effectively with customer infrastructures could reduce the demand for our platform, and our business, financial condition and results of operations may be adversely affected.

We are substantially dependent upon customers renewing their subscriptions to, and expanding their use of, our platform to maintain and grow our revenue, which requires us to scale our platform infrastructure and business quickly enough to meet our customers’ growing needs. If we are not able to grow in an efficient manner, our business, financial condition and results of operations could be harmed.

As usage of our platform grows and as customers use it for more complex projects, we may need to devote additional resources to improving our platform architecture, updating our platform’s products and functionality, integrating with third-party systems and maintaining infrastructure performance. In addition, we will need to appropriately scale our internal business as well as grow our partner services network to serve our growing customer base, particularly as our customer base expands over time. Our ability to scale our business is dependent on our ability to maintain and grow our revenue through new and renewed customer subscriptions to our platform, from which we derive substantially all of our revenue. We cannot assure you that we will be able to renew subscriptions with any of our customers at the same or higher contract value, particularly if our customers experience reductions or delays in general customer engagement technology spending in connection with a sustained general economic downturn. In addition, some customers have multiple order forms with different divisions of their entities, which could increase the complexity of negotiating renewals.

The market for customer engagement products is still evolving, and competitive dynamics may cause our pricing to change as the market matures and as existing and new market participants introduce new types of products and different approaches to enable customers to address their needs. 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.

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 have in the past, and may in the future, adapt our strategy to address these market dynamics for customers that were significantly negatively impacted by the macroeconomic environment. 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. Our customers may also terminate their contracts, renew their agreements on terms less favorable to us, or fail to purchase additional product subscriptions. As such, our revenue may decline, and, as a result, our ability to scale our business may be impaired and our business, financial condition and results of operations would likely be harmed as a result.

Any failure of or delay in efforts to scale our business could cause difficulty or delay in deploying our products or functionality to customers, could lead to impaired performance, other declines in quality or customer satisfaction, increased costs, difficulty in introducing new features or other operational inefficiencies or failures. These issues could reduce the attractiveness of our platform to customers, resulting in decreased subscriptions with existing and new customers, lower subscription renewal rates, the issuance of service credits or requests for refunds, which could hurt our revenue growth and our reputation. Even if we can upgrade our systems and expand our staff, any such expansion will be expensive and complex, requiring management time and attention, as well as improvements to our operational and financial controls and reporting systems and procedures. Because of these risks and other inherent risks associated with upgrading, improving and expanding our information technology systems, any needed expansion and improvements to our infrastructure and systems may not be fully or effectively implemented on a timely basis, if at all. Any such expansion efforts may reduce revenue or may not bring the benefits we anticipate, and our business, financial condition and results of operations may be adversely affected.

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.

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Our ability to expand our customer base and achieve broader market adoption of our platform will depend on the productivity of our sales and marketing operations. We plan to continue expanding our sales team and strategic partners over the long term, both domestically and internationally; however, there is no assurance that we will be successful in attracting and retaining talented sales personnel or strategic partners or that any new sales personnel will be able to achieve productivity in a reasonable period of time or at all. We also plan to dedicate significant resources to sales and marketing programs to drive new customer acquisition, as well as engage with customers to promote upsell and cross-sell opportunities. For example, to encourage awareness, usage, familiarity and adoption of our platform and products, we offer free trials of our platform. This strategy may not be successful in leading customers to purchase long term subscriptions of our product, as usage of our free tier may not cause users or others within their organization to purchase and deploy our platform. 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. Our business, financial condition and results of operations may be harmed if our sales and marketing efforts do not generate a corresponding increase in revenue. In addition, we may not achieve anticipated revenue growth from expanding our sales team if we are unable to hire, develop and retain talented sales personnel, if our new sales personnel are unable to achieve desired productivity levels in a reasonable period of time, or if our sales and marketing programs are not effective. If the cost of marketing our platform and products increases or competition reduces the effectiveness of our marketing efforts, our business, financial condition and results of operations may be adversely affected.

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.

Substantially all of our revenue is attributable to subscriptions for our cloud-based platform. We expect that we will be substantially dependent on our platform to generate revenue for the foreseeable future. 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 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.

If the market for our platform grows more slowly than anticipated or if demand for our products does not grow as quickly as anticipated, whether as a result of competition, pricing sensitivities, product obsolescence, technological change, unfavorable economic conditions, uncertain geopolitical environment, budgetary constraints of our customers or other factors, we may not be able to grow our revenue, and our business, financial condition and results of operations may be adversely affected.

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.

Our platform is inherently complex and may contain material defects or errors. Any defects or errors that impact functionality or that cause interruptions in the availability of our platform could result in:

loss or delayed market acceptance and subscriptions;
breach of warranty claims;
breach of contract claims;
sales credits or refunds for prepaid amounts;
loss of customers;
diversion of development and support resources; and
injury to our reputation.

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The costs we would be forced to incur to correct any material defects or errors could be substantial and could adversely affect our business, financial condition and results of operations.

Our customer agreements often provide service level commitments. We have in the past, and may in the future, fail to meet the stated service level commitments or suffer extended periods of unavailability of our platform. Any such incident could result in us being obligated to provide these customers with service credits. We could also face contract terminations or refusal by certain of our customers to renew as a result of any such outages. We outsource substantially all the infrastructure relating to our cloud-based platform to third-party hosting providers and, as a result, our services may be impacted in the future, and have been impacted in the past, by unscheduled downtime at such providers that is beyond our control. Our revenue has in the past been affected, and could be significantly affected in the future, by unscheduled downtime that exceeds the allowed downtimes under our agreements with our customers.

Because of the large amount of data that we collect, process, transmit, store and manage, it is possible that hardware failures or errors in our systems could result in data loss or cause the information that we collect to be incomplete which may result in breach of contract claims, damage our reputation or subject us to regulatory fines or investigations. Furthermore, the availability or performance of our platform could be adversely affected by a number of factors outside our control, including customers’ inability to access the internet, the failure of software systems caused by our third-party vendors, security breaches, cyberattacks or variability in user traffic for our services. For example, our customers access our platform through their internet service providers. If a customer’s service provider fails to provide sufficient capacity to support our platform or otherwise experiences service outages, such failure could interrupt our customers’ access to our platform and adversely affect their perception of our platform’s reliability. In addition to potential liability, if we experience interruptions in the availability of our cloud-based platform, our reputation could be adversely affected, and we could lose customers or have difficulty acquiring new customers.

We also provide frequent incremental releases of updates and functional enhancements to our platform. Despite extensive pre-release testing, such new versions occasionally contain undetected errors when first introduced or released. We have, from time to time, found errors in our platform, and new errors in our platform may be detected in the future. Since our customers use our products for important aspects of their business, any errors, defects, disruptions in our platform or other performance problems with our solutions could hurt our reputation and may damage our customers’ businesses. If that occurs, some of our customers may delay or withhold payment to us, elect not to renew their subscriptions with us, make service credit claims, warranty claims or other claims against us, and we could lose future sales. 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.

Our subscription fees are principally based on an upfront commitment by our customers for a specific number of monthly active users, messaging volume, platform access and/or support and certain add-on products. We expect that we may need to change our pricing from time to time. As new or existing competitors introduce products that compete with ours or reduce their prices, we may be unable to attract new customers or retain existing customers. We also must determine the appropriate price to enable us to compete effectively internationally. Customers may demand substantial price discounts as part of the negotiation of subscription agreements. As a result, we may be required or choose to reduce our prices or otherwise change our pricing model, which could adversely affect our business, financial condition and results of operations.

Our sales cycle with large enterprise customers can be long and unpredictable, and our sales efforts require considerable time and expense.

The timing of our sales cycles with our large enterprise customers and related revenue recognition is difficult to predict because of the length and unpredictability of the sales cycle for these customers. Large enterprise customers may have a lengthy sales cycle for the evaluation and procurement of our platform. Additionally, to the extent there is a sustained general economic downturn resulting in delays or reductions in general customer engagement technology spending by large enterprise customers, we may experience an extension of our sales cycle with potential customers or a reduction in sales cycle win rates due to budgetary constraints. Any delays in our sales cycles may cause a delay between increasing operating expenses for such sales efforts and, upon successful sales, the generation of corresponding revenue. We are often required to spend significant time and resources to better educate our potential large enterprise customers and familiarize them with the platform. The length of our sales cycle for these customers, from initial evaluation to contract execution, is generally three to six months but can vary substantially and sometimes extend for over 12 months. Large enterprise customers often view a subscription to our platform and products as a strategic decision with significant investment. As a result, customers frequently require considerable time to evaluate, test and qualify our platform prior to entering into or expanding a subscription. During the sales cycle, we expend significant time and money on sales and marketing and contract negotiation activities, which may not result in a sale. Moreover, large enterprise customers may demand complicated configuration and integration services, which can increase our upfront investment with no guarantee that these customers will deploy our offering widely enough across their organization to justify
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our substantial upfront investment. Further, if we are not able to satisfy the demands of our enterprise customers, we may also face reputational harm.

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.

Given these factors, it is difficult to predict whether and when a sale will be completed. Consequently, a shortfall in demand for our products and services or a decline in new or renewed contracts in a given period may not significantly reduce our revenue for that period but could negatively affect our revenue in future periods, which could have a material adverse effect on our business, financial condition and results of operations.

Our business and reputation could be adversely affected if our customers are not satisfied with the integration, implementation, or services provided by us or our partners.

The success of our business depends on our customers’ satisfaction with our platform, the support that we provide for our platform and the services that we provide to help integrate and utilize our platform. Onboarding services may be performed by our own staff, by a third party or by a combination of the two. We have partnered with third parties to increase the breadth, capability and depth of capacity for delivery of these onboarding services to our customers, and third parties provide a significant portion of such support. If a customer is not satisfied with the quality of work performed by us or a third party or with the solutions delivered, we could incur additional costs to address the deficiency, which would diminish the profitability of the customer relationship. If we do not help our customers quickly resolve issues and provide effective ongoing support, our ability to sell new products to existing and new customers will suffer and our reputation with existing or potential customers will be harmed, even if the dissatisfaction is with services provided by a third party partner. Further, customer dissatisfaction with our services could impair our ability to expand the subscriptions within our customer base or adversely affect our customers’ renewal of existing subscriptions. In addition, negative publicity related to our customer relationships, regardless of accuracy, may further damage our business by affecting our ability to compete for new business with actual and prospective customers.

Because we generally recognize revenue ratably over the term of each subscription agreement, downturns or upturns in our sales may not be immediately reflected in our financial condition and results of operations.

We recognize revenue ratably over the term of each subscription agreement. Consequently, while a decline in new sales or renewals in any one period may not be reflected in our revenue for that period, this decline will negatively affect our revenue in future periods. Accordingly, the effect of significant downturns in sales and market acceptance of our products and potential changes in our rate of renewals may not be fully reflected in our results of operations until future periods. Our model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers generally is recognized over the term of the applicable agreement.

If we fail to maintain and enhance our brand, our ability to expand our customer base may be impaired and our business, financial condition and results of operations may suffer.

We believe that maintaining and enhancing our brand is important to support the marketing and sale of our existing and future products to new customers and expand sales of our platform and products to existing customers. We also believe that the importance of brand recognition will increase as competition in our market increases. Successfully maintaining and enhancing our brand will depend largely on the effectiveness of our marketing efforts, our ability to provide reliable products that continue to meet the needs of our customers at competitive prices, our ability to maintain our customers’ trust, our ability to continue to develop new functionality and use cases, and our ability to successfully differentiate our products and platform capabilities from competitive products. If we are not able to effectively differentiate our platform and its capabilities from those of our competitors, we may experience difficulty in attracting new customers. Our brand promotion activities may not generate customer awareness or yield increased revenue and, even if they do, any increased revenue may not offset the expenses we incur in building our brand. If we fail to successfully promote and maintain our brand, our business, financial condition and results of operations may be adversely affected.

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If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service and customer satisfaction or adequately address competitive challenges.

We may continue to experience rapid growth and organizational change, which may continue to place significant demands on our management and our operational and financial resources. We have also experienced growth in the number of customers, the number of engagements we enable and the amount of data that our infrastructure supports. In particular, acquiring and supporting enterprise customers can require significant resources due to their size, volume of messaging and complexity. Our success will depend in part on our ability to manage this growth effectively. 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. Our expansion will continue to place a significant strain on our managerial, administrative, financial and other resources. If we are unable to manage our growth successfully, our business, financial condition and results of operations may be adversely affected.

It is important that we maintain a high level of customer services, integration services, technical support and satisfaction as we expand our business. As our customer base continues to grow and as our penetration within existing customers expands, we will need to expand our account management, customer service and other personnel. Failure to manage growth could result in difficulty or delays in launching our platform, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features, or other operational difficulties. Any of these could adversely impact our business, financial condition and results of operations.

We anticipate that our operations will continue to increase in complexity as we grow, which will create management challenges.

Our business has experienced strong growth and is complex. We expect this growth to continue and for our operations to become increasingly complex. To manage this growth, we continue to make substantial investments to improve our operational, financial and management controls as well as our reporting systems and procedures. We may not be able to implement and scale improvements to our systems and processes in a timely or efficient manner or in a manner that does not negatively affect our results of operations. For example, we may not be able to effectively monitor certain contract requirements for specific products. We may have difficulty managing improvements to our systems, processes and controls or in connection with third-party software, which could impair our ability to provide our platform to our customers, causing us to lose customers, limiting our platform to less significant updates or increasing our technical support costs. 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. We also will need to manage our sales processes as our sales personnel and partner network continue to grow and become more complex and as we continue to expand into new geographies and market segments. If we do not effectively manage this increasing complexity, the quality of our platform and customer service could suffer, and we may not be able to adequately address competitive challenges. These factors could impair our ability to attract and retain customers and expand our customers’ use of our platform.

We depend on our senior management team and the loss of one or more key employees or an inability to attract and retain highly skilled employees could adversely affect our business.

Our success depends largely upon the continued services of our executive officers, particularly our chief executive officer. We rely heavily on our chief executive officer’s vision, expertise and reputation. We rely on our leadership team for research and development, marketing, sales, services and general and administrative functions, and on mission-critical individual contributors. From time to time, our executive management team may change due to the hiring or departure of executives, which could disrupt our business. We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period; therefore, they could terminate their employment with us at any time. The loss of one or more of our executive officers, particularly our chief executive officer, or key employees (including any limitation on the performance of their duties or short-term or long-term absences as a result of illness or disability) could have a serious adverse effect on our business.

To execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense, especially for experienced software engineers and senior sales executives. We expect to continue to experience difficulty in hiring and retaining employees with appropriate qualifications. In addition, as a result of our hybrid work model, we have a large, remote workforce, which adds to the complexity and costs of our business operations. Our hybrid work model may impact our ability to identify, hire and train new personnel. Also, as a public company, potential candidates may not perceive our compensation package, including our equity awards, as favorably as employees hired prior to our initial public offering or as compared to our private competitors. In addition, our recruiting personnel, methodology and approach may need
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to be altered to address a changing candidate pool and profile. We may not be able to identify or implement such changes in a timely manner. If we fail to attract new personnel, experience significant turnover or the loss of key personnel or fail to retain and motivate our current personnel, it could adversely affect our business and future growth prospects. Further, many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached legal obligations, resulting in a diversion of our time and resources.

If we are unable to maintain our culture and core values as we grow, we could lose the innovation, teamwork, passion and focus on execution that we believe contribute to our success, and our business may be harmed.

We believe our culture and core values are critical to our success and have delivered tangible financial and operational benefits to our customers, employees and stockholders. We are a mission-driven company and have designed our core values as a guiding set of principles for our employees and business. Accordingly, we have invested substantial time and resources in building a team that reflects our culture and core values. As we grow and develop our infrastructure as a public company, our operations may become increasingly complex. We may find it difficult to maintain these important aspects of our culture and core values. In addition, the growth of our remote workforce may impact our ability to preserve our culture and core values. Any failure to preserve our culture or core values could negatively affect our future success, including our ability to retain and recruit personnel, and to effectively focus on and pursue our corporate objectives.

Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, violations of privacy, data protection and other laws, regulations or contractual obligations, data breaches and other losses.

Many of our agreements with customers and certain other third parties include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, violation of applicable privacy, data protection or other laws, regulations or contractual obligations, data breaches or other liabilities relating to or arising from our platform, products or other contractual obligations. Some of these agreements provide for uncapped liability for losses caused by claims alleging gross negligence or willful misconduct, or claims alleging third party intellectual property infringement, and some indemnity provisions survive termination or expiration of the applicable agreement. 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. 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. 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. A claim brought against us that is uninsured or under-insured could result in unanticipated costs, and our business, financial condition and results of operations may be adversely affected. Further, any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer, other existing customers and new customers, which could adversely affect our business, financial condition and results of operations.

Our current operations are international in scope, and we plan further geographic expansion. This will create a variety of operational challenges.

A component of our growth strategy involves the further expansion of our operations and customer base internationally. We currently have customers in North America, Europe, the Middle East, the Asia-Pacific region and Latin America. We are continuing to adapt and develop strategies to address international markets, but such efforts may not be successful. In addition, any future stay-at-home, business closure and other restrictive orders and travel restrictions into and outside the United States as a result of international conflicts, domestic unrest or the emergence of new highly infectious diseases, if any, may pose additional challenges for international expansion and may impact our ability to launch new locations and further expand geographically.

We expect that our international activities will continue to grow over the foreseeable future as we continue to pursue opportunities in existing and new international markets. This and any other future expansion of our international activities and operations will require significant management attention and financial resources.

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;
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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. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the U.K. Bribery Act of 2010, the U.K. Proceeds of Crime Act 2002 and similar laws and regulations in other jurisdictions; and
adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.

Failure to overcome any of these difficulties could negatively affect our results of operations. 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.

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. As a result, remote work has become the primary experience for a large number of our employees, and our intention is for our workforce to continue to have remote work opportunities into the future. 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. Additionally, there is no guarantee that we will realize any anticipated benefits to our business, including any cost savings, operational efficiencies or productivity.

Our continuing shift to hybrid and remote work may make it increasingly difficult to manage our business and adequately oversee our employees and business functions, potentially resulting in harm to our company culture, increased employee attrition, the loss of key personnel, difficulty in properly classifying employees and a potentially negative impact on product research and development, and the growth of our business. We may also experience an increased risk of privacy and data security breaches and incidents involving our or our customers’ data as a result of the decentralization of the technology used to operate our business. The mobility of our remote workers may also subject us to an increased risk of regulatory claims if our remote employees establish a nexus for our business in unanticipated jurisdictions. This could cause us to be subject to tax and employment claims in the applicable jurisdiction. Any of these factors could adversely affect our financial condition and operating results.

We may also face operational or other challenges as we and our customers, partners, suppliers and vendors and other parties with whom we do business continue to adjust to a hybrid model of remote and onsite work. These challenges may result in operational inefficiencies or employee dissatisfaction, either of which could harm our business.

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.

We have in the past and may in the future seek to acquire or invest in businesses, joint ventures, products and platform capabilities, or technologies that we believe could complement or expand our products and platform capabilities, enhance our technical capabilities or otherwise offer growth opportunities. Further, our proceeds from our initial public offering increase the likelihood that we will devote resources to exploring larger and more complex acquisitions and investments than we have previously attempted. We may not be able to find and identify desirable acquisition targets or business opportunities or be successful in entering into an agreement with any particular strategic partner. Additionally, any such acquisition or investment may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing
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suitable opportunities, whether or not the transactions are completed, and may result in unforeseen operating difficulties and expenditures. 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. 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. Any such transactions that we are able to complete may not result in any synergies or operational, financial or other benefits we had expected to achieve, which could result in impairment charges that could be substantial. These transactions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our business, financial condition and results of operations. 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.

Risks Related to Our Dependence on Third Parties

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.

Our brand, reputation and ability to attract new customers depend on the reliable performance of our technology infrastructure and content delivery. 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. 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. Further, if any of these third-party providers were to suspend or terminate our customers’ use of their services or to suffer extended service outages, then our customers may not be able to deliver the applicable messages or content using our platform. If this were to occur, it could lead to customer dissatisfaction, harm to our reputation or subject us to liability, any of which may harm our business, financial condition and results of operations. For instance, any incident broadly affecting the interaction of Apple or Android devices with necessary Apple or Google services (e.g., iCloud or Apple push notifications), including any delays or interruptions in such Apple or Google services, could adversely affect our business. Further, any cybersecurity events affecting Apple or Google Android devices could result in a disruption to Apple or Google services, regulatory investigations, reputational damage and a loss of sales and customers for Apple or Google, which could in turn impact our business. A prolonged disruption, cybersecurity event or any other negative event affecting Apple or Google could lead to customer dissatisfaction and could in turn damage our reputation with current and potential customers, expose us to liability and cause us to lose customers or otherwise harm our business, financial condition and results of operations. We will also face similar risks as we add new channels and integrations to our platform that are supported by third parties if such third parties were to face similar challenges or disruptions with regard to their respective channels or integrations. Additionally, many of the third parties that we use or with which we integrate hold us responsible for the acts and omissions of our customers. While we contractually obligate our customers to comply with the requirements of third-party providers and applicable laws when using our platform to deliver content through our messaging channels or integrations, we cannot guarantee that all customers will do so at all times. If any of our customers were to use our platform in violation of the policies of third-party providers or applicable law, even without our knowledge, we may be subject to financial penalties and reputational harm.

We depend in part on mobile operating systems, such as Android and iOS, and their respective infrastructures, to send notifications through various applications that utilize our platform. Any changes in such systems that negatively impact the functionality of our platform could adversely affect our ability to interact with consumers in a timely and effective fashion, which could adversely affect our ability to retain and attract new customers. For example, any anti-tracking features adopted by Apple or Google that require applications to obtain additional permissions to track end user data may impact our customers’ decisions relating to how to interact with end users through our platform. Additionally, if such mobile operating systems change their policies or otherwise limit or prohibit us from sending notifications or otherwise make changes that degrade the functionality of our platform, such changes could adversely affect our business, financial condition and results of operations.

As new mobile devices and mobile, web, email and other messaging platforms are released, there is no guarantee that these mobile devices and platforms will continue to support our platform or effectively roll out updates to our customers’ applications. The parties that control the operating systems for mobile devices and such platforms have no obligation to test the interoperability of new mobile devices or platforms with our platform, and third parties may produce new products that are incompatible with or not optimal for the operation of our platform. Additionally, in order to deliver high-quality customer engagement, we need to ensure that our platform is designed to work effectively with a range of mobile technologies, systems,
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networks and standards. If consumers choose to use products or platforms that do not support our platform, or if we do not ensure our platform can work effectively with such products or platforms, our business and growth could be harmed. We also may not be successful in developing or maintaining relationships with key participants in the mobile industry that permit such interoperability. If we are unable to adapt to changes in popular operating systems, we expect that our customer retention and customer growth would be adversely affected.

We rely upon third-party providers of cloud-based infrastructure, including Amazon Web Services and Rackspace, 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. Our customers need to be able to access our platform at any time, without interruption or degradation of performance, and we provide many of them with service-level commitments with respect to uptime and, occasionally, throughput. Our products depend on protecting the virtual cloud infrastructure hosted by third-party hosting providers by maintaining its configuration, architecture, features and interconnection specifications, as well as the information stored in these virtual data centers, which is transmitted by third-party internet service providers. Any limitation on the capacity or availability of our third-party hosting providers could impede our ability to onboard new customers or expand the usage of our existing customers, which could adversely affect our business, financial condition and results of operations. Currently, we rely on cloud computing infrastructure, particularly from Amazon Web Services, or AWS, to host our platform and support our operations and many of the internal products we use to operate our business. We also host our end user profiles on Rackspace. We do not have control over the operations of the facilities of AWS, Rackspace or other cloud providers. Each provider’s respective facilities may be vulnerable to damage or interruption from earthquakes, hurricanes, floods, fires, cybersecurity attacks, security breaches, terrorist attacks, power losses, service outages, software or hardware failures, telecommunications failures and other events beyond our or their control. 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. A decision to close these facilities without adequate notice, or other unanticipated problems, could result in lengthy interruptions to our platform. All of the aforementioned risks may be exacerbated if our or our partners’ business continuity and disaster recovery plans prove to be inadequate in such a scenario.

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. 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. 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 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. 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. We may not carry sufficient business interruption insurance or have sufficient contractual remedies to compensate us for losses that may occur as a result of any events that cause interruptions in our service.

In the event that our service agreements with our third-party hosting providers are terminated or there is a lapse of service, elimination of services or features that we utilize, interruption of internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our platform as well as significant delays and additional expense in arranging or creating new facilities and services and/or re-architecting our cloud solution for deployment on a different cloud infrastructure service provider, which could adversely affect our business, financial condition and results of operations.

Our agreement with AWS allows AWS to terminate for any reason with 30 days’ advance notice or in case of a breach of contract if such breach is uncured for 30 days. AWS may also terminate immediately upon notice if (1) AWS determines that our use of its service poses a security risk to its services or any other third party, could otherwise adversely impact AWS’s systems, could subject AWS to liability or could be fraudulent, (2) we fail to pay AWS in accordance with our agreement, (3) we cease to operate in the ordinary course, make an assignment for the benefit of creditors or become the subject of any bankruptcy, reorganization, liquidation, dissolution or other similar proceeding, (4) AWS’s relationship with any third-party providers terminates or requires AWS to change the way it provides services or (5) termination is necessary to comply with the law or the requests of governmental entities. Although we expect that we could receive similar services from other third parties if any of our arrangements with AWS are terminated, transitioning the cloud infrastructure currently hosted by AWS to alternative providers would likely be disruptive, and we could incur significant one-time costs. If we are unable to renew our
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agreement with AWS on commercially reasonable terms or at all, our agreement with AWS is prematurely terminated or we add additional infrastructure providers, we may experience costs or downtime in connection with the transfer to, or the addition of, new data center providers. 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.

In order to grow our business, we anticipate that we will continue to depend on relationships with strategic partners, including cloud alliance/marketing, infrastructure and technology partners, to provide broader customer coverage and solution delivery capabilities, and also achieve product stickiness. While our strategic partners have not played a lead role in our customer generation process in the past, we intend to develop these relationships to rely more heavily on our partners to help us generate business going forward. Identifying partners, and negotiating, documenting and maintaining relationships with them, requires significant time and resources. Our agreements with our strategic partners are non-exclusive and do not prohibit them from working with our competitors or recommending competing products. Our competitors may be effective in providing incentives to such third parties to favor their products or services or to prevent or reduce subscriptions to our services. If our partners choose to place greater emphasis on products of their own or those offered by our competitors or do not effectively market and sell our platform, our ability to grow our business and sell our products and services may be adversely affected. In addition, acquisitions of our partners by our competitors could result in a decrease in the number of our current and potential customers, as our partners may no longer facilitate the adoption of our platform by potential customers.

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. Changes to developer platform policies related to third-party software, such as Apple or Google, creating restrictions that limit the ability of our existing or potential customers to use software development kits or that further limit the use of cookies could similarly adversely affect our business.

If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our business, financial condition and results of operations may suffer. Even if we are successful, it is not assured that these relationships will result in increased customer usage of our platform or increased revenue.

Risks Related to Privacy, Data Security and Data Protection Laws

We are subject to stringent and changing laws, regulations, rules, industry standards and contractual obligations related to privacy, data security and data protection. The restrictions and costs imposed by these requirements and our actual or perceived failure to comply with them, could harm our business.

Operating our business and platform involves the collection, use, storage, transfer, sharing and other processing of sensitive, proprietary, confidential, regulated and personal data, including such information that we handle on behalf of our customers. These activities subject us to numerous privacy, data security and data protection obligations, such as various laws, regulations, rules, guidance, industry standards, external and internal policies, contracts, and other obligations that govern the processing of personal data by us and on our behalf.

In the United States, federal, state, and local governments have enacted numerous privacy, data security and data protection laws, including data breach notification laws, personal data privacy laws, and consumer protection laws. For example, the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations, imposes specified requirements relating to the privacy, security and transmission of individually identifiable health information. Federal laws also limit the processing of personal data of children under 13. Violations of these laws can lead to statutory penalties (up to $46,515 per violation in the case of the Children’s Online Privacy Protection Act, for example). If a private plaintiff or regulator alleges that our privacy, data security or data protection policies and practices are either unfair or deceptive, we may be subject to litigation or regulatory enforcement. In the United States, there are federal and state laws that prohibit unfair and deceptive acts and practices, with federal enforcement typically arising out of Section 5 of the Federal Trade Commission Act, or FTC Act. State analogs to the FTC Act, such as the California Unfair Competition Law, often allow for a private right of action as well.

Similarly, the California Consumer Privacy Act (as amended by the California Privacy Rights Act), or the CCPA, imposes privacy, data security and data protection obligations on businesses to which it applies. These obligations include, but are not limited to, providing specific disclosures in privacy notices and affording California residents certain rights related to their personal data. The CCPA allows for statutory fines for noncompliance (up to $7,500 per violation) and provides a private right of action for certain data breaches. Numerous other states also have enacted, or are considering enacting, comprehensive
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data privacy laws. If we become subject to further new privacy, data security or data protection laws at the state level, the risk of enforcement action against us could increase because we may become subject to additional obligations, and the number of individuals or entities that can initiate actions against us may increase (including individuals, via a private right of action, and state actors).

Outside of the United States, an increasing number of laws, regulations, rules and industry standards apply with respect to privacy, data security and data protection. For example, the European Union’s General Data Protection Regulation, or the EU GDPR, and the version thereof implemented into the laws of the United Kingdom, or the U.K. GDPR, impose strict requirements with respect to processing the personal data of individuals located within the European Economic Area, or the EEA, and the United Kingdom, or the U.K., respectively. 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. While these developments increase uncertainty with regard to data protection regulation in the U.K., even in their current, substantially similar form, the EU GDPR and U.K. GDPR can expose businesses to divergent parallel regimes that may be subject to different interpretations and enforcement actions for certain violations and related uncertainty. Under the EU GDPR, government regulators may impose temporary or definitive bans on data processing, as well as fines of up to 20 million euros or 4% of annual global revenue, whichever is greater (and the U.K. GDPR currently imposes comparable penalties). Furthermore, because both regimes allow for private rights of action, individuals in the EEA and the U.K. may initiate litigation related to our processing of their personal data.

In addition, many jurisdictions have enacted data localization laws and cross-border personal data transfer laws. These laws may make it more difficult for us to transfer personal data across jurisdictions, which could impede our business. For example, legal developments in the EEA have created complexity and uncertainty regarding processing and transfers of personal data from the EEA to the United States and other countries outside the EEA. Similar complexities and uncertainties also apply to transfers from the U.K. to third countries. For example, the EU, U.K. and Switzerland have agreed to a ‘Data Privacy Framework’ for transfers of personal data from Europe to the U.S which we rely on. For the time being, this provides a valid mechanism for the international transfer of personal data. Privacy activists have challenged, and are expected to continue to challenge, the adequacy of this transfer mechanism, and therefore we cannot guarantee that such mechanism will remain available to us indefinitely. 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. For example, on May 22, 2023, Ireland’s Data Protection Commission fined Meta Platforms Ireland Ltd. 1.2 billion euros for violating the EU GDPR’s data transfer requirements by unlawfully transferring the personal data of Facebook users from the EEA to the United States, and ordered Meta to suspend any future transfers of such personal data to the United States within five months and to stop further processing and storing of such personal data in the U.S. within six months, finding that Meta did not have adequate supplementary measures in place in addition to the SCCs. While Meta has appealed this decision, and it applies solely to Meta, it is possible that, as a result of such decision, if Braze is forced to rely on the SCCs for international transfers, that the supplementary measures we have implemented in addition to the SCCs will not be deemed adequate.

In addition to EU and U.K. restrictions on cross-border transfers of personal data, other jurisdictions have enacted or are considering similar cross-border personal data transfer laws and data localization laws, any of which could increase the cost and complexity of doing business in those jurisdictions. If we cannot implement a workable, valid compliance mechanism for cross-border transfers of personal data, we may face increased exposure to regulatory actions, substantial fines, and injunctions against processing or transferring personal data from the EEA or elsewhere. The inability to import personal data to the United States could significantly and negatively impact our business operations, including by limiting our ability to offer our full range of services in the EEA and elsewhere, limiting our ability to collaborate with parties that are subject to EU and other privacy, data security and data protection laws or requiring us to increase our personal data processing capabilities in the EEA and elsewhere at significant expense.

We enter into agreements with our customers regarding our collection, use, storage, transfer, sharing and other processing of personal data in relation to the services we provide to them. We also publish public privacy policies and make other public statements about our privacy, data security and data protection practices. Although we endeavor to comply with such agreements, policies and public statements, we may at times fail to do so or may be perceived to have failed to do so, including due to the errors or omissions of our personnel and third-party service providers and vendors. Such failures or perceived failures can subject us to customer lawsuits, termination of customer agreements and governmental enforcement actions. Even if we eventually prevail in any such dispute, resolving them could be expensive and time-consuming to defend and could result in adverse publicity and reputational harm that could adversely affect our business, financial condition and results of operations.

Our obligations related to privacy, data protection and data security are quickly changing in an increasingly stringent fashion. These obligations may be subject to differing applications and interpretations, which may be inconsistent or in conflict among jurisdictions. Preparing for and complying with these obligations requires us to devote significant resources (including,
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without limitation, financial and time-related resources). These obligations may necessitate changes to our information technologies, systems and practices and to those of any third parties that process personal data on our behalf. In addition, these obligations may require us to change our business model. Although we endeavor to comply with all applicable privacy, data security and data protection obligations, we may at times fail (or be perceived to have failed) to do so. Moreover, despite our efforts, our personnel or third parties upon whom we rely may fail to comply with such obligations which could impact our compliance posture. If we fail, or are perceived to have failed, to address or comply with privacy, data security and data protection obligations, we could face significant consequences. 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 of these events could have a material adverse effect on our reputation, business, or financial condition, including, but not limited to, loss of customers, interruptions or stoppages in our business operations, inability to process personal data or to operate in certain jurisdictions, limited ability to develop or commercialize our products, expenditure of time and resources to defend any claim or action, adverse publicity or revision or restructuring of our operations.

For more information on the privacy, data security and data protection laws and regulations to which we are or may become subject, see the section titled “Business – Privacy, Data Security and Data Protection” in our Annual Report.

If we or our third-party service providers or vendors experience a security breach or unauthorized third 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.

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. 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. In addition to traditional computer “hackers,” threat actors, personnel (such as through theft or misuse), sophisticated nation-states, and nation-state-supported actors now engage in cyberattacks, and nation-state actors may do so for geopolitical reasons and in conjunction with military conflicts and defense activities. 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. Additionally, our customers have been and may be in the future, targeted by similar cybersecurity threats, and bad actors have accessed, and may in the future, access our platform and services using such customer’s credentials. Accordingly, the failure of our customers to use appropriate cybersecurity technology and practices can result in unauthorized parties obtaining access to our platform and customer data. Ransomware attacks, including those perpetrated by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. Threat actors could also use artificial intelligence technology for malicious purposes, increasing the frequency and complexity of their attacks, e.g., phishing attacks, fraud, social engineering, and other possible malicious uses, such as with writing malware. Code, including code generated by generative artificial intelligence, could potentially be used and deployed that contains undetected vulnerable or malicious components. This could cause widespread deployment of vulnerable code within our systems. Any of the previously identified or similar threats could cause a security incident. We have also implemented a free trial program that may increase the number of users with access to our platform, and some of these users may include malicious actors who may attempt to breach our platform’s security. This may heighten the likelihood of us experiencing a cybersecurity incident. Additionally, the risk of these threats may increase for us and our third-party service providers and vendors due to ongoing international instability. In the past, nation-states have sponsored cyberattacks against private companies in response to U.S. governmental actions or for other strategic purposes. We cannot guarantee that similar actions will not occur in the future. A security incident could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to data. A security incident could disrupt our ability (and that of third parties upon whom we rely) to provide our platform.

We may expend significant resources or modify our business activities in an effort to protect against security incidents. Certain data privacy and security obligations require us to implement and maintain specific security measures, industry-standard or reasonable security measures to protect our information technology systems and data. While we have taken steps designed to protect the proprietary, regulated, sensitive, confidential and personal data in our control, our security measures or those of the third parties on which we rely may not be effective against current or future security risks and threats. Moreover,
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we or our third-party service providers or vendors may be more vulnerable to such attacks in remote work environments, which have increased in recent years and will likely continue into the foreseeable future.

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. 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. If we, our customers or a third party upon whom we rely experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences. 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. Security incidents and attendant consequences may cause customers to stop using our platform, deter new customers for using our platform and negatively impact our ability to grow and operate our business.

Risks Related to Other Laws and Litigation

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.

The future success of our business depends upon the continued use of smart cell phones, other mobile devices and internet-connected devices as primary mediums for commerce, communication and business applications. Government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the internet and internet-connected devices and cell phones as commercial mediums. Changes in these laws or regulations could require us to modify our platform in order to comply with these changes. 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, the use of the internet as a business tool could be adversely affected due to delays in the development or adoption of new standards and protocols to handle increased demands of internet activity, security, reliability, cost, ease of use, accessibility and quality of service. The performance of the internet and its acceptance as a business tool have been adversely affected by “viruses,” “worms” and similar malicious programs, along with distributed denial-of-service and similar attacks. As a result, the internet has experienced a variety of outages and other delays as a result of such damage to or attacks on portions of its infrastructure. If the use of the internet is adversely affected by these issues, demand for our platform could suffer.

Any future litigation against us could be costly and time-consuming to defend.

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. Litigation might result in substantial costs and may divert management’s attention and resources, which might seriously harm our business, financial condition and results of operations. Insurance might not cover 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. A claim brought against us that is uninsured or under-insured could result in unanticipated costs, and our business, financial condition and results of operations may be adversely affected.

If we fail to provide services that our customers can use in compliance with regulations and/or industry standards, our revenue and results of operations could be harmed.

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. Governments and industry organizations may also adopt new laws, regulations, rules, certifications, requirements or standards, or make changes to existing laws, regulations, rules, requirements or standards, that could impact the demand for, or value of, our platform. If we fail to maintain our current security certifications and/or to continue to meet security standards, or if we are unable to adapt our platform to changing legal and regulatory standards or other requirements in a timely manner, our customers may lose confidence in our platform, and our revenue, business, financial condition and results of operations could be adversely affected.

We are subject to anti-corruption, anti-bribery, anti-money laundering and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations.
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We are subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the U.K. Bribery Act of 2010, the U.K. Proceeds of Crime Act 2002 and other anti-corruption laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit our company from authorizing, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. We use third-party law firms, accountants and other representatives for regulatory compliance, sales and other purposes in several countries. We can be held liable for the corrupt or other illegal activities of these third-party representatives, our employees, contractors, partners and other agents, even if we do not explicitly authorize such activities. In addition, although we have implemented policies and procedures to ensure compliance with anti-corruption laws, our employees, representatives, contractors, partners and agents may not comply with these laws at all times.

Noncompliance with these laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage and other collateral consequences. If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, financial condition and results of operations could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. Enforcement actions and sanctions could further harm our business, financial condition and results of operations.

Moreover, as an issuer of securities, we also are subject to the accounting and internal controls provisions of the FCPA. These provisions require us to maintain accurate books and records and a system of internal controls sufficient to detect and prevent corrupt conduct. Failure to abide by these provisions may have an adverse effect on our business, financial condition or results of operations.

We are subject to governmental export and import controls that could impair our ability to compete in international markets and subject us to liability if we violate the controls.

Our platform is subject to U.S. export controls, including the Export Administration Regulations and economic sanctions administered by the U.S. Treasury Department’s Office of Foreign Assets Control. We incorporate encryption technology into our platform. These encryption products and the underlying technology are currently considered “publicly available” by the Export Administration Regulations and may be exported outside of the United States. However, if they cease to be considered “publicly available,” then these encryption products and underlying technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception or other appropriate government authorizations.

Furthermore, our activities are subject to U.S. economic sanctions laws and regulations that prohibit the shipment of certain products and services to countries, governments and persons targeted by U.S. embargoes or sanctions. Obtaining the necessary export license or other authorization for a particular sale may be time consuming and may result in the delay or loss of sales opportunities even if the export license ultimately may be granted. While we take precautions to prevent our platform from being exported in violation of these laws, including obtaining authorizations for our platform and performing geolocation IP blocking and screenings against United States and other lists of restricted and prohibited persons, we cannot guarantee that the precautions we take will prevent violations of export control and sanctions laws. Additionally, U.S. embargoes and sanctions can change rapidly and unpredictably in response to international events, such as the application of new and broad sanctions against Russia and Belarus in connection with the invasion of Ukraine. Future embargoes or sanctions could have a significant impact on our business or the business of our customers, either of which could have a material adverse effect on our financial results and operations. Violations of U.S. sanctions or export control laws can result in incarceration for responsible employees and managers or the imposition of significant fines or penalties.

If our partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected through reputational harm as well as other negative consequences, including government investigations and penalties. We presently incorporate export control compliance requirements into our strategic partner agreements, however, our partners may not comply with such requirements.

Various countries regulate the import and export of certain encryption and other technology, including import and export licensing requirements. Some countries have enacted laws that could limit our ability to distribute our platform or could limit our customers’ ability to implement our platform in those countries. Changes in our platform or future changes in export and import regulations may create delays in the introduction of our platform in international markets, prevent our customers with international operations from launching our platform globally or, in some cases, prevent the export or import of our platform to certain countries, governments or persons altogether. Various governmental agencies have proposed additional regulation of encryption technology, including the escrow and government recovery of private encryption keys. Any change in export or import regulations, economic sanctions or related legislation, or change in the countries, governments, persons or technologies
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targeted by such regulations, could limit our ability to export or sell our platform to existing or potential customers with international operations. Any decreased use of our platform or limitation on our ability to export or sell our platform would adversely affect our business, results of operations and prospects.

Our international operations may subject us to potential adverse tax consequences.

We are expanding our international operations and staff to better support our growth into international markets. Our corporate structure and associated transfer pricing policies contemplate future growth into the international markets, and consider the functions, risks and assets of the various entities involved in the intercompany transactions. The amount of taxes we pay in different jurisdictions may depend on (1) the application of the tax laws of the various jurisdictions, including the United States, to our international business activities, (2) changes in tax rates, (3) new or revised tax laws or interpretations of existing tax laws and policies and (4) our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. Taxing authorities may challenge the pricing methodologies of our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were to occur and our position were not sustained, we could be required to pay additional taxes, interest and penalties. This could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

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. Under current law, U.S. federal NOLs incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of federal NOLs is limited to 80% of taxable income in tax years beginning after December 31, 2020. 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. 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. We have experienced ownership changes in the past and we may experience a future ownership change under Section 382 of the Code that could affect our ability to utilize the NOLs to offset our income, some of which may be outside of our control. Furthermore, our ability to utilize NOLs of companies that we have acquired or may acquire in the future may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheets, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our business, financial condition and results of operations.

Changes in our effective tax rate or tax liability may have an adverse effect on our results of operations.

Our effective tax rate could increase due to several factors, including:

changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;
expansion to new jurisdictions;
changes in tax laws, tax treaties and regulations or the interpretation of them;
changes in our assessment of our ability to realize our deferred tax assets that are based on estimates of our future results, the advisability and feasibility of possible tax planning strategies and the economic and political environments in which we do business;
the outcome of future tax audits, examinations or administrative appeals; and
limitations or adverse findings regarding our ability to do business in some jurisdictions.

Any of these developments could adversely affect our business, financial condition and results of operations.

We could be required to collect additional sales taxes or be subject to other tax liabilities that may increase the costs our customers would have to pay for our products and adversely affect our results of operations.

An increasing number of states have considered or adopted laws that attempt to impose tax collection obligations on out-of-state companies. Additionally, the Supreme Court of the United States ruled in 2018 in South Dakota v. Wayfair, Inc. et al, or Wayfair, that online sellers can be required to collect sales and use tax despite not having a physical presence in the buyer’s
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state. In response to Wayfair, or otherwise, state or local governments have adopted and may continue to adopt, or begin to enforce, laws requiring us to calculate, collect and remit taxes on sales in their jurisdictions. In addition, we are subject to indirect taxes in foreign jurisdictions, such as value-added tax and goods and services tax, in connection with certain foreign sales transactions. A successful assertion by one or more tax authorities requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently do collect some taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest that we otherwise have not accounted for in our financial statements. The imposition by tax authorities of indirect tax collection obligations on out-of-jurisdiction sellers also could create additional administrative burdens for us, put us at a competitive disadvantage if similar obligations are not imposed on our competitors and decrease our future sales, which could adversely affect our business, financial condition and results of operations.

Risks Related to Intellectual Property

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.

Our platform incorporates certain third-party software obtained under licenses from third parties. We anticipate that we will continue to rely on such third-party software and development tools from third parties in the future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, including open-source software, this may not always be the case, or it may be difficult or costly to migrate to other third-party software. Our use of additional or alternative third-party software may require us to enter into new license agreements with third parties, which may not be available on as favorable terms as our current licenses. In addition, integration of the third-party software used in our software with new third-party software may require significant work and require substantial investment of our time and resources, or require downtime affecting our service level commitments. Also, any undetected errors, defects or security vulnerabilities in third-party software could prevent the deployment or impair the functionality of our software, delay new updates or enhancements to our platform, result in a failure of our platform and injure our reputation.

We use open-source software in our products, which could negatively affect our ability to sell our services or subject us to litigation or other actions.

We use open-source software in our products, and we expect to continue to incorporate open-source software in our services in the future. Few of the licenses applicable to open-source software have been interpreted by courts, and there is a risk that these licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our products or to maintain the confidentiality of our proprietary source code. Moreover, we may encounter instances in which we have incorporated additional open-source software in our proprietary software in a manner that is inconsistent with the terms of the applicable license or our current policies and procedures. While we have adopted guidelines for the appropriate use of, and regularly audit our use of, open-source software, these measures may not always be effective. If we were to combine or link our proprietary software products with open-source software in a certain manner, we could, under certain open-source licenses, be required to release the source code of our proprietary software products and allow others to use it at no cost. If an author or other third party that distributes such open-source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our products that contained the open-source software and required to comply with onerous conditions or restrictions on these products, which could disrupt the distribution and sale of these products or put our proprietary source code at risk.

From time to time, there have been claims challenging the ownership rights in open-source software against companies that incorporate it into their products and the licensors of such open-source software provide no warranties or indemnities with respect to such claims. As a result, we and our customers could be subject to lawsuits by parties claiming ownership of what we believe to be open-source software. Litigation could be costly for us to defend, have a negative effect on our business, financial condition and results of operations, or require us to devote additional research and development resources to change our products. Some open-source projects have known vulnerabilities and architectural instabilities and are provided on an “as-is” basis which, if not properly addressed, could negatively affect the performance of our product. If we inappropriately use or incorporate open-source software subject to certain types of open-source licenses that challenge the proprietary nature of our products, we may be required to re-engineer such products, discontinue the sale of such products or take other remedial actions.

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. To safeguard these rights, we rely on a combination of patent, trademark, copyright and trade secret laws and
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contractual protections, all of which provide only limited protection and may not now or in the future provide us with a competitive advantage.

As of October 31, 2024, we owned 26 granted patents related to our platform and its technology and had 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. Any patents that issue from any patent applications may not give us the protection that we seek or may be challenged, invalidated or circumvented. Any patents that may issue in the future from our pending or future patent applications may not provide sufficiently broad protection and may not be valid and enforceable in actions against alleged infringers or provide us with a competitive advantage. Any patents we have obtained or may obtain in the future may be found to be invalid or unenforceable in light of recent and future changes in the law, or because of technology developed prior to the inventions we have sought to patent or because of defects in our patent prosecution process. The United States Patent and Trademark Office, or the USPTO, and various foreign governmental patent agencies also require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and after a patent has issued. There are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

We have registered the “Braze” name, logo, and/or other marks as trademarks in Australia, Canada, the EU, Japan, New Zealand, Singapore, Tonga, the United Kingdom, and the United States. However, any pending or future trademark applications may not be approved, and any registered trademarks may not be enforceable or provide adequate protection of our proprietary rights. The USPTO and various foreign trademark offices also require compliance with a number of procedural, documentary, fee payment and other similar provisions during the trademark registration process and after a registration has issued. There are situations in which noncompliance can result in abandonment or cancellation of a trademark filing, resulting in partial or complete loss of trademark rights in the relevant jurisdiction. If this occurs, our competitors might be able to enter the market under identical or similar brands or we may be forced to abandon marks that we currently rely on.

In order to protect our proprietary technologies and processes, we also rely on trade secret laws and confidentiality and invention assignment agreements with our employees, consultants, strategic partners, vendors and others. Also, despite our efforts to protect our proprietary technology and trade secrets, unauthorized parties may attempt to misappropriate, copy, reverse engineer or otherwise obtain and use them. 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. Moreover, policing unauthorized use of our technologies, trade secrets and intellectual property is difficult, expensive and time-consuming, particularly in countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. For instance, in response to U.S. sanctions, the Russian government has adopted a decree which allows local companies and individuals to use inventions, utility models and industrial designs held by owners from “unfriendly countries” without the owner’s consent and without paying any compensation. If similar policies or laws are adopted in other jurisdictions, it may be difficult for us to enforce our intellectual property rights internationally and subject us to material risk of unauthorized use of our technologies, trade secrets and intellectual property. As we expand our activities outside of the United States, our exposure to unauthorized copying and use of our platform and proprietary information may increase. We may be unable to determine the extent of any unauthorized use or infringement of our platform, technologies or intellectual property rights.

The steps that we take may not be adequate to protect our proprietary technology and intellectual property, others may develop or patent similar or superior technologies, products or services, or our trademarks, patents and other intellectual property may be challenged, invalidated or circumvented by others. Furthermore, effective trademark, patent, copyright and trade secret protection may not be available or commercially feasible in every country in which our software is available or where we have employees or independent contractors.

In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Our failure to secure, protect and enforce our intellectual property rights could materially adversely affect our brand and business. An adverse determination of any litigation proceedings could put our intellectual property at risk of being invalidated or interpreted narrowly and could put our related patents, patent applications and trademark filings at risk of not issuing or being cancelled. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, some of our confidential or sensitive information could be compromised by disclosure in the event of litigation. 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
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technologies into our platform or injure our reputation. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. If we fail to meaningfully protect our intellectual property and proprietary rights, our business, financial condition and results of operations could be adversely affected.

We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.

We cannot guarantee that the operation of our business does not infringe the intellectual property rights of third parties. Companies in the software and technology industries, including some of our current and potential competitors, own significant numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. In addition, many of these companies have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. Further, patent litigation may involve patent holding companies, commonly known as patent “trolls,” or other adverse patent owners that have no relevant product revenue and against which our patents may therefore provide little or no deterrence. In the past, we have been subject to allegations of patent infringement that were unsuccessful, and we may in the future be subject to claims that we have misappropriated, misused, or infringed other parties’ intellectual property rights, and, to the extent we gain greater market visibility or face increasing competition, we face a higher risk of being the subject of intellectual property infringement claims, which is not uncommon with respect to enterprise software companies. In addition, we may in the future be subject to claims that employees or contractors, or we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of our competitors or other parties. Because patent applications can take years to issue and are often afforded confidentiality for some period of time, there may currently be pending applications, unknown to us, that later result in issued patents that could cover one or more of our products. To the extent that intellectual property claims are made against our customers based on their usage of our technology, we have certain obligations to indemnify and defend such customers from those claims. The term of our contractual indemnity provisions often survives termination or expiration of the applicable agreement. 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. These claims could also subject us to making substantial payments for legal fees, settlement payments and other costs or damages, potentially including treble damages if we are found to have willfully infringed patents or copyrights. Intellectual property claims could also result in our having to stop making, selling, offering for sale or using technology found to be in violation of a third party’s rights. We might be required to seek a license for the third-party intellectual property rights, which may not be available on reasonable terms or at all. Even if a license is available to us, we may be required to pay significant upfront fees, milestone payments or royalties, which would increase our operating expenses. Moreover, to the extent we only have a license to any intellectual property used in our platform, there may be no guarantee of continued access to such intellectual property, including on reasonable terms. As a result, we may be required to develop alternative non-infringing technology, which could require significant effort and expense. If a third party is able to obtain an injunction preventing us from accessing such third-party intellectual property rights, or if we cannot license or develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of our products or cease business activities covered by such intellectual property and may be unable to compete effectively. Any of these results would adversely affect our business, financial condition and results of operations.

We could face liability, or our reputation might be harmed, as a result of the activities of our customers, the content sent through our platform or the data they store on our servers.

As a provider of cloud-based solutions, we may be subject to potential liability for the activities of our customers on or in connection with the content or data they store on or send through our servers. Although our customer terms of use and our acceptable use policy, or AUP, prohibit (1) illegal use of our services by our customers, (2) the use of our services for certain activities that do not comply with industry standards and guidelines outlined in our AUP, or (3) the use of our services in any manner that would infringe, misappropriate or otherwise violate the intellectual property rights of third parties, customers may nonetheless engage in prohibited activities or upload or store content with us in violation of our agreement, our AUP, applicable law or the customer’s own policies, which could subject us to liability and/or harm our reputation.

We do not typically monitor the content, activities or messages of our customers in connection with their use of our services, so inappropriate content may be sent to third parties, which could subject us to legal liability. Even if we comply with legal obligations to remove or disable certain content, our customers may continue to send messages through our platform that third parties may find hostile, offensive or inappropriate. 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. For instance, if our customers use our platform in violation of law it may subject us to increased regulatory scrutiny or direct financial penalties, either of which may have an adverse effect on our reputation and financial results, even if we have
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complied with our legal obligations. Conversely, actions we take in response to the activities of our customers or users, up to and including suspending their use of our products or services, may harm our brand and reputation.

There are certain statutory and common law frameworks and doctrines that offer defenses against liability for customer activities, including the Digital Millennium Copyright Act, the Communications Decency Act and the fair use doctrine in the United States and the Electronic Commerce Directive in the European Union. Although these and other statutes and case law in the United States offer certain defenses against liability from customer activities under U.S. copyright law or regarding secondary liability from the Telephone Consumer Protection Act or the Controlling the Assault of Non-Solicited Pornography and Marketing Act, they are subject to uncertain or evolving judicial interpretation and regulatory and legislative amendments, and in any event we cannot assure you that we will be successful in asserting them. In addition, pending or recently adopted legislation in the European Union may impose additional obligations or liability on us associated with content uploaded by users to our platform. Laws governing these activities are unsettled in many international jurisdictions, or may prove difficult or impossible for us to comply with in some international jurisdictions. Even if ultimately resolved in our favor, we may become involved in related complaints, lawsuits or investigations which add cost to our doing business and may divert management’s time and attention or otherwise harm our reputation.

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.

We have incorporated and may continue to incorporate AI and machine learning solutions and features, including generative AI solutions and features, into our platform, and otherwise within our business, and these solutions and features may become more important to our operations or to our future growth over time. There can be no assurance that the use of AI and machine learning solutions and features will enhance our products or services, produce the intended results, or be beneficial to our business, including our efficiency or profitability, and we may fail to properly implement or market our AI and machine learning solutions and features. Our competitors or other third parties may incorporate AI and machine learning tools into their products, offerings, and solutions more quickly or more successfully than we do, which could impair our ability to compete effectively, and adversely affect our results of operations.

Additionally, our AI and machine learning solutions and features may expose us to additional claims, demands, and proceedings by private parties and regulatory authorities and subject us to legal liability as well as brand and reputational harm. There are significant risks involved in utilizing AI and machine learning technologies, and in particular, generative AI technologies. For example, AI and machine learning algorithms may be flawed, insufficient, or of poor quality, reflect unwanted forms of bias, or contain other errors or inadequacies, any of which may not easily be detectable. AI and machine learning technologies have also been known to produce false or “hallucinatory” inferences or outputs. Further, inappropriate or controversial data practices by developers and end-users, or other factors adversely affecting public opinion regarding the use of AI and machine learning, could impair the acceptance of AI and machine learning solutions, including those incorporated into our products and services. If the AI and machine learning tools incorporated into our platform, or the content generated by such tools, is harmful, biased, inaccurate, discriminatory or controversial, we could suffer operational efficiencies in addition to legal, competitive and reputational harm, and our customers may be less likely to utilize our AI and machine learning tools or may cease using our platform altogether. If we do not have sufficient rights to use the output of such AI and machine learning tools, or the data or other material or content on which the AI and machine learning tools we use rely, we also may incur liability through the violation of applicable laws and regulations, third-party intellectual property, privacy or other rights, or contracts to which we are a party.

In addition, we are subject to the risks of new or enhanced governmental or regulatory scrutiny, litigation, or other legal liability, ethical concerns, negative consumer perceptions as to automation and AI and machine learning technologies, any of which could adversely affect our business, reputation, or financial results. The technologies underlying AI and machine learning and their uses are subject to a variety of laws and regulations related to online services, intermediary liability, intellectual property rights, privacy, data security and data protection, consumer protection, competition and equal opportunity laws, and are expected to be subject to increased regulation and new laws or new applications of existing laws and regulations. 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. Additionally, various federal, state and foreign governments and regulators have implemented, or are considering implementing, general legal and regulatory frameworks for the appropriate use of AI and machine learning, such as the EU AI Act which entered into force on August 1, 2024. As the legal, regulatory, and policy environments around AI and machine learning evolve, we may become subject to new legal and regulatory obligations in connection with our use of AI and machine learning technology, which could require us to make significant changes to our policies and practices, necessitating expenditure of significant time, expense, and other resources. 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. Accordingly, it is not possible to predict all of the risks related to the use of AI and machine
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learning solutions that we may face, and changes in laws, rules, directives, and regulations governing the use of AI and machine learning solutions may adversely affect our ability to use or sell these solutions or subject us to legal liability.

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.

In response to the COVID-19 pandemic, governments previously instituted shelter-in-place orders, social distancing requirements, travel restrictions and similar measures to slow infection rates. These restrictions prompted shifts from physical commerce to e-commerce, from in-room dining to take out and delivery, from gyms to at home health and fitness and from the theaters to in-home media streaming services. 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. 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.

We rely heavily on our network infrastructure and information technology systems for our business operations. An online attack, damage as a result of civil unrest, earthquake, fire, terrorist attack, power loss, global pandemics, telecommunications failures, climate change-related events or other similar catastrophic event could cause system interruptions, delays in accessing our service, reputational harm and loss of critical data. Such events could prevent us from providing our platform and products to our customers. 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. In addition, many companies that provide cloud-based services have reported a significant increase in cyberattack activity in recent years. Further, events outside of our control, including natural disasters, climate change-related events, pandemics or health crises may arise from time to time and be accompanied by governmental actions. Any such events and responses, including regulatory developments, may cause significant volatility and declines in the global markets, disproportionate impacts to certain industries or sectors, disruptions to commerce (including to economic activity, travel and supply chains), loss of life and property damage, and may materially and adversely affect the global economy or capital markets, as well as our business and results of operations.

Risks Related to Public Company Reporting and Public Disclosure Practices

We are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our Class A common stock.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting on an annual basis. This assessment must include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. In addition, our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting. Our compliance with Section 404 of the Sarbanes-Oxley Act requires that we incur substantial expenses and expend significant management efforts. We have hired, and need to continue to hire, additional accounting and financial staff with appropriate public company experience and technical accounting knowledge to comply with Section 404 of the Sarbanes-Oxley Act.

During the evaluation and testing process of our internal controls in future years, if we identify one or more material weaknesses in our internal control over financial reporting, we may be unable to certify that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our Class A common stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
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We are subject to risks related to our environmental, social, and governance practices and disclosures.

There is an increasing focus from regulators, certain investors and other stakeholders concerning environmental, social, and governance, or ESG, matters, both in the United States and internationally. Often those stakeholders have differing, and sometimes conflicting, priorities or requirements regarding ESG matters. The heightened and sometimes conflicting stakeholder focus on ESG issues related to our business requires the continuous monitoring of various and evolving laws, regulations, standards and expectations and the associated reporting requirements. Our interpretation or application of such reporting requirements may change over time or differ from other similarly situated companies. Certain organizations also provide ESG ratings, scores and benchmarking studies that assess companies’ ESG practices. Although there are no universal standards for such ratings, scores or benchmarking studies, they are used by some investors to inform their investment and voting decisions. It is possible that our future shareholders or organizations that report on, rate or score ESG practices will not be satisfied with our ESG strategy or performance. Unfavorable or inaccurate press about ratings or assessments of our ESG strategies or practices, regardless of whether or not we comply with applicable legal requirements, may lead to adverse investor sentiment toward us, which in turn could have an adverse impact on our share price, demand for our securities and our access to, and cost of, capital.

In addition, any of our current or future social impact practices and initiatives could be difficult to achieve and costly to implement. In the event that we publicly disclose, voluntarily or otherwise, certain practices and initiatives regarding ESG matters, we could fail, or be perceived to fail, in our achievement of such practices or initiatives, or we could be criticized for the scope of such practices or initiatives, which could negatively impact our ability to attract or retain employees or customers or reduce the attractiveness of our stock in the investment community. There has also been a recent increase in litigation surrounding ESG practices and related disclosures. For example, there is increased focus by regulators, investors and other stakeholders on greenwashing and sustainability-related claims. There can be no assurance that we will not be subject to allegations or claims associated with our sustainability-related claims or other ESG practices and initiatives.

Risks Related to Ownership of Our Class A Common Stock

We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our Class A common stock.

We have never declared or paid any cash dividends on our Class A or Class B common stock and we do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors and governed by the limitations of any credit agreements we may become party to. Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

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.

Our Class B common stock has ten votes per share and our Class A common stock, which is the stock listed on the Nasdaq Global Select Market, has one vote per share. As a result, as of October 31, 2024, holders of our Class B common stock collectively beneficially owned, in the aggregate, shares representing approximately 71.1% 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 75.8% of the total voting power of our outstanding capital stock. As a result, the holders of our Class B common stock, and in particular our executive officers, directors and holders of 5% or more of our common stock (by voting power), will be able to exercise considerable influence over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or our assets, even if their stock holdings represent less than 50% of the outstanding shares of our capital stock. This concentration of ownership will limit the ability of other stockholders to influence corporate matters and may cause us to make strategic decisions that could involve risks to holders of our Class A common stock or that may not be aligned with the interests of holders of our Class A common stock. This control may adversely affect the market price of our Class A common stock.

Further, future transfers by holders of our Class B common stock will generally result in those shares converting into shares of our Class A common stock, subject to limited exceptions, such as certain transfers effected for tax or estate planning purposes. The conversion of shares of our Class B common stock into shares of our Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term.

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We cannot predict the impact our dual class structure may have on the market price of our Class A common stock.

We cannot predict whether our dual class structure, combined with the concentrated control of certain stockholders, including our executive officers, employees and directors, investors and their affiliates, will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple class share structures in certain of their indexes, and our dual class capital structure may make it more difficult for us, or make us ineligible, to be included in certain stock indexes. Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.

An active public trading market for our Class A common stock may not develop or be sustained.

Prior to the closing of our initial public offering, no public market for our Class A common stock existed. An active public trading market for our Class A common stock may not continue to develop or, if further developed, it may not be sustained. The lack of an active market may impair the ability of holders of our Class A common stock to sell their shares at the time they wish to sell them or at a price that the holders of our Class A common stock consider reasonable. The lack of an active market may also reduce the fair value of shares of our Class A common stock. An 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.

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.

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. Such amended and restated certificate of incorporation and amended and restated bylaws include provisions that:

authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our board of directors that may be senior to our Class A common stock;
require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;
specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors or our chief executive officer;
establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;
establish that our board of directors is divided into three classes, with each class serving three-year staggered terms;
prohibit cumulative voting in the election of directors;
provide that our directors may be removed for cause only upon the vote of at least 66 2/3% of our outstanding shares of voting stock;
provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and
require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of voting stock to amend our bylaws and certain provisions of our certificate of incorporation.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our Class A common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that holders of our Class A common stock would receive a premium for their shares of our Class A common stock in an acquisition.

The provision of our amended and restated certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.

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Our amended and restated certificate of incorporation as currently in effect provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware be the sole and exclusive forum for:

any derivative claim or cause of action brought on our behalf;
any claim or cause of action asserting a breach of fiduciary duty;
any claim or cause of action against us arising under the DGCL;
any claim or cause of action arising under or seeking to interpret our amended and restated certificate of incorporation or our amended and restated bylaws; and
any claim or cause of action against us that is governed by the internal affairs doctrine.

Our amended and restated certificate of incorporation as currently in effect further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolutions of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the Securities Act, including all causes of action asserted against any defendant named in such complaint. The exclusive forum clauses described above shall not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying any offering.

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. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and there is uncertainty as to whether a court would enforce such provisions. In addition, investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. 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. If so, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition and results of operations.

Future sales of our Class A common stock in the public market could cause the market price of our Class A common stock to decline.

Future sales of a substantial number of shares of our Class A common stock in the public market, or the perception that these sales might occur, could depress the market price of our Class A common stock and could impair our ability to raise capital through the sale of additional equity securities. Many of our existing equity holders have substantial unrecognized gains on the value of the equity they hold, and therefore they may take steps to sell their shares or otherwise secure the unrecognized gains on those shares. We are unable to predict the effect that such sales may have on the prevailing market price of our Class A common stock.

We have registered all of our common stock issuable upon exercise of outstanding stock options, settlement of outstanding restricted stock units, or RSUs, or otherwise issuable pursuant to the terms of the purchase rights under our employee stock purchase plan or any equity incentives we may grant in the future, for public resale under the Securities Act. Such underlying common stock will become eligible for sale in the public market to the extent such options or purchase rights are exercised or RSUs are settled, subject to compliance with applicable securities laws.

Further, the holders of Class A and Class B common stock issued in connection with the conversion of our previously outstanding convertible preferred stock immediately prior to the completion of our initial public offering have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

General Risk Factors

The price of our Class A common stock may be volatile, and you may lose some or all of your investment.

The market price of our Class A common stock may be highly volatile and may fluctuate substantially as a result of a variety of 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;
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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.

Accordingly, we cannot assure you of the liquidity of an active trading market, your ability to sell your shares of our Class A common stock when desired, or the prices that you may obtain for your shares of our Class A common stock. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair value of your shares. An 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.

The stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Additionally, the recent and acute volatility among certain financial institutions have raised questions regarding the stability of the banking sector and, while such volatility has not adversely affected our operations, it has had an adverse impact on the equity and credit markets. Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may negatively impact the market price of our Class A common stock. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial costs and divert our management’s attention.

Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other stockholders.

We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors and consultants under our equity incentive plans and purchase rights to our employees under our employee stock purchase plan. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in companies, products, services or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our Class A common stock to decline.

If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our share price and trading volume could decline.

The trading market for our Class A common stock depends, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. Our business results may vary significantly from such analyst estimates or any analyst consensus due to a number of factors, many of which are outside of our control, including due to the global economic uncertainty and financial market conditions, including as a result of global or domestic 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, that impact us and our customers, which could adversely affect our business, financial condition and results of operations. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities

The following sets forth information regarding all of our unregistered securities sold in the fiscal quarter ended October 31, 2024:
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On August 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.
Use of Proceeds

Not applicable.
Item 3.    Defaults Upon Senior Securities

Not applicable.
Item 4.    Mine Safety Disclosures

Not applicable.

Item 5.    Other Information

(a)

On December 9, 2024, the Company’s board of directors amended and restated the bylaws of the Company, effective as of the date of adoption (the “Amended Bylaws”), in connection with the Company’s periodic review of its bylaws. The Amended Bylaws, among other things, amended the prior bylaws to clarify the notice and information to be delivered to the Company and other procedures to be followed by a stockholder wishing to nominate persons for election to the board of directors or to propose other business at a meeting of stockholders, including that:

the number of nominees a stockholder may nominate for election at a meeting of stockholders on its own behalf (or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at a meeting of stockholders on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such annual meeting;

the stockholder’s notice for any such director nominee shall include, among other additional matters:
any questionnaire, representation and agreement otherwise required under the terms of the Amended Bylaws and signed by such nominee, and
a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such nominee proponents on the one hand, and each such proposed nominee and his or her respective affiliates and associates on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 promulgated under Regulation S-K under the Exchange Act if the stockholder making the nomination or any such proponents were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant;

the stockholder notice for any proposal of other business shall include all other information relating to such business or proposal as would be required to be disclosed in a proxy statement soliciting proxies in support of such business or proposal or that is otherwise required to be disclosed pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;

the stockholder’s notice for any director nominee or proposal for other business shall include, among other additional matters:
a representation whether any proponent or any other participant (as defined in Item 4 of Schedule 14A under the Exchange Act) will engage in a solicitation with respect to such nomination or proposal and, if so, the name of each participant in such solicitation and the amount of the cost of solicitation that has been and will be borne, directly or indirectly, by each participant in such solicitation, and a representation as to whether the proponents intend (x) to deliver, or make available, a proxy statement and form of proxy to holders of a sufficient number of the corporation’s voting shares to adopt such proposal, (y) to otherwise solicit proxies or votes from stockholders in support of such proposal or nomination and/or (z) to solicit proxies in support of any proposed nominee in accordance with Rule 14a-19 promulgated under the Exchange Act;
a certification regarding whether each proponent has complied with all applicable federal, state and other legal requirements in connection with such proponent’s acquisition of shares of capital stock or other
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securities of the Company and/or such proponent’s acts or omissions as a stockholder or beneficial owner of the Company; and
any other information relating to each proponent required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;

to be eligible to be a nominee for election or re-election as a director of the Company, each proponent of such nominee must deliver to the Company a written questionnaire with respect to the background, qualifications, stock ownership and independence of such proposed nominee and the background of any other person or entity on whose behalf the nomination is being made (in the form provided by the Secretary of the Company within 10 days following a written request therefor by a stockholder of record) and a written representation and agreement (in the form provided by the Secretary of the Company within 10 days following written request therefor by a stockholder of record) that such person:
is not and will not become a party to any agreement, arrangement or understanding (whether oral or in writing) with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Company, will act or vote on any issue or question that (x) has not been disclosed to the Company in the questionnaire or (y) could limit or interfere with such person’s ability to comply, if elected as a director of the Company, with such person’s fiduciary duties under applicable law;
is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director of the Company or a nominee therefor that has not been disclosed to the Company in such questionnaire;
would be in compliance, if elected as a director of the Company, and a statement whether or not such person intends, if elected, to comply, with, all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Company; and
if elected as a director of the Company, intends to serve the entire term until the next meeting at which such candidate would face re-election; and

if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting of stockholders to present a nomination or proposed business, such nomination shall be disregarded (and such nominee disqualified from standing for election or re-election) and such proposed business shall not be transacted, notwithstanding that such nomination or proposed business is set forth in (as applicable) the Company’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such vote may have been solicited or received by the Company.

In addition, the Amended Bylaws implemented technical and administrative changes to the prior bylaws, including changes related to and consistent with the foregoing amendments and to address recent changes in Delaware law.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the complete text of the Amended Bylaws, a copy of which is attached hereto as Exhibit 3.2 and incorporated herein by this reference.

(b)

On September 25, 2024, Jonathan Hyman, our Chief Technology Officer, terminated a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The trading plan was previously adopted on December 29, 2023 and provided for the sale of, in the aggregate, up to 217,000 shares of our Class A common stock, subject to the satisfaction of specified price conditions.
Item 6.    Exhibits
The documents listed in the Exhibit Index of this Quarterly Report on Form 10-Q are incorporated by reference or are filed with this Quarterly Report on Form 10-Q, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

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EXHIBIT INDEX
Incorporated by Reference
Exhibit Number
Description
Form
File No.
Exhibit
Filing Date
3.1
8-K
001-41065
3.1November 23, 2021
3.2+
31.1+
31.2+
32.1*+
101.INS+
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH+
Inline XBRL Taxonomy Extension Schema Document
101.CAL+
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF+
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB+
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE+
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104+
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*    The certifications attached as Exhibit 32 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Braze, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
+    Indicates an Exhibit filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Braze, Inc.
By:/s/ William Magnuson
William Magnuson
Chief Executive Officer
(Principal Executive Officer)
Date: December 9, 2024
By:/s/ Isabelle Winkles
Isabelle Winkles
Chief Financial Officer
(Principal Financial Officer)
Date: December 9, 2024
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