What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-04-01 compared with 2023-03-31 · 269 added, 213 removed, 925 unchanged (34% of the section changed)

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 30, 2023 expressed an adverse opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 1, 2024 expressed an unqualified opinion thereon.

Adoption of ASU No.

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases in 2023 due to the adoption of Accounting Standards Update (ASU) No.

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases effective February 1, 2022 due to the adoption of Accounting Standards Update (ASU) No.

2016-02, Leases and associated amendments (Topic 842) using the modified retrospective method.

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Timing and measurement of Revenue Recognition

Revenue Recognition

Description of the Matter As of January 31, 2024, the Company recorded revenue and unearned revenue of $471.8 million and $204.3 million, respectively.

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The Company’s revenue contracts include contractual terms and conditions that can impact the amount allocated to each of its performance obligations and the timing of revenue recognition.

Auditing the timing and measurement of the Company's revenue recognition was especially challenging due to the assessment of any potential unique terms and contract modifications.

This involved assessing the contractual terms and conditions of both new and modified contracts to determine the contract period and identifying all performance obligations.

In addition, as described in Management’s Report on Internal Control Over Financial Reporting, the Company identified a material weakness in their internal control over financial reporting associated with the revenue process including the ITGC’s of the related systems, which required significant changes to the extent of effort in the performance of our procedures.

How We Addressed the Matter in Our Audit We performed audit procedures that included, among others, reading a sample of revenue contracts, including modifications, to evaluate the contractual terms and conditions.

Auditing the timing of recognition and the measurement of the Company's revenue was especially challenging and complex due to the high volume of transactions that are dependent on the design and operation of multiple applications and data sources for processing transactions as well as the complexity of the information technology (IT) environment and the involvement of professionals with expertise in IT to identify, test, and evaluate the revenue data flows, systems, and automated controls.

How We Addressed the Matter in Our Audit We tested controls that address the risks of material misstatement relating to the timing of recognition and the measurement of revenue and unearned revenue.

For example, we tested controls over the initiation of new and recurring revenue contracts, management’s review of customer provisioning, management’s review of data reconciling revenue recognition to delivery, the reconciliation of revenue and unearned revenue, and the assumptions used within the Company’s analysis of standalone selling price.

We also tested the design and operating effectiveness of IT general controls for systems relevant to the revenue recognition process.

We performed audit procedures that included, among others, testing completeness and, on a sample basis, accuracy of the underlying data within the Company’s billing and revenue recognition systems, reading a sample of revenue contracts, including modifications, evaluating the contractual terms and conditions, and testing a sample of cash to billings.

Our procedures included assessing the performance obligations and the related allocation of transaction price.

In addition, for the selected new contracts and modifications we tested the timing of revenue recognized and unearned revenue recorded as of year-end.

In response to the material weakness, we performed incremental audit procedures, for instance we increased the extent of testing on reports derived from the Company's systems and applications.

We tested the revenue recognized and unearned revenue as of year-end through analytical procedures, including revenue recognized on a disaggregated basis.

We tested the revenue recognized and unearned revenue as of year-end by extracting data from the general ledger to evaluate the completeness and accuracy of recorded revenue and deferred revenue amounts and through analytical procedures, including revenue recognized on a monthly basis compared to prior periods.

Finally, we assessed the appropriateness of the related disclosures in the consolidated financial statements.

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We have served as the Company’s auditor since 2019.

March 30, 2023

April 1, 2024

Report of Independent Registered Public Accounting Firm

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We have audited Braze, Inc.’s internal control over financial reporting as of January 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria).

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Braze Inc.

(the Company) has not maintained effective internal control over financial reporting as of January 31, 2023, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness related to the Company’s revenue recognition processes.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2023 consolidated financial statements of the Company as of January 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, convertible preferred stock, redeemable non-controlling interest and stockholders’ equity (deficit), and cash flows for each of the three years in the period ended January 31, 2023, and the related notes.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and this report does not affect our report dated March 30, 2023, which expressed an unqualified opinion thereon.

In our opinion, Braze, Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2024, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Braze Australia, which is included in the 2024 consolidated financial statements of the Company and constituted 1% of total assets, as of January 31, 2024 and 6% of total revenues, for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Braze Australia.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, convertible preferred stock, redeemable non-controlling interest and stockholders’ equity (deficit), and cash flows for each of the three years in the period ended January 31, 2024, and the related notes and our report dated April 1, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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/s/ Ernst & Young LLP

March 30, 2023

April 1, 2024

CONSOLIDATED BALANCE SHEETS

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Cash and cash equivalents $ 68,228 $ 68,587

Restricted cash, current 3,373 —

Accounts receivable, net of allowance of $ 2,772 and $ 1,613 at January 31, 2024 and January 31, 2023, respectively

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Deferred contract costs 63,661 48,451

Goodwill 28,448 —

Intangible assets, net 3,690 500

Other assets 2,970 2,648

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Other income (expense), net

16,220 7,977 ( 121 )

Loss before provision for income taxes ( 128,472 ) ( 140,163 ) ( 78,332 )

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Change in foreign currency translation adjustments 230 ( 633 ) ( 534 )

Unrealized losses on marketable securities ( 5,551 ) ( 64 ) ( 50 )

Other comprehensive loss, net ( 6,184 ) ( 598 ) ( 76 )

Unrealized gains (losses) on marketable securities 5,416 ( 5,551 ) ( 64 )

Other comprehensive income (loss), net 5,646 ( 6,184 ) ( 598 )

Comprehensive loss, net ( 124,783 ) ( 146,930 ) ( 78,765 )

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Issuance of common stock for options exercised — — — 2,856 2 — — 8,164 — — 8,166

Vesting of early exercised options — — — — — — — 263 — — 263

Repurchase of shares related to early exercised options — — — — — ( 5 ) — ( 10 ) — — ( 10 )

Repurchase of common shares — — — — — ( 11 ) — ( 204 ) — — ( 204 )

Stock-based compensation — — — — — — — 7,666 — — 7,666

Investment in redeemable non-controlling interests — — 2,450 — — — — — — — —

Other comprehensive loss — — — — — — — — — ( 76 ) ( 76 )

Net loss attributable to redeemable non-controlling interests — — ( 217 ) — — — — — — — —

Net loss attributable to Braze, Inc.

— — — — — — — — ( 31,752 ) — ( 31,752 )

Balance at January 31, 2021

62,831 $ 174,229 $ 2,233 — $ — 19,498 $ — $ 29,777 $ ( 138,242 ) $ ( 42 ) $ ( 108,507 )

Issuance of common stock for options exercised — — — 2,856 2 — — 8,164 — — 8,166

Issuance of common stock for warrants exercised — — — 216 — — — — — — —

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$ 1,455 95,975 $ 10 $ 806,044 $ ( 353,927 ) $ ( 6,824 ) $ 445,303

Issuance of common stock for options exercised — 1,955 — 7,263 — — 7,263

Issuance of common stock under employee stock purchase plan — 234 — 6,011 — — 6,011

Vesting of restricted stock units — 1,760 — — — — —

Stock-based compensation — — — 99,293 — — 99,293

Other comprehensive income

— — — — — 5,646 5,646

Net loss attributable to redeemable non-controlling interests ( 1,263 ) — — — — — —

Charitable donation of stock — 96 — 3,762 — — 3,762

Issuance of common stock from acquisition — 190 — 6,121 — — 6,121

Net loss attributable to Braze, Inc.

— — — — ( 129,166 ) — ( 129,166 )

Balance at January 31, 2024

$ 192 100,210 $ 10 $ 928,494 $ ( 483,093 ) $ ( 1,178 ) $ 444,233

The accompanying notes are an integral part of these consolidated financial statements.

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Net loss (including amounts attributable to redeemable non-controlling interests) $ ( 130,429 ) $ ( 140,746 ) $ ( 78,167 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:

Stock-based compensation 97,232 72,243 47,180

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Value of common stock donated to charity 3,762 4,260 —

Amortization of discount/premium on marketable securities 1,336 369 345

Non-cash foreign exchange loss (gain) 1,612 387 222

(Accretion) amortization of (discount) premium on marketable securities

( 2,077 ) 1,336 369

Non-cash foreign exchange loss 460 1,612 387

Fair value adjustments to contingent consideration

( 1,572 ) — —

Other ( 349 ) 495 ( 80 )

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Other long-term liabilities 571 10 ( 756 )

Net cash used in operating activities ( 22,308 ) ( 35,398 ) ( 6,080 )

Net cash provided by/(used in) operating activities 6,850 ( 22,308 ) ( 35,398 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Cash paid for acquisition, net of cash acquired

( 16,319 ) — —

Purchases of property and equipment ( 9,761 ) ( 15,447 ) ( 2,310 )

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Proceeds from exercise of common stock options 7,263 11,332 8,362

Proceeds from stock associated with employee stock purchase plan 6,011 — —

Payment of deferred offering costs — — ( 5,157 )

Repurchase of common shares — — ( 204 )

Payments of deferred purchase consideration ( 165 ) — —

Repurchase of shares related to early exercised options — — ( 5 )

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Net change in capitalized internal-use software development costs in accrued expenses $ — $ 21 $ ( 58 )

Unrealized net loss on marketable investment securities $ ( 5,551 ) $ ( 64 ) $ ( 50 )

Unrealized net gain (loss) on marketable investment securities

$ 5,416 $ ( 5,551 ) $ ( 64 )

Net change to property and equipment (included in accounts payable / accrued liabilities) $ 208 $ 75 $ ( 23 )

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Asset retirement obligation $ 62 $ 374 $ —

Common stock issuance, acquisition $ ( 6,121 ) $ — $ —

Contingent consideration, acquisition $ ( 1,795 ) $ — $ —

Indemnity holdbacks, acquisition

$ ( 3,081 ) $ — $ —

The accompanying notes are an integral part of these consolidated financial statements.

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Our headquarters are located in New York, New York.

We also lease additional office space in Austin, Berlin, Chicago, Jakarta, London, Paris, San Francisco, Singapore, and Tokyo.

Emerging Growth Company Status

Based on the market value of the Company’s common equity held by non-affiliates as of July 29, 2022 (the last business day of the Company’s most recently completed second fiscal quarter), the Company ceased to qualify as an emerging growth company (as described in Section 107(b) of the Jumpstart Our Business Startups Act of 2012) as of the end of the fiscal year ended January 31, 2023.

As a result, the Company will no longer be able to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

In addition, the Company will no longer be able to use the extended transition period for complying with new or revised accounting standards available to emerging growth companies and will be required to adopt new or revised accounting standards as of the effective dates for public companies.

As of January 31, 2024, we also lease additional office space in Austin, Berlin, Chicago, Jakarta, London, Paris, San Francisco, Singapore, Sydney, and Tokyo.

Summary of Significant Accounting Policies

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We evaluate estimates based on historical and anticipated results, trends, and various other assumptions.

Significant items subject to such estimates and assumptions include, but are not limited to, the standalone selling price for separate performance obligations in our revenue arrangements, expected period of benefit for deferred contract costs, the valuation of common stock and stock-based compensation, the allocation of overhead costs between cost of revenue and operating expenses, the estimated useful lives of intangible and depreciable assets, the incremental borrowing rate, the valuation of deferred tax assets and liabilities and other tax estimates including our ability to utilize net operating losses.

Significant items subject to such estimates and assumptions include, but are not limited to, the standalone selling price for separate performance obligations in our revenue arrangements, expected period of benefit for deferred contract costs, the valuation of common stock and stock-based compensation, the allocation of overhead costs between cost of revenue and operating expenses, the estimated useful lives of intangible and depreciable assets, the fair value of acquired assets and assumed liabilities from business combinations, valuation of long-lived assets and their recoverability, including goodwill, the incremental borrowing rate, the valuation of deferred tax assets and liabilities and other tax estimates including our ability to utilize net operating losses.

Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments as facts and circumstances dictate.

As future events and their effects, including the uncertainty surrounding rapidly changing market and economic conditions from the outbreak of COVID-19 or other significant macroeconomic events, cannot be determined with precision, actual results could differ from those estimates and many of our estimates and assumptions have required increased judgement and carry a higher degree of variability and volatility.

As future events and their effects, including the uncertainty surrounding rapidly changing market and economic conditions from 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, cannot be determined with precision, actual results could differ from those estimates and many of our estimates and assumptions have required increased judgement and carry a higher degree of variability and volatility.

Basic and Diluted Net Loss attributable to Braze, Inc.

Common Stockholders per Share

Basic and diluted net loss attributable to Braze, Inc.

common stockholders per share is presented in conformity with the two-class method required for participating securities.

Under the two-class method, net loss is attributed to common stockholders and participating securities based on their participation rights.

Prior to our IPO, we considered all series of our convertible preferred stock to be participating securities.

Under the two-class method, the net loss attributable to Braze, Inc.

common stockholders is not allocated to the convertible preferred stock as the holders of our convertible preferred stock do not have a contractual obligation to share in our losses.

Basic loss attributable to Braze, Inc.

Basic net loss attributable to Braze, Inc.

per common stockholder’s share is computed by dividing the net loss by the weighted-average number of shares of Braze, Inc.

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common stockholders since the effects of potentially dilutive securities are antidilutive.

Prior to our IPO, basic and diluted net loss attributable to Braze, Inc.

per common stockholder’s share is presented in conformity with the two-class method required for participating securities.

Under the two-class method, net loss is attributed to common stockholders and participating securities based on their participation rights.

Prior to our IPO, we considered all series of our convertible preferred stock to be participating securities.

Under the two-class method, the net loss attributable to Braze, Inc.

common stockholders is not allocated to the convertible preferred stock as the holders of our convertible preferred stock do not have a contractual obligation to share in our losses.

Segment Reporting

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Foreign Currency

The functional currency of our foreign subsidiaries is the local currency.

The functional currency of our foreign subsidiaries is primarily the local currency.

Transactions denominated in currencies other than the functional currency are remeasured to the functional currency at the exchange rate on the transaction date.

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Cash and cash equivalents represent cash and highly liquid investments with original contractual maturities of three months or less at the date of purchase.

Cash and cash equivalents consist of deposit accounts, interest-bearing money market accounts, and overnight short-term repurchase agreements that are stated at fair value.

Cash and cash equivalents consist of deposit accounts and interest-bearing money market accounts that are stated at fair value.

As of January 31, 2024 and 2023, approximately $ 3.9 million and $ 4.0 million, respectively, of deposits were restricted due to multiple letters of credit related to our leased and subleased properties.

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Cash and cash equivalents $ 68,228 $ 68,587

Restricted cash, current 3,373 —

Restricted cash, noncurrent 530 4,036

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Accounts Receivable, Net and Credit Losses

Accounts receivable consists of customer obligations due under normal trade terms and are recorded at amounts billed and unbilled to customers, net of allowance for any potential uncollectible accounts.

Accounts receivable, net consists of customer obligations due under normal trade terms and are recorded at amounts billed and unbilled to customers, net of allowance for any potential uncollectible accounts.

Unbilled amounts are included in trade accounts receivable, net, which generally arise from our contractual right to bill our customers in advance of services on the contract effective date.

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Significant customers are those which represent 10% or more of our total revenue for the period, or accounts receivable at the balance sheets dates.

For fiscal years ended January 31, 2023 or 2022, no customer accounted for 10% or more of total revenue.

For fiscal years ended January 31, 2024 and 2023, no customer accounted for 10% or more of total revenue.

For accounts receivable, we are exposed to credit risk in the event of nonpayment by customers to the extent of the amounts recorded on the consolidated balance sheets.

As of January 31, 2023 or 2022, no customer accounted for 10% or more of our total accounts receivable balance.

As of January 31, 2024, one customer accounted for approximately 11 % of accounts receivable, net.

No other customer accounted for more than 10% of our total accounts receivable balance.

As of January 31, 2023, no customers accounted for 10% or more of our total accounts receivable balance.

Marketable Securities

We classify our investments in marketable securities within current assets on the consolidated balance sheets as the investments are available for use, if needed, in current operations as we may sell our marketable securities at any time, without

significant penalty, even if they have not yet reached maturity.

These investments are carried at fair value, based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves.

Gains and losses are determined based on the specific identification method and are recognized when realized as a component of Other income, net in our consolidated statements of operations.

Gains and losses are determined based on the specific identification method and are recognized when realized as a component of other income (expense), net in our consolidated statements of operations.

We review our securities on a regular basis to evaluate if any security has experienced an other-than temporary decline in fair value.

We consider an available-for-sale security to be impaired if the fair value of the investment is less than its amortized cost basis, our intent to sell, or whether it is more likely than not that we are required to sell the security before recovery of its amortized cost basis.

We consider an available-for-sale security to be impaired if the fair value of the investment is less than its amortized

cost basis, our intent to sell, or whether it is more likely than not that we are required to sell the security before recovery of its amortized cost basis.

If we believe that an other-than-temporary decline exists in one of the securities, we will write down these investments to fair value.

To the extent that the decline in fair value is related to credit losses, such as changes to the rating of the security by third-party rating agencies, and adverse conditions specific to the security, among other factors, the write-down related to credit loss would be recorded in Other income, net in our consolidated statements of operations.

Impairments related to factors other than credit losses are recognized in accumulated other comprehensive income (loss), net of tax.

To the extent that the decline in fair value is related to credit losses, such as changes to the rating of the security by third-party rating agencies, and adverse conditions specific to the security, among other factors, the write-down related to credit loss would be recorded in other income (expense), net in the consolidated statements of operations.

Impairments related to factors other than credit losses are recognized in accumulated other comprehensive loss.

As of January 31, 2024, the Company had not recorded any credit impairments.

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The estimated useful lives for significant property and equipment categories are as follows:

Computer equipment, office equipment, and software 3 years

Computer equipment, office equipment, and software 3 to 5 years

Furniture and fixtures 7 years

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A VIE is an entity that either has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or has equity investors who lack the characteristics of a controlling financial interest.

The primary beneficiary of a VIE is the party with both the power to direct the activities of the VIE that most significantly impact

the VIE’s economic performance and the obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE.

The primary beneficiary of a VIE is the party with both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE.

To assess whether we have the power to direct the activities of a VIE that most significantly impact its economic performance, we consider all the facts and circumstances including our role in establishing the VIE and our ongoing rights and responsibilities.

This assessment includes identifying the activities that most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities.

In general, the party that makes the most significant decisions affecting the VIE is determined to have the power to direct the activities of the VIE.

In general, the party that makes the most

significant decisions affecting the VIE is determined to have the power to direct the activities of the VIE.

To assess whether we have the obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE, we consider all of our economic interests, including debt and equity interests, servicing rights and fee arrangements, and any other variable interests in the VIE.

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Variable consideration, including as a result of service level guarantees, product usage and overage fees or other potential claims such as breach of warranty, was not material during the fiscal years ended January 31, 2024 and 2023.

We allocate the variable consideration related to the product usages and overages to the distinct month during which the related services were performed as those fees relate specifically to providing usage of the platform in the period and represents the consideration we are entitled to for the access to the platform.

We allocate the variable consideration related to the product usages and overages to the distinct month during which the related services were performed

as those fees relate specifically to providing usage of the platform in the period and represents the consideration we are entitled to for the access to the platform.

As a result, the usage and overage fees are included in the transaction price and recognized as revenue in the period in which the fee was generated.

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We record deferred revenue when we have an unconditional right to payments in advance of satisfying the performance obligations on our contracts.

The balance consists primarily of annual plan subscription services and professional services not

yet provided as of the balance sheet date.

The balance consists primarily of annual plan subscription services and professional services not yet provided as of the balance sheet date.

Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as a current liability in our consolidated balance sheets.

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We estimate expected forfeitures of stock-based awards at the grant date and recognize compensation cost only for those awards expected to vest.

We estimate our forfeitures rate based on an analysis of our actual historical forfeitures materializing in the previous fiscal years, and revise the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

We estimate our forfeitures rate based on an analysis of our actual historical forfeitures materializing

in the previous fiscal years, and revise the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

We routinely evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover and expectations of future option exercise behavior.

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Other income (expense), net, is primarily comprised of realized and unrealized foreign currency gains and losses.

Effective February 1, 2023, the Company adopted ASU 2016-02, utilizing the modified retrospective approach.

We determine if an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether we have the right to control the identified asset.

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Leases, for further information.

Prior to adoption, during the fiscal year ended January 31, 2022 and prior, the Company accounted for leases under ASC 840, whereby rent expense associated with operating leases was recognized on a straight-line basis over the lease term.

We account for income taxes using the asset and liability method.

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The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

Business Combinations

The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values.

The excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date is recorded as goodwill.

Such valuations require the Company to make significant estimates and assumptions.

The Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, but these estimates are inherently uncertain and subject to refinement.

During the measurement period, the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to

Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statements of operations.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination.

Goodwill and indefinite-lived intangible assets are not amortized and are tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may be impaired.

Goodwill is tested for impairment at the reporting unit level.

The Company has the option to first perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit and indefinite-lived intangible assets are less than its carrying amount.

The Company may elect to bypass the qualitative assessment and proceed directly to the quantitative impairment tests.

The quantitative impairment test for goodwill involves comparing the fair value of the reporting unit to its carrying value, including goodwill.

A goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value.

The impairment is limited to the carrying amount of goodwill.

The quantitative impairment test for indefinite-lived intangible assets involves a comparison of the estimated fair value of the intangible asset with its carrying value.

If the carrying value of the indefinite-lived intangible asset exceeds its estimated fair value, an impairment loss is recognized in an amount equal to that excess.

The estimates of fair value of indefinite-lived intangible assets are determined using a discounted cash flow valuation analysis that employs different valuation methodology in estimating the fair value of the asset.

Significant judgments are inherent in the discounted cash flow analysis.

The Company has determined that it operates as one reporting unit and has selected November 1 as the date to perform its annual impairment test.

No goodwill impairment charges have been recorded for any period presented.

Restructuring

Restructuring costs generally include significant actions involving employee-related severance payments, benefits, and certain facilitation costs, associated with our workforce reductions.

Employee-related severance charges are largely based upon substantive severance plans, while some are mandated requirements in certain foreign jurisdictions.

Severance costs generally include severance payments, health insurance coverage, and legal costs.

These charges are reflected in the period when both the actions are probable, at the balance sheet date, and the amounts are reasonably estimable.

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2016-02, Leases (Topic 842), (“ASC 842”) and issued certain transitional guidance and subsequent amendments between January 2018 and February 2020 within ASU No.

2017-13, ASU No.

2018-01, ASU No.

2018-10, ASU No.

2018-11, ASU No.

2018-20, ASU No.

2019-01, ASU No.

2019-10, ASU No.

2020-02, and ASU No.

2020-05 (collectively, “Topic 842”).

The guidance in Topic 842 supersedes the leasing guidance in Topic 840, Leases.

Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than twelve months.

Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the consolidated statements of operations.

2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842):

Effective Dates for Certain Entities, issued June 2020, Topic 842, as amended, is effective for fiscal years beginning after

December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

Topic 842 is effective for our fiscal year ending January 31, 2022 and interim periods beginning February 1, 2023 with early adoption permitted.

While we previously elected to take advantage of the extended transition period available to emerging growth companies for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, we decided to early adopt Topic 842.

We adopted this standard under the modified-retrospective approach, using the practical expedients allowing us to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired leases, and (iii) indirect costs for any existing leases.

Additionally, any lease arrangements with a term of 12 months or less will be recognized on the consolidated statements of operations on a straight-line basis over the lease term and any non-lease components shall not be separated from the lease components, but instead accounted for as a single lease component.

Upon adoption of ASC 842, we recognized a right-of-use asset of $ 59.6 million and a lease liability of $ 61.3 million at February 1, 2022 on our consolidated balance sheets.

Prior period amounts were not restated and are reported in accordance with ASC 840.

Refer to Note 14.

Leases, for further information.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments — Credit Losses (Topic 326):

Measurement on Credit Losses on Financial Instruments, and issued subsequent amendments to the initial guidance and transitional guidance between November 2018 and February 2020 within ASU No.

2018-19, ASU No.

2019-04, ASU No.

2019-05, ASU No.

2019-10, ASU No.

2019-11 and ASU No.

2020-02 (collectively, “Topic 326”).

Topic 326 introduces new guidance for credit losses on instruments within its scope.

The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade and other receivables, held-to-maturity debt securities, loans and net investments in leases.

The new guidance also modifies the impairment model for available-for-sale debt securities and requires entities to determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss.

Further, the new guidance indicates that entities may not use the length of time a security has been in an unrealized loss position as a factor in concluding whether a credit loss exists.

2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), Topic 326, as amended, is effective for (1) public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and (2) all other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Topic 326 is effective for our fiscal year beginning February 1, 2023 and early adoption is permitted.

We determined that the adoption of this ASU did not have a material impact on our consolidated financial statements.

As such, we adopted this ASU prospectively on February 1, 2022.

In December 2019, the FASB issued ASU No.

2019-12, Simplifying the Accounting for Income Taxes (Topic 740) (“Topic 740”), which removes certain exceptions to the general principles in Topic 740.

The amendments also improve consistent application of and simplify U.S.

GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

For public companies, the guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

Early adoption of the amendments is permitted, including adoption in any interim period for (1) public business entities for periods for which financial statements have not yet been issued and (2) all other entities for periods for which financial statements have not yet been made available for issuance.

We adopted ASU 2019-12 on February 1, 2022 and determined that the adoption of this ASU had no material impact on our consolidated financial statements.

In October 2020, FASB issued ASU No.

2020-10, Codification Improvements (“ASU 2020-10”).

The amendments in this guidance affect a wide variety of topics in the ASC by either clarifying the codification or correcting unintended application of guidance.

The changes are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities.

For public companies, the guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

We adopted ASU 2020-10 prospectively on February 1, 2022 and determined that this ASU does not have a material impact on our consolidated financial statements.

In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update No.

2021-08 Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, (“ASU 2021-08”), which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers.

The Company adopted ASU 2021-08 prospectively during the second quarter of the fiscal year ended January 31, 2024, and determined that ASU 2021-08 does not have a material impact on the Company’s consolidated financial statements nor its related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update No.

2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, (“ASU 2023-07”), which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), an amount for other segment items with a description of the composition, and disclosure of the title and position of the CODM.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and the update should be applied retrospectively to each period presented in the financial statements.

The Company is currently evaluating the impact of the new standard on the consolidated financial statements and related disclosures.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update No.

2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, (“ASU 2023-09”), which requires public business entities on an annual basis to disclose specific categories in a tabular rate reconciliation and provide additional information for reconciling items that meet a five percent quantitative threshold.

Additionally, the ASU requires all entities to disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes, as well as individual jurisdictions where income taxes paid are equal to or greater than five percent of total income taxes paid.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted and the updated should be applied on a prospective basis, with a retrospective

application permitted in the financial statements.

The Company is currently evaluating the impact of the new standard on its consolidated financial statements and related disclosures.

No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures.

Revenue from Contracts with Customers

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Variable Interest Entity and Redeemable Non-Controlling Interest

On September 14, 2020, we, along with Japan Cloud Computing Co., Ltd., and M30 LLC, (the “Investors”), entered into an agreement, whereby each Investor agreed to purchase shares of common stock of Braze KK (“Braze KK Shares”) for a total purchase price of $ 10.0 million in two tranches of $ 5.0 million per tranche in September 2020 and September 2021, to engage in the investment, organization, management and operation of Braze KK focused on the distribution of our products in Japan.

On September 14, 2020, we, along with Japan Cloud Computing Co., Ltd., and M30 LLC, (the “Investors”), entered into an agreement, whereby each Investor agreed to purchase shares of common stock of Braze Kabushiki Kaisha (“Braze KK” and “Braze KK Shares”) for a total purchase price of $ 10.0 million in two tranches of $ 5.0 million per tranche in September 2020 and September 2021, to engage in the investment, organization, management and operation of Braze KK focused on the distribution of our products in Japan.

The purpose of this arrangement was to further expand our business in the Japanese market.

In March 2022, we consented to the issuance of stock options to purchase Braze KK Shares by certain employees of Braze KK.

These options will vest in full in March 2027 and, other than the options held by one officer of Braze KK, cannot be exercised by the holders thereof prior to the exercise of the call or put options described in more detail below.

In March 2022, we consented to the periodic issuance of stock options to purchase Braze KK Shares by certain employees of Braze KK.

These options cannot be exercised by the holders thereof prior to the exercise of the call or put options described in more detail below.

The Company considers the stock options to be a substantive class of equity, classified as a liability within other long-term liabilities on the consolidated balance sheets.

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The issuance of stock options does not impact our majority stake in Braze KK, as none of the vesting criteria of the options were met as of the balance sheet date.

The issuance of stock options did not result in a reconsideration event and therefore Braze KK still met the criteria of a VIE as Braze KK did not have sufficient equity at risk to finance their activities.

The issuance of stock options did not result in a reconsideration event and therefore Braze KK still met the criteria of a Variable Interest Entity as Braze KK did not have sufficient equity at risk to finance their activities.

As a result, we continue to operate Braze KK as a subsidiary, exposing us to business and foreign exchange risk.

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Should the call or put option be exercised, the redemption value would be determined based on a prescribed formula derived from the discrete revenues of Braze KK and the Company and may be settled, at our discretion, with our stock or cash.

The non-controlling interest in Braze KK is classified in mezzanine equity as redeemable non-controlling interest as a result of the put right available to the Investors in the future, an event that is not solely in our control.

The non-controlling interest in Braze KK is classified in mezzanine equity as redeemable non-controlling interest as a result of the

put right available to the Investors in the future, an event that is not solely in our control.

The non-controlling interest is not accreted to redemption value because it is currently not probable that the non-controlling interest will become redeemable.

1 unchanged sentence

Balance as of January 31, 2022

Investment in redeemable non-controlling interest 2,450

Net loss attributable to redeemable non-controlling interest ( 1,780 )

8 unchanged sentences

Property and equipment, net 57 84

Operating lease right-of-use assets

Deferred contract costs 1,102 902

4 unchanged sentences

Deferred revenue 3,625 1,918

Operating lease liabilities, current

Total liabilities 7,766 4,778

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Level 1 Level 2 Level 3 Total

Financial Assets:

Cash equivalents

Money market funds $ 20,758 $ — $ — $ 20,758

30,873 — — 30,873

government securities 6,996 — — 6,996

Total cash equivalents 27,754 — — 27,754

Marketable securities

government securities $ 318,957 $ — $ — $ 318,957

Foreign bonds — 2,967 — 2,967

Foreign securities — 6,367 — 6,367

Corporate debt securities — 82,574 — 82,574

Total marketable securities 318,957 88,941 — 407,898

Total $ 338,617 $ 102,339 $ — $ 440,956

Contingent consideration $ — $ — $ 223 $ 223

Total liabilities — — 223 223

Total financial assets

$ 346,711 $ 88,941 $ 223 $ 435,875

January 31, 2023

Level 1 Level 2 Level 3 Total

Financial Assets:

Cash equivalents

Money market funds $ 30,873 $ — $ — $ 30,873

439,627 — — 439,627

Total cash equivalents 30,873 — — 30,873

Marketable securities

government bonds $ 4,006 $ — $ — $ 4,006

Foreign bonds — 3,203 — 3,203

Commercial paper — 18,993 — 18,993

government securities $ 307,744 $ — $ — $ 307,744

Foreign securities — 2,967 — 2,967

Corporate debt securities — 99,372 — 99,372

Asset-backed securities — 5,934 — 5,934

Total marketable securities 307,744 102,339 — 410,083

Total $ 443,633 $ 31,150 $ — $ 474,783

Total financial assets $ 338,617 $ 102,339 $ — $ 440,956

Our money market funds are classified as Level 1 within the fair value hierarchy, because they are valued using quoted prices in active markets as of January 31, 2024 and January 31, 2023.

2 unchanged sentences

In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments.

The fair value of our contingent consideration is estimated using Level 3 unobservable inputs.

The estimates of fair value are based upon assumptions believed to be reasonable but which are uncertain, and involve significant judgments by management.

We will reassess the fair value of the contingent consideration quarterly until the contingency is resolved.

The short-term portion of the contingent consideration is recorded within accrued expenses and other current liabilities, and the long-term portion is recorded within other-long term liabilities on the consolidated balance sheets.

Changes in the fair value are recorded in operating income in the consolidated statements of operations.

There were no transfers of financial instruments among Level 1, Level 2, and Level 3 during the periods presented.

The following table summarizes the fair value changes in the contingent consideration liability in connection with the acquisition of North Star Y, Pty Ltd (in thousands):

Fiscal Year Ended January 31, 2024

Beginning fair value $ —

Additions in the period (1)

Ending fair value $ 223

(1) Includes measurement period adjustments related to the Company’s preliminary fair values of the assets acquired and liabilities assumed in business combinations, which did not have a material impact on goodwill.

Marketable Securities

3 unchanged sentences

government securities $ 319,343 $ 782 $ ( 1,168 ) $ 318,957

Foreign bonds 3,028 — ( 61 ) 2,967

Foreign securities 6,349 31 ( 13 ) 6,367

Corporate debt securities 82,368 340 ( 134 ) 82,574

2 unchanged sentences

Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Total Estimated Fair Value

government bonds $ 4,021 $ — $ ( 15 ) $ 4,006

Foreign bonds 3,203 — — 3,203

Commercial paper 18,993 — — 18,993

government securities $ 312,044 $ 31 $ ( 4,331 ) $ 307,744

Foreign securities 3,028 — ( 61 ) 2,967

Corporate debt securities 100,589 27 ( 1,244 ) 99,372

Asset-backed securities 5,941 — ( 7 ) 5,934

Total $ 415,661 $ 58 $ ( 5,636 ) $ 410,083

Accrued interest receivables related to our available-for-sale securities of $ 3.4 million as of January 31, 2024 and $ 2.0 million as of January 31, 2023 were included within prepaid expenses and other current assets on our consolidated balance sheets.

The Company’s short-term investments consist of available-for-sale debt securities.

The weighted-average remaining maturity of the Company’s investment portfolio was less than one year as of the periods presented.

No individual security incurred continuous unrealized losses for greater than 12 months.

The Company’s short-term investments consist of available-for-sale debt securities and term deposits.

The term deposits are at cost, which approximates fair value.

The weighted-average remaining maturity of the Company’s investment portfolio is one and a half years as of the periods presented.

The following table summarizes the fair value and gross unrealized losses aggregated by category of individual securities that have been in a continuous unrealized loss position for greater than 12 months (in thousands):

January 31, 2024

Continuous Unrealized Loss for Greater than 12 months

Estimated Fair Value Gross Unrealized Losses

government securities $ 99,613 $ ( 741 )

Foreign securities 1,325 ( 11 )

Corporate debt securities 28,858 ( 113 )

Total $ 129,796 $ ( 865 )

No individual security incurred continuous unrealized losses for greater than 12 months as of January 31, 2023.

The Company purchases investment grade marketable debt securities which are rated by nationally recognized statistical credit rating organizations in accordance with its investment policy.

1 unchanged sentence

As of January 31, 2024, the credit-quality of the Company’s marketable available-for-sale debt securities had remained stable.

The unrealized losses recognized on marketable available-for-sale debt securities as of January 31, 2023 was primarily related to the continued market volatility associated with market expectations of interest rate increases by the Federal Reserve.

The unrealized losses recognized on marketable available-for-sale debt securities as of January 31, 2024 was primarily related to the continued market volatility associated with market expectations of an aggressive pace of interest rate increases by the Federal Reserve.

The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments and it is not expected that the investments would be settled at a price less than their amortized cost basis.

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Investment Income

Investment income consists of interest income and accretion income/amortization expense on our cash, cash equivalents, and marketable securities.

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 (expense), net on the consolidated statements of operations.

The components of investment income were as follows (in thousands):

The primary components of investment income from marketable securities were as follows (in thousands):

Fiscal Year Ended January 31,

1 unchanged sentence

Interest income $ 13,546 $ 7,393 $ 506

Amortization of discount/premium, net 1,336 ( 369 ) ( 345 )

Accretion/amortization of discount/premium, net

2,077 1,336 ( 369 )

Investment income $ 15,623 $ 8,729 $ 137

9 unchanged sentences

The total depreciation expense and amortization expense for property and equipment was $ 5.5 million, $ 3.4 million and $ 2.8 million, during the fiscal years ended January 31, 2024, 2023 and 2022, respectively.

During the fiscal year ended January 31, 2023, the Company removed $ 1.2 million of fixed assets substantially consisting of leasehold improvements and computer equipment, office equipment, and software, that was fully depreciated from property and equipment, gross and accumulated depreciation, which had no net impact on the Company’s financial results.

During the fiscal years ended January 31, 2024 and 2023, the Company removed $ 1.0 million and $ 1.2 million, respectively, of fixed assets substantially consisting of leasehold improvements and 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.

The fixed assets removed during the fiscal year ended January 31, 2022 were immaterial to the Company’s consolidated financial results.

We capitalized internal-use software of $ 5.7 million, $ 2.0 million and $ 2.4 million during the fiscal years ended January 31, 2024, 2023, and 2022 respectively.

7 unchanged sentences

Consumption tax receivable 1,606 1,045

Prepaid employee bonuses 538 332

Prepaid events

Prepaid employee benefits 902 811

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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.

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 96,465 shares of our Class A common stock to a charitable donor-advised fund that resulted in the recognition of $ 4.3 million expense within general and administrative in our consolidated statements of operations during the fiscal year ended January 31, 2023.

No stock donations were made during the fiscal years ended January 31, 2022 and 2021.

In connection with our Pledge 1% commitment, we donated 96,465 and 96,465 shares of our Class A common stock to a charitable donor-advised fund that resulted in the recognition of $ 3.8 million and $ 4.3 million expense within general and administrative in our consolidated statements of operations during the fiscal years ended January 31, 2024 and 2023, respectively.

No stock donations were made during the fiscal year ended January 31, 2022.

Employee Stock Plans

9 unchanged sentences

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 the Board no later than the February 1 increase.

On February 1, 2023, the number of shares of our Class A common stock reserved for issuance under our 2021 Plan increased by an additional 4,798,771 shares.

6 unchanged sentences

11,035,704 $ 12.56 7.69 $ 413,384

Granted 3,120,516 35.02

Granted — n/a

Exercised ( 2,155,929 ) $ 3.94

13 unchanged sentences

2024 2023 2022

Weighted-average grant date fair value per share of options granted during each respective period n/a $ 24.53 $ 7.41

Aggregate intrinsic value of options exercised during each respective period (in thousands) $ 71.16 $ 121.90 $ 78.90

Weighted-average grant date fair value per share of options granted during each respective period n/a n/a $ 24.53

Aggregate intrinsic value of options exercised during each respective period (in millions) $ 72.85 $ 71.16 $ 121.90

We estimate the fair value of stock options using the Black-Scholes option-pricing model on the date of grant.

2 unchanged sentences

2024 2023 2022

Dividend yield (in percentage) n/a — % — %

Expected volatility (in percentage) n/a 61.8 - 66.1 %

55.7 - 62.5 %

Expected term (in years) n/a 5.9 - 6.7

Risk-free interest rate (in percentage) n/a 1.0 - 1.2 %

Fair value of common stock n/a $ 65.00

$ 5.28 - $ 28.35

Dividend yield (in percentage) n/a n/a — %

Expected volatility (in percentage) n/a n/a 61.8 - 66.1 %

Expected term (in years) n/a n/a 5.9 - 6.7

Risk-free interest rate (in percentage) n/a n/a 1.0 - 1.2 %

Fair value of common stock n/a n/a $ 65.00

Restricted Stock Units

9 unchanged sentences

Employee Stock Purchase Plan

In November 2021, our board of directors and our stockholders approved our employee stock purchase plan (the “ESPP”), which became effective on November 16, 2021.

In November 2021, our board of directors and our stockholders approved the 2021 Plan, which became effective on November 16, 2021.

Following completion of our initial public offering, the ESPP authorized the issuance of 1,825,000 shares of our Class A common stock under purchase rights granted to our employees or to employees of any of our designated affiliates.

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On each purchase date, eligible employees will purchase the shares at a price per share equal to 85 % of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period or (2) the fair market value of the Company’s Class A common stock on the last day of the offering period, as defined by the ESPP.

The Company recognized $ 1.8 million of stock-based compensation expense related to the ESPP during the fiscal year ended January 31, 2023.

The Company recognized $ 2.2 million and $ 1.8 million of stock-based compensation expense related to the ESPP during the fiscal year ended January 31, 2024 and 2023, respectively.

As of January 31, 2024, $ 0.6 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.

During the fiscal year ended January 31, 2023, the Company issued 125,276 shares of Class A common stock under the ESPP.

As of January 31, 2023, 2,629,404 shares of Class A common stock remain available for issuance under the ESPP.

During the fiscal years ended January 31, 2024 and 2023, the Company issued 234,089 and 125,276 shares of Class A common stock under the ESPP, respectively.

As of January 31, 2024, there are 3,355,070 shares of Class A common stock available for issuance under the ESPP.

Stock-based Compensation Expense

18 unchanged sentences

The expense is included in the same financial statement line items as the employees’ other compensation.

No secondary transactions involving employees occurred during the fiscal year ended January 31, 2023 .

No secondary transactions involving employees occurred during the fiscal years ended January 31, 2024 and 2023 .

Commitments and Contingencies

13 unchanged sentences

Based on the information available, we continue to evaluate and assess the jurisdictions in which indirect tax nexus exists and believe that the indirect tax liabilities are adequate and reasonable.

Due to the complexity and uncertainty around the application of these rules by taxing authorities, results may vary materially from expectations, and we have recognized liabilities for contingencies related to state sales and use tax, VAT, and GST deemed probable and estimable totaling $ 0.5 million and $ 1.3 million as of January 31, 2023 and 2022, respectively, which is included in other

current liabilities on the consolidated balance sheets.

As of fiscal year ended January 31, 2023, we have remediated potential exposure in several jurisdictions due to not filing prior returns, and the Company continues to evaluate the potential exposure on an ongoing basis.

Due to the complexity and uncertainty around the application of these rules by taxing authorities, results may vary materially from expectations, and we have recognized liabilities for contingencies related to state sales and use tax, VAT, and GST deemed probable and estimable totaling $ 1.0 million and $ 0.5 million as of January 31, 2024 and 2023, respectively, which is included in accrued expenses and other current liabilities on the consolidated balance sheets.

As of January 31, 2024, we have filed prior period returns in several jurisdictions in order to remediate this potential exposure, and the Company continues to evaluate the potential exposure on an ongoing basis.

Legal Contingencies

1 unchanged sentence

We have been, and may in the future be, put on notice or sued by third-parties for alleged infringement of their proprietary rights, including patent infringement.

We accrue a liability when we believe that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated.

We accrue a liability when we believe that it is both probable that a liability has been incurred and the amount of

loss can be reasonably estimated.

We believe we have recorded adequate provisions for any such matters and, as of January 31, 2024, we believe that no material loss will be incurred in excess of the amounts recognized in our financial statements.

The Company’s lease portfolio consists solely of office space with lease terms ranging from less than one to ten years .

The Company’s lease portfolio consists solely of office space with lease terms ranging from approximately one to ten years .

Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into the determination of lease payments.

The following table presents information on our operating leases for the fiscal year ended January 31, 2023 (in thousands):

Fiscal Year Ended January 31, 2023

The components of lease cost reflected on the consolidated statements of operations were as follows (in thousands):

Fiscal Year Ended

Operating lease cost $ 17,619 $ 13,638

2 unchanged sentences

Total net lease cost $ 21,156 $ 17,954

The future maturities of the Company’s operating lease liabilities by fiscal year were as follows (in thousands):

The future maturities of the Company’s operating lease liabilities by fiscal year are as follows (in thousands):

2025 $ 15,713

2 unchanged sentences

imputed interest ( 32,311 )

tenant improvement allowance not yet received —

Total reported lease liability $ 90,612

The Company's lease terms and discount rates are as follows:

January 31, 2023

Weighted-average remaining lease term (years) 8.1 6.6

1 unchanged sentence

Other information for the Company's leases is as follows (in thousands):

Fiscal Year Ended January 31, 2023

Fiscal Year Ended

Cash paid for amounts included in the measurement of lease liabilities $ 13,404 $ 10,292

Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 47,834 $ —

New York City Headquarters Agreement

In November 2022, the Company entered into a Sublease Agreement (the “Sublease”) pursuant to which the Company agreed to lease approximately 92,300 square feet of general office space in New York, New York.

The term of the Sublease commences on October 1, 2023 and will terminate on January 30, 2034.

Under the Sublease, the Company's fixed rent obligation is $ 0.6 million per month, provided, that the Company shall be entitled to a rent abatement in the aggregate amount of $ 6.6 million to be applied in equal monthly installments until the abatement amount is fully exhausted.

The Sublease contains customary provisions for real property subleases of this type, including specified termination rights, and is subject to and contingent upon receipt of a standard third-party consent.

Berlin Lease Agreement

In October 2022, the Company entered into a lease agreement for a new office space in Berlin, Germany.

The lease commencement date, which is when the premises will become available to the Company for use, is expected to be in the first quarter of fiscal year 2024.

The Company is obligated to pay € 0.1 million per month beginning in the second quarter of fiscal year 2024 through the fourth quarter of fiscal 2025, the expiration date.

The components of the provision for (benefit from) income taxes are as follows (in thousands):

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Loss before provision for income taxes $ ( 128,472 ) $ ( 140,163 ) $ ( 78,332 )

A reconciliation of the benefit from (provision for) income taxes to the amounts computed by applying the statutory federal income tax rate to earnings before income taxes is shown as follows:

A reconciliation of the provision for (benefit from) income taxes to the amounts computed by applying the statutory federal income tax rate to earnings before income taxes is shown as follows:

Fiscal Year Ended January 31,

11 unchanged sentences

The valuation allowance relates to deferred tax assets for which it is more likely than not that the tax benefit will not be realized.

Fiscal Year Ended January 31,

Deferred tax assets:

12 unchanged sentences

Operating lease right-of-use assets ( 20,240 ) ( 11,447 )

Intangible assets

Deferred tax liabilities ( 39,120 ) ( 24,537 )

13 unchanged sentences

These ownership shifts resulted in a reduction of NOLs in the fiscal year ended January 31, 2021 of $ 13.8 million and credits of $ 0.7 million.

Our utilization of our NOLs and credits is limited by these ownership shifts but those limitations do not have a significant impact to

the financial statements since there is no utilization of the NOLs and credits and a full valuation allowance exists against the net operating losses and credits.

Our utilization of our NOLs and credits is limited by these ownership shifts but those limitations do not have a significant impact to the financial statements since there is no utilization of the NOLs and credits and a full valuation allowance exists against the net operating losses and credits.

Subsequent ownership changes may subject us to additional annual limitations of its net operating losses.

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Net Loss per Share

We compute net loss per share of our Class A common stock and Class B common stock under the two-class method required for multiple classes of common stock and participating securities.

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.

18 unchanged sentences

2024 2023 2022

Convertible preferred stock on an as-converted basis — — 62,831

Options to purchase common stock 6,121 8,172 11,036

1 unchanged sentence

ESPP shares estimated to be purchased 92 121 —

Warrants to purchase common stock — — 218

Total 12,477 12,919 12,391

2 unchanged sentences

We have purchased services from Datadog, Inc.

in the aggregate amount of approxi mately $ 1.4 million during the fiscal year ended January 31, 2023, of which $ 0.4 million was included within accrued expenses and other current liabilities on the consolidated balance sheets.

We have purchased $ 1.2 million during the fiscal year ended 2022.

During the fiscal year ended January 31, 2021, we had no related party transactions.

S ubsequent Events

in the aggregate amount of approximately $ 2.5 million during the fiscal year ended January 31, 2024.

We have purchased $ 1.4 million and $ 1.2 million during the fiscal years ended January 31, 2023 and 2022, respectively.

Restructuring

In May 2023, the Company implemented a workforce reduction designed to rebalance talent to better meet customer needs and achieve business priorities.

As a result, the Company recorded associated severance and other termination costs of approximately $ 0.6 million during the fiscal year ended January 31, 2024 related to these measures.

No restructuring costs were recognized during the fiscal years ended January 31, 2023 and 2022.

Business Combination

Acquisition of North Star Y, Pty Ltd

On June 1, 2023, the Company acquired all the outstanding stock of North Star Y, Pty Ltd (“North Star”), Braze’s exclusive reseller in Australia and New Zealand.

The transaction provides Braze with a direct market presence in Australia and New Zealand, along with local market expertise from the North Star team.

The total purchase price consideration, as adjusted, of $ 27.0 million consisted of cash payments of $ 17.6 million, $ 6.1 million in issuances of Braze Class A common stock, and contingent consideration payments, the fair value of which was $ 1.8 million as of the acquisition date.

The sellers are eligible to receive cash earn-out payments calculated based on qualified revenue performance metrics for the two individual twelve month periods immediately subsequent to the closing of the acquisition.

The earn-out payments are capped at $ 10.0 million for the first earn-out period and $ 16.0 million for the second earn-out period.

The fair value measurement of the contingent consideration liability has been influenced by developments in the significant inputs, notably the new and incremental actual and forecasted deal closings from the Australia-New Zealand region.

As a result, during the quarter ended January 31, 2024, the Company reduced the contingent consideration liability by $ 1.6 million to $ 0.2 million.

The preliminary purchase price, as adjusted, was allocated to intangible assets in the amount of $ 3.8 million and goodwill in the amount of $ 28.4 million based on the respective estimated fair values.

The resulting goodwill is not deductible for income tax purposes.

An indemnification holdback of $ 2.8 million was recorded within accrued expenses and other current liabilities on the consolidated balance sheets.

The indemnification holdback represents security for potential indemnification claims against the seller.

The indemnification holdback will be released subject to amounts withheld for actual, pending or potential claims.

Of the initial $ 0.5 million working capital holdback, $ 0.3 million is subject to release based on the completion of post-close adjustment procedures.

The results of operations of North Star from the date of acquisition, which were not material, have been included in the Company’s consolidated statements of operations for the fiscal year ended January 31, 2024.

Intangible Assets, Net

Intangible assets, net, consisted of the following (in thousands):

January 31, 2024

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortization Period

Amortizable intangible assets

Customer relationships $ 3,119 $ ( 208 ) $ 2,911 10 years

Restrictive covenant relationships 186 ( 62 ) 124 2 years

Trademark 465 ( 310 ) 155 1 year

Total amortizable intangible assets 3,770 ( 580 ) 3,190

Non-amortizable intangible assets

Technology licenses $ 500 $ — $ 500 n/a

Total intangible assets, net $ 4,270 $ ( 580 ) $ 3,690

January 31, 2023

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortization Period

Non-amortizable intangible assets

Technology licenses $ 500 $ — $ 500 n/a

Total intangible assets, net $ 500 $ — $ 500

Intangible amortization expense was approximately $ 0.6 million for the fiscal year ended January 31, 2024.

There were no amortizable intangible assets in the fiscal years ended January 31, 2023 and 2022, therefore no intangible amortization expense was recorded.

As of January 31, 2024, future amortization expense by fiscal year is expected to be as follows (in thousands):

Thereafter 1,351

Total $ 3,190

The changes in the carrying amounts of goodwill were as follows (in thousands):

Balance at January 31, 2023

North Star addition and related adjustments (1)

Balance at January 31, 2024

Subsequent Events

In February 2024, the Company granted RSUs for a total of 610,521 shares of Class A common stock to employees pursuant to the 2021 Plan.

4 unchanged sentences

The grant date fair value of these awards was $ 59.3 million.

On March 27, 2023, the Company entered into a definitive stock purchase agreement to acquire all outstanding stock of North Star Y, Pty Ltd (“North Star”) for estimated aggregate closing consideration of $28.0 million in cash and stock.

In addition, the sellers in the transaction may also be entitled to certain earn-out payments based on specified commercial targets over two years, in each case subject to customary payment caps.

The acquisition is expected to close during the second quarter of fiscal year 2024, subject to customary closing conditions.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data