Item 9A. Controls and Procedures
Item 9A. 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 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 January 31, 2024, the end of the period covered by this Annual Report on Form 10-K. Our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of January 31, 2024.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate “internal control over financial reporting” (as defined in Rules 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Our management, with participation of our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of January 31, 2024, based on the guidelines established in the Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In accordance with guidance issued by the SEC, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred. Our management's evaluation of internal control over financial reporting excluded Braze Australia, formally known as North Star, which we acquired on June 1, 2023. Total assets (excluding acquired goodwill and intangible assets) and total revenues related to Braze Australia collectively represented approximately 1% and 6% of our consolidated total assets and total revenues as of and for the fiscal year ended January 31, 2024, respectively.
Based on the results of our evaluation, management concluded that our internal control over financial reporting was effective as of January 31, 2024.
The effectiveness of our internal control over financial reporting as of January 31, 2024 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their audit report, included in Item 8 of this Annual Report on Form 10-K.
Material Weakness
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As previously disclosed within our Annual Report on Form 10-K for the fiscal year ended January 31, 2023, we had identified one material weakness in our internal control over financial reporting. The material weakness was over the lack of properly designed controls related to accounting for revenue recognition in accordance with standards under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers. We have completed execution of our remediation plan for this material weakness and, as of January 31, 2024, successfully remediated this material weakness by implementing the following measures:
• Implemented the revenue management dashboard to support timely provisioning of Braze products;
• Enhanced business process review controls over the dashboard to identify delays in provisioning;
• Remediated IT control deficiencies over applications and tools used for order management, provisioning and revenue recognition; and
• Strengthened review and validation procedures over information produced by systems and applications used in the operation of revenue controls.
Changes in Internal Control Over Financial Reporting
Other than the remediation efforts noted above, there were no changes 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 fiscal year ended January 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitation on the Effectiveness of Internal 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.
Item 9B. Other Information
On December 29, 2023 , Jonathan Hyman , our Chief Technology Officer , entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The trading plan provides for the sale of, in the aggregate, up to 292,000 shares of our Class A common stock, subject to the satisfaction of specified price conditions. The plan will terminate on December 31, 2024, subject to early termination for certain specified events set forth in the plan.
On December 29, 2023 , Myles Kleeger , our President and Chief Commercial Officer , entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The trading plan provides for the sale of, in the aggregate, up to 310,000 shares of our Class A common stock, subject to the satisfaction of specified price conditions, and all shares received upon the settlement of Mr. Kleeger’s then outstanding restricted stock unit awards during the duration of the plan, excluding any shares withheld or sold by the company to satisfy its income tax withholding and remittance obligations in connection with the settlement of such equity awards. The plan will terminate on March 15, 2025, subject to early termination for certain specified events set forth in the plan.
On January 11, 2024 , Isabelle Winkles , our Chief Financial Officer , entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The trading plan provides for the sale of, in the aggregate, up to 130,169 shares of our Class A common stock, subject to the satisfaction of specified price conditions, and all the shares received upon the settlement of certain of Ms. Winkles’ outstanding restricted stock unit awards during the duration of the plan, excluding any shares withheld or sold by the company to satisfy its income tax withholding and remittance obligations in connection with the settlement of such equity awards. The plan will terminate on December 31, 2024, subject to early termination for certain specified events set forth in the plan.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item will be included in our Definitive Proxy Statement for our 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended January 31, 2024, or the 2024 Proxy Statement, and is incorporated herein by reference.
Code of Conduct
We have adopted a Code of Conduct that applies to all our employees, officers and directors. This includes our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. The full text of our Code of Conduct is posted on our website at www.braze.com. We intend to disclose on our website any future amendments of our Code of Conduct or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions or our directors from provisions in the Code of Conduct. Information contained on, or that can be accessed through, our website is not incorporated by reference into this report, and you should not consider information on our website to be part of this report on Annual Report on Form 10-K.
Item 11. Executive Compensation
The information required by this item will be included in the 2024 Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item will be included in the 2024 Proxy Statement and is incorporated herein by reference.
Securities Authorized for Issuance under Equity Compensation Plan
The information required by this item will be included in the 2024 Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be included in the 2024 Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
The information required by this item will be included in the 2024 Proxy Statement and is incorporated herein by reference.
With the exception of the information incorporated in Items 10, 11, 12, 13, and 14 of this Annual Report on Form 10-K, the 2024 Proxy Statement is not deemed “filed” as part of this Annual Report on Form 10-K.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
Documents filed as part of this report are as follows:
1. Consolidated Financial Statements:
Our Consolidated Financial Statements are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8 of this Annual Report on Form 10-K.
2. Financial Statement Schedules:
Financial Statement Schedules have been omitted as information required is inapplicable or the information is presented in the consolidated financial statements and the related notes.
3. Exhibits:
The documents listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Annual Report on Form 10-K.
Exhibit Index
Incorporated by Reference
Exhibit Number
Description
Form
File No.
Exhibit
Filing Date
3.1 Amended and Restated Certificate of Incorporation of Braze, Inc.
8-K
001-41065
3.1
November 23, 2021
3.2 Amended and Restated Bylaws of Braze, Inc.
8-K 001-41065 3.2 November 23, 2021
4.1 Form of Class A Common Stock Certificate .
S-1/A
333-260428
4.1
November 8, 2021
4.2* Description of Registrant’s Securities.
10.1 Fourth Amended and Restated Investors’ Rights Agreement, dated as of September 24, 2018.
S-1
333-260428
10.1
October 22, 2021
10.2+ Amended and Restated 2011 Equity Incentive Plan and forms of agreements thereunder.
S-1
333-260428
10.2
October 22, 2021
10.3+ 2021 Equity Incentive Plan and forms of agreements thereunder
.
S-1/A
333-260428
10.3
November 8, 2021
10.4+ 2021 Employee Stock Purchase Plan .
S-1/A
333-260428
10.4
November 8, 2021
10.5+ Form of Indemnification Agreement entered into by and between Registrant and each director and executive officer.
S-1/A
333-260428
10.5
November 8, 2021
10.6+ Confirmatory Offer Letter, by and between Braze, Inc. and William Magnuson, dated November 2, 2021.
S-1/A
333-260428
10.6
November 8, 2021
10.7+ Confirmatory Offer Letter, by and between Braze, Inc. and Isabelle Winkles, dated November 2, 2021.
S-1/A 333-260428 10.7 November 8, 2021
10.8+ Confirmatory Offer Letter, by and between Braze, Inc. and Susan Wiseman, dated November 2, 2021.
S-1/A 333-260428 10.8 November 8, 2021
10.9+ Confirmatory Offer Letter, by and between Braze, Inc. and Jonathan Hyman, dated November 2, 2021.
S-1/A 333-260428 10.9 November 8, 2021
10.10+ Confirmatory Offer Letter, by and between Braze, Inc. and Myles Kleeger, dated November 2, 2021.
S-1/A 333-260428 10.1 November 8, 2021
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10.11+ Executive Severance Plan.
S-1/A 333-260428 10.11 November 8, 2021
10.12+ Non-Employee Director Compensation Policy.
S-1/A 333-260428 10.12 November 8, 2021
10.13 Sub-sublease Agreement by and between Braze, Inc. and ContextMedia Health, LLC, dated December 20, 2018.
S-1 333-260428 10.13 October 22, 2021
10.14 Sublease by and between Braze, Inc. and Web.com Group, Inc., dated June 30, 2019.
S-1 333-260428 10.14 October 22, 2021
10.15 Sublease by and between Braze, Inc. and Nestle USA , Inc., dated November 17 , 20 22 .
10-K
001-41065 10.15 March 31, 2023
10.16+
S enior Leadership Performance-Based C ompensation Plan
10-K
001-41065 10.16 March 31, 2023
21.1* List of Subsidiaries of the Company.
23.1* Consent of Ernst & Young LLP, independent registered public accounting firm.
24.1* Power of Attorney (included in signature pages hereto).
31.1* Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*† Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97+
Compensation Recoupment Policy .
101.INS* Inline XBRL Instance 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)
* Filed herewith.
+ Indicates management contract or compensatory plan.
† The certifications attached as Exhibit 32.1 that accompany this Annual Report on Form 10-K 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 Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
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Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on April 1, 2024.
BRAZE, INC.
By: /s/ William Magnuson
Name: William Magnuson
Title: Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints William Magnuson, Isabelle Winkles, and Susan Wiseman, and each of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated:
Signature
Title
Date
/s/ William Magnuson
Chief Executive Officer and Director
(Principal Executive Officer)
April 1, 2024
William Magnuson
/s/ Isabelle Winkles
Chief Financial Officer
(Principal Financial Officer)
April 1, 2024
Isabelle Winkles
/s/ Pankaj Malik
Chief Accounting Officer
(Principal Accounting Officer)
April 1, 2024
Pankaj Malik
/s/ Neeraj Agrawal
Director
April 1, 2024
Neeraj Agrawal
/s/ Phillip M. Fernandez
Director
April 1, 2024
Phillip M. Fernandez
/s/ Tara Levy
Director
April 1, 2024
Tara Levy
/s/ David Obstler
Director
April 1, 2024
David Obstler
/s/ Doug Pepper
Director
April 1, 2024
Doug Pepper
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/s/ Fernando Machado
Director
April 1, 2024
Fernando Machado
105