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Item 9A. Controls and Procedures

2025-03-31 compared with 2024-04-01 · 43 added, 47 removed, 129 unchanged (41% of the section changed)

4 unchanged sentences

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, 2025, 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.

Our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of January 31, 2025 because of the material weakness in our internal control, discussed below.

Notwithstanding the material weakness in internal control over financial reporting described below, our management has concluded that our consolidated financial statements included in this Annual Report on Form 10-K are fairly stated in all material respects in accordance with accounting principles generally accepted in the United States of America.

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.

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.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting.

Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of its internal control over financial reporting based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that these controls were not effective as of January 31, 2025, due to material weaknesses in the operation of certain key Information Technology General Controls .

Consequently, automated and information technology dependent manual business process controls that rely upon information from the information technology systems were also deemed ineffective.

Notwithstanding this material weakness noted above, management has concluded that our consolidated financial statements and related notes thereto included in this Annual Report fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report.

Additional detail on the nature of the material weaknesses, and management's conclusions can be found below.

Material Weakness

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;

• Strengthened review and validation procedures over information produced by systems and applications used in the operation of revenue controls.

We identified a material weakness in internal control related to ineffective information technology general controls, or ITGCs, in the areas of user access and program change management over the information technology systems that support our financial reporting processes.

Automated and manual controls that rely on system-generated data or reports from the affected information technology environment or process level automated controls in the affected information technology environment were ineffective because they could have been adversely impacted.

Remediation Plan

We have developed a detailed plan for remediation of the material weakness, as well as compliance with Section 404 of the Sarbanes-Oxley Act, including:

• Enhancing controls and procedures over user access and program change management;

• Strengthening our systems and IT compliance functions through targeted hiring, staff training and implementation of new IT policies;

• Engaging an external advisor to assist with control documentation, gap analysis and remediation monitoring.

While we have performed certain remediation activities to strengthen our controls to address the identified material weakness, control weaknesses are not considered remediated until new internal controls have been operational for a period of time, are tested, and management concludes that these controls are operating effectively.

We will continue to monitor the effectiveness of our remediation measures in connection with our future assessments of the effectiveness of internal control over financial reporting and disclosure controls and procedures, and we will make any changes to the design of our plan and take such other actions that we deem appropriate given the circumstances.

We expect to complete the remediation process by the end of the fourth quarter of our fiscal year ending January 31, 2026.

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.

Other than the remediation efforts noted above, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal year ended January 31, 2025 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitation on the Effectiveness of Internal Controls

1 unchanged sentence

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.

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.

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.

On September 11, 2024 , Phillip Fernandez , a member of our board of directors , 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 18,000 shares of our Class A common stock, subject to the satisfaction of specified price conditions.

The plan will terminate on December 15, 2025 , 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.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

32 unchanged sentences

3.2 Amended and Restated Bylaws of Braze, Inc.

8-K 001-41065 3.2 November 23, 2021

001-41065 3.2 December 10, 2024

4.1 Form of Class A Common Stock Certificate .

7 unchanged sentences

November 8, 2021

PSU Award Grant Notice.

10.4+ 2021 Employee Stock Purchase Plan .

18 unchanged sentences

10.11+ Executive Severance Plan.

S-1/A 333-260428 10.11 November 8, 2021

333-260428 10.1 September 06, 2024

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

10.15 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, 2022.

001-41065 10.15 March 31, 2023

S enior Leadership Performance-Based C ompensation Plan

Senior Leadership Performance-Based Compensation Plan.

001-41065 10.16 March 31, 2023

Transition, Separation and Release Agreement between Braze, Inc.

and Myles Kleeger.

10.1 February 3, 2025

Insider Trading Policy.

21.1* List of Subsidiaries of the Company.

6 unchanged sentences

Compensation Recoupment Policy .

97 April 1, 2024

101.INS* Inline XBRL Instance Document

10 unchanged sentences

Form 10-K Summary

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.

/s/ William Magnuson

7 unchanged sentences

(Principal Executive Officer)

April 1, 2024

March 31, 2025

William Magnuson

2 unchanged sentences

(Principal Financial Officer)

April 1, 2024

March 31, 2025

Isabelle Winkles

2 unchanged sentences

(Principal Accounting Officer)

April 1, 2024

March 31, 2025

/s/ Neeraj Agrawal

April 1, 2024

March 31, 2025

Neeraj Agrawal

/s/ Phillip M.

April 1, 2024

March 31, 2025

/s/ Tara Levy

April 1, 2024

March 31, 2025

/s/ David Obstler

April 1, 2024

March 31, 2025

David Obstler

/s/ Doug Pepper

April 1, 2024

/s/ Fernando Machado

April 1, 2024

March 31, 2025

Fernando Machado

/s/ Yvonne Wassenaar

March 31, 2025

Yvonne Wassenaar

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 9A. Controls and Procedures