Braze, Inc. (BRZE) Earnings Call Transcript & Summary

I'm Chris Ferris, Head of Investor Relations of Braze. Welcome to Braze's Second Investor Day at Forge 2024. We're really excited to have all of you here in Vegas. Thank you to everyone who traveled far and wide to get here. We really appreciate you joining us to learn more about Braze and our long-term vision for customer engagement, and thank you to everyone who's joining us on the webcast as well. You're missing out on Vegas, but there's a ton of great content coming your way here today at Forge, and we hope that all of you, whether you're here in person or virtual, deepen your understanding of Braze and the customer engagement ecosystem. Today, we'll start off with a keynote Bill, followed by a product presentation from our Co-Founder and CTO, Jon Hyman; and our SVP of Product, Kevin Wang. Then we'll transition to a go-to-market session, featuring presentations from our President and Chief Commercial Officer, Myles Kleeger; our SVP of Growth, Spencer Burke; and our Chief Business Officer, Astha Malik. During the GTM session, Myles will sit down for a conversation with Matthew Pharr, Managing Director, leading Accenture Song's marketing data and AI practice in North America. And then following a short break at 3:00, our VP of Customer Success, Global Strategic Accounts, Scott Dzialo, will host an exciting customer featuring Sina Zand, Head of CRM Strategy and Lifestyle (sic) [ Lifecycle ] Marketing, Xbox Digital Marketing; and Sarah Lands Ramrup, Senior Personalization Lead, Nestle Purina North America; and then finally, our Chief Financial Officer, Isabelle Winkles, will provide a financial update. And then, of course, we'll host an extended Q&A session with the entire leadership team up here. So we hope you find the events enriching and informative. Before we get started, let me turn to the slide that all of you love, the safe harbor. I think this is the best part of the IR job, I have to tell you, reading it on the earnings calls. Anyway, I'd like to remind you that during this session, we will make statements related to our business that are forward-looking under federal securities laws. These may include, but are not limited to, statements regarding our financial outlook, our long-term financial targets, the size of our anticipated total addressable market and our business and product development plans. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations and reflect our views only as of today. For a discussion of the material risks and uncertainties that could affect our actual results, please refer to the risk factors identified in our SEC filings, including Form 10-Q for the quarter ended July 31, 2024, which are available on the Investors section of our website. I'd also like to remind you that today's session will include certain non-GAAP financial measures. Please refer to the reconciliations of our non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with U.S. GAAP included in the appendix to the accompanying presentation. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with U.S. GAAP. And with that out of the way, please let me extend a warm welcome to our Co-Founder and CEO, Bill Magnuson.

Thank you, Chris. Welcome, everyone. And thank you for joining us today. I also want to thank those of you who are joining us online and to all of you for your continued interest in Braze. We're really excited to be hosting our second-ever investor event since going public in November of 2021, nearly 3 years ago. Just a few weeks ago on our Q2 earnings call, I referenced 2 key components of our long-term ecosystem strategy, both of which I believe will deepen the competitive moat that Braze is building as we seek to become the de facto leader in the customer engagement market. The first is to establish Braze as the premier skill set for customer engagement practitioners; and the second is to occupy center stage in the reference architecture of the modern customer engagement technology stack. I love Forge because it provides an annual showcase of our progress on both of these goals, as we bring together thousands of people from our ecosystem of customers, partners and prospects, all in one place. And they're joining us not only for the inspiring on-stage content and networking, but also hundreds of this week's Forge attendees are signed up for in-person workshops, training and certification. Many of them showed up early in our in sessions right now. So far in 2024, we've also seen nearly 11,000 people complete Braze learning courses and have awarded more than 3,000 Braze certifications, as our momentum continues to grow with their customer base and our partners. And of course, while Forge is our annual flagship event, with a keen focus on our global enterprise and strategic customers, I just met one of many Braze-owned events in our 2024 calendar as we welcomed thousands of Braze customers and prospects through the doors of our city by city and grow with Braze event series across 5 continents and all over the world. Now for those of you that are new to the story, the notion of connection and creating strong bonds is behind both the Braze company name and the namesake of this event, Forge, where stories about customer engagement and connection come to life. And this year's theme for Forge challenges our community. Even in this difficult environment, there's never been a better time to be a better marketer. It builds on our rebrand from earlier this year, and it's a critical message for those striving to be the best in their field. Today, we all stand on a mountain of fast-moving innovation being supercharged by AI. Yet no matter how much things change on the technology side, as humans, we continue to place tremendous value on connection, and we want to be understood. And we know that the best marketing doesn't just drive leads, it builds enduring and valuable relationships. It's the magic of amazing storytelling and the ability to connect to those stories to our passions. When done well, it allows brands to become trusted companions as consumers progress down their own journeys, finding those relevant moments to engage, interact and drive mutual value. And no matter what happens to technology, we know that the effectiveness of great storytelling isn't going anywhere, and the importance of building first-party relationships is only increasing, as markets grow more competitive and consumer attention is increasingly scarce. What is changing is the technology like Braze, combined with new ways of working, helping brands and marketers navigate this dynamic and challenging environment to build critical business assets in the form of direct customer relationships, the first-party data that describes them and the right to communicate on the channels that unlock them. Since the founding of Braze only 13 years ago, we've already seen 3 tremendous waves of technological change, begin, grow and now compound together. Cloud and mobile was the wave that we were born from. Then came the rise of big data and the widespread application of machine learning. And more recently, the invention of the transformer has ushered in the next major wave of AI innovation with LLMs and agents at the forefront. And just like we're still seeing the widespread impacts of the deployment of smartphones all these years later, the important questions related to GenAI are far from resolved. For those of you that will be here tomorrow, I'll speak about this in more length at my keynote. But while we're here, I wanted to give everyone a preview into how we're thinking about two of those questions today. The first one is how the advance of GenAI assistants or agents are going to change our behaviors as consumers, diners, travelers and more. And the second question is how those same advances will integrate into customer engagement as they usher in new interaction and user experience paradigms, transforming both marketing and product delivery in the process. At Braze, our origin bet was that mobile would fundamentally change the world, and we were right. That's why we're here today. Mobile forever change the way that we not only engage with technology, but our relationships with each other, with brands, with institutions and even with knowledge. These changes in the way that we live our lives laid the groundwork for Braze to help define the new category of customer engagement and to develop a craft around its practice. And now with the development of large language models, agents and the broader advance of transformer-driven generative AI, we're going back to these mobile, personal and connected interfaces that have become a pervasive part of nearly every facet of our lived experience in the last 15 years, and we're challenging them to transform us again. This has all been further aided by the rapid deployment of AI-optimized silicon, and we're seeing frontier capabilities and artificial intelligence continue to evolve rapidly. Now in computer science, when we encapsulate advanced capabilities into easy to manage packages, we call those programs. When those programs are interacting directly with humans and they're capable of achieving goals instead of merely completing tasks, we call them agents. And the future for those agents is really bright. Embracing this future, the challenge of today for brand is to understand how AI is going to permeate product and marketing experiences to interact with customers directly as well as we as consumers will utilize agents to act on our behalf. Now this could be as simple as directing ChatGPT to book a hotel for you from the chat window or ordering food for a quick night at home through a conversation with a voice assistant. But the more likely future is that it's going to be as diverse human passions and preferences are. And it's a future that Braze is well prepared for and that we're working closely with our customers to take advantage of. As I say, even if history doesn't repeat, it does rhyme. And while this new mode of interaction is relying on advanced technology, its concepts are familiar. When software like ChatGPT or Apple Intelligence leverages GenAI in this manner, they're effectively creating a form of demand aggregator, specifically a digital intermediary or gatekeeper that's empowered to act on their behalf. That's a market mechanic and user experience concept that we've all seen and used before. In fact, many people probably already have used it today or this weekend on their way here. And many of these aggregators are also Braze customers. And platforms and technologies have been injecting themselves between brands and consumers forever. Websites that aggregate flight options, streaming services that serve up movies for multiple companies or studios, transport applications, a dispatch taxis alongside their own cars. These are all in service of providing higher levels of convenience and consumer choice and in many scenarios, it's extremely helpful. But of course, even though we love convenience and choice, the story never ends there. Because having direct relationships with customers, the data to understand them and the right to communicate with them directly is highly valuable. And a brand that wants to stick around is never going to give that up without a fight. Brands don't want to be disintermediated. They want to connect directly with customers. They want to own the data, which helps them understand them better, and they want to be able to optimize those relationships to achieve their business goals. Consumers crave that connection as well. And we see it in the data as consumers are simultaneously leveraging aggregators for conveniences and selections for the commodities of their life. We'll simultaneously paying more and more for personal experiences and high-quality products, especially when brands connect with their passions. Look no further than the resurgence of vinyl records, Posh Pet products, designer sneakers and the rise of extravagant bucket list of experiences. Even across the digital sphere, we see brands responding to this desire for deeper connection with exclusive products, concierge support benefits and robust loyalty programs. All of which offer enhanced value and connection in exchange for a more direct relationship and also expand the sphere of Braze customers. Now if we step back into the hard questions of the present, we also want to ponder a future where both brands and consumers are represented by agents. And those agents operate with some level of autonomy to do our bidding, relying on expansive knowledge and training, but with little input from us. Now for some parts of our life, that's awesome, that's an excellent vision for the future. But for the parts that we're passionate about and we want to invest in, we want to stay involved. And we know that when faced with overwhelming selection often by literally referencing it as the tyranny of choice, the consumers disengage and they look for connection in new places. So make no mistake, we will certainly see advanced AI used to create demand aggregators in the form of chatbots, assistants and next-generation search engines, precisely because these are valuable positions in the value chain, and there are large parts of our life where the convenience and flexibility of an aggregator makes sense, but you should never stop your analysis at the first stage of change. In all of these situations, the brands that thrive will be those that continue to form a connection that build those first-party relationship assets. And they'll need to use intelligence, awareness and creativity to do it successfully. Navigating this challenge require strong competencies, which should sound familiar. It starts with understanding customers better through data, and it leverages that understanding with sophisticated engagement tools. And yet again, we can rely on the humanity of this problem to guide us. When we want to strength the relationship with someone, we rely on our senses and our ability to communicate. Intelligence is driven by a transformer architecture and formed by large language models are no different. They need robust sources of data that are accurate and current and they need to be able to communicate flexibly and interactively. And that's why we paired the Braze data platform with an industry-leading selection of channels, and we're continuously enhancing the intelligence that connects them to each other. Through the Braze data platform and our extensive partner network, Braze provides an unparalleled array of senses that brands can rely on to deeply understand their customers and build those first-party data assets. And with a wide array of feature-filled channels, Braze customers can feel confident that their creatively crafted messages are being seen, heard and understood. Now if you've heard me speak at customer events before, you've probably heard me characterize the goals of first-party data collection as being more like a good listener and distinct from the practice of being a creepy detective, which is the modus operandi that a lot of the adtech industry was built on. And today, we continue to double down in that approach, operating with an extreme focus on delivering value to consumers as a knowledgeable and considerate companion to their journey. Think about the brands you love or those that have captivated your attention over time. They become not just a companion to your journey as a consumer in the early innings, but a companion to your life. Those products and their behavior live up to their promise. Maybe it's a health and wellness brand who recommends new recipes, exercises or adventures that improve your vitality, get you outside of your comfort zone and prepare you for spontaneity, or a learning app that helps you master a new language. It allows you to connect with your family heritage or new friends around the world in a way that you couldn't before or a banking application that makes us as fun to save as it is to spend so people can move into the future, confident in their retirement. We now have the tools and insights to become a valuable companion to the customer journey and not just as a commodity waiting to be disintermediated, but as a part of our customers' entire life and identity, amplifying their passions and strengthening a relationship with them through deep connection. And as modern brands rise on this challenge, the level of competition, standard of excellence and expectations of their customers will rise in tandem. Standing out will require bringing together advanced technology with AI and the creative soul of marketing and therein lies the power of experimentation and creativity coming together. Now the long-standing goal of Braze's Canvas product is to provide a visual environment that allows brands to map the union between their customers' journey and the goals of their business. In Canvas, marketers map out the potential twists, turns and forks in the road of the customer journey. And with the flexibility of the Braze data platform and the power of our event-driven stream processing technology, we're able to engage in the pivotal moments of the customer journey with relevant messaging that enhances customer stickiness, drives incremental revenue, amplifies customer passion and advocacy and avoids churn. But as advance as Canvas is today, we know that this problem stays as far from solved. And the reason is simple. Humans are complicated and their journeys are incredibly complex. Even a small brand customer base contains a multitude of personas with diversity across many dimensions, including language and culture, socioeconomic constraints and spending habits, varying passions, preferences and more. And alongside the complexity, a growing company's products are expanding over time. Their competitive landscape is evolving, and the outside world continues to be highly dynamic. So this task of mapping out the customer journey to a brand's business goals often results in a simplified version of reality. But both our skills and the tools we use continue to get better every year. With Canvas, we provide an environment where marketers can define, observe, test, experiment and expand upon their engagement strategies over time. And the teams that do it best operate with both high levels of agility and a data-driven feedback loop, treating customer engagement as an active process that compounds learning, all in service to stronger customer connection. At Braze, we've understood the difficulty of this process for a long time, which is why we've spent years investing in automated decision-making and advanced machine learning to systematically improve our built-in capabilities while decreasing Canvas complexity overall. Now as Canvas evolved from its original version, we look to make sophisticated, personalized and cohesive journey building easier by encapsulating logic into single Canvas components, including new blocks like Audience Paths, exit criteria, Action Paths and experiment steps to guide audiences and personalized experiences based on responsive real-time actions, behaviors, attributes and preferences. Then in order to bring predictive analytics and relevance optimization to Canvas, we made it simple to incorporate our intelligence suite to optimize delivery, helping to share the right message variant at the moments that matter most and in the places that customers are, all available with the check of a box or the pull of a slider. And while we delivered optimization for delivery, timing and channel selection, we also wanted to give marketers the ability to test any facet of an experience and to do so at any one of those potential twist, turns or forks in the customer journey. So we introduced winning pass to automatically optimize any test in a journey. We push further ahead with Personalized Path, leveraging logistic regressions to match each customer with the mode of interaction they're most likely to engage with at any step of a journey. Instead of optimizing for averages, Personalized Path empowers optimization based on what will drive individual customers to have the experience uniquely tailored to their own preferences and behaviors. Additional generative capabilities have been embedded and layered into Canvas to enable rapid variant creation by utilizing assistants or copilots that can generate templates, create on-brand tone controlled content, QA that copy, generate images and pull it all together into relevant experiences for customers. And when layered with additional Canvas AI functionality, these features allow marketers to take full advantage of our experiment automation and optimization capabilities to uncover the experiences that each customer will appreciate most. We've even gone back and reimplemented the logic in some of these features as the state-of-the-art in AI advances. And you can see that in our recent launch of transformer driven AI-item recommendations that layer brand messages with the products, experiences and content that will resonate most for each customer. The goal stays the same, maximizing relevance for consumers through personalized content. But the approach evolves as the frontier of AI continues to advance and that drives better and better results. As we continue forging ahead, we will increasingly be able to trust GenAI to take over more and more of these journeys. Just as we trusted automation and machine learning to do so in the past, we will trust agents to increasingly do so in the future. And with history as our guide, we know that this is going to be an iterative process. When you want to solve a complex problem, you break it down into sub problems, scrutinize the inputs and outputs, often evolving the approach behind each one independently, and then you combine it into a coherent solution. That same process describes how LLMs think, how agents work and how Canvases are built. You then observe and optimize the individual components and the entire system over time using the most advanced capability available at each step to achieve the broader goal, evolving and learning along the way. And we need to remember that none of this is standing still. As the frontier underlying technology continues to advance, brands are going to want to test new capabilities. And we'll often need to do so in live customer journeys head-to-head against prior approaches. And so as we think about the customer experience, the complex customer journey and how brands present themselves along the way, there are certainly many opportunities where agents are going to be able to optimize content, be a companion to the customer and communicate in a manner that amplifies connection. Some of these will be fully built and hosted by Braze, others by our partners. And still more will be built in-house by our customers' engineering teams and then interconnected to Braze, relying on the power and flexibility of Canvas, our APIs and the Braze data platform. But none of this removes the fact the customer journeys and the broader customer experience is multifaceted and wildly complex. And thus, the ability to govern, report on, experiment with and adapt agents to human goals, passions and workflows will continue to be where the value is created. And as we move faster and these sub-problems become easier, we can tackle more audacious goals, delivering on that promise of strong connection to ever more dimensions of our increasingly diverse customer bases. All right. So I hope that sets the stage, and it grounded you in our thinking about the past, present and future of innovation in our space. And why we believe that Braze is best positioned to take advantage of continued advances in frontier AI capabilities and why the continued evolution of brands and customer behavior will continue to benefit Braze as we see massive shifts toward investing in direct customer relationships and the first-party data sets that support them. So I'm now very happy to welcome 2 long-tenured R&D colleagues of mine, Jon Hyman, our CTO; and Kevin Wang, our Chief Product Officer, to give you a more detailed preview of what's to come this week.

Hi, everyone. I'm Jon Hyman, Co-Founder and CTO of Braze.

And I'm Kevin, the Chief Product Officer here at Braze. So for this next section, we're excited to dive into the products that our teams are building to drive growth and stickiness. The product investments that we make are distributed across 3 main components, a data layer that powers one-to-one personalization, and orchestration layer that customers use to craft journeys and optimize experiences with AI. And, of course, the channels that deliver messages. We have dozens of teams that are working to advance these areas within our consolidated product, giving us the balance of platform cohesiveness as well as the ability to exploit new opportunities as they arise. This product area is tied directly into our company goals of driving higher bookings, improving the efficiency with which we're growing and, of course, increasing stickiness to drive [ DBNR ]. Later on, Isabelle is going to describe these goals in more detail from a finance lens. We've grouped these product advancements into these goals to help elucidate how advancements in different technology areas translate into business impact. But one thing that you should consider is that much of our product road map will help in 2 or more of these areas as the features that help us to close more deals do tend to also increase customer stickiness and reduce churn as well.

So we'll start with how our products help drive customer growth. In general, kind of like Kevin was saying, everything we build is intended to help sales close deals. We will show a few areas where we think that expanding our product's breadth and depth lets us deliver value through use cases that competitors in the market just can't match. I'll start first with mobile messaging. This is an area that's constantly evolving which means that R&D investments to support more channels allows our customers to consolidate their point solutions into Braze and start using these new mediums. Importantly, because all of our messaging channels run through Canvas, we provide a differentiated experience through ease of use, experimentation, personalization and the orchestration capabilities of these channels. What's especially exciting about new channels is that broader channel adoption increases customer stickiness and new channel expansions are also an opportunity for monetization. On the screen here are the 6 major mobile messaging types that we see ourselves offering in the near term and with us supporting the majority of these today. So I'm going to walk through a couple of them, starting with RCS. RCS is an extension of SMS and MMS, where interactivity and richness are important to deliver an engaging customer experience. As such, Braze supporting RCS in conjunction with Apple's recent iOS 18 release, allows our customers to stay at the forefront of messaging innovation and take advantage of these new messaging types and very engaging rich media support. We have an initial launch of RCS coming out soon. We think this is an area where we're going to see a lot of interest with our customers.

We're also expanding our investments in WhatsApp. This channel has been very successful for us. And given the growth that we've seen, we've established dedicated resources to support new capabilities like rich images and new e-commerce message types for personalized shopping experiences. The overall story here is that we view WhatsApp as a key channel, and we aim to be at the leading edge of the market in partnership with Meta. Finally, we're expanding our suite of messaging apps with LINE Messenger, the most popular messaging app in Japan and Thailand. Our first significant customer campaigns recently went live on the channel, and it should be generally available next month. Similar to WhatsApp and RCS, LINE is a rich messaging channel with significant prospect and customer demand in specific geographies, and we expect it to unlock more business in these regions.

These messenger channels will help drive continued success as we invest in markets outside of the United States. Another important dimension of this expansion is the establishment of launching Braze in international data centers to allow customers to comply with data residency and localization regulations. We know that this is particularly important for overseas enterprise sales cycles in regulated industries, such as financial services and health care. In 2025, we're focused initially on expansion into the Asia Pacific region with AWS, but the deeper story here is that we're replatforming much of our infrastructure so that it's affordable to add additional future data centers in the regions in the cloud as we go forward. This is going to allow us to enter new geographies much, much faster and in response to demand that we're seeing in our pipeline.

Shifting now towards in-product messaging. We're excited about the potential for landing pages to provide tailored web experiences and bridge the gap between in product and traditional marketing channels. Landing pages are tightly integrated with the rest of the Braze system. The key differentiation point for our offering is that all landing pages will have the Braze SDK automatically integrated. And as a result, they will support our other in-product messaging channels such as content cards, in-app messages, future flags and everything else that we will develop in the future. Early access for landing pages is planned to start in the next 30 to 60 days. And we've seen very high interest in landing pages as a way to generate new leads and grow subscriber lists to host events or webinars and more. We're also developing complementary features for landing pages, such as the ability to sync accounts and opportunities from Salesforce to provide a more streamlined experience for our many B2B customers. And speaking of B2B, we already have a number of customers who are using Braze to execute on a high-volume B2B customer engagement strategy. For example, Miro and AB InBev are here today with us at Forge. In general, we want to build our product to better deliver for their use cases and this isn't a change in our product or go-to-market strategy. But as a service area of our product offerings continues to expand, B2B is a space where we plan to have incremental product releases in this next year, such as that ability to sync data from Salesforce. This is going to allow us to make meaningful progress in B2B in the medium term and continue to build on our current momentum.

To close out this section of driving customer growth, Kevin and I will talk a little bit more about our AI developments to complement what you heard from Bill. As you heard from Bill, our approach into AI is really centered on helping our customers by providing statistically rigorous offerings that demonstrably create relevant better experiences for the consumer. That's because the brands that are able to do that are rewarded with their customers as loyalty, advocacy and dollars. Now when I say AI, I don't just mean Generative AI. Over the years, we released multiple features that used machine learning and data analysis techniques to help our customers optimize their engagement strategies. We have 3 proprietary AI models that we've built or expanded upon in the last year. The first that Bill described was Personalized Paths for Canvas. This is our first foray into journey selection, and it uses look-alike audience modeling to determine which messages and which Canvas paths have the highest likelihood of conversion for each user. Earlier this year, we released AI item recommendations, which uses transformer model to help customers improve their relevance and usefulness of their product recommendations. We've seen that these kinds of out-of-the-box AI item recommendations can be a compelling addition in retail-focused sales cycle. This year, we also released a slew of updates to our generative AI copyrighting assistant. Braze customers can reference generated content based on the previous campaigns they have made to ensure that all the generative content is on brand, they can dictate its tone and style, and they can create and apply brand guidelines to ensure that generative content matches their brand's personality. As we've improved the Braze AI capabilities and the data science behind them, we've enhanced the foundation of these 3 things: journey selection, item recommendations and generative AI to help marketers deliver more value to their customers and drive more value for their business. We have 2 new AI assistants launching this year that Kevin is going to talk about.

First, we have a new message template assistant that will automatically generate an on-band message template, accelerating time to value and customer efficiency. The Braze AI message template assistant is scheduled to roll out in beta for e-mail later this year, and we're going to expand to additional channels from there. The other assistant we're launching gives marketers the ability to quickly and easily translate plain text personalization concepts into the templating language that underpins all of Braze's personalization. That helps them rapidly crop sophisticated experiences in Braze without writing any code or doing anything technical themselves. And with all of this in mind, tomorrow, we're really excited to announce Project Catalyst, an AI agent that's going to allow customers to harness the combined power of many of Braze's most important features, a rich data landscape for personalization, real-time orchestration, cross channel reach and AI optimization. Customers will be able to take an audience and a marketing goal and Braze will use generative AI and item recommendations to generate thousands of content options. Our reinforcement learning-based optimization engine is then designed to find exactly the right content, journey and incentives to match users one-to-one and maximize our customer defined goal. Project Catalyst builds on everything that we mentioned. Our proprietary models for journey selection and [ vitamin ] recommendations as well as our new generative AI capabilities to compose message templates and personalized all of that content at scale. And this is where Braze's event-driven stream processor along with having the market-leading first-party data sets on campaign performance and cross-channel architecture help us to bring Project Catalyst to life.

For example, we can use generative AI to create 10 different subject lines for e-mail and 10 different calls to actions. When combined with up to 10 different offers in a Braze catalog, now we've got anywhere from 100 to 1,000 different variants for that campaign. We then create even more variants by turning other parts of the message into components. This component-based approach provides one-to-one personalization, but it still lets the marketers review, modify and approve any generative content, so they can ensure consistency of brand voice and promise as well as compliance in highly regulated industries. And we think that creating these one-to-one customer experiences with AI at scale is the future of customer engagement. And we believe that Braze is uniquely well positioned to win this space. In addition to our data platforms and our ability to orchestrate trillions of messages a year for our customers, we have a wide breadth of channels, which increases the surface area over which we can optimize these experiences. And we have a tightly integrated feedback loop where we both send messages and also ingest data from user activities all in a single platform. We plan to bring Project Catalyst to customers and iterative enhancements over the next year.

So moving on to sales efficiency. We're excited to accelerate our customers' journeys to a deep integration with Braze that delivers differentiated experiences. By fine-tuning the ways that customers integrate and streamlining the user experience, we can help them to be more successful and also increase the efficiency of our pre- and post-sales teams.

I'll begin with the Braze data platform and focus on our data flexibility. Ease of use and flexibility are highly intertwined since those concepts let us support more customer use cases and get customers up and running much faster. As we expected, the Braze data platform launch has been very well received. And this makes sense because in order for our customers to deliver relevant messages, they have to know how to add value to an end user's experience. To add value, that requires unifying and activating data from more sources quickly. We've been building in exactly that direction. So I just want to toss this up here because we're at the beautiful Virgin Hotels in Las Vegas. Virgin Red, the rewards club for Virgin, show that they're using Braze to leverage data they have and drive both engagement and acquisition at a speed that they just couldn't dream about before. So I'll give you an example of what it can mean when a customer says, "This is operating at a speed at which you couldn't dream about before." We released Cloud Data Ingestion about 2 years ago. This allows customers to connect their data warehouses and data platforms to Braze and then start sending messages immediately with that data. Cloud Data Ingestion has helped us in many sales cycles because it's built on an architecture that's compatible with modern customers as data warehouse and data platform-based approaches. A few months ago, I was in Singapore for our city-by-city event there. And I spoke with a customer who, on day 1 of using Braze, backfilled and imported in all of their historical user data into Braze and about 80 minutes of the Cloud Data Ingestion and was able to build campaigns that day. The tremendous adoption that we've seen with Cloud Data Ingestion bears us out. We now have thousands of active data integrations through CDI, up 487% year-over-year. And as this adoption increases, we're seeing an explosion in the amount of data that brands are bringing into Braze. Our customers bringing over 3 billion rows of data every single day. This is all fuel for more customer value, whether they're doing better fine-grained audience targeting or better personalization. So when we look at our Cloud Data Ingestion road map, what we want to continue to do is enhance our integrations to decrease the time to value for our customers while increasing the share of customers and prospects who can then benefit from Cloud Data Ingestion. So to that end, one thing that we're announcing tomorrow is we're launching support for flat files and cloud storage. We regularly hear from customers who use legacy tooling that they have data stored in CSVs or other flat files, and they want to send that data directly into Braze. So now those kinds of customers or prospects will be able to easily ingest those file formats to Braze, starting with AWS S3, which is generally available tomorrow, and Azure and GCS coming soon. Another thing that we hear from customers is that they have yet to connect their data platforms to Braze because they either feel that their warehouse data is just changing too fast to keep a copy of it up to date and Braze by sinking it over, or they have internal security restrictions anyway around SaaS products, having a copy of their data warehouse data. So we want to bring them into the fold, too, by offering zero-copy data access to Braze with a new feature called CDI segments. CDI segments are generally available now for all of our data warehouse types, and it allows customers to connect their data warehouse to Braze, but not transfer any of the underlying data to us. We expect that this is going to help us win more deals in highly regulated or sensitive industries like financial services, while letting these kinds of customers use more of their own data to deliver a great customer experience. Now Cloud Data Ingestion is just one part of the Braze data platform, and we have similar stories of improved customer agility, decrease time to value and better ROI with other areas in the Braze data platform, but we just didn't have time to talk about them today.

Finally, we wanted to discuss our free trials, which were a key evolution of how we're going to market across all of our customer segments. The core experiences that can be built with Braze are ultimately highly relatable like in e-commerce SMS promotion, in-product subscription upsells, or e-mail and in-product flows for managing tickets to an event or for a trip. As a result, buyers of all sizes want to directly try the Braze product before they partner with us. Our free trials are essentially expansions of the enterprise sandbox that we've already been running successfully. And free trials allow us to showcase the platform earlier and more prominently in the sales cycle. Free trials are also significantly more scalable and higher quality if they don't require setup or administration from our presales team and they allow us to bake compelling examples of how to get started directly into that product experience. We're already seeing these free trials make a difference. We've been using them to win competitive deals of all sizes and have made free trial conversion in explicit company goal. We're going to continue to invest in this as a way to accelerate bookings in an even more efficient way. And for our last theme, our product strategy focuses directly on increasing customer stickiness. Customers who take advantage of the sophistication of features like Canvas or use multiple channels are reliably stickier. Our goal is to ensure that our customers are increasing their usage of Braze and that we are increasing the depth of their integration with our product.

Here's an easy example of how we can increase usage by creating Canvas templates. So instead of a customer having to ideate all of their Canvases from a blank slate, we've now created a default library of Canvas templates that cover common use cases like onboarding, abandoned card, feature adoption laps and users and more. This is going to general availability tomorrow. We expect this to increase adoption of Canvas, which is going to make Braze stickier for those customers.

Reporting is an area where customers get more sophisticated with their engagement strategies and then they're reporting analytics needs become more complex. Customers want flexible reporting options to understand their engagement strategies. Therefore, reporting is a massive focus area for us to help do more ROI analysis inside the Braze dashboard. Tomorrow during my keynote, we'll be announcing our next-gen dashboard builder as well as templated dashboards that are going to be launching with Braze expected in Q1. This should keep more customer analysis in Braze and make marketers want to get more of their teams inside our product to share those dashboards that they're building inside Braze. Customers who integrate Braze directly into their in-product experience are able to create some of the stickiest use cases that we provide. Content cards are a fantastic channel for marketers to deliver persistent one-to-one content within a digital property. It's been a unique and exciting piece of digital real estate, where we have been able to create great user experiences, such as the homepages of the Sephora and Equinox mobile apps. So this winter, we plan to release a new version of content cards that allows customers to even more easily customize the look and feel to match their app or website as well as launching a drag-and-drop editor for easier editing. And of course, we have multiple product and engineering teams who build Canvas. We know that usage of Canvas leads to higher retention, particularly when customers are using it for sophisticated orchestration use cases. So pushing the state of the art for collaborative journey creation is a top priority for us. In the last year, we've added comments, drafts, versioning, made canvases easier to visualize with Zoom tools and much more. We're continuing to expand with features like AutoSave and being able to copy canvases across workspaces. And we're also building governance and QA tools so that enterprise users can run agile distributed teams without compromising on quality. These kinds of features will continue to be released indefinitely as we iterate on this flagship product.

Thank you all for joining us on this brief tour of the road map. We're happy to speak more with you about any of this during the Q&A to come later. And we also have 2 more product keynotes as we get Forge, mine tomorrow and Kevin's on Wednesday. With that, I'm going to or to our President and Chief Commercial Officer, Myles Kleeger, for a go-to-market overview. Thank you very much.

Thank you. Kevin. Great to see everyone here today. So for our go-to-market section, we're going to start with a primer for those who don't know us very well and an update for those who do. And then we're going to have a fireside chat with Accenture, as Chris mentioned at the top. And then we're going to talk a little bit about where we're going next and future levers for growth. So jumping right in, let's start with distribution. Braze is primarily sold through a direct sales team that is organized by geography and segment. We also have a small but growing network of resellers and co-sellers who are utilized in global markets where we have little or no direct sales presence. And we have a handful of industry-specific OEM partners in categories like small restaurant chains or gas stations who extend our reach into parts of the market we're not actively selling to you at this time. Our core buyer -- on the next slide. Our core buyer is the marketer or the teams who are directly responsible for engaging customers through digital channels. We also sell to product and growth teams who can leverage Braze's capabilities to meet their needs, and we actively engage other stakeholders in sales cycles, including engineering, data science and sometimes even CX to help us differentiate and justify our premium price. Our business is extremely diverse from a geographic standpoint, with 45% of our revenues coming from outside the U.S. in our most recent fiscal quarter and over 2,000 customers who are sold to and supported by teams in 12 offices around the world. Our business is also extremely diverse from our vertical industry and customer segment standpoint. Braze remains a strong fit for companies, no matter their size, vertical, business model or technical competence. We serve large enterprises like Gap Inc., Viacom, MAX and Intuit as well as emerging disruptors and category creators like Deliveroo, Venmo, Roman and FanDuel. Our top industry verticals include retail and e-commerce, media and entertainment, restaurants and QSR, financial services and health and wellness. We continue to lend impressive new logos across industries and around the world, many of whom are takeaways from the legacy marketing clouds, which is something you'll hear a bit more about in a few minutes. With premier brands like Miro, BAMBAS, L'Occitane En Provence, Solaris Bank, TF1 and DoorDash, all becoming Braze customers in the past year. We also continue to have a very strong upsell and cross-sell motion. This is a very simple visual representation of the variety of dimensions that Braze contracts can grow on, along with our customers' growing usage of Braze. Given the depth and breadth of the use cases we satisfy, the channels we support and the personas that we engage with, we're able to partner with our customers across a wide and ever-growing range of customer experience needs as their businesses continue to evolve and their sophistication level continues to increase over time. With Braze, brands can truly start anywhere and go everywhere. It's not about where you start, it's about where you go next. At Braze, we meet customers where they are at the outset and we focus our efforts on helping them progress and deliver on ever rising customer expectations, no matter where they started with us. The depth and breadth of our offerings also helps us land in more places and weighs in new accounts, which harkens back to our strength in new business. Consistent with this approach, our pricing and packaging aligns our products and services to the needs of each client's unique use cases and therefore, improves the accessibility of Braze to marketers. Our pricing model includes monthly active users, a platform fee, volume-based channels and onetime or recurring services. Braze has always differentiated itself on pricing by charging per monthly active user, which relies on a value-based approach that drives more revenue for Braze as our customers user base grows. In 2024, we updated our pricing and packaging with the launch of message credits, a model that allows customers to purchase an allotment of credits upfront for use across channels. This cross-channel pricing element is new for Braze. It directly complements our cross-channel product strength, and it provides more commercial flexibility for our customers to experiment and optimize with their channel mix and strategies as their needs evolve over time. Finally, I want to talk a bit about our partner motion. We understand that Braze is one piece of a brand's broader technology ecosystem. It's our goal to ensure customers are able to easily integrate and amplify the value of Braze in the context of their current and future state technology investments. That's why since the very beginning, we've invested heavily in our Alloys Partners Program. Today, we offer prebuilt integrations with over 170 technology and ISV partners who help us drive innovation and differentiation for our joint customers at every layer of our vertically integrated platform. Tech partners are crucially important to our GTM strategy in motion. They source a significant part of our pipeline, our win rates are higher and our initial deal sizes are generally larger when tech partners are attached to deals. Key tech partnerships include AWS, Snowflake, Meta and Shopify, all of whom you'll see here this week. Additionally, our open flexible APIs and productized integration methods provide flexibility to connect Braze into any tech stack, something that's becoming increasingly important in the age of native solutions and composable technology stacks, which leads us to our solutions partners, who are advising customers on how to design the optimal technology stack and then integrating and in some cases, operating those tech stacks inclusive of Braze on their clients' behalf. We've always recognized the importance of the solutions and services partner ecosystem to our long-term success, particularly with large enterprise customers. We know that the more services revenue we can feed the solutions partner ecosystem, the more software revenue the ecosystem will ultimately feed us. Accordingly, we've built a network of over 1,600 services partners who extend the value of Braze into new categories, verticals and regions. They help us win new customers and they help make our customers more successful when they choose to buy Braze. Our services partners fall under one of 3 categories: marketing agencies, consulting and implementation partners and resellers, which I touched on earlier. We manage a tiered partner program and we nurture partner relationships using high touch to low-touch partner management teams and dedicated portals. We also provide extensive training and certifications to ensure that our partners have all the knowledge and expertise they need. This way, we can match customers with the right partners based on their size, use cases, language, region or vertical industry. Key global service partnerships include Accenture, Deloitte and WPP, all of whom are represented here at Forge this week. And one of them, Accenture, you'll hear from directly in a few minutes. Now I'd like to welcome Spencer Burke, our SVP of Growth, to take you through our market opportunity and share some perspective on our competitive landscape and why we win.

I appreciate the opportunity to provide a perspective on our market and why we win. I'm Spencer Burke, the Senior Vice President of Growth. And this month, actually, last week marks my 13th year with Braze. I joined the company shortly after it was founded and have had the privilege of seeing our market evolve from the beginning, including the history of the market, our competitors and the names that have come and gone from the Marketplace. I'm going to share a perspective on 3 areas: first, the size of our market; second, the competitive landscape; and finally, why we win. First, we want to start by providing our view of the addressable market. And I know many of the folks in this room, the analysts, you've done your homework. You have your own point of view. And I want to share some of the high-level numbers that we have based on a study that we did with the support of some independent market experts. We looked at the size of our core market as well as some of the adjacent markets. We started by looking at where the market is today and then mapped out our view over the next several years and how fast we will get there. We thought it was important to look at the core market as well as the adjacencies to give us a view of the core investments that's happening around Braze, but then also where their investment opportunities. Where is investment happening across our partner ecosystem and across the broader technology landscape that our customers are investing in. So zooming out, our view is that the market is growing to $30 billion by 2028, nearly doubling in size from where it is today. One of the things that we tried to do with this exercise is show how we can align the investment opportunities to where we see the market growing and where the largest market opportunities are. So you'll see this in some of the things that Myles highlighted in terms of regional expansion and incremental offices. One of the areas that we've made investment over the last year has been in Latin America and Asia Pacific. Well, those are small markets today, they're 2 of the fastest growing regions. We also see really strong alignment with the market's estimate of the U.S. to the rest of the world split to our actuals. Our market sizing exercise said that the U.S. is about 60% of the market. You highlighted some data earlier that showed Braze is currently tracking about 55% of revenue. So that's a good validation that the places that we're winning today are in line with where the opportunities are. We also see this in the enterprise segment, which is one of the largest market opportunities within the broader landscape and where we'll continue to invest. Second, we want to talk about the scope of the customer -- the competitive landscape. Over the last 13 years, we've navigated an ever-changing competitive landscape. And in 2024, we're always competing with an incumbent in some part of the stock. There's very few companies that aren't doing any customer engagement at all, and we take pride in every competitive win. But really for us, it's about understanding the value that we can provide to customers and prospects. And we can take them through the migration journey from an existing solution and bring them on to Braze. Part of what we try to do is take a long-term view of the market. And in my 13 years, can I provide some of that context for where the market's gone and where we see it heading. And we try to think more about the structure of the competitive landscape than obsessing or going down the rabbit hole of any individual competitor. We look at the landscape at 3 levels: First, the legacy marketing clouds. These are the usual suspects, and this is an important segment for us, particularly as we focus on the enterprise, this is where many of our enterprise prospects are coming from. We believe that we're beneficiaries of an enterprise replacement cycle that with the support of partners like Accenture, who Myles is going to have up on stage shortly after this, enterprise brands are going through large change management programs as well as digital transformations. And as part of that process, they're making investments in the public clouds and cloud data warehouses. And when doing so, they don't want to leave their marketing technology stack behind. And so those moments are opportunities for Braze to participate in an enterprise replacement cycle where we can come in and modernize many parts of what the customer is trying to achieve. Second, we look at point and vertical solutions. Throughout our history, there have been many companies in this category, focusing on setting just e-mail, push notifications or SMS. We believe that structurally, this is a challenging category in 2024. There's tailwinds that continue to support our vision of a multichannel experience orchestrated in a single place through Braze Canvas. We also see that in the current macro environment where budgets are constrained, that this is one of the first opportunities where consolidation starts to occur. And third, we look at venture-backed competitors. These tend to be smaller competitors often pursuing a look-like strategy. Many of these names have come and gone over the years. But we continue to focus on some of the key brands and takeaways that have been really successful for us. And there's a couple that I wanted to highlight up here. The first is Going, formerly Scott's Cheap Flights. If you haven't heard of them, it's an amazing brand for finding travel deals. I actually saw a stat today that they've been on Good Morning America 73 times. They're also in the zeitgeist of how America is booking travel right now. Going is a great story for us because we had an amazing champion there, who I had actually been one of the first customers that I've ever worked with at Braze. I had onboarded back in our early days. He had purchased Braze multiple times, and when he got to Going, we took a close look at their technology stack and in particular, their incumbent e-mail solution. They had many challenges that was preventing them from moving quickly. And as soon as he got there, he knew there would an opportunity to take a look and start working with the Braze team. Another one I wanted to highlight is the Guardian. The Guardian is a great story, and not because this is a recent takeaway. Actually, they've been working with us for several years. And I think it's important to recognize that it's not just about the short-term win that we get, but it's the continued trust that brands continue to show in Braze to deliver critical messaging year after year and day after day. In particular, with the Guardian, they were looking to modernize off legacy solution. As a leader in the media category, and a company that had really started to push the boundaries of paywalls within the media space, they also wanted to make sure that their e-mail marketing strategy reflected the brand that they built and the trust that they had with consumers. Now finally, I want to bring this all together to look at why we win. This is the last slide for me, and then Myles is going to come back on stage with Matt Pharr from Accenture. There's 3 things I want to focus on here. The first is product, partners and then community. Our products is a huge part of why we win. You heard from Kevin and Jon on where the product is headed and some of the success stories that we've had. One of the things that I love about our products is a huge spectrum of things that we get to do for customers. On one hand, there's mission-critical messaging. And on the other hand, there is incredible creativity that we unlock. I was lucky enough this year to join our team at the Cannes Lions Festival. And I was blown away by what customers and partners were doing with Braze. When we started, we would hear all the time that customers had a vision for what they wanted to do, but the technology they were using was getting in the way. And now we see with our customers that are using Braze, their imagination is the limit and not the technology and not the product. Second, partners. Partners are a critical part of the equation for why we win. You'll hear firsthand, as Myles sits down with Matt. So you don't have to take my word for it. You'll get to hear directly from him on how Accenture is supporting some of the best brands in the world with digital transformation projects and how Braze becomes a part of that. We have a constant focus on helping partners win. We believe that when they win, we win. And finally, our community. Over the next couple of days, you all experience this yourself. I love being at Forge. I've seen some of you walking around the halls already. If you haven't, the energy here is infectious. It's incredible to see. You'll hear that day in and day out from our customers, from our partners. My team has been really focused this morning on delivering certification boot camps, training sessions, hands-on workshops. The demand was tremendous. We had to waitlist many of the sessions because our community has been so engaged with learning more about Braze and sharing that with each other. Our champions help us sell. They reduce friction. We recently had an opportunity that closed within a week because the prospects that came to us had such conviction that Braze was the right solution because all of their peers were also Braze's customers. And so when they started their evaluation, it was an easy decision for them. I want to thank everyone for this opportunity. And I'll be available in the Q&A with the rest of the team. But now I want to hand it back to Myles and also introduce Matt Pharr, one of the MDs from Accenture, who will be joining Myles on stage in a fireside chat.

Matt, thank you for joining us. Really appreciate you making the trip out here. Let's get started. Maybe just by you introducing yourself to the audience, share a little bit about your background and what you do at Accenture or so.

It's a great pleasure to be here. I lead Song's marketing data and AI practice in North America, where an integrated team of data strategists, data engineers and data scientists and marketing technology advisers to our clients. And we release it at the intersection of the front stage in the backstage, making sure that our clients' data and the technology they've invested in can manifest themselves and better customer and more transformative customer experiences. That's where we sit. That's our passion, and it's part of the reason that Braze is such an important partner to us.

Awesome. And how long ago did you join Accenture?

I joined 6 years ago. Prior to that, I've been on the agency services side, all of the [ alphabet ] soup of agencies. I was the Chief Analytics Officer at a company that was acquired by then Accenture Interactive several years ago and have been leading our data and AI and customer initiatives since that time.

Very good. So one of the things I wanted to ask you about just given where Accenture Song sits in the ecosystem and the practice area that you specialize in specifically, you're in a lot of conversations, you to a lot of the biggest brands in the world. Curious if you could just share a little bit about what you're kind of seeing and hearing across your clientele, either the brands you're already working with or ones that you're prospectively working with? What are the kind of big things are top of mind from them from a customer engagement standpoint, a martech standpoint?

It's a few different things. For a lot of our clients, we sit at within the part of the organization that served the Chief Marketing Officer. And what they're really coming to us and asking is a couple of different things. One, how do we modernize our marketing organization, both from a technology standpoint but also from our operating model, the way we think about our people in that operating model and how we train and upskill them. And they're doing that because they're very focused on transforming their digital core. How can they harvest all of the data that they have on their customers in order to do really 2 things. One, be able to drive better one-to-one relationships with their customers across the enterprise. So yes, within marketing, but also thinking about how marketing needs to integrate with customer care, the customer service center, a financial part of the organization. And the second component of what they're really asking us about, particularly when they're looking at those big bets they've made in technology, money has to come from somewhere. And they want to be able to look at investments in their digital core and in their digital platforms as a way to think about reducing spend on working media, the ads that we see all over the digital ecosystem, both online and offline in some instances. So really thinking about how they can transform their relationships with their customers, putting, data and digital at the core but understanding that that's going to take time. There needs to be a road map, and there needs to be a way to recognize value across that road map. And they come to us and say, "Help us with this Accenture." You know the CIO, you know the CTO, you understand martech and you understand providers and platforms like Braze. We also understand how to organize teams differently to take value, capture value from these investments. Help us do that, yes.

And just given all of the rapid innovation and change and every day, obviously, seemingly there is a new announcement, we'll talk about AI more in a minute. But are you sensing that marketers, but organizations more broadly, are they sensing this as a moment of transition where maybe just given the constant pace of change, the pressures on their business, that they see this as an opportunity to maybe reevaluate their current technology stack and start to ask some questions of the business? Like are we properly prepared for the present and the future more importantly?

Absolutely. It's very easy, particularly for marketing clients to -- they're responsible oftentimes for creating a hype cycle. It's their job as marketer, creating cycle around their brand and their products. But there's something in our conversations and my conversations with clients that feels qualitatively different from other things that we've heard about in the past, the Metaverse, which we a bit forgotten about now, but we -- we're obsessed 2.5, 3 years ago, and they care about this for a few different reasons. One, they see it as an opportunity to rethink the way the marketing organization operates and how it can start to move upstream of the relationship with the customer, but also downstream in managing the relationship with the customer better, like we understand the human. We understand the data around them. We understand the platforms of activation and they want to become an enterprise player in a way that they weren't and they see this as their moment to do that. And the second aspect of this is it's an industry that was born out of the desire to be creative. And -- but they look at applications and platforms and tools and large language models and see that as something that can both augment human creativity, but something that can help make that process more efficient. So they see this as a real opportunity to drive transformational growth for their enterprise, with marketing at the tip of the spear to do that, but they realize there needs to be a reimagining of the way they think about their data state, their digital core and the way that they engage platform providers.

So in some senses, it's a moment in time for marketing to flex a little bit within certain organizations and really, in some ways, expand their influence, right? Do you find that yourself and your colleagues are at times brought in to help build that case to influence other stakeholders within companies?

Yes, absolutely. Whenever we're brought in, oftentimes alongside Braze, to think about both like your data strategy and getting that digital core in good working order before those big investments are made our clients also ask us, can you help us with the value case, Accenture? And that's kind of where they come to us to be agnostic looking at the ecosystem and say, okay, not CMO, CIO and CFO, here is the value case associated with digital transformation, managing your data state better, thinking more front stage. And we have a very rigorous process that's used as part of the evaluation process to look at these large capital expenditures, treat them as the investment that they are and put a robust value case that literally has ROI targets at different points in time based upon different milestone deliverables associated with the platform implementation and the way that that's going to transform the customer experience, and then putting around that a value realization office. So that when a Braze is put in, for example, and you're attached to monthly active users, which is incentivizes you to drive adoption, they're looking at that as an investment that they're making in the business against the value case that we've helped them put together and how that value is being realized and things start to click. Because then marketers suddenly become a place to drive growth in an investment center rather than a cost center, which is where it's been historically.

Right. And would you say there are certain types of organizations that are more open to that type of dialogue and sort of reframing of kind of how it's always been versus how it could be?

Yes. Certainly, digitally first, client base for us. You have a lot of the logos on the screen that you showed earlier. But I will say it's even sort of the legacy players and legacy clients are starting to realize that they are going to be out matched by those digitally native competitors that exist within their ecosystem. And so they're really starting to pay attention and look at their marketing technology investments in a bit of a different way. It used to be what are the speeds and feeds and how can I sort of amortize this cost over multiple years to put me in a more advantageous financial position. And now it's really about how is this going to change the customer agenda that we have within an organization and looking at those investments through that lens.

Yes. Yes, and that's certainly consistent with what we've seen through the years where we -- you name it in different vertical industries. We tend to work with disruptors and then they're disrupted who have big moats in a lot of cases and advantages that have been deteriorating on an increasingly rapid basis over time are, in many cases, forced to make these types of transformative decisions and then of course, they're going to turn to the likes of Accenture Song to help them figure out what to do and who to work with. So when you look at kind of all of the different themes we've been talking now about over the past few minutes here. How would you sort of characterize why you think and Accenture more broadly thinks that Braze is well positioned to be a company that helps more and more and more of your clients, big enterprises through these types of critical transitions over the next couple of years?

I think it was evidenced by the language that's been used the first hour, 1.5 hour of this. You heard marketing used a lot. You heard things like abandoned cart and customer onboarding. One of the things that I very much enjoy about partnering with Braze is you understand our clients as well as we do and you understand this idea that there's really a tribe that is built around a marketing technology platform, particularly one that is going to drive the customer agenda and your product and feature road map is aligned to how we want to help our clients change our organizational -- their organizational and operating model. So even looking at something like Canvas, you see elements of that where there's going to be a data scientist that's going to be on platform, doing certain things, training algorithms, building ML applications. But there's also going to be content creators and creatives that need GenAI assist in creating 15 different subject lines because the analytics team told them that when you put a subject in a verb into that, it's going to drive better engagement. So you really understand the operating model around which the platform sits and then you're incentivized to drive that adoption and you certainly help your clients do, but you help my team do that through training and certification and being open to our feedback to you and seeing that feedback reflected in your product strategy.

Yes. And would you say that -- you certainly heard some of these themes in Jon and Kevin's presentation, I touched on it a bit as well in my comments around ecosystem. This notion of the kind of all-in-one suite of yesterday versus the more kind of composable modular tech stack of, again, the President and the future. How -- I guess how are you thinking about that? What types of things you're hearing from customers? Do you think they're more open to these types of approaches now because they feel that they need to, they need to be?

Yes. Absolutely. So a couple of things. One, kind of more technical to the other kind of more enterprise and business focus. These ideas of composable data architecture, reverse ETL, they're things that from a technical standpoint are evolutions, but they have big commercial impact. I was just sitting down with one of our clients last week and they're in the cosmetics industry. And they're having a moment where they're really evaluating their IT infrastructure cost and one of their big cost is storing data and moving data. So if you think about having data reside in one place in a data platform or in a data warehouse, but being able to then put that data out to different endpoint destinations to drive customer interactions without having to move a lot of data around, that has a big impact on the bottom line and cost containment for our clients. And when you couple that with the ability to really think about how marketing technology platforms can both assist in more technical audiences, but also the content and creative teams that are around them. I think you have 2 things that come together, they really drive some differentiation in the marketplace and make it easier for clients like -- for your customers like Accenture supporting you to step into a client situation and immediately appeal to all of the various audiences that have different concerns on their particular road map.

And also like zero-copy data as a theme, which is obviously along the lines of what you're discussing now, like there's a lot of hidden costs with that, too, that I think a lot of companies don't necessarily anticipate. So you probably have to kind of manage all of those stakeholders too and exposed in certain cases, maybe flaws in certain approaches that they hadn't previously thought of.

Yes. I mean it's a key question. Clients are looking at the explosion of data. If you think about the e-mail interactions, SMS, mobile applications, digital interactions, it's terabytes and terabytes of data that our clients are having to manage and process and extract value from. And so those opportunities just drive evolutions and the way that data is managed and the engineering to support that is an important part of the customer agenda. And it goes back to the question, Myles, you asked about the value case, that's a key part of the value case. We will look at things like how much does it cost you to host this data in the cloud and consume that data and compute. And also, we look at it from a sustainability standpoint as well. I mean we have a sustainability practice at Accenture. And so we're looking at how do you get more value from your data, drive better experiences, cost -- control the cost to the IT department but also control the impact on the environment, you bring all of that together, and that's the conversation that we're having with our clients, and we need partners that can do that.

While still unlocking all that new capabilities...

Still unlocking the new capability and not forgetting about how do we drive more relevant, deeper, more commercially accretive experiences with our customers.

Yes. And something you mentioned briefly a few minutes ago, which I thought was super interesting is this -- we talk a lot about marketing as our core buyer, but the desire amongst a lot of your clients to connect marketing into other functions, other parts of the operation where data is being generated and data can be deployed. And so can you share just a few more maybe just thoughts or examples about that in the retail environment or a QSR or something like that?

Yes. Absolutely. So a lot of our clients, look, I'll give you a specific example. One of our clients was looking at how they could use marketing engagement data, e-mail opens and click-through rates, configurations on a website searching for certain products. That's a marketing-facing motion. But they were looking at that data as a demand indicator for certain products in different regions of the United States. And they wanted to use that data that was -- that engagement data which was a precursor to demand for their products to think about how they could better manage their retail operations. How could this potentially impact store hours and staffing? How could this potentially impact our supply chain, knowing that we need to funnel supply to high demand areas? How do we need to think about our pricing strategy if there is high demand? Should we be discounting? Maybe we should hold off on that until we see low demand that's being tracked and measured on these platforms. And so that little vignette right there, that has a CFO, Chief Logistics Officer conversation and a Chief Marketing Officer conversation, but you've got to be able to move at pace and with agility to unlock the value because the attention span is short, and the need to measure or to drive value quickly is absolutely an imperative that our clients are facing. And so that's where marketing is saying since we know so much about the customer and we have the platforms to activate against that customer, why can't we extend our reach into other parts of the organization and at least be an assist and an influencer to make their business run more effectively.

Absolutely. And the value proposition you're talking about earlier has expanded dramatically in that case.

Exactly. Yes.

Can you talk for a minute about usability and kind of how you've experienced within Accenture teams as well as within client teams. When they use the system like Braze, the types of skill sets that are required relative to other systems, other technology platforms in the past. Do you feel that Braze is more accessible, it allows more teams at a company, not just to benefit but to actually also use the tools?

Yes. Absolutely. I mean if you look at some of the product features that the team talked about earlier, there's a lot in there that is not just for a systems integration analyst within an organization or someone within the IT organization. Looking at how Braze is a customer-facing platform can develop features and functionality that act as productivity accelerators to a content and creative team. Again, the example in Canvas, I really liked because there's a perfect example of you need to be able to use data to set up a trigger and put that segment on a predetermined journey, but you need to be able to learn from that and you need to be able to fill that journey with content.

Exactly.

And you need to be able to make adaptations to a web page based upon what you're learning from the data, but having that tooling all in one place, so that a marketing organization doesn't have to -- it's very hard to drive fragmented -- it's very hard to drive a unified experience for a customer, if your own team is fragmented in the way that they create the experience, it shows up to the customer. They wouldn't articulate it that way. They would just know. This is a bad experience but it's that ability to kind of bring multiple -- a multidisciplinary approach to it.

Yes. It's really well said. We always talk about the customer, the end user could care less who creates the message and what department it came from or what data set was generated from. They just want to have a positive experience with the brand, right, that adds value. Two more questions for you, and then I think we're going to get kicked off, unfortunately. So curious if you -- Accenture, obviously, as you obviously should and do works with many different companies, right, technology companies and providers, can you share anything about your experience in partnering with Braze? And what that's been like and some of the things that you've seen that you think are positive or even frankly, could be better?

So certainly, from -- I lead a practice -- and so developing our people and making sure that they have the skills and know how to use emerging platforms and well-established platforms to help our clients in their mission. That's important to me. It's also important to their career development and Braze has been just a top-tier partner in terms of the training, the certification, the credentialing in like the hands-on practical acceleration of my team in terms of being able to use the platform and use new features and functionality and doing that at a global scale has been really important for us because we're a very large global business and have a global clientele. So that human development, part of the Braze partnership has been enormously beneficial. The other aspect of it is the agility with which you work with our teams around these marketing transformation activities and initiatives that we're leading with our clients. In other dynamics, you sometimes see a legacy way of delivery that is not matched with a modern way to drive value. And when we've been working with your teams, I really understand upper case A, and lower case a, agile delivery. This notion of value realization. This notion of speeding up the product development road map in alignment with client ambitions if it's the right client, if the value case is there. But that agility both in terms of the way you work with our teams, but also in the way you invest in your product road map is something that has been really critical for us in driving success with our joint clients.

That's great. And I also appreciate from Braze's perspective, how you've helped us understand how to work with you most effectively. And our shared clients together because that's how we're ultimately going to be successful. So it's been a great partnership, and we're looking forward to many more. So final question, I have to ask it. When you look forward, do you think of -- I mean, you're at the -- literally the intersection of all the most important and most critical trends right now? I mean what are you most excited about as we get into next year. And hopefully, the economy starts to improve and budgets start to get unlocked?

Yes. While I work for a consulting company. So hopefully, fewer headwinds when it comes to discretionary spending for our clients would be -- would certainly be nice. But what I'm really most excited about is -- back to you, one of your earlier questions, Myles. I do think it is -- it's a liminal moment in the marketing services business and for the marketing organization within our clients -- within our clients. And I'm really excited about seeing about how we can finally pay off that promise of being able to, at scale deliver and manage and orchestrate truly one-to-one in individualized experiences. And the reason I say that, and it can some kind of glib, but the reason that I say that is you think about all of the impediments that made that difficult, we didn't have enough content for personalized journeys. Well, AI can help us with that. We didn't have a martech stack that could integrate with other integrators and other providers and that drove up our cost because they couldn't do that. We didn't have teams that were upskilled and trained in the right way to take advantage of these platforms. The reasons that can't happen are quickly exiting stage left. And so there's no reason that our clients can't go deliver against that transformational promise. And by the way, their investor community, their executive team, their shareholders are asking them to do that. And so there's motivation. Those headwinds are gone and there's nothing but opportunity to move forward at pace and drive that agenda.

Yes, I couldn't agree more. And that holy grail of true one-to-one at scale that we've all been aspiring to for years. It does feel like that moment is finally here. And I'm excited to bring that to life and make it a reality with you for our shared clients. So thank you so much. At this point, I'm going to invite our Chief Business Officer, Astha Malik, up to the stage, to talk a little bit about Braze's next act.

All right. Thank you, Myles, and good afternoon, everyone. I'm excited to share some of the opportunities and growth vectors that we're looking at for the short- to medium-term opportunities we have ahead of us. As we explore these opportunities, obviously, we'll remain disciplined in evaluating the timing and the projected ROI against our goals of short-term profitability and how do we effectively allocate resources to all these various options we're looking at. So first, let's discuss our global expansion strategy. Braze is recognized for delivering exceptional customer service to our customers no matter where they are across the globe, and increasing our local presence in these international markets, reinforces our commitment to these customers and how do we serve them in a better way across different regions. By adding local teams, hiring in market leadership and opening new offices, we see significant growth potential as we strengthen our global leadership and invest in our customer communities across the world. LATAM opportunity, let's talk about that. I know Spencer touched upon it briefly before. In Latin America, we have tremendous market opportunity, supported by not only existing customer relationships but also the macro trends and how that market is outpacing some of the other regions. Our local presence should help us also nurture existing accounts. We're already seeing that how it's removing friction from renewal and expansion processes. And our go-to-market strategy is going to include a mix of direct co-sell and resell go-to-market motions. We've recently appointed a new AVP, and we've hired a few AEs in the region as well. And we are also establishing the supporting go-to-market teams in the region. So you'll see more CS people, you'll see more GSS people supporting the teams that we are establishing from a sales perspective. We're also excited to announce that we anticipate opening a new office in October, and that should definitely enhance our ability to hire more exceptional talent in the region and just make it more of a strategic location for us on an ongoing basis. Shifting gears to GCC. And again, Spencer touched upon the overall opportunity there. We're definitely seeing some early results there. We have actually moved a few people from EMEA to the region locally, and those AEs are having tremendous success. So having boots on the ground, definitely is helping in a region that is looking for in-person collaboration. I was actually in Dubai earlier this year as well, and just being in front of the customers, meeting our top clients, both prospects and customers, it made a lot of difference. I think when you're not in the region, you don't see the teams often enough, you're out of mind out of sight. And we wanted to deliberately invest in the region, and that strategy is working with the relocation of these resources. So we have acquired some new logos there, including notable names like FIVE Hotels, Resorts, Floward, McDonald's, GCC and Snoonu. And we're in the process of hiring a new AVP there as well. So we already have the sales teams on the ground, but having leadership there should definitely strengthen our opportunity and execution in the region. And then looking at Korea. We've been in Korea for some time now, but we've always operated through resellers. We have now hired an ADP to establish a direct presence, especially for the larger enterprises and tapping into that opportunity. So we're also making sure that as we are going direct, we're establishing very clear rules of engagement along with our resellers to avoid any friction in our sales process. We're also working with a third party to attain the Cloud Service Provider Certification, which is equivalent to a SOC. It's not exactly but it's equivalent to the SOC compliance, which is required for really large enterprises and we hope that it will unlock even more opportunities and growth for us in the region. And then another vector that we are investing in, in the region is also sales and marketing, and we had a really good growth with Braze event. It was actually 1 of our largest events and the turnout in the region. We usually do grow with Braze events in smaller cities, making sure that we can actually reach out of the local communities. So we had over 500 people attend the event, again, indicating strong interest and engagement for us in that market. Next, let's focus on investment areas aimed at enhancing sales productivity. You already heard Kevin talk enough about the free trials, so I'm not going to go into a lot of details here. But just to reiterate, this is another great way for us to deliver unsupervised sandbox-type access to our enterprise accounts, and it reduces the burden on our sales teams who have been heavily engaged in this process for many, many years. And even more exciting here is that all this like talk and the investment we're making around free trial is under the umbrella of product-led growth. So there's a lot of other initiatives that are happening to make sure that we are supporting our sales teams not only acquiring new customers at the time of free trial, but also upselling and cross-selling our products as they go along the journey. We're also seeing positive results from the adoption of our Braze value framework, which I know many of you have heard about from Myles before. This was a big investment we made in our sales teams last year, making sure that we were able to differentiate ourselves in the market through our sales team and equipping them with the right language, with the right messaging against our competitors in the market as well and ensuring our differentiation was coming through. So those efforts are definitely paying off. And these are the usual tactics that are low-cost competitors employ when it comes to just competing against price. We have elevated the conversation. We are talking about the value Braze delivers, and that is definitely working for us across markets. We have now extended this program beyond sales. We are investing in our GSS teams and CS. So making sure that there is a unified and a common language that our sales teams, our success teams, our GSS teams are using and how they're serving our customers. And then another thing that we are making sure is that once we launch any new sales program, of course, the test is how well it resonates in the market. And this is resonating quite well, but there are also some feedback that we're getting around areas that we could be a little bit more sharp around. So we're continuously investing in making sure that these messages resonate, and making sure that our teams across the board are equipping themselves in delivering the right message. We're also investing in other initiatives aimed at strengthening our collaboration as a unified go-to-market team in service of our customers. This includes, obviously, like I said, evolving our Braze value framework but also investing in our commercial leaders. As we are getting more leaders across the region, making sure that they are equipped in managing a very well-run sales team and efficient sales team, and they're able to manage their book of business in the most efficient way possible. So there's skilled investment, there is the Braze value investment and all these things are working quite well for us. And then to improve sales productivity, we must also take a closer look at what we're doing from a marketing to help our sales team. So I'm going to talk a little bit about that. And first, let's talk about our creative refresh. In February of this year, and hopefully, you've seen that a few times. If you visited our website, of course, of the event here as well. We launched a comprehensive visual and verbal brand refresh. We've gotten great feedback from our customers. I'd love to hear from you as well, one-on-one after this where do you think about it. And the initiative was designed to create a more distinctful and impactful message for our customers. And it was targeted towards obviously, marketeers as a primary target audience but also towards our technical audience and buyers as well. So if you haven't seen the website, I highly recommend, go check it out with definitely more comprehensive. It's more vibrant and it definitely makes us stand out against some of the competition in the market. So like I said, the goal of the refresh is not only to elevate our position in the market, but also make sure as we were investing in the Braze value framework and equipping our sales teams to take these messages to our customers, we were aligning our marketing efforts and speaking a consistent language. So it wasn't like our sales teams were saying one thing and then you'd see another thing on our website. So we time these efforts actually quite well. Both of them launched in Q1 of this year across all our teams. So really excited to see that come live in various forms, including here, if you haven't seen any Braze word yet, hopefully, you'll see that in the future. So this was actually the first time we launched out of home. We've never done any out of home or billboards before at Braze, and some of this came in live -- came to life both in digital form, in static form and, of course, in the form of our website. In addition to investing in out-of-home, we also did a lot of new campaigns. We tried out in different new publications, even digital publications like Forbes, we did a takeover. It all drove really good traffic to our website. So again, a new brand refresh only is catered towards driving traffic at the top of the funnel, but we're also seeing how it is helping us continuously gain better conversions because we are making sure that our life cycle marketing efforts are targeted towards that as well. So that's been great to see in the form of significant traffic on our website and building on top of this successful strategy, we're going to continue to invest in more of these efforts as we go along, again, being prudent and mindful about our profitability goals and just the investments that we have to play with. So as we -- can we go to the next slide, please. We also have a number of strategic initiatives aimed at global events. So hopefully, you're experiencing this at Forge. We've upleveled this event, and we have more people attending this event this year than ever before. We've also invested in other tiered events. So marketing budgets are still tight across many customers, and they are being prudent about where they're sending their teams. So instead of expecting everybody to come and see us at 1 event, we made sure that we were launching another program called City by City. So we're making sure that we're going to our customers. We had 6 of those events this year in New York, London, Singapore, Sao Paulo is happening next month. We already did Tokyo and Sydney as well. So that's been really successful in making sure that we don't really expect everyone to come to a single event, but we are reaching out to our customers. And we introduced a Tier 2 event as well where we have about 30 Grow with Braze. I talked about Korea before. That was our largest. We had 500 people attend that event. So the combination of these events is definitely helping us not only from a brand awareness perspective in newer markets but also making sure that we're reaching out of the communities and fostering and strengthening our relationships with both our prospects and customers, along with our partners. As we build this momentum with our events and campaigns, we are also exploring ways to enhance the precision of our outreach to expand our growth. One key area of focus is adopting a little more verticalized approach from a go-to-market perspective. And when I say go to market, it's specifically sales and marketing efforts with dedicated resources. While we have a highly diversified customer base, our focus from a verticalization perspective, from a sales and marketing investments is going to be on 3 key sectors: retail and consumer goods, financial services, travel and hospitality. We've established a great product market fit in these industries, and they are among the top 10 verticals by ARR for us. So there's significant potential for us to grow across all of these verticals globally. Let's talk a little bit about e-commerce and retail. We have dedicated product resources already working on simplifying and enriching our e-commerce use cases through new workflows, Braze AI integration and enhanced Shopify integration. In fact, we're working on additional integrations across different e-commerce platforms as well. Retail also encompasses consumer packaged goods for us, and many of you know, some of our top GSA accounts are part of this vertical. And we've been focused on driving more specific ABM efforts along with our sales and marketing teams there. We're also excited to announce that Braze will be available on WPP Open. Their SaaS solution that allows employees to access products and services for blue-chip clients, including one of the largest CPGs globally. Additionally, we are expanding our partnership in the beauty sector with global premier brands. And I think you all know already, we have a lot of presence in this vertical. And we're making sure that we're reaching out to these customers and expanding their use cases and channels as they grow with Braze. Some of the brands that we've been working with recently include e.l.f. and we've recently acquired another client, L'Occitane. I'm pretty sure I'm pronouncing that wrong, but you know what I mean. Also, from a marketing perspective, the retail sector is a major focus for us in the first half of the year, starting with NRF and then we go to Shoptalk. So we've been investing in these events, third-party events for quite some time. There has been especially helpful in accelerating our enterprise deal cycle. So we'll continue to make sure we show up at these events. We also joined the MACH Alliance earlier this year, which has definitely bolstered our e-commerce effort, particularly in EMEA. And then last but not least, actually, the second vertical here is financial services. We've been successful in fintech companies, including top payment platforms and services like Intuit, MoneySmart, TurboTax and Venmo, but there is substantial opportunity for us in retail banks. We're currently engaged in active discussions with major retail banks and making sure that we are increasing our marketing efforts to reach out more in this sector. Our marketing investments for second half, for example, include a partnership with the economist, a financial services customer engagement report. And for the first time, we're actually going to show up at Money 2020 as well to make more interactions with our prospects and customer base there. Braze is also addressing critical requirements, financial services use cases with recent and upcoming product releases signed to enhance our competitiveness in the space. Our key features that we've been working on or some of them are in the road map include solutions to address concerns about copying data. Myles briefly talked about it and so did Kevin. And this is particularly regarding the PII and sensitive data, which is related to the CDI segments and connected content, which will enable the zero-copy data querying without storing data in Braze. And you'll hear more about this. You'll see a demo about this tomorrow as well. And of course, you're more than welcome to see some of these things in action at our booth as well. The other thing that we worked on is the e-mail encryption capabilities, controlled by customers. So the keys in this case are controlled by customers. And speaking of keys, we also launched to bring your own key offering through the AWS managed key services program. We also have message archiving available for our customers, and many of you already know, financial services customers sometimes require up to 7 years of messages archiving, and we already support that across all channels, which is a competitive differentiation against some of the players in the market. And then last but not least, travel and hospitality is the vertical that we are focusing on to go in a little bit deeper from a sales and marketing efforts perspective. This vertical represents tremendous potential for us. We've been gaining a lot of traction with some of the notable wins in hospitality sector. I'll talk about Fontainebleau a little bit. That's a new chain that we've enrolled as a customer. But then you'll also hear, if you stick around for some of the sessions, we have 2 of the major hotel brands speaking at our conference here tomorrow and day after. We've also done a lot of work with challenger airlines, and we've gotten some great traction there. So EasyJet is a new customer. You may have heard about it already, and also Asiana Airlines. The thing to note here is that as we've gotten some traction in this particular segment, it's also because we've been working very closely with our partners, and they have been able to source some of these deals for us. So CACI, for example, sourced EasyJet for us. Spectra sourced a large Scandinavian airline for us. And then Deloitte was actually behind sourcing of one of the most prestige global hotel brands as well. In closing, I want to emphasize our unwavering commitment to fostering the growth and engagement of our customer community. You probably heard a little bit about Braze Bonfire before. But we have done a lot of work in the last 1.5 years to make sure that this community continues to grow, and we are fostering better engagement. So we've done 2 things. One, on the digital front, and you can see the results. We have seen an impressive 67% increase in the users on this community. And this also means that better engagement, more interaction with the product teams, with our service teams, with our sales teams, et cetera. But we're also making sure that in some regions where people still prefer face-to-face interactions like APAC, we're doing more in-person community events. So we've done this almost like a bifurcated approach, which is really working to enhance not only the engagement in the community, but also the expansion of the community in general. The second, Spencer already touched on this is also really important for us is our education and certification program. If you think about like our customer base, the more people that learn and certify Braze, the more stickiness we actually get into that account. So we have really good impressive numbers here as well. We've seen a 26% increase in the number of people who have taken certifications with Braze. And as Spencer mentioned, we have a completely sold-out certification session here. So next year, probably we'll have to go bigger and better. And we've also seen a significant increase in the number of hours people are spending and learning about Braze, and that is about 67% increase year-over-year. So again, that was a quick snapshot of all the investments we're making from a sales and marketing perspective on our key growth levers, and we're really excited about these opportunities. And with that, I'm going to hand it back to Chris. Thank you for joining us today.

Hey, everybody. We're going to take about a 15-minute break and be back here at 3:20 for a customer conversation with Scott Dzialo, Nestle Purina and Xbox Activision Blizzard. So see you back here at 3:20 sharp. Thank you. [Break]

All right, everybody. If you could take your seats, we're going to proceed with the next part of our session here. Everybody, please take your seats. Thank you.

Well, hello, everyone, and good afternoon. Thank you all again for coming to Forge 2024. It's really incredible to be here with all of you. Those of you who do not know me, my name is Scott Dzialo. I am a Vice President of Customer Success here at Braze. I actually had the pleasure of working up this company for the last 9 years of my life. So for close to a decade, I have worked with all different sorts of customers and truly ranking in the hundreds at this point. And it's the biggest joy of my job, getting to see how customers actually take our technology and create incredible experiences for their end users. That is sensibly why we are here today. I am joined on stage by 2 incredible marketers. And we're going to take the opportunity to just have a bit of a fireside chat, really bring to life for all of you about how our technology is leveraged and give you a little bit of an overview of how different types of customers can leverage the Braze platform, creates some great experience. So without any further ado, I think we just dive right into things. let's introduce both of you to the team. Let's start with you, Sarah. Why don't we just give you a little bit of a background for everyone to hear about what your marketer background looks like, what do you do today? And how you were first introduced to Braze?

Sure. Hi, everyone. My name is Sarah Lands Ramrup. I lead personalization at Nestle Purina. My role is focused on 2 things when we talk about personalization. The first is making our digital experiences feel one-to-one for not only you, but also figure pets, and driving users across our ecosystem. Purina is building out a digital ecosystem that meets consumers throughout their pet ownership journey, bringing forward the right recommendations, expertise and resources. My background is pretty varied. Before stepping into this role last year, I led product analytics and marketing technology. In analytics -- in Purina's Analytics Center of Excellence. But prior to Purina, I've held roles in consumer data strategy, new product development and analytics. First learned about Braze last year, just as I stepped into this role in January, and when I first saw the demo, I was like, wow, this is exactly what we need. We've been talking about doing personalized consumer journeys for years at Purina. And it felt like the right opportunity and the right platform to bring our ecosystem to the next level.

Awesome. Thank you for that. And I hope that your first year with us has been just as great as it has been for everyone else. Sina, I know you've been with us for a little bit longer. Same question for you. Tell us a little bit about your background, what do you do today? And how did you first get introduced to, I believe, Appway at the time.

Yes, Appway. Let's see the Head of CRM Strategy and Lifecycle Marketing over at Xbox, specifically within the Blizzard studio. I've been there for 4 years. I have a gaming and entertainment background. That's actually where I got my start with Apple now Braze. I've worked for Disney, Hulu, CBS All Access, which is now Paramount+ and then launched HBO Max, all of which, for the most part, have been integrated with Braze. But my background, yes, like I said, it started probably with you guys about 7, 8 years ago. At that time, we were at CBS All Access, we're trying to figure out a mobile platform to utilize. The one we currently had very basic functionality hull the lane. We couldn't really do what we needed to do. So we were at that time vetting some different companies. I came across Appway, looked interesting. So Appway, Salesforce and Leanplum were all in the running. And I met with your team, got the demo, I was impressed by the platform, Salesforce, of course, came to the table like, "We're a Salesforce." And here's the technology we've used for the last 10 years with nothing new, be impressed. And then Lean Plum also had a pretty good pitch. But it was really using your guys' platform and getting that demo and actually being able to test it out hands on at that time that really slow me on it. It seems so easy compared to what we were doing. And say the rest of this history. So Apple and then now you guys are Braze and I've been with you guys for in 8 years.

Yes. It's been an incredible run with you. I know that you brought us long term with every single company that you've gone into as well, which I really appreciate. So thank you for that. But we've also had a chance to see the platform grow over all the time, right? All the new features and all the stuff that we've invested into it. You've had a chance to take advantage of. So when we were thinking about putting this customer panel together, we really wanted to make sure that we gave you a couple of different perspectives. You have Sarah here who has been with us very recently, is somewhat new in the platform, a year in and just starting to get her feet wet versus Sina, who's been with us for 7, 8 years and has seen all different sorts of integration. So really appreciate you both getting up on the stage and sharing your experiences with us. Let's just start with today. Talk to us a little bit about your overall experience with Braze. How are your teams using it today? And what sort of problems are you trying to solve with Braze? Why don't we start with you Sarah?

Sure. Yes. Braze is -- our experience has been fantastic. We first rolled out Braze in August of last year to MyPurina, which is our latest mobile app. It includes features like our loyalty program, Purina Perks. It also includes training and enrichment content. We knew that we wanted a platform that could work universally across web and mobile. We've seen other platforms in the market where they have 2 separate stacks, depending on what if you're talking mobile and web, Braze is totally integrated. And that was important to us because we eventually had ambitions to roll this out across our ecosystem. We've seen tremendous success in less than 12 months. We've deployed over 200 experiences. Just baseline before Braze, we had deployed 16. So we've 12-Star campaign volume. We cut our speed to market in half, and we do experimentation 100% of the time with control groups, global holdouts so that we can understand incrementality. So it's really taking our marketing on own channels to the next level, and it's also bringing our business along for the ride that they can understand the value that we're able to deliver.

Awesome. And Sina, I think that we're in almost every single one of your game experiences at this point. Talk to us a little bit about how you're leveraging Braze across your gaming divisions.

So we use Braze in absolutely everything we do, whether it's e-mail, push in-app. To your point, we do have it integrated into all of our games. So we do use it as our primary mode of contact across our different marketing channels. We personalize everything we do across those games dependent on the behavior of the players, depending on the audiences we're going after, and then depending on the business model. Each of them are slightly different. We have a game called World of Warcraft. It's a subscription model. So that's very similar to kind of the streaming background I've come from. We use e-mail across that as well as we have a mobile app component. So we use in-app notifications and push and are able to actually leverage omnichannel to basically ensure that we're getting at least 1 point of contact to the users as we go through their life cycle, depending on the campaign. And it allows us to very much tailor everything we do for the customer, reaching them where they want, how they want to be reached with pertinent information. The other great part is the fact that you guys, obviously, partner and are great with working with partners. So we're able to leverage other technology, bring in video personalization and create a very unique experience. So for us, it's been great. We're able to really stick to our different business models and leverage those different marketing channels for the needs we have in the audiences for each of the different cohorts and games.

Yes. I love that. And I want to dive into it in a little bit more detail. Sina, you've obviously brought us along into many different companies that you've worked out. You've had a chance to kick out a lot of other platforms. And you have a lot of experience with other platforms. I'm curious, can you just speak to what distinguishes Braze from other CRM tools that you've used in the past?

So I think we saw this early on to as we were kind of getting the different platforms. There's a lot of smoke and mirrors when you're working with these different platforms. They promise you the world, anything they can really do to get you to buy into what they're selling again, 90% of the time, smoke and mirrors. With Braze, it was very obvious they let us use it hands on, and we were able to see that the value was actually there. What was promised is what you get. So moving forward, it's kind of been how I operate. Actually, it's one of the contingencies to any place I work, I believe it or not. The first thing I asked them is what's your more tech stack look like? I take a look at it. And even in my last position, I told my VPOs like, if I come on board, the first thing I'm going to have to do is get Salesforce because that's not going to work for what we need. So I'd like to build my stacks from the ground up. I usually put raise at the center of it and then I build depending on what we need -- it's an evolution, crawl-walk-run. You got to make sure you have what you need to establish a good foundation and build up from there, personalize and continue to go on. But the other thing, as I mentioned previously, is the fact that you guys partner so well. There's -- the other problem is, I hate to keep harping on Salesforce, but the experience I have or even Adobe. The platforms I kind of want to do everything, but don't do things well. Also don't want to play well with others. They're like, well, this is something we're probably eventually going to have on our portfolio. This is a tool set we offer. So they don't want to partner up with different companies, and that's problematic because at the end of the day, you want to kind of build a best-in-class Martech stack or platform. So for us, where you guys work with like movable Inc. high-touch playable all of these different companies were able to really customize and build a stack to the specifications of what we want to do. So we can do that one-to-one personalization. We can ensure that we're delighting and allowing our players with every time we do. So I enjoy the platform at least.

As someone who works in success, there's like nothing better to hear than your platforms in distensible. And I appreciate all the places that you pulled us along. I know, Sarah, you similarly have had lots of experience with Salesforce, Adobes of the world. What makes Braze different?

Yes. I think -- I mean, a lot of the points that Sina touched on. I'd also say that with Braze, we have a platform that's marketer friendly. So having folks who know had a brief design consumer journeys and now they get to jump into the tool and make that a reality. I think that level of capability, and you don't have to have a master's degree to understand how the platform works. I think that has been so valuable to us and in some of the early successes we've seen. The other I would also say is it's so easy to get data into Braze, whether it's through partners or it's through enterprise integrations. And that has meant that for us, we're able to move really fast. And instead of biting the tech or seeing the tech as a hurdle. Now it becomes like, okay, great. We've got the data, what can we do next? And it's really just empowered our teams.

Yes. We've always wanted Braze to be a marketer first platform, right? We want to make it easy to use. We really want to remove barriers to entry for people to actually get campaigns out the door for people. I also know that on your teams there, you have a ton of people in the Braze platform. Can you just like talk us through like the different types of teams and different types of people that are working in Braze sort of what that production workflow looks like?

Absolutely. And maybe just transparency wise, my team, we started using Braze in August of last year. We got a couple of wins on the board to demonstrate the value of the platform. We have had unprecedented demand from every single one of our brand teams from other Nestle opcos, and it's meant that we've actually had to change our workflow that we can intake the demand and build out activations very quickly. So the way that it operates now is my role is focused on prioritization and feasibility. Do we have the data we need, does this deliver business value, does this deliver user value? And then hand off to marketers within my team. They will write the creative briefs, they'll design the consumer journey. And then we kind of hit it a decision point. We either use VML for really complicated builds, maybe use cases that we're doing for the first time. And otherwise, our design team actually for these rinse-and-repeat activations, they go straight from design into building out the platform in Braze. So it's helped us increase our speed to market. It's also pollinating, cross-pollinating like the Braze platform to other people so that they understand the capabilities. And it's also meant that we just have a ton of momentum and energy around this platform and what it can do for our business.

I think that's a really interesting thing that you're able to have your internal teams, our external teams, all sort of working together creatively and able to send the campaign in a really meaningful manner out to one another. It's a lot of coordination that you have to do.

It is. Yes, definitely.

But that's really important that the tool has guardrails for you, that you have admin permissions that allow certain access to certain things, really making sure that the right message gets out to the right person without any human error interest in.

Yes. And I'd say to that. And with the campaign volume and the way that it has exploded, we're now in the state. I mean this is a good problem to have of like multiple brands want to go after the same consumer. And so you've got Purina 1 and Purina Plan. They all want to go after the same dog owner. And now we have to start to decide what's the prioritization of those messages. And what's most important for us to serve first, and I think it's just taking the conversation to another level because we have so many activations at our fingertips that we get to weigh in on the business prioritization.

That's a perfect segue into what I really wanted to talk about today, which is like a real example. Sina, let's dive into like what you've actually been able to launch. Sina, let's hand it over to you real quickly. I think gaming is just such an incredible industry. you have such rich IP, you have such a passionate players. How do you think about utilizing Braze and the personalization that does to make sure that you're bringing gamers back season after season, game after game?

So there's so much to tackle. We do everything from automations, which using Canvas tools make is so simple. But we have our ad hoc campaigns as well. And personalization is at the forefront of this. The gaming industry has changed so much and the players let's be honest, I'm on myself. We can be fickle. So you have to keep their entertainment, you have to keep them engaged. And to that point, we're always looking to evolve. So when we started out with momentary things like using once a season we would send out your stats for a player or whatnot, we incorporated, say, a peripheral, like move in directly with Braze and now we can tag into our own APIs, leverage data in real time and send reports on a weekly basis to players, delighting the players, but also engaging them. So for example, we use their stats within our e-mails on a weekly basis. We dynamically populate the characters they play. And that alone is not only producing additional attributable revenue for us for like e-mail, but we're also finding that the average game time is increasing. So for Overwatch, for example, where we use this, on average, players are each playing 5 minutes more a week than they would. And as we know, the more they play, the more they spend. So there's a continuous cycle of benefit from this. But we're also doing a lot of other custom things like one of the things we implemented was a preference center. It's not just a matter of getting people into your ecosystem, getting them to engage. The biggest problem we also see is that players are leaving that ecosystem. When you're not hitting them with the right messaging, they're quickly churning out. So what we did is we developed a preference center that made sure that whatever they wanted to receive was specifically for the games they engaged with. So now where they go to opt out, they're opting out of their game, and we're managing to retain more people and more marketing reach, which again drives attributable revenue of our span of any given year. So we constantly have these abilities through Braze to leverage the technology to really customize the experience. Additional things we do are we incorporate, again, third-party tools. We can put custom videos and we can dynamically change the e-mail, and we can do this all at scale. So rather than I'll give you an example. When we were on Salesforce, we would have to manually produce each e-mail for every language. Now we service at any point about 10 games, 14 to 18 languages per game. Do some quick math. It's a lot of work. And what we found is when we switched over to Braze, we were able to incorporate our native tools that we'd also built in and scale and be very much a lot more efficient. So we basically, the first, I want to say, years, we left Salesforce. We 2x our output across our marketing channels. And we're able to then personalize one-to-one. We can now put in leveraging our data dynamically populate the modules, so I could basically take the data we have for, say, if you were all players, send you out an e-mail for a single campaign and you guys could potentially get all different e-mails across the board utilizing the data and the dynamic qualities being able to liquid code, for example, for the engineers out there. So there's a ton of value in being able to continuously scale, evolve, personalized, using your data stack, using the tools and being able to then bring in other partner companies to elevate what you do to make you stand out across that noise that's in the ether.

Yes, I love that. There's so much there that I think really speaks to the power of modern marketing, right? You're leveraging data, you're doing it in real time. You're trying to harp on moments of tomo as well as excitement. I have to say I am an Overwatch player. I'm very passionate about it. I am a platinum Moira player actually quite specifically. So every week, I get an e-mail in my inbox that outlines exactly what my performance looked like last week. And I can see in real time if I'm improving or getting worse. At the moment, I'm actually getting a little bit worse, which kind of put in some hours. But it's amazing how effective that is and pulling me in and making me more passionate about a game that I'm already engaged with. I think that a huge amount of gaming though, is also about building hype for new properties. Curious if you could talk to us a little bit about the launch of Diablo recently and what it was like for you?

That was one of our favorite ones, actually. We basically went into -- probably about a year or so ago going into Diablo IV launch we had basically -- we were looking for multiple avenues of increasing revenue both in automation and just doing gaining prepurchase. So we created an automation by taking into account the telemetry of people who had come into our funnels and basically fell off before purchasing the game. We were able to incorporate that in, and we saw a continuous increase in conversion for the people who showed interest in the game and we were able to automate that going into launch. But I think my favorite portion of it was we incorporated a countdown timer through Movable Ink going into launch. It was very themed kind of like that blood look as it was counting down. And we had a little surprise, a little Easter egg in there when it basically zeroed out at game launch, and we had the gates of hell open and Lilith, our blessing mother was there. And the fans went crazy for it. So not only did it give us an opportunity to drive kind of that urgency as we were counting down towards launch and increase our conversion rates there, but we were actually able to really delight our players into something they hadn't seen from us before. It was all overrated, and we got a lot of positive sentiment, and we've continued to customize and utilize those tools since.

Yes. Modern marketing is all about driving passion out of people and then using that passion to get real meaningful business results. And so gaming, I think it's a perfect example of that. You have such a clear progression path and such a carrot that you can put in front of everyone to really drive a lot of excitement.

I think we think that or was going to say to that point, to your care point, we have these automations for each of our games. We call them new player journeys and they're essentially built out to that very way. As you're engaging with the game, we continue to show you what your progression is, what the next obstacle is, how do -- if you're at risk because you're running each of these barriers, how to get over that. But additionally, different leveling stages, we kind of push you along in that engagement, and we even have real-time triggers in there. So for example, when you're playing World of Warcraft and you hit your Level 20, your trial is over. So we found that before we would take us about 3 or 5 days to get the necessary data in place. Obviously, you want to ride that wave that high run orphans. They're having a great time playing the game. So you want to make sure it's timely. So we were able to take a real-time trigger at Level 20, trigger that e-mail to them. We saw again a lift in conversion and they started continuing down their path and playing, but it's all of these little things that add up and have a large impact on the game, especially as whether you're just trying to get them the career or just trying to get them to continue and join the game and find out what to do in that next stage.

Yes. It's such a clear example of like activating passion, if you will, which I think is a lovely segue to pets.

I mean people love their pets.

Come on. I literally chose these socks because I'm a doxy owner. And so today, the opportunity to tell a whole bunch of people about my dog moon is like just fills my heart with joy. Sarah, I think you really lean into that love their pets and want to take care of them for their entire life cycle. So talk to us a little bit about some cool moments that you've built out over the last year and how that leans into that pet passion.

Yes. So our first Braze use case is for a program that we call happy. And the idea is you spend 15 minutes with your pet every day to foster a deeper emotional connection. It was built by my colleague, Alex Johnson. She's an animal behavior, so she's been doing this for years, and she developed it as a pilot program, and this was our first time building it in one of our digital products. So kind of a gnarly use case because there's content that needs to be delivered every single day based on details about your pet. Certain supplies that you need from week to week. And what we found was that with brazes orchestration capabilities and the connected content feature could pull in content every single day and queue up the activity that we wanted them to participate in. So driving relevancy for our users. The other piece is that we know consumers purchase pet food every 3 weeks. This fills in those purchase gaps, so that every single day, they have a reason to engage with us and it delivers something tangible for them, and we can see it in the data that they are having that deeper emotional bond with their pet. So I think it delivers, I think, in that keeping us top of mind, which is super important in digital interactions. And then the other is like delivering on that promise of being a pet care company and putting your pet first. So I think that's like one use case that comes to mind. The other is super basic, but like pet profiles, that is the basis of everything that we do, and you would be amazed how much people want to give you information about their pets. They want to share the breed or how old they are or the birthday versus the Gotcha day, and these are all moments to celebrate. And I see some people laughing because they're like, yes, I totally would share that information because it creates relevancy, and it builds actually more trust for Purina, which is awesome because now we have the authority to step in a little bit more and bring forward recommendations, resources, all the things that we know pet owners need. And ultimately, that leads to deeper loyalty to Purina with your dollars. And so I think it just -- it puts us in a position of strength by meeting the consumer where they are in some of these key moments. And that, for us, I think, kind of just unlocks where we'd like to take the business next.

Yes, in many ways, your marketing isn't necessarily marketing per se, but rather trying to become a trusted adviser.

Absolutely. Yes.

I think a little bit about myself. My dog about 8 months into having him just starting to get rates everywhere. We didn't really know what was going on with him. And it was kind of scary. Like all of a sudden, my perfectly healthy puppies just really uncomfortable. And so that became a huge journey to find food that he wasn't allergic to. It actually started with a pet profile where we were able to give you a bunch of information and to really quickly deduce that maybe chicken is not the right protein for him, right? So in this sense, as you helped me through my own sort of pet food woes, I came to view the brand as like the definitive source of truth for all sorts of animal knowledge. And all of a sudden, that's not just a brand that I'm buying food for on a 3-week basis. It's something that's helping keep my dog healthy and in turn enriching my life.

Yes. And I think we see this in our user data and consumer research. People want to ensure that their pets are happy and healthy. And I think, especially as we see like what we call the humanization of pet care, like the more we think about things for ourselves, we naturally translate that to the furry members of our family. And so I think there's so much opportunity for us in building out our ecosystem and with Braze as a part of that as we identify these need states that arise of my dog has a rash, what's going on or recently, I just move to a new house. My cat is like howling in the middle of the night and trying to figure out what's going on, and it's totally normal, but we're providing those resources to folks. And they continue to engage with us, which is exactly what we want.

So 2 more quick questions, and then we'll be out of time, unfortunately, for today. Braze is a very powerful platform, even customers that have been with us for years don't use the full suite of tools available to them. So I'm curious, is there something that you aren't using today, Sina, that you want to use at some point in the near future?

I'd say it's also that we're not using. I think it's something that I'd like to use more. It's we've dabbled in it. And it's the connections that you guys have actually between the Braze platform being able to reuse the data, especially the engagement data and paid platforms. So we've kind of dabbled with it. We're able to basically take the targeting. So for persons on engaging with our comms on the e-mail platform, for example, we can then take that and repurpose it across Meta, Snapchat, a few other platforms, Google, for example, and target those or use the mass suppressions moving forward. We want to test that a little bit more to see if we can continue to lower our CPA costs. So being able to utilize that data across multiple platforms seems like a worthy endeavor to try out. And we're -- that's kind of one of the things I want to touch more on this year.

Yes. In my sort of anecdotal experience, customers can make back money like instantly with that. The cost for acquisition is just gone up so high on these digital platforms and making sure that you're spending your media dollars in a smarter manner is often worth its weight in gold. And yes, we've seen a huge uptick in people using those features as a result. How about you, Sarah?

Yes. We have what I'll call a divided house in Nestle Purina, where we have Salesforce and that runs e-mail and SMS for us. We've used that platform for many years. When we brought on Braze, we leveraged the other Braze-native channels, content cards, push notifications in app and in browser messages. I've kind of laid out a business case to our leadership team to test out e-mail with Braze, to do an e-mail proof of concept and to demonstrate based on the key metrics of how often does the user engage with us? Do we see increases in their spend with Braze at the forefront of that and leveraging every single native channel to meet the consumer where they prefer instead of where we prefer. So I think that's kind of the next inflection point for us in this journey, is to see what impact we can drive both for our users and the efficiency of running our business. And so we're really excited to dabble in some e-mail with Braze.

Yes. Really excited to do that with you. All right. So final question that I'm done. At the end of the day, we make Braze to really drive value for our end customers, and we're obsessed with that. And that really goes from our platform straight to all the teams that are working with you. So let's just make it really straightforward. Let's paint a picture for me in the audience today about what is sort of the value that Braze has given to your customers? And how has it impacted your bottom line at the end of the day. Sina, why don't you start us off there?

We, again, we use it across every known channel that we have when we utilize. And again, it gives us a real opportunity of reaching our players where they want to be reached with pertinent information. We're able to customize it, give them the tools, both the preference centers I previously mentioned to choose what they want to receive. And then again, personalize that experience. I think players, especially are tired of just receiving generic thought-provoking, unthoughtful just e-mails in general. You have so few opportunities to get the right message across to the right person. And this -- the integration between our data and the tools allows us to do that. The other big thing, I think it is, is that a lot of companies get lost and like, well, this tool or that tool should only be used for these specific things. I'm a smaller company. I can't use Braze. I can tell you I've been companies of all different sizes. That's not the case. Like if you have a need, if it's just mobile, you use it for mobile, you have e-mail, you can use a e-mail, and not everything has to be done all at once. Walk, crawl, run, we use this I can't tell you how many times a day when we're talking to different teams and being able to evolve to that point, you use it for what you need to in that moment, you find the most value out of it. If it meets the other needs, you need you add on to it. So pretty much anyone can use it, and I'll attest to it. It's been game changing for us. Again, we've been able to 2x every year in scale, and we've actually led the pack to the point where most folks may know in the room, we got acquired by Microsoft. We're now part of the Xbox family. And we are a bit ahead of them from the standpoint of our capabilities, and they're now looking to us to help guide them into the future. And Braze is going to be part of that.

yes. It's really a special place to be in. What about you, Sarah? Last thoughts on value.

Yes. I think we've rolled out Braze to MyPurina and purina.com this year mentioned just the unprecedented campaign volume we've been able to push out. We are going to be expanding Braze across our ecosystem to our full set of digital products. And I think to me, like it's the value is certainly there, and we're seeing it on key metrics like retention acquisition, just engagement with us in between those purchase cycles. So I think all signs are pointing to this continues to deliver for us, and we're excited to activate more with Braze next year.

Yes. Sarah, Sina, thank you so much. Everyone, let's give them a round of applause, right? Pretty incredible. Getting here straight in the horses now what you're doing. We're just filled with incredible stories like this. So as you spend the next few days with us, please get in front of other customers, hear what they're doing, it really brings to life this incredible platform. So thank you both again. Appreciate your time.

Thank you.

We're on the last presentation before we start the Q&A. So I just want to thank everyone for joining us here today, both in person and through our webcast for Braze's second Investor Day since our initial public offering in November of 2021. Throughout the presentations, you've heard so far, we've articulated our vision for Braze's future as the leading customer engagement platform. Our product road map will continue to build towards our goals to establish Braze as both the premier skill set for customer engagement professionals and as a reference architecture for the modern customer engagement stack. Capitalizing on our existing diversifications across industries, customer sizes and geographies, we look forward to crossing our next milestone as we grow towards $1 billion of top line and beyond. Our objectives are to drive durable top line growth efficiently across all components of the P&L and execute a disciplined capital deployment strategy with the goal of generating attractive long-term ROI for all of our stakeholders. Over the last several years, we have successfully scaled the company. Based on the midpoint of our guidance for fiscal year 2025, since fiscal year 2021, revenues have increased by a factor of nearly 4x. And since fiscal year '21, we've increased our customer count as of July 31, 2024, by nearly 2.5x. With the exception of the first fiscal year in which we have fully transitioned to becoming a public company, Braze's growth has been achieved while consistently improving non-GAAP operating income margins. Since our first fiscal year as a public company and based on the midpoint of our most current guided range provided for fiscal year 2025, we have improved non-GAAP operating leverage by 1,750 basis points. And we're also proud of the progress that we have made in our non-GAAP gross margin profile. At the time of our IPO, we shared a long-term non-GAAP gross margin range of 65% to 70%. About a year later, in October 2022, at the time of our last Investor Day, we increased that range by 200 basis points to 67% to 72%. And today, we're pleased to announce another upward revision to our long-term target range for non-GAAP gross margins, up another 200 basis points to 69% to 74%. Today's announcement reflects ongoing discipline in our cost of revenue as we continue to realize scaling efficiencies across both personnel and technology costs as well as the impact of performance enhancement initiatives, which have optimized our infrastructure spend, even as usage of premium message channels have expanded, and our customer base has continued to grow into new verticals and new geographies. Since the year of our IPO, we have continued to make progress in growing our base of large customers, realizing a 39% CAGR in the number of customers spending at least $500,000 annually with Braze since the end of FY '21. And today, we're happy to provide, for the first time, an update to our progress with customers spending at least $1 million with Braze annually. The number of customers spending at this level with Braze has experienced a 42% CAGR since the end of FY '21. Those of you who have been on our quarterly earnings calls this year, also know that 3 of those million-dollar customers also stepped into the next bracket to represent Braze's first ever $10 million accounts. It's also notable that each of these 3 8-figure accounts represents a different industry vertical, and that diversification is an incredible feature of Braze's broader customer base. While we have strong footholds in core industries such as retail and e-commerce, media and entertainment, QSR and financial services, each representing at least a mid-teens percent of Braze's ARR as of Q2 of this fiscal year, we also continue to gain momentum in other industries given the ongoing secular tailwinds towards digital customer relationships and engagement and the broad applicability of our platform across engagement use cases, channels and end user interfaces. Beyond industry diversification, our global footprint has also extended since our IPO, growing from 4 core regions in fiscal '21 to a physical presence in more than a dozen countries and increasing our revenue contribution from outside the United States to 45% as of Q2 of this fiscal year. Looking ahead, we intend to pursue durable growth while furthering the material efficiency improvements realized to date, combining improved customer acquisition efficiency with reduced churn will accelerate our growth profile over time. And these in conjunction with continued scaling of our personnel and technology resources should provide for the drivers for Braze's to return to a Rule of 40 company. Building upon the leadership position we have established over the last 13 years, we will continue to pursue growth from the diversified opportunity base where we have already established a strong right to win. As we capitalize on both new customer lands and deepen our penetration with existing customers through our successful multidimensional land and expand motion. As our platform extends with new channels and features, customers will be able to expand their use cases of Braze to more and more use cases, driving added sales opportunities for us and higher ROI for our customers. And our investments in our partner ecosystem, particularly among the large system integrators and agency partners as well as investments in product-led growth will improve our top of funnel metrics, increasing our sales speed and efficiency. We believe that our land and expand motion will continue to drive growth as we enable brands to realize that strong ROI from the Braze platform. and drive a broad range of upsell opportunities from channel expansions and increased message volumes to further brand and geographic penetration at larger organizations to expanding use cases and line of business within an organization. Our revenue model has remained broadly the same since our IPO, with the largest change tracking the expansion and evolution of our product, resulting in more rapid growth of revenue contribution from our paid messaging channels. This category now represents the largest component of our total top line. While the majority of our revenue today is composed of a combination of paid messaging and monthly active users, we're excited to see the significant success in a number of our new offerings and premium add-ons have experienced. In particular, products and features such as cloud data ingestion, catalogs and feature flags, among others, have experienced meaningful increases in attach rates since inception. Some of these features are purchased as premium add-ons. Others are sold via a freemium model relying on product-led growth investments, and the remainder are bundled into the entitlements to support customer stickiness and use case expansion. I mentioned channel expansion as one of the components of growth. And indeed, the number of customers leveraging an ever-increasing number of available channels represents strong evidence that sophisticated cross-channel customer engagement strategies are increasingly becoming table stakes for brands. Thanks to the technology architecture Braze adopted from the very beginning, which drives an effective and efficient R&D investment model, as new channels are built, they're automatically compatible with the same targeting orchestration and relevance optimization capabilities that our end users are familiar with from channels they already use. This allows us to meet the needs of our customers' most sophisticated and diverse use cases across a growing set of channels while maintaining a high level of usability and familiarity encouraging our customers to grow their channel set over time. And while deal cycles have remained elongated in this macro environment, we're doing what we can to get time back to our sales team and drive down contracting and negotiating efforts through the evolution of our pricing and packaging. As our channel offerings continue to expand, we introduced a new way to purchase certain message volumes through a message credit model. Currently, only covering SMS, MMS and WhatsApp, the objective is to expand this credit model to other existing channels and seamlessly add new channels as they're enabled on Braze over time. The credit model provides customers with greater flexibility to experiment with new channels, negating the need for a new order form each time a customer wants to expand their channel usage or a specific volume allocation attached to a particular channel at the time of purchase. Sales cycles can accelerate as both customers and account teams spend less time estimating volumes across a complex landscape of channels and countries, and the credit model is likely to drive higher customer satisfaction as customers leave fewer unused entitlements behind due to misaligned purchase volumes by channel. What won't change is that customers will still commit to a particular volume of message credit. These can be upsold at any time. We'll continue to represent annual entitlements that don't roll over to future periods. And as they are part of our stand-ready performance obligation, revenue related to the sale of message credits will continue to be recognized ratably over the contract term, the same way revenue for channel-specific volumes are recognized today. While essentially all new business now leverages the credit model following the Q1 rollout, existing customers will transition to this model at the time of renewal. Even in a challenging environment, all of our historical cohorts continue to expand. And as we have said during the last several earnings calls, outside of business failures, which are concentrated in our SMB segment, elevated levels of churn can generally be attributable to contract rightsizing as contracts initiated during periods of lower interest rates come up for renewal. When looking back over the last few years, we can broadly limit new customer cohorts into 2 groups. Specifically, those that became customers during the lower interest rate environment between August 2019 and August 2022. And those that didn't become customers until interest rates had broadly established a higher new level between August 2022 and July 2023 when buyer behaviors shifted accordingly. These earlier cohorts of new customers exhibited buying patterns that were anchored in expectations of more significant future growth and a different view on the cost of capital. Buying patterns for our more recent customers reflect the context of the current macro and interest rate environment with entitlement levels that are much closer to current expected requirements. And we're encouraged by the analysis of relative dollar-based net retention for these 2 groups, as the post-ZIRP cohort realized a 12-month trailing dollar-based net retention rate in Q2 of FY '25 of more than 9 points above the average performance of the new customers from those prior 3 years. As we continue to work our way out of the remaining contracts initiated during the more constructive interest rate environment, we do expect to see dollar-based net retention continue to reduce, and expect to reach a dollar-based net retention of 110% in Q4 of this year. Across our P&L, we will continue to deliver improved operational efficiencies. As I indicated earlier in the presentation, we have increased our long-term target for non-GAAP gross margin by 200 basis points from 67% to 72% to 69% to 74%. Automation and growth in our strategic locations will drive personnel cost optimization and continued R&D investments to improve system performance while proactively managing vendor costs will increase efficiencies across our technology expenses. Sales and marketing is the expense category where we expect to make the most meaningful efficiency improvements over the coming years. We believe the benefits across a number of dimensions will compound to drive durable growth at scale. The growing community of our partner ecosystem, including tech partners, agencies and GSIs should drive greater brand awareness and pipeline generation and more rapid contract conversions over time. Our expanding network of co-sellers, resellers and emerging OEM partners should continue to efficiently extend the reach of our direct sales team. And we expect that product-led growth in our free trials will reduce the sales motion effort for account executives across the commercial and enterprise levels alike, as prospects will have a chance to engage in a more self-serve model, both before and during the customer relationship, and personnel efficiencies will increase as we continue to invest in our strategic locations and improved automation across the post sales and support teams. Research and development expense growth will track most closely with that of revenue growth, enabling Braze to further extend its product lead and pursue the category leadership position and engagement marketing technology. However, R&D investments will benefit from efficiencies as we expand the use of our strategic locations, AI and automation. Finally, across our general and administrative expenses from our first full year as a public company in FY '23 to the first half of fiscal year 2025, we have already realized more than 5 points of improvement in operating leverage. We expect to achieve a similar level of ongoing operating leverage improvement over the coming years as we continue to scale the organization while controlling public company costs and realize continued personnel efficiencies through automation and investments in our strategic locations. The combined effects of improved acquisition efficiency, reduced churn and continued improvements in operating efficiencies should drive a return to a more attractive Rule of 40 metric over the medium term. We have established a framework that balances revenue growth with non-GAAP operating income margin expansion over the next 3 fiscal years, committing to ongoing levels of margin expansion, which vary across revenue growth outcomes. While we will continue to pursue growth opportunities, we will do so with discipline and rigor while adhering to the framework described here today, enabling us to materially improve our Rule of 40 metrics over the medium term. Over the last 15 minutes or so, I've had the opportunity to summarize the durable and diversified revenue expansion and efficiency gains realized by Braze since the year of our IPO. For those of you who have participated in our earnings calls over the last several years, the accomplishments summarized here today upon what has been disclosed and discussed since 2021. Before we move into the Q&A portion of our Investor Day, I'd like to highlight the 3 new financial components I disclosed today. One, we have established a framework to balance revenue growth with year-over-year incremental non-GAAP operating income gains over the next 3 fiscal years, supporting our return to becoming, to being a Rule of 40 company. Next, we have provided you with the outlook for our Q4 FY '25 dollar-based net retention of 110%. And finally, we have announced a 200 basis point increase in our long-term target gross margin range to 69% to 74%, the second 200 basis point increase we have announced to this range since our IPO. Thank you all so much for your participation here with us today and online. We'll now take a brief moment to set up for the Q&A portion of today's event. Thank you.

Okay. I think we're ready. Gabriela Borges from Goldman Sachs.

[indiscernible] questions some a little bit about [indiscernible] about where [indiscernible] and Braze [indiscernible]

Yes. So I think that as we look into the future of kind of all of this frontier technology on the generative side from a content perspective, that we're going to transition through a bunch of different phases. And the answer is going to be a hybrid at kind of every step along the way. If we kind of look at where agents are being deployed or where they're attempting to be deployed right now, they're primarily in use cases where you're replacing really high expense kind of human conversations along things like support where they can be trained on kind of repetitive interactions. And those are places where if we kind of look at even the revenue structure, like if we see the Agentforce example, just recently, $2 to $3 per conversation, and we apply that to the scale that Braze operates at, where we're sending literally trillions of messages every year. I would love to have trillions of dollars in annual revenue. But I think that when you kind of look at the basic math there, that it's clear that the state of the art and agents right now is still requiring a high amount of compute. It has a high amount of guardrails. And kind of in these places where it's not repetitive, they're not fit for purpose exactly. Now that being said, the same architectures that are driving those agents and those customer support conversations, are also driving things like our AI item recommendations. They're also driving things like the generative content producers and the cultural appropriateness checkers where we're keeping the human in the loop in order to prove those from a brand perspective, and then we're able to use automation and other forms of AI in order to deploy those at massive scale and be able to combine together the generative content production, along with the automated decision making in order to be able to deliver that when we're talking about scale that's up in the trillions for a cost function that makes sense for B2C customer engagement. But of course, as we know like if we project into the future, it's not outside of the realm of possibility that cost could come down by 100 or 1,000x that performance will continue to increase tremendously. And that also similarly, the guardrails are going to get better and better. And some of that new development is going to come about because the frontier models themselves. Many of which are available through things like LLaMA and an open source perspective as well as hosting in other ways. And additional development that sits on top of that is going to advance the state of the art. We have a role to play in adapting that to customer engagement workflows, just like our customers have a role to play in advancing it to their domain expertise, no matter what vertical they're in. And I think that the really important part of really understanding how to be successful as the state of the art in these kind of approaches to generative content continue to advance, are a bunch of the things I spoke about. And you've heard Satya actually spoke about this last week as well when talking about how the important parts of really looking at -- looking at these agents as things like LLMs get more commoditized and a lot of the capabilities there is really governing them, managing them, understanding how they work, being able to report on them. I showed in the Canada's examples earlier that also, you're going to have to run these head-to-head against your existing solutions as well. And so I think you saw in those animations, we've kind of had this progression over time where you start out with something that involves literally a bunch of nodes and edges and everything in order to solve these like simple use cases. We collapse those into encapsulated logic, move them over. Now you can accomplish even more and you heard in the customer examples, great use cases for when you can encapsulate that logic, a marketer can then use these more advanced capabilities without having advanced statistics degrees or computer science degrees or what have you. And then over time, as the agents get better and better, and we can trust them more, they can do more than just simple repetitive conversations, right? We're actually using similar technology to be able to have conversations with people on conversational channels like WhatsApp as an example or to be able to pull in kind of fuzzy logic and be able to match and say, hey, instead of requiring somebody to just say the word stop in all caps, if they send me something derogatory and exclamatory, maybe I should just unsubscribe them, right? And that's a great use case where an LLM can be trained on kind of fuzzy logic that doesn't need to be as deterministic and grown over time. So there's all these different places in the customer engagement life cycle where this technology is going to get injected in. But all along the way, you're going to need to be able to observe it. You're going to want to challenge head to head against the existing strategies that you're using. And then things get easy enough, you're also going to want to be able to expand those use cases because the way that you train your model to, for instance, speak to people in Gen X in the U.K., it's probably not fit for purpose for your growing millennial customer base based out of Brazil. And in the past, because that was too hard to kind of bifurcate, you probably just weren't even attempting to adapt to those other markets. So that meant that you were leaving opportunity for deeper connection and more ROI on the floor. And so we kind of see it as iterative process where as the state of the art gets better and we integrate that into all of the customer engagement workflows, whether that's because Braze builds the models as we've seen great examples of today, it's because we partner with people and we heard reference from Accenture and from our customers today about the flexibility that the Braze's data platform and other aspects of our ecosystem bring to bear so that we can take advantage of great advancements all over the partner ecosystem or they're built in-house. And you also heard references to connected content calls and the Braze's data platform, being able to bring in work from in-house data science teams and other engineering groups. So we've got examples of all of those deployment models already in the customer base. We anticipate that as the state of the art improves, all boats will rise along that. And that over time, you're still going to need to be able to map out that union of your business goals, and the customer journey. And then you're going to want to be able to bifurcate it over time so that you can better adapt all these great opportunities and you're expanding product space and all the customer persona. So we're really excited to see the state of the art continue to advance. I think that we're still quite a ways away from just kind of having an agent that you just trust to handle everything and have every conversation with your customer and be able to do it at the scale of trillions, right? There's a long way until we get there. But even when we do get there, we're still going to want to be able to continue to advance from that standpoint. We're going to want to be able to kind of challenge with the new state of the art. Our own product will expand. Those personas will continue to have more diversity in them. And so the idea that at any point, the technology will be good enough that we would just opt to stand still in a competitive environment, I think it's a little bit ridiculous as well. And you need to be prepared for this to be an ongoing process and incorporates new learning and new evolution the whole time.

Absolutely follow-up, if I may.

Go ahead.

Sorry. We'll go faster for future questions.

Just a quick one is about 110 NRR trough in 4Q. How much of that is just mechanical versus actual company-specific drivers like what Jon and Kevin were talking about with improving engagement within the platform?

Yes. So I just want to be clear. I'm calling the Q4 number, but I'm not declaring that as any kind of a trough. It's just to give 6 months' worth of visibility to the number. I think if I go back to the slide with the pre-ZIRP and the post-ZIRP cohorts, I think it's just, what I'm trying to do is provide a little bit more transparency to the fact that we have not fully worked our way out of that pre-ZIRP cohort buying patterns that still need to come up for renewal and have that sort of moment where they recognize what the right buying structure for them is. And so we just need to go through that. So I just want to provide that level of visibility, but I do want to be clear, I am not declaring that as a trough.

We'll go to Taylor McGinnis with UBS.

The people on the web can hear it. Can we actually turn up the mics for the questions as well.

Taylor McGinnis with UBS. Maybe a 2-part or so Isabelle, just talking on the 110 NRR, is there any color that you can give us on what the in-period trend looks like that? So, is there a point maybe we're in-period NRR knowing that the trailing 12 months is going to be a lagging indicator that we could start to see that flatten maybe as you get through some of the tougher renewals that you talked about? And then as a second part of the question for you all. When you think about how much of this is just things that are top -- you have these tougher renewals versus where there's the opportunity, right, to see inflections and expansions. You talked about verticalization, adding more AVPs, a lot of the product announcements, could you just give color on maybe what the areas that you guys are most excited for that could be catalysts for that metric?

So I can talk about the in period. So without giving a forecast or a view of kind of where the in-period might go, we are close-ish to the 10, the 110 currently on an in-period basis. I do still think, again, there is more to kind of work its way out and that may show up in that metric as well. So again, I don't want to declare this 110 as a floor just because the in period is close to that today.

Yes. And I'll start out in terms of what we're most excited about by also pointing back to an important point that Isabelle shared, which is said, we've already seen a 9 percentage point difference in the pre- versus post-ZIRP customer cohorts in -- with they have similar average contract lengths and obviously, the measurement period was the same for both of them. But there's a few things that are at play there. One is obviously the purchasing that they're doing a little bit closer to where they see today, and that means that things like volume-based upsells come in more automatically, which is great. Those are great upsells that we obviously had as a robust part of our expansion motion before that have been largely absent. And similarly, I think that the way that Braze's contract structure works, where an increase in customer user bases also leads to increases in message volumes and also leads to usually growing teams, which then expanded to new use cases. Those things all compound together. And the fact that by and large, across the entire economy, user acquisition budgets were kind of slash down to zero, we saw that in a lot of performance marketing results from other companies in the marketing technology space over the last couple of years, means that we don't need anything like a resumption to what we were seeing in the kind of ZIRP period. We just need companies start investing in their own normal growth again, and we're excited about what that will mean for that compounding acceleration. I think that when we also look at a few of the changes that we've made over the last couple of years that I speak about being really excited about the competitive differentiation that we've been strengthening during this time period, we looked at a lot of the product expansion across a lot of new channels. And Isabelle also shared, we refreshed our disclosure on the number of channels that our customers have updated or that our customers are using for the first time since our last Investor Day, and the news is fantastic to see, right? The number of customers that are using greater than like literally every cohort improved across that time period and improved in every single year, which means that not only is our product continuing to expand to give us more use cases, which leads to kind of higher stickiness and higher value for those customers, but they're adopting them. And they're continuing to do so in a consistent way. And so we've got more channels coming out later this year. We're improving the usability on existing channels while also deepening the flexibility for them. You combine that together with more advanced AI that lets customers run more differentiated use cases. We also spoke about some of the copycat competitors that we've seen from the venture-backed start-up space. And when we look at the combined flexibility and the channel breadth across those, we make life substantially harder for those types of strategies. I think that they've certainly been, they kind of showed up in the right place at the right time with a proposition that was high on promises and low on prices at a time when the macro was really difficult, but the shine is coming off of that. The differentiation that we're delivering through our investments in AI and our data platform and our channel breadth is really showing up for impressive differentiation. We shared in Q2 that we've seen improvements in our competitive win rates against them. And I think those things just combined together into a lot of optimism for the structural strength of the Braze business. Now that's all presented obviously with a difficult macro and a lot of the other things that we've been talking about. But I think that the story across Braze last years is one where we've been really investing in improving our foundations, and I'm really excited about seeing what that means for how we can accelerate.

Also, I'd like to point out for those on the webcast that there is an ask a question function in the upper right. So if you want to send in a question and you're online, please do so. We'll go to Ryan MacWilliams next, Barclays.

Just a follow-up to Gabriela's question. Marketers have been comfortable with sending out millions of e-mails at once, but 2-way messaging has been difficult historically as challenging to service inbounds from millions of users at once. Now this seems more possible with generative AI and chatbots, but do you think this brings more use cases from customer service onto Braze? And how do you think about marketers potentially dealing with the challenge of like actually answering the customer, and so they're just sending out e-mail or a text.

Yes. So I'll give a quick framework on that and then hand it over to Kevin and Jon. First of all, I want to highlight one of the great performance differentiators of Braze in response to that because a lot of our -- in particular, our legacy competition, but also our venture-backed competition are designed for outbound scale, and Braze's presence in our customers' products means that we've always been designed to also handle both inbound scale and interactivity during inbound scale. So when you consider that one of the hardest things that we do from a performance perspective is that we'll send out like, let's say, breaking news use case where by definition, you don't know when the mass upload is coming. And you need to get out information to people as quickly as possible. And then as soon as that information goes out to them, they open up the mobile application or whatever it is in order to learn more about it. And then once they're in that experience, we need to render yet more to them in a personalized way within that. And so we're responding to in the moment signals from customers with load that kind of shows up unexpectedly and then able to do so in an interactive fashion. And so first of all, as a starting point, I think our event-driven stream processor and Canvas within it has given us a position where we've already proven the ability to scale and be able to deliver in an interactive way to customers. And in fact, the majority of the messaging that we do on something like WhatsApp and increasingly on SMS now, but definitely on WhatsApp because the nature of it is all conversational by nature and actually includes a bunch of logic there. And then, Kevin, do you want to just talk about how we're looking at expanding all of that?

Yes, absolutely. So. Due to the infrastructure, the streaming infrastructure that we have, as Bill mentioned, we have this ability to very flexibly meet a lot of the different sorts of response cadences and workflows that our customers want to set up. And we actually have seen a number of different cases where customers want to run these messenger platform 2-way conversations. And it's actually been very important for us to make sure that we are continuing the performance in the applications that we can support those use cases. And one of the great virtuous cycles that we run into there is that since we're a realtime streaming platform, we already have all of these different realtime use cases that are set up on the platform. And so maintaining that cadence of ensuring that we have the very top of the line performance that's able to robustly support all these use cases has been, always been a part of our culture. So there's no replatforming or rebuilding of infrastructure that needs to happen for us to support those sorts of workflows. The other thing that I would say is that on this general front, especially as we're looking at marketing getting more involved in its 2-way conversations, which has historically not been a really core marketing use case as much, what's really exciting is that our enterprise customer base, and in particular, the customers that we have that are really constantly pushing the envelope of new workflows and new use cases, we feel are really helping to partner with us as we push and shape the future of where this market and where this industry is really going to go. And so we think that having that lens into like what are the sharpest marketers doing, what are the newest use cases and being at the leading-edge of pushing the envelope, we think that's really a strong advantage for us.

Yes. And then to speak to your service use case point, one of the distinctions and I've shared this with the investor community in the past that we make in terms of the power of our scale is that one thing we haven't really built to scale is like Braze is not built to manage like a team of thousands of customer support agents in all of our queues and everything else, right? Braze has been built with an assumption that you can fully automate your use cases. And so the places where you see Braze doing conversational use cases in places where we can fully automate the responses. Now if we go back to my answer to Gabriela's question, the kind of surface area that you can fully automate with the right cost function and the right performance requirements, we believe will also continue to increase over time, which means that Braze like the available use cases that Braze engine can actually satisfy will certainly, over time, increase to include more and more conversational workflows as that capability to fully automate continues to grow, also provide a reminder, that we don't sell as a seat-based product, right? We started with kind of selling at the point where we're generating value through the engagement or the interaction. And so we're certainly not -- we're not trying to, and this is not part of our product strategy to go try to kind of compete in the kind of service desk world. In fact, we partner with service desk providers, but it is also absolutely the case that as conversational capability becomes more and more possible on a fully automated way that you should expect Braze to become more and more responsible for those types of use cases over time.

We have an online question from Pinjalim Bora from JPMorgan Chase, which I'd like to give to Jon. Can you talk about zero-copy data and the technical implementation in the simplest way possible? And then the second question is, are you offloading the processing into the data warehouse layer?

Well, just essentially try to simplify this as much as I can. If you have your own database, right, before zero-copy data, essentially, what we would have with cloud data ingestion is allow you to then essentially sync some of those tables or database views, essentially database queries into Braze store on the user profile and in our catalog system. However, if you wanted to say, look at a cohort of users, I'd say, your financial services institution and wanted to look at users who had low account balances which you didn't again, want to send account balance information to Braze because it's very sensitive. You get from Braze now, query the data warehouse -- do you have and then simply just pull the user cohort into Braze. So the thing that we get now is simply that list of users who belong to that segment which we can encode in our classification system as belonging into that segment and lets you marry that with our realtime segmentation filter. So basically, we're running a query in your data warehouse, taking the results of who those users are and then taking that metadata of the user list back into Braze without having a story of the underlying data.

Well, then Myles, you referenced the hidden costs in your conversation with Accenture. So do you want to touch on that point about offloading the processing to the data warehouse and why it's not a panacea.

Yes. A lot of companies don't realize that if they're running, there's a lot of things to like about zero-copy data, particularly if you're in a regulated industry like Jon was talking about now. However, when you sink with Braze, we basically can absorb a lot of the need to constantly be querying your cloud data warehouse to ask those questions that you then want to answer and take action on through messaging and conversations. So what seems like a nice idea up-front might actually have a lot of hidden costs that might show up on your Snowflake bill or your Databricks bill as you're running all these queries and consuming a lot of processing power on the data warehouse side.

Yes. And I think that just goes back to the importance of flexibility in the Braze data platform because zero copy data is fantastic for certain use cases, but there's a reason that cashing exists. And similarly, we know that a lot of -- the data warehouses are not suited for streaming use cases, right? And so well, this is really useful for certain places where you want to start with maybe a sensitive audience definition and kind of start those people into a journey, it's not an appropriate place to be doing queries where you need to be living in the flow of realtime interaction. And it's similarly not a good way to be doing queries that need to be repeated all the time. Because in the first case, you've got a strict performance requirement. And in the second case, you get a lot of benefit both from a performance and a cost perspective out of cashing, right, which is effectively what loading something on to a user profile does. And so while zero-copy data is an important, it's an important option to have, not a panacea for anything, and anyone that is positioning it as like the right way to kind of do everything, probably either has limitations in their platform where they can't take advantage of the realtime data. So the slowness doesn't matter to them. or they're happy in deciding costs from their customers. And we think it's really important to be kind of transparent about where the strengths and weaknesses of these different options are. It's also why the Braze data platform is part -- is also part of a broader partner ecosystem because we often the right solution also involves using partners in flexible ways.

Scott Berg, Needham.

All right. It looks like it's great. I guess maybe a couple of parts into the question there is the TAM analysis here, it's going a little bit better than a 20% CAGR for the next couple, 4 years. Your revenue growth, at least according to your current guidance, it's going to dip below 20% of the subscription level here in Q4. We know that's artificially depressed because of the renewal cohorts that you've been talking about. But as you think about growing at that market rate or better, how much of that growth is coming from your product set today and how much of that market growth is coming from something new that you're already starting to work on that we're not aware of?

Yes. So first of all, I think that our growth assumptions can be fully funded by the existing product today, existing product set that we have. When we look at the diversification of our addressable market, diversification of our existing customer base and then how that maps some of the addressable market, we are still so early in our penetration of so many massive and important verticals. I think that the -- another really important difference between Braze and a lot of the more vertical-focused competitors kind of in the broader messaging space, is that we've already proven that we can run these use cases. We have incredible customer logos. You even look at our travel and hospitality segment, which is a mid-single-digit percent of revenue, and there are global -- important global enterprise brands there across airlines and hotels and travel booking and different layers of kind of the aggregator stack as well, which I spoke about before. And there's just tremendous additional opportunity in that in financial services and health and wellness and what have you. The other important thing that's been happening along the way is that it's not just our product that's expanding, it's also this secular tailwind behind investment into direct-to-consumer relationships and the building out of first-party data sets. And you heard from Nestlé Purina here earlier, a lot of the CPG category simply didn't have first-party data sets not too long ago. And that means that even though they were probably sending e-mail in various ways, but they weren't really doing so as part of robust life cycle programs. And you heard today that the development of being able to build a pet profile is the starting point to be able to build that first-party data and be able to have that direct customer relationship. If you've heard me speak in the last couple of quarters, I'd like to talk about automotive because I think it's such an interesting example where you use a product every single day and have no interaction with the automobile manufacturer and tell the simple innovation of letting you unlock your car with your phone, and now they get data from you every day, and they can talk to you every day. And that unlocks a whole new set of customers. You similarly look at QSR. Before McDonald's was working with us, they certainly were running things like the monopoly sweepstakes and other ways that they were having people kind of sign up for things. But when you look at McDonald's' digital footprint today, they have enhanced take out offers. They've got mobile wallet, they have loyalty, you can get delivery directly from the application. It's an entirely new digital ecosystem that they're building out so yes, like on the one hand, you can look and say, yes, that was a legacy takeaway. It certainly was. It was on these channels. But fundamentally, the business strategy across like all these verticals around the economy is trending towards this world where they're investing heavily in building direct-to-consumer relationships. And so I think like even if our product stood still and the channel set stood still and people didn't adopt initial use cases, even that secular tailwind where you see that kind of across every single vertical businesses are reprioritizing investment into first-party relationships and first-party data, I think that alone is a massive growth vector for us.

We'll go to Arjun Bhatia, William Blair.

Perfect. I want to go back to the verticalization point. It sounds like you're doing a little bit more on vertical go-to-market. Is there an opportunity to do more on product verticalization? Is that something that you're contemplating? And then if I'm picking on one vertical, you laid out the financial services vertical, it sounds like you're doing well with challenger banks, but still room to go with traditional banks. What is the kind of biggest roadblock that you see with some of these more traditional legacy brands to adopting Braze? Is that just in our share of market awareness? Or are there things in your control that you can do to speed that up?

So yes, Astha, do you want to talk about verticalization next year? And Kevin, you can touch on the product side?

Yes. I think I briefly mentioned some of this before in my presentation as well. So if you look at the 2 verticals that I mentioned, financial services and then e-commerce and retail, there has been product investment, and that's why we've been able to get the traction over the last few years. And again, just to remind everyone, those 3 industries, including travel and hospitality are amongst our top 10 from an ARR perspective. So despite that, we still see a ton of room and leverage for us to continue to grow in those and some of the advancements we made on the product side have definitely helped us expand our use cases and sort of like in a discrete further into some of the hard-to-get accounts, maybe because of traditional limitations or sensitive and compliance needs, especially in financial services. So for financial services, there are a few things that, the product team has already invested in and there are more coming, and I'll let Kevin touch upon those. But again, going back to zero copy data. That was one of the things, and you'll hear more about that again tomorrow in our keynote. And that has been one of the requirements for many of those traditional retail banks. And that's great to see that we're going to get an expanded opportunity because of this capability with those highly sensitive or regulated industries. The other thing that we've also done is just having that data retention. And for us, that has been a big differentiator in the market, and a lot of competitors in the market don't actually just save the data for more than like a couple of years. We actually retain the data if the customers want for 7 years across all channels. So that has been really good for us in terms of getting more traction within market as well. And then, yes, encryption is the other part, giving more control to the customers with bring your own keys, and e-mail encryption as well. Those have been the product enhancements that we've made. And Kevin, if you want to talk a little bit more about that for financial services.

Yes, definitely. So the way that I would think about this in terms of how we use the product to crack into these different industry verticals is that, our product is built in a very modular, it's actually built in a very modular and in some sense is horizontal way. But what we are able to do is we will take these products, and we will assemble them into building blocks that we know are very expressive in terms of what they're capable of doing, but that also are very generalized in terms of being able to be morphed into different sorts of use cases. So one example of this that I would use would be our catalogs feature, which has had very high adoption. It's been a very successful product for us overall. Catalogs are great for an e-commerce sort of use case and our item recommendations, which have also helped us crack a number of enterprise cycles, that product sits on top of catalogs. But catalogs can also be used for things like a media catalog. And it can also be used for other sorts of data objects that are nonuser data like accounts that will expand that core building block into different ways that allow us to crack into different verticals. The same thing is also true of, say, like a number of different ways that data can be passed through a Canvas where there are many flows like the flow of a shopping cart through a Canvas that can, that needs to be manipulable and editable by user by customers in terms of crafting that journey that are also very similar to, say, a trip in a travel and hospitality use case. And so we are very, very cognizant as a company that has a lot of engineering and product DNA in our bones from founding team onwards on how we can design these systems from an infrastructure and architecture and data model perspective, such that they can be used for many different use cases, and that's a very explicit part of our overall product design strategy.

All right. We'll go to Brent Bracelin up here, Piper Sandler, up the front.

I'm going to pivot here and ask a bit of a tactical question specifically around the paid credits model, rolling that out now to the renewal base. Myles for you as you think about that, great progress with channel attached, but 49% of your customers still have 3 or less channels. So as you go to a renewal, what is that paid credit model enable you to do and power your sales reps to potentially sell more channels and more flexibility restriction? And then, Isabelle, can you just talk about the gross margin impact of paid credits? Is it neutral to gross margins or accretive to gross margins?

Yes. So right now, the message credit structure only applies to WhatsApp and SMS. So our plan -- it was a plan all along, but we intentionally are easing into it and we have some operational things that we need to still work through internally is to include many more channels in the message credit structure with the natural goal of improving our customers' ability to experiment, to consume more of what's working, to try new things, all of the benefits that you were just mentioning, Brent. So as we get into renewal cycles that are happening now, we're very much talking to our customers about the benefits of this new approach. We're getting them to try WhatsApp and SMS, use them more interchangeably. RCS will be coming online soon. LINE will be coming online. So as we add some of these new channels that Jon and Kevin mentioned, we're going to be adding them into the structure, and then next year, adding even more channels. So the answer to your question is actually a story that's going to unfold over the next 12 months or so and we're really excited about what it will mean.

And to answer your question about the gross margin. So to go back to the specific comments that I made in my slides and to answer the question first, very narrowly and then I'll sort of expand from there. I said that this would lead to better customer satisfaction because they would likely -- they would be likely to leave fewer unused entitlements on the table. If they consume more of their entitlements, particularly in these more premium messaging channels, that would be a net headwind on gross margins. That being said, even as we have expanded the number and utilization of these premium messaging channels, not only have we materially improved our own gross margins. We've now given you an additional 200 basis point increase on the long-term range. So we're confident that actually this is the right thing to be doing for the customer. What's right for the customer is the long-term happiness and satisfaction, not trying to make some short-term gain because they are purchasing entitlements that they're not using. That is just the wrong strategy. And so tactically, yes, in theory, there is a margin headwind. I am not concerned that this in any way produces something structural that we need to deal with.

Well, Spencer, do you want to talk about the plans to monetize Webhooks as well?

Yes. In addition to bringing in some of the channels that we currently monetize into the credit umbrella, we're also looking at channels that historically haven't been monetized at all. One of the notable ones is Webhooks. This is the ability for marketers and especially some of our partners to be able to interface with an API, which unlocks a whole slew of use cases above and beyond what a customer can do inside our native channels. We believe there's a lot of opportunities there, and that's one of the first priorities on the road map in terms of credit expansion. I'd also look at -- add to what Isabelle said, credit expansion in 2 lenses. I think the first is it lowers some of the friction to adopting a new channel. The fungibility between the different channels within the credit system means that a customer can more freely experiment. The other thing that we expect that to do is act as a way to counter some of the contract rightsizing we've seen where if you have e-mail entitlement in that one bucket, and you don't use all your e-mail, you're kind of stuck there. And for us, once we bring more channels into the credit model, we can look and say, okay, your e-mail usage may be for some of our customers their e-mail usage gets optimized because they're sending the right message to the right users. So before maybe something that was a little bit spammy, they can stop doing, lowers the e-mail volume in a way that's good for customers. And instead of being stuck there, we can talk to them, well -- how can we maybe move that into SMS or WhatsApp or one of the other channels. And so we think that, that fungibility is good for customers in a lot of ways.

All right. We're going to take one last question and then management has to wrap because they have some other commitments. So, we'll go to Brian Schwartz from Oppenheimer.

My question is for Isabelle on the growth and framework that you gave us. And just talking about the growth part, not the margin part, when we finish this period, say we come back for the next Investor Day at the end of the period fiscal '28. And regardless of the macro, if the business is able to be in the upper right or if we think about the midpoint and the growth is to the right of where that midpoint line was, which of those 5 growth factors that you have, the geography, land and expand, platform expansion, partner ecosystem and the product-led growth, which of those will we look back at and you'd be like, wow, we really got that right. That really helped catalyze the growth to land in the upper half?

Yes. I think it's truly going to be a combination of all of them because when I think about the things that are going to benefit the top of funnel, like the partner ecosystem, that then feeds down the change actually what the customers are going to buy, extending the platform in different directions, the additional volumes, the additional messaging channels, the additional use cases. It's -- that's the beauty of sort of what we have built and the existing diversification that we have is we have all of the ingredients in place. And you've heard Bill talk about in the last couple of earnings calls, we've seen some positive green shoots but nothing kind of sustained more than like 2 quarters sequentially. And so when things start to fire on all cylinders across more of these dimensions simultaneously, that's when we would look for that growth re-acceleration and more opportunity and being that more on the right side of that framework. So I think they really kind of compound together and we will work together. And I hope that if we're all back here in Vegas in 2020 -- in fiscal 2028, that we're talking about the successes across a number of those dimensions.

All right. Thank you, everyone. Bill, do you have any final remarks?

I just want to thank everybody for being here today. If you have the opportunity to -- I know that we actually kicked off Investor Day before the actual event started. But tomorrow morning is when we're going to officially open the event, have keynotes. If you had the opportunity to walk around today, actually, people have been doing training all over the place, the Partner Midway has been pretty active. The Torchie awards are about to start with kind of the opening session. So that's why our Torchie award presenters had to kind of disappear here right in the middle of the chat. But I encourage you to stick around if you are here tomorrow morning, definitely drop into the keynotes. There's a lot of new exciting product news that we didn't share [indiscernible] want to scoop every single one of our stories here today. But thank you for coming. As we mentioned, this is only our second Investor Day since IPO, a little bit under 3 years ago. And we're really excited to continue to provide transparency and engagement with the investor community. So thank you for being here and for the great questions. Cheers.