Yun Kim

Yun Kim of Loop Capital Markets asked if Agentic AI presents an opportunity to introduce new usage or consumption-based pricing models.

Answer

President Vahe Kuzoyan responded that the current Pro Product suite already utilizes a broad range of pricing models, including per-seat and consumption-based. He indicated that this existing, familiar structure will be used to monetize new opportunities created by agentic AI.

Yun Suk Kim asked if the growing mix of commercial and roofing would alter GTV seasonality and take-rate trends, and requested an update on the adoption of the new mobile app.

Answer

CFO Dave Sherry stated they are not forecasting a significant change to seasonality or earn rate from the new segments but acknowledged it could be impacted by faster-than-expected growth. President Vahe Kuzoyan reported a meaningful increase in the new mobile app's utilization, with a rollout that is on schedule and showing strong results.

Asked how the industry consolidation trend affects sales cycles and monetization, and requested an update on the Convex business and its role in the commercial strategy.

Answer

Sales cycles for consolidators can vary, but these sophisticated operators have a high appetite for Pro products, which enhances monetization. The Convex acquisition is performing well and is integral to the commercial strategy, providing a valuable data set for a future prepopulated CRM and offering crucial insights and relationships within the commercial market.

Yun Kim inquired about trends in different messaging channels, specifically which premium channels performed well in the quarter, and if any messaging channels are expected to receive a boost from customer adoption of OfferFit.

Answer

Co-founder and CEO Bill Magnuson reported consistent growth across messaging channels, with notable growth in premium channels, especially outside the U.S., driven by the flexible credits model. He highlighted increased adoption of channels like RCS, WhatsApp, landing pages, and content cards. OfferFit's decisioning engine is primarily deployed around email but is flexible enough to be applied across various marketing channels, including performance marketing use cases beyond Braze's existing footprint.

Yun Kim requested an update on Braze's partner ecosystem, specifically regarding global system integrators (GSIs) and potential OEM opportunities with other software vendors.

Answer

CEO Bill Magnuson stated that Braze's strategy remains focused on direct sales, and OEM is not a significant part of its go-to-market motion. The primary focus with tech and services partners is on aligning sales teams, rationalizing technical architectures for digital transformations, and leveraging product integrations, which leads to faster deal cycles and better customer outcomes.

Yun Kim of Loop Capital Markets LLC asked if the Flex pricing model is improving deal visibility and sales velocity, and whether it might encourage customers to pursue early renewals.

Answer

CEO Tomer Weingarten confirmed that the Flex model is 'definitely streamlining the sales process' and unlocking more velocity by allowing customers to think more broadly about platform adoption. He clarified that the company will continue its standard customer engagement cadence and not pursue unnatural early renewals.

Yun Kim from Loop Capital Markets LLC questioned the near-term cross-sell opportunities and whether they require a fully integrated platform first. He also asked about the expected trend for the combined Net Revenue Retention (NRR) rate post-acquisition.

Answer

CEO Sandeep Sahai identified Beacon's risk capabilities as the most immediate cross-sell opportunity and cited the recent VKB win as proof of the demand for a front-to-back solution. CFO Jim Cox explained that the consolidated NRR of 110% is on a similar journey to the core business a few years ago, with a clear path to the 115% target through commercial model enhancements and expanded cross-sell offerings.

Yun Kim of Loop Capital Markets asked if the strong performance in the customer identity business was broad-based or driven by a few large deals, and inquired about the typical timeframe for a large renewal following a customer's viral event.

Answer

CEO Todd McKinnon confirmed that the Auth0 business had a strong Q1, particularly with large customers, and he is optimistic about broad-based success for the rest of the year. CFO Brett Tighe added that the quarter's largest deal was an Auth0 deal from a specialized team, demonstrating strong execution following a record Q4.

Yun Kim asked about the overall pricing environment and whether products like pre-bid optimization provide greater pricing leverage. He also inquired if the optimization segment is expected to achieve double-digit growth in 2025.

Answer

CFO Tania Secor noted that while measurement CPMs were down slightly, optimization CPMs were stable, and confirmed that optimization products command a material premium. She highlighted pre-bid social as a significant upsell opportunity. While not providing a specific growth target for the optimization segment in 2025, she reiterated that ramping pre-bid social revenue is a key driver for next year's growth.

Asked about the drivers of enterprise momentum, trends in deal size, customer reaction to price increases, and the outlook for the Net Dollar Expansion Rate (NRR).

Answer

Enterprise momentum is driven by sales efficiency, a strong pipeline, and improved product-market fit. Deal sizes are growing, evidenced by more large customers (>$50k ARR) and a recent eight-figure deal. The price increase did not cause an uptick in churn for SMBs, and the NRR improvement was driven by both organic growth and pricing, a trend expected to continue in Q4.