I have been following this board for a few months now and I found a stock that I haven’t seen much coverage on called Braze, Inc. It seems to fit many of the criteria that makes for a stellar hypergrowth stock, so I am curious if anyone has additional info on it!
Braze offers SaaS cloud-based data analysis products that identify/segment/process/predict consumers based on input data. Currently, it processes data from 3.3B end-users whose data is received by Braze’s customers.
DBNRR is 126% for the most recent quarter (134% for customers w/ ARR >$500k) and its gross margins are improving each quarter (currently around 70% GM).
Revenue growth is accelerating and it seems like Braze is following the land-and-expand formula that many successful SaaS companies follow.
Braze has a net cash balance of $564M (shows as $74M net debt on TIKR - this is incorrect and a great example of why we need to be looking at actual financial statements of the stocks we research).
The biggest red flag I have found is that it has Class A and B shares. However, management owns around 6% of of the company, and so I will be conducting more due diligence on what is going on here.
Another thing to note is that >$500k ARR customers account for 50% of Braze’s revenue (97 total). These customers have increased from 67 last year for a ~45% increase YoY.
Please let me know what you think about this company! This is just my initial research on Braze, and so I will provide the board with updates when I find interesting info on it.
In particular, there is a writeup on SA from Bert Hochfeld linked in those threads which you may be interested in.
Note: The Motley Fool has primitive boards and no searching, but as this is a publicly-available board, it is indexed by Google. Searching site:fool.com “Saul’s Investing” Braze led me to those threads in short order.
Aaaaaand I was incorrect about Braze’s net cash balance. I am not sure where in the world I saw that Braze has a $564M net cash balance. Perhaps it was different a few weeks ago when I began researching it. Either way, it does have a net cash balance of $74M. $564M would be way cooler.
Note: The Motley Fool has primitive boards and no searching, but as this is a publicly-available board, it is indexed by Google. Searching site:fool.com “Saul’s Investing” Braze led me to those threads in short order.
To the right side of every post there is a link titled “Board Search Sites” that allows you to search just Saul’s board right here thanks to some members who added those tools.
As for Braze, I have a small position. It is very similar in size, valuation and metrics to Amplitude. They are valued almost identically with similar growth, margins, etc. Braze was -6% FCF margin last quarter and is likely to break even here soon. Amplitude has been growing slightly faster. It’s quarter just ended at end of January, so they won’t report until March.
It has been a while, so BRZE is not on top of my head, but tne thing I did not understand from Bert is the relationship, if any, between BRZE and TWLO Engage.
If Engage is upstream from BRZE, is that not a potentially huge problem for BRZE?
If there is no potential intersection/collision, where does BRZE get first party data from?