Cloud-based software company Braze (NASDAQ: BRZE) saw its shares rise by over 16% at one point yesterday following a bumper day of trading. The customer engagement firm saw solid investor interest following a positive third-quarter earnings report. This was the company’s first earnings call since going public via IPO last month.
What happened during Braze’s earnings call?
Braze reported a loss per share of only $0.16 versus an analyst estimate of $0.60, on revenue of $64 million against an anticipated $56.4 million. The narrowing losses and soaring revenue were enough to entice investors to buy into the company.
Braze credited factors such as increased customer numbers and customer renewals, along with being able to sell at a higher margin, for the pointed rise in revenue. The company now anticipates Q4 revenue of $65.5 million, which puts it right at the center of its guidance range.
CEO and co-founder Bill Magnuson was jubilant during the call as he described the company’s progress this quarter:
“Exemplary execution combined with strong demand allowed us to deliver outstanding third-quarter results, demonstrating high growth at scale. We are in the early stages of addressing a large market opportunity in the customer engagement space, and we believe Braze can help all brands create valuable customer experiences that drive growth and retention.”
So should I invest in Braze stock?
Braze’s stellar earnings are certainly cause for intrigue amongst investors. While it may be a little early to get involved in the company just yet, the strong financials are a factor that will put Braze on our radar.
The company also seems to have developed a “stickiness”, which means customers are more likely to stay with the company than move to competitors. This is of vital importance in a space that contains industry giants such as Adobe and Salesforce.
Caution is definitely advised considering how new Braze is to the public market, but if the company keeps producing winning earnings calls similar to the one seen this week, it will be hard to stay away for too much longer.
Financial Writer at MyWallSt
Pádraig’s favorite stock is Nike. Growing up as a sports fanatic, seeing Nike collaborate with athletes like Jordan, Lebron, and Ronaldo inspired him and cemented the brand in his mind. Now, despite having failed miserably in his attempts to earn a fabled Nike sponsorship, he still believes in the innovation and creativity behind Nike and is convinced they will only grow stronger as the world's leading sports brand.