Braze CEO Bill Magnuson discusses the company’s latest results, plus how it is incorporating A.I. to be more efficient and effective.

Opening Bell

CEO of Braze Talks how A.I. Is Making the Difference

Customer engagement platform raises recently announced its fourth quarter and full year earnings and the company did exceed revenue estimates upped its full year outlook saw 33% revenue growth year on year and reached $500 million in committed annual reoccurring revenue. The company CEO Bill Magnusson joins me now to give us a deeper dive into these results. What it means for the publicly traded company bill. Welcome. Thanks for having me. It's great to be here. Uh It's, we're, we're happy to have you here on the show. And so what do investors need to know here as your company begins a new fiscal year, a new fiscal quarter? Absolutely. So Ray is a customer engagement platform and we work with primarily B to C brands to help them forge stronger relationships with their customers. The way that we do that is by integrating into their products and services. That integration gives us data to understand what those customers care about the most. And then we dispatch messages uh and modify the product and personalize all the content within those in order to be a companion to the customer journey and help drive better results for brands in the form of better faster activation, more customer advocacy, more customer loyalty, increased purchases, uh and also avoiding churn. So really throughout the entire customer life cycle, uh to put some numbers on that, we actually uh dispatched over two trillion messages and other sorts of uh orchestration actions last year, uh we processed over seven trillion incoming API request. So uh doing this at absolutely tremendous scale, you mentioned the 500 billion in annual recurring revenue uh from a financial scale perspective. And we're really excited to start this year, which brands do the most business with you. So we, we were really happy to announce, I can't, I can't share the name, but uh large media conglomerate just became our first eight figure annual customer uh in Q four. And so that was an exciting thing to share. We work across a lot of different verticals and, you know, we mentioned a few of those brands on the call. Uh companies like Wendy's Door dash A B Inbev, uh Draft Kings Fan Duel. Uh We also work all over the world. So 44% of our revenue comes from outside of the United United States. Uh And I talked through some examples of that as well. So really, you know, you can see a lot of diversification across different company types and all over the world. And you know, that's really a testament to the fact that Braze works on a very core business problem, which is just how do I create better relationships with my customer and use that in order to drive additional value for my business. What are the customer trends that you're noticing right now across your diversified portfolio? Yeah, so I think one of the really big ones is continuing to connect with uh the reality that the customer journey today is really one that is in the hands of the consumer. So a lot of kind of marketing automation around the space in the past really talked about the customer journey as if it was something that the marketing itself was driving, you know, you were orchestrating the journey. Um I think that with a modern consumer who's always on, who wants to be able to access your products and services on their terms. Doing so in a way that is nonlinear and is cross platforms, they're moving from web to email to mobile, to in person, to connected devices, connected cars, connected fitness products, et cetera. Um There's all these different ways that a consumer is going to interact with you and and places where they want to have the experience of your product or service delivered to them or augmented. And so the biggest trend I think is really meeting that consumer where they are, but that consumer of course, is more and more demanding over time. They want to have relevance and communication, they get from uh brands, they want all of these different channels that they're interacting on to be connected and to be cohesive. They don't want to have siloed experiences where the left hand is not talking to the right hand from a brand perspective. And so really helping, you know, marketers and in general, customer engagement teams connect together all of the understanding they have about the customer, all the opportunities they have to speak to them drive additional relevance and cohesion across that $4.5 billion company that I see. And my next question bill is specifically how you want to grow the company this year on the back of artificial intelligence. Yeah, absolutely. So we actually are, you know, continue to invest very heavily in R and D. Uh We're actively hiring across both adding a new sales capacity for this year already in Q one. as well as continue to expand in R and D uh on the earnings call last night, I spoke through our A I investments. They run across a broad spectrum. We're trying to do, you know, largely two things. One of them is make marketers more productive so that they can bring their ideas to life more quickly. They can get more creative inspiration by interacting with gen A I assistants. They can help check things like tone, uh they can do so in ways where they're generating new variants and new experiments that have brand safety. Uh And that where they can have the right tone of voice uh while still being able to localize and more regions around the world. So when you kind of think about that job of the modern marketer and what we demand of them as they're trying to evolve their own strategies over time. Uh It's a, it's a really global and diverse problem and one that, you know, many marketing teams are understaffed for. So when we're talking about improving marketer productivity, a lot of that is about doing more with the same size team. Uh Because I think a lot of these teams actually uh today are, are relatively, you know, stretched for resources. And then the second side is really using that artificial intelligence to drive additional performance and the results. And so I I spoke about one example of that last night, uh using New Transformer based A I technology to be able to do a better recommendation of whether or not it's catalog um options if your media and streaming, maybe looking at a product catalog, if or commerce company uh different service recommendations or maybe you are um language learning or you're doing fitness apps and you're trying to recognize uh recommend new exercises um or new tutorials or courses to people. Um There's been obviously a lot of different ways that recommendation has been done in the past. Uh We were excited to share yesterday that we put into a general availability, a version of that that is based on transformers where Transformer really being the T in chat GP T uh brand new technology that we're able to put into the back end of those recommendation engines. And I shared an example last night where uh one of our customers was actually able to triple the occurrence of purchases during news or on boarding by doing a better job of generating those recommendations when they're introducing a new customer to the brand over time. And so that's a great example where we can combine together the additional productivity with these assistants and co plots. Um And then we also just drive better bottom line results through having better technology that's driving the personalization. How much money is artificial intelligence able to save your business or make your business. We think that it's a really important part of differentiation and you know, braze has always differentiated uh within the kind of broader marketing automation and customer engagement landscape by the sophistication of our capabilities. And I think that when you look at the copilot side and the productivity enhancements, what we're able to do is get more marketers using more of brass advanced functionality more quickly. So that's really fantastic for us from an adoption standpoint and helping grow the community of people that use bras every day. Uh that helps speed up our sales team, it helps speed up our on boarding, it helps our customers get more ro i out of bras more quickly and more easily. Um even if they have small teams and they're trying to be um small but mighty from that perspective. And then, you know, from a dollar perspective, if we go back to the of enhancing performance, you know, there's a lot of money left on the table by uh messaging that's just disjoint or not relevant to customers. You can think about yourself as a consumer, you can probably receive, you know, emails and push notifications and S MS and messages every single day. Uh that might as well have not been sent to you. And that is not only a waste, a waste of expense, it's a waste of uh the, the kind of brand trust that is there. Uh the customer, you know, is being trained to not necessarily uh respond to those messages much and the brands are also missing out on opportunities to really drive more sales and create more advocacy and more uh brand affinity over time. And so I think that, you know, we can put a kind of short term dollar number on that in terms of revenue and purchases. Uh but the, the other thing that I think gets lost because brands don't deliver relevance in those moments where they have an opportunity to communicate with the customer is that they're losing that ability to cement a relationship with the customer over time, losing their. Let me ask you this, how much money will artificial intelligence save your business, quantify it for us? Yeah, I mean, II I can't put an exact dollar number on that. Um But, you know, we're definitely speeding up the ability to onboard new uh employees into Braves. You know, I think that so far a lot of the generative work is not replacing tenured expertise, but it is helping new people come up to speed faster by helping them navigate complicated uh information environments more quickly. And so that's been fantastic for us to see as we're growing our business, we're able to get new people productive faster. Uh And we're able to also help, you know, a um employee that maybe needed to be more specialized in a certain part of the business because the amount of advanced training that they needed was much higher, be able to work in a broader aspect of it because they're able to navigate the information environment more effectively. All right, Ceo Bras, Bill Magnusson Bras is a publicly traded company bill. Thank you for joining.