S-1

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

S-1 1 d40379ds1.htm S-1 S-1

As filed with the Securities and Exchange Commission on October 22, 2021.

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Braze, Inc.

(Exact name of Registrant as specified in its charter)

Delaware

7372

45-2505271

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

330 West 34th Street, Floor 18

New York, New York 10001

(609) 964-0582

(Address, including zip code, and telephone number, including

area code, of Registrant’s principal executive offices)

William Magnuson

Chief Executive Officer

Braze, Inc.

330 West 34th Street, Floor 18

New York, New York 10001

(609) 964-0582

(Name, address, including zip code, and telephone number, including

area code, of agent for service)

Copies to:

Nicole Brookshire

Jodie Bourdet

Peter Byrne

Owen Williams

Cooley LLP

55 Hudson Yards

New York, New York 10001

(212) 479-6000

Isabelle Winkles

Chief Financial Officer

Braze, Inc.
330 West 34th Street, Floor 18

New York, New York 10001

(609) 964-0582

John C. Ericson

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

(212) 455-2000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

CALCULATION OF REGISTRATION FEE



Title of each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price⁽¹⁾⁽²⁾	Amount of Registration Fee
Class A common stock, par value $0.0001 per share	$100,000,000	$9,270

(1)	Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933, as amended.

(2)	Includes the aggregate offering price of additional shares that the underwriters have the option to purchase.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant will file a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement will become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities

Subject to Completion. Dated , 2021

Shares

LOGO

Class A Common Stock

This is an initial public offering of shares of Class A common stock of Braze, Inc. We are offering shares of Class A common stock and the selling stockholders identified in this prospectus are offering an additional shares of Class A common stock. We will not receive any proceeds from the sale of shares by the selling stockholders.

Prior to this offering, there has been no public market for our Class A common stock. It is currently estimated that the initial public offering price for our Class A common stock will be between $ and $ per share. We have applied to list our Class A common stock on the Nasdaq Global Select Market under the symbol “BRZE.”

Following this offering, we will have two classes of common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock will be identical, except with respect to voting, conversion and transfer rights. Each share of Class A common stock will be entitled to one vote. Each share of Class B common stock will be entitled to ten votes and may be converted at any time into one share of Class A common stock. In addition, all shares of Class B common stock will automatically convert into shares of Class A common stock in certain circumstances, including on the earlier of (i) the last trading day of the fiscal quarter during which the number of shares of Class B common stock then outstanding represents less than 10% of the aggregate number of shares of Class A common stock and Class B common stock then outstanding, or (ii) the last trading day of the fiscal quarter immediately following the fifth anniversary of this offering. All shares of our capital stock outstanding immediately prior to this offering, including all shares held by our executive officers, directors and their respective affiliates, and all shares issuable upon the conversion of our outstanding convertible preferred stock, will be reclassified into shares of our Class B common stock immediately prior to the completion of this offering. The holders of our outstanding Class B common stock will hold approximately % of the voting power of our outstanding capital stock immediately following this offering.

We are an “emerging growth company” as defined under the federal securities laws and, as such, we have elected to comply with certain reduced reporting requirements for this prospectus and may elect to do so in future filings.

Investing in our Class A common stock involves risks. See “Risk Factors” beginning on page 18 to read about factors you should consider before buying our Class A common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.


	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions⁽¹⁾	$	$
Proceeds, before expenses, to Braze, Inc.	$	$
Proceeds, before expenses, to the selling stockholders	$	$

(1)	See the section titled “Underwriting” for additional information regarding compensation payable to the underwriters.

We have granted the underwriters an option for a period of 30 days to purchase up to an additional shares of Class A common stock from us at the initial public offering price less underwriting discounts and commissions.

The underwriters expect to deliver the shares of Class A common stock to purchasers on , 2021.


Canaccord Genuity		Cowen		JMP Securities				Needham & Company


Oppenheimer & Co.		Raymond James		Loop Capital Markets

Prospectus dated , 2021.

LOGO

TABLE OF CONTENTS

Prospectus


	Page
LETTER FROM WILLIAM MAGNUSON, CHIEF EXECUTIVE OFFICER AND FOUNDER		iii
PROSPECTUS SUMMARY		1
RISK FACTORS		18
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		57
MARKET, INDUSTRY AND OTHER DATA		59
USE OF PROCEEDS		60
DIVIDEND POLICY		61
CAPITALIZATION		62
DILUTION		65
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		68
BUSINESS		92
MANAGEMENT		120
EXECUTIVE COMPENSATION		127
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		140
PRINCIPAL AND SELLING STOCKHOLDERS		142
DESCRIPTION OF CAPITAL STOCK		146
SHARES ELIGIBLE FOR FUTURE SALE		153
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS OF OUR CLASS A COMMON STOCK		157
UNDERWRITING		161
LEGAL MATTERS		167
EXPERTS		167
WHERE YOU CAN FIND ADDITIONAL INFORMATION		167
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1

Through and including , 2021 (the 25^th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Neither we, the selling stockholders, nor any of the underwriters, have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we, the selling stockholders, nor any of the underwriters, take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We, the selling stockholders and the underwriters are offering to sell, and seeking offers to buy, shares of our Class A common stock only under circumstances and in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our Class A common stock.

For investors outside the United States: Neither we, the selling stockholders, nor any of the underwriters, have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside of the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our Class A common stock and the distribution of this prospectus outside of the United States.

“Braze,” “B,” “Appboy,” “Braze Currents,” “Braze Alloys,” “Braze Canvas,” “Braze Campaign,” “Braze Intelligence,” “Braze Predictive Suite,” “Braze Content Cards,” “Braze Firebrands,” “Braze Classification,” “Braze Teams,” “Braze Cares” and our other registered and common law trade names, trademarks and service marks are the property of Braze, Inc. or our subsidiaries. All other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus may be referred to without the ® and ^™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

Letter from William Magnuson, Chief Executive Officer and Founder

We founded Braze 10 years ago with the deeply held belief that the broad adoption of mobile would drive tremendous change in business and society. It was a step change in human history: the moment in our evolution when humans gained the ability to be constantly connected—to each other, to the collective knowledge of our species, and to the products and services that brands compete to deliver every day.

At our founding, Jon Hyman, Mark Ghermezian and I shared a dual conviction about the opportunities presented by mobile. First, fast growing new businesses would be born and built to be mobile first. And second, that generations-old companies would be driven by changing consumer behavior to transform the way they delivered products and services.

Our goal was to build a company that would capitalize on new technology to help the world’s best companies grow by trusting us with their most valuable asset: their customer relationships. While technological change drove us forward, we knew that humanity should always guide us. Great human relationships are built on mutual understanding, engaging communication and shared experience. It’s thus no surprise that the secret weapon of exceptional, enduring companies is the quality of their customer engagement.

Since those early days, we’ve seen tremendous evolution by brands of all kinds. Great apps became great businesses by building authentic, long-term relationships with their customers. Existing businesses adapted their products to the “always-on” mobile world, investing in direct, first-party relationships. Braze was built to help brands forge strong bonds with their customers and over the past few years, we have seen customer engagement become a critical brand priority around the world. We are excited to continue our work alongside our customers to push its practice to new heights.

Humans are complicated, dynamic, and demanding. Even with the best tools, it is still hard to deliver a consistently excellent customer experience. As consumer expectations and the number of digital channels and devices continue to grow, complexity increases. That makes it even more important for brands to have a sophisticated customer engagement platform like Braze.

Braze exists to help brand teams imagine innovative customer experiences, create the ideal journey for each customer and evolve campaign strategies based on customer reactions in real time. Technology continues to advance, and we at Braze continue to be nimble, as we see a growing recognition that authentic engagement and relationship-building are fundamental to business-building.

With the wind at our backs, we’ve seen three generational shifts converge in the last decade.

•

Computing is intimate and connectivity is persistent—with mobile, we can engage with brands from practically anywhere. An “always-on” consumer demands a customer experience that deeply understands their context, and acts on it in the moment.

•

Building first-party relationships is both a possibility and an imperative for every industry. Modern brands know that when a customer is intermediated by a third-party aggregator, ad platform or distribution channel, it’s not really their customer relationship. The highest value customer relationships are informed by first-party data and cemented through direct engagement.

•

Excellence in customer engagement demands interdisciplinary collaboration. Marketing teams have evolved to incorporate close collaboration with data scientists and product teams in order to amplify their creativity and hone their efforts over time. We believe that the businesses that achieve the highest ROI with Braze are those that embrace an “imagine, create, and evolve” loop fueled by cross-team collaboration.

These three generational changes led to a large, rapidly growing business opportunity to serve both emerging disruptors and traditional enterprises. Then, in 2020, the COVID-19 pandemic further accelerated

iii

digital transformation. As consumers around the globe were staying at home, brands across all industries had to pivot their focus to delivering effective and engaging digital experiences. Most importantly, we are confident that the transformative impact from 2020 will echo into the future, further validating our founding vision: Using mobile technology to make the customer the center of brand communications generates long-lasting, personal connections that lead to strong business results.

Since our founding days in a borrowed office in New York City, we’ve expanded around the world with teams in Austin, Chicago, Berlin, London, San Francisco, Singapore, and Tokyo in addition to our New York headquarters. We have been acknowledged as a Leader in “The Forrester Wave^™: Cross-Channel Campaign Management (Independent Platforms), Q3 2021” and in “The Forrester Wave^™: Mobile Engagement Automation, Q3 2020,” and listed in the Forbes Cloud 100 four years in a row, as well as being recognized in Crain’s Best Places to Work in NYC three years in a row.

Braze is well positioned to stay on the leading edge of the ongoing customer engagement evolution. Our ability to maintain this leadership position is a direct result of our strategy, teamwork and the dedication of every one of our employees (more than strong as of this writing) to achieve our goals and operate by our values: Take Your Seat At The Table, Don’t Ignore Smoke, Shape The Future, Embrace Curiosity, Seek The Truth, and Be A Human. It is an honor to lead this company into its next decade, and we hope you’ll join us in shaping the future of customer engagement.

Cheers,

Bill

PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, all references in this prospectus to “Braze,” the “company,” “we,” “our,” “us” or similar terms refer to Braze, Inc. and its subsidiaries. Our fiscal year ends January 31.

Mission

Our mission is to forge human connections between consumers and the brands they love through relevant and memorable experiences.

Overview

Braze is a leading comprehensive customer engagement platform that powers customer-centric interactions between consumers and brands. Our platform empowers brands to listen to their customers better, understand them more deeply and act on that understanding in a way that is human and personal. Using our platform, brands ingest and process customer data in real time, orchestrate and optimize contextually relevant, cross-channel marketing campaigns and continuously evolve their customer engagement strategies. As of July 2021, more than 1,000 customers around the world trust Braze with their most valuable assets: their customer relationships. Over the past three years, the scale of our platform has grown substantially. Our platform enabled interactions with 3.3 billion monthly active users via our customers’ apps, websites and other digital interfaces in July 2021, up from 2.3 billion in January 2020 and 1.6 billion in January 2019. In fiscal year 2021 alone, we processed over seven trillion consumer-generated data points on our platform, and our customers sent approximately one trillion messages to their consumers using our platform.

Today, consumers can interact with a seemingly unlimited number of brands anytime, anywhere, resulting in a dramatic increase in competitive pressure among brands. At the same time, the data generated from digital experiences and the increased number of consumer touchpoints have provided brands with new opportunities to reach consumers and personalize consumer experiences. But with this opportunity comes greater consumer expectations for highly relevant and seamless cross-channel interactions. These trends have led brands to increase their focus and investment on customer experience – the holistic impression that brands create across the customer journey – to differentiate themselves and form long-lasting customer relationships.

Most marketing platforms available today approach customer engagement on a channel-by-channel basis. Channel-centric strategies often lead to disjointed customer experiences that destroy brand equity and diminish customer loyalty.

We offer a new and different way of thinking about customer engagement. We built our platform on the premise that in order to foster positive customer experiences and long-lasting customer relationships, brands must communicate with consumers in human-like ways. To ensure that interactions between brands and consumers have the same relevance and cross-channel continuity as human interactions, we avoid channel silos so that each channel is aware of activity occurring in other channels and is able to react to that activity in real time.

The real-time nature of the interactions we enable is made possible by our proprietary, enterprise-grade stream processing architecture. This architecture receives, contextualizes and responds to first-party customer data in the moment. We have designed it to mimic the human ability to listen, process new information in context and react instantaneously.

We vertically integrate our orchestration, classification and personalization capabilities such that coordinating between them is simple and fast. Meanwhile, we decouple our data ingestion and message sending capabilities from the channels they support. This enables our capabilities to be centralized and available across channels and easily extensible to new channels. We support interactions across in-product and out-of-product messaging channels. Today, our in-product messaging channels consist of Content Cards, which are pieces of personalized content embedded into a brand’s website or application, and in-app and in-browser messages. Our out-of-product channels include, but are not limited to, mobile push notifications, web push notifications, email, SMS and MMS messages, webhooks, Facebook and Google advertisements and multiple over-the-top, or OTT, media services and connected TV channels.

Braze unleashes the power of interdisciplinary teams by serving numerous stakeholders, beyond traditional marketers, including product and engineering teams and business intelligence teams. Our platform produces valuable data that informs decisions and actions across the entire customer engagement spectrum. Our messaging capabilities transcend marketing use cases, often being used for product or transactional use cases that facilitate or enhance the consumer’s experience with the brand or product.

We enable brands to easily integrate our platform with both their in-house technical infrastructure and our expanding partner ecosystem of best-in-class technologies. Our customers can import data from other systems into any layer of our technology stack via our application programming interfaces, or APIs. They can also use Braze Currents to stream data in real time to those systems, which increases the return on our customers’ other technology investments. We support direct integrations with cloud data service providers such as Snowflake, customer data management platforms such as Segment, analytic solutions such as Amplitude, and other components of the modern marketing technology ecosystem.

Our platform is designed to serve the needs of customers across sizes, stages of growth, industries and geographies. As of July 31, 2021, we had 1,119 customers, up from 890 customers as of January 31, 2021 and 728 customers as of January 31, 2020. Our customers include many established global enterprises and leading technology innovators. We employ a land-and-expand business model centered around offering products that are easy to adopt and have a rapid time to value. We expand our reach within existing customers when our customers add new channels, purchase additional subscription products such as Braze Currents, implement new engagement strategies or onboard new business units and geographies. We also grow as our customers grow because our pricing is based in large part on the number of consumers that our customers reach and the volume of messages our customers send. We believe our successful land-and-expand strategy is evidenced by our dollar-based net retention rate, which for the trailing 12 months ended July 31, 2021, January 31, 2021 and January 31, 2020 was 125%, 123% and 126%, respectively, for all our customers, and 135%, 133% and 127%, respectively, for our customers with annual recurring revenue, or ARR, of $500,000 or more. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors Affecting Our Performance” for additional information regarding our customers and our dollar-based net retention rate.

We have grown significantly in recent periods. We generated revenue of $150.2 million and $96.4 million in fiscal year 2021 and fiscal year 2020, respectively, representing year-over-year growth of 56%. We generated revenue of $103.6 million and $67.9 million in the six months ended July 31, 2021 and 2020, respectively, representing period-over-period growth of 53%. We had net losses of $32.0 million, $31.8 million, $25.8 million and $12.4 million in fiscal year 2021, fiscal year 2020 and the six months ended July 31, 2021 and 2020, respectively. We had net cash used in operating activities of $6.1 million, $7.4 million, $8.4 million and $0.2 million in fiscal year 2021, fiscal year 2020 and the six months ended July 31, 2021 and 2020, respectively. Our free cash flow was $(10.4) million, $(9.9) million, $(10.3) million and $(3.0) million in fiscal year 2021, fiscal year 2020 and the six months ended July 31, 2021 and 2020, respectively. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Free Cash Flow” for additional information about how we calculate free cash flow, a non-GAAP financial metric.

Industry Trends

Consumers Expect Real-Time, Personalized Brand Interactions Across Channels

In the last decade, rapid innovations in consumer communication technologies, primarily mobile devices and mobile applications, have enabled brands to increase their understanding of and access to consumers. These innovations have also raised consumer expectations around messaging relevance. Expectations for relevance are no longer limited to including the customer’s name in the subject line of an email. Consumers now expect brands to recognize them as individuals with constantly evolving needs and desires, not as static database entries.

Meeting consumers’ expectations for messaging relevance is not only more difficult but also more critical than ever. As consumers become increasingly inundated with marketing emails, text messages and other digital communications, generic information blasts are less likely to be effective and may put a brand’s most valuable asset — their customer relationships — at serious risk.

Delivering customer experiences relevant to individual consumers requires a customer engagement strategy that is customer-centric rather than channel-centric. Channel-centric strategies often lead to a siloed understanding of customers, resulting in disjointed customer experiences that destroy brand equity and diminish customer loyalty.

A customer-centric customer engagement strategy requires customer-centric technology. When consumer profiles or customer journey management are decentralized across channels, brands are unable to deliver cohesive customer experiences. A siloed understanding of consumers also limits a brand’s ability to deliver relevant messages since a single channel represents only a small portion of a consumer’s attention and behavior.

Customer Experience is the New Battleground for Brands

Given the permanent shift in consumer behavior toward digital and mobile transactions, which was significantly accelerated by the COVID-19 pandemic, today’s consumers can transact with a seemingly unlimited number of brands anytime, anywhere. The abundance of options available to consumers has resulted in a dramatic increase in competitive pressure among brands. Meanwhile, the data generated from digital experiences provides brands with new opportunities to enhance customer experience via real-time personalization. Together, these forces have brought the customer experience to the forefront of brands’ strategic focus.

First-Party Data is Critical for Effective Customer Engagement

First-party data includes information consumers share directly with a brand, as well as individual behaviors and interests demonstrated through the actions consumers take within a brand’s applications, websites and other digital interfaces. Such data is typically reliable because a brand knows how it is collected and relevant because it relates directly to the consumer’s use of a brand’s products. It is also typically more current than third-party data because it does not need to travel through multiple parties. Importantly, use of first-party data tends to be more respectful of consumers because it is held only by brands with whom consumers have chosen to engage. As a result, brands who design their data-driven marketing strategies to leverage first-party sources may be more likely to maintain consumer trust and are better prepared to navigate the ever-evolving, privacy-focused regulatory environment. Moreover, third-party data is becoming increasingly aggregated or anonymized due to privacy concerns, devaluing it further. This increases the competitive advantage that first-party data provides.

Customer Engagement Demands Cross-Functional Collaboration

Delivering a cohesive customer journey in a world of vast and competing consumer touchpoints demands sophisticated technology in the hands of interdisciplinary teams. For example, in order for a brand’s out-of-product communications to be consistent and work in concert with its in-product content, marketing and product teams must collaborate and share customer data.

Challenges with Existing Solutions

Legacy marketing clouds and emerging customer engagement technologies generally suffer from several of the following limitations:

•

Lack of Comprehensiveness: Many customer engagement solutions, particularly point solutions, do not address engagement across the full customer journey. In particular, they do not have comprehensive capabilities that enable a marketer to understand the user’s context at each stage of their journey — prompting, guiding, and nudging as appropriate and relevant, but waiting patiently when the customer is already on the right track.

•

Limited Interoperability: Because many customer engagement solutions, particularly point solutions, lack comprehensiveness across channels and across the customer journey, their customers must integrate these point solutions with several other technologies to fill in the gaps. However, not all point solutions easily integrate with other technologies. They also typically do not enable businesses to combine customer data across all sources, stream customer data across their organizations or supplement their functionality with other external marketing solutions.

•

High Latency: Many customer engagement solutions, particularly legacy marketing clouds, are riddled with sources of latency. Many rely on batch processing technology, which processes data at fixed intervals rather than in real time. Without real-time data processing, brands cannot engage in the natural, high-quality interactions with consumers that underpin long-lasting relationships. For other solutions, latency often derives from lack of comprehensiveness and limited interoperability.

•

Time-Consuming and Difficult to Implement and Use: Implementing and using legacy marketing clouds are typically both time-consuming and difficult because legacy marketing clouds can be inflexible, and therefore difficult and expensive to customize, and can be less intuitive to use.

•

Not Enterprise-Grade: Emerging technologies typically lack the scale, reliability, security, customer support, and sophistication needed to service large enterprises or to grow with companies that eventually become large enterprises. Furthermore, in today’s privacy-focused world, these solutions often fall short of meeting the requirements of the evolving privacy landscape and the resulting expectations of customers.

The Braze Platform

Our comprehensive customer engagement platform enables authentic, real-time relationships between consumers and the brands they love. We enable brands to perform three core functions: listen to their customers

better, understand them more deeply and act on that understanding by communicating with them in a way that is human, relevant and personal.

Our platform facilitates these core functions through five functional layers that are unified by an interactive feedback loop of continuously flowing data. Brands can easily and securely supplement that data by plugging into any layer of the technology stack via APIs. Additionally, using Braze Currents, they can continuously and automatically export consumer event and campaign interaction data to their internal data storage systems and to Braze partners.

Listen

Understand

Classification: Our customers can build granular audience segments based upon each consumer’s demographics, past behaviors, and current actions. Once created, audience segments in our platform are continuously updated in real time to reflect each consumer’s ongoing behaviors. This is designed to ensure that consumers receive only messages that are likely to be relevant to them at a particular point in time.

Act

We have a vertically integrated technical infrastructure that encompasses all of the engagement functionality between data ingestion and action. By tightly integrating layers of product functionality into a single, comprehensive platform, we can optimize the relationships between layers to minimize latency and complexity.

Our technology is built on a unified stream processing architecture. This architecture enables us to turn data into action and action back into data in real time. This provides a significant advantage over architectures that rely on batch processing technology. Any action taken by a consumer in response to a brand’s message flows immediately back into the data ingestion layer of our platform (thus serving as an input to subsequent interactions), creating a real-time interactive feedback loop.

Our Competitive Strengths

Cross-Channel Approach, Enabling Customer-Centric Experiences

Our cross-channel engagement approach enables customer-centric experiences. We build a more complete picture of the customer and draw insights from data to inform strategy, enabling brands to tactically deploy channels according to each channel’s strengths and proven customer preferences.

Our architecture ensures that our capabilities can be used across all of our channels, maximizing the impact of new feature development. Additionally, when we add new channels, they immediately benefit from all of the existing features that we have already built, which makes them fully robust from the outset.

The applicability of features across all channels, combined with our intuitive user interface, allows our customers to quickly and easily construct cross-channel consumer journeys without the need to learn different skills for each channel or be constantly retrained. This is accomplished without sacrificing the unique qualities or capabilities associated with each individual channel that we support.

Data Streaming Architecture Processes First-Party Data in Real Time

The real-time nature of the interactions we enable is made possible by our proprietary, enterprise-grade stream processing architecture. This architecture receives, contextualizes, and responds to first-party customer data in the moment. Our platform allows for high-volume, continuous data streaming, providing a live view of the various interactions that consumers are having with a brand. Unlike batch processing, where data is processed only when a specific time or threshold is hit, our data streaming architecture processes each unit of data as it is created. Real-time data processing enhances messaging relevance, while delayed data processing often leads to irrelevant messages and frustrated consumers.

We not only process data but also create analytical data. When a consumer interacts with an out-of-product marketing campaign or a website or application with the Braze SDK embedded, that consumer generates data that is processed and contextualized with existing data in real time.

Value Propositions Across the Organization

Rapid Time to Value

High Performance at Scale

As brands continue to globalize and conduct more of their business digitally, they need a scalable customer engagement platform. Our platform enabled interactions with 3.3 billion monthly active users via our customers’ applications, websites and other digital interfaces in July 2021, up from 2.3 billion in January 2020 and 1.6 billion in January 2019. Our scalability distinguishes our platform from point solutions, and we can handle the biggest of enterprise needs. We facilitate the rapid delivery of a high volume of messages, which enables us to power a brand’s highest-volume events, whether they are expected, like Black Friday, or unexpected, like the sudden surge of food delivery demand during the COVID-19 pandemic. Forrester Research, Inc., or Forrester, has recognized the company as a Leader in “The Forrester Wave^™: Cross-Channel Campaign Management (Independent Platforms), Q3 2021.” Braze received the highest score in the Strategy category. The company was also named a Leader in “The Forrester Wave^™: Mobile Engagement Automation, Q3 2020,” where it earned the highest scores in both the Current Offering and Strategy (tied) categories.

Seamless, Real-Time Interoperability across the Customer Engagement Technology Stack

Our open APIs support easy-to-implement integrations with an expanding selection of technology partners, which we refer to as Braze Alloys, other third-party technology providers and in-house systems. These integrations allow our platform to import and export data to and from a wide variety of sources.

These seamless integrations with technology partners not only enrich the consumer insights collected by our platform but also increase the return on other technology investments by allowing other systems and tools to benefit from or add to the data and insights collected by our platform.

For example, a food delivery app may combine a consumer’s food preferences with weather data to either send a campaign to encourage a consumer to order in their favorite foods when a blizzard is forecasted or skip the “order-in tonight” discount on days when the weather is sunny. A retailer might reach out to a consumer when a favorite article of clothing goes on sale after confirming with their inventory management technology that the particular article of clothing is in stock in the consumer’s size and color preference.

Customer Engagement Expertise and Highly Engaged Community

When brands partner with us, they get access to strategic and technical advice from our experts and from a community of like-minded, forward-thinking marketers and product leaders.

Our documentation library, interactive online certification courses and customer success and technical support teams help brands design effective marketing strategies and use our platform to its maximum capability. Braze Bonfire, our virtual, global customer community, includes thousands of individuals across a wide spectrum of industries, business sizes, and roles. As of July 2021, over 3,000 community members use Braze Bonfire to exchange growth marketing and lifecycle marketing best practices, to give direct feedback to our product and engineering teams and to attend events and engage in professional networking.

Braze Firebrands, our customer advocacy group, consists of over 300 customers that represent us in the market. In addition to serving as references to prospective customers, they participate in case studies, speaking engagements and media interviews, adding to our brand equity and overall market awareness.

Market Opportunity

International Data Corporation, or IDC, estimates the market for marketing campaign management software to reach $15.0 billion in 2021 and $19.4 billion in 2024. We believe this understates our addressable market because in addition to marketing campaign management capabilities, we offer analytical tools that help companies better understand their consumers and improve the overall consumer experience.

We estimate that, based on our current average customer spending levels, the annual market opportunity for our solution is currently $16 billion in the United States alone, and we believe there is also significant opportunity outside the United States.

Growth Strategy

The principal components of our growth strategy are:

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Acquire new customers

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Expand within our existing customer base

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Expand geographically

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Expand our technology leadership through continued investment and new products

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Continue to increase and strengthen our partnerships

Our Culture

We believe our culture and core values are critical to our success and have delivered tangible financial and operational benefits to our customers, employees, and stockholders. We are a mission-driven company and have designed our core values as a guiding set of principles for our employees and business.

Our core values are:

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Take Your Seat at the Table

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Don’t Ignore Smoke

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Shape the Future

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Embrace Curiosity

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Seek the Truth

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Be a Human

Risk Factors Summary

Investing in our Class A common stock involves substantial risk. The risks described in the section titled “Risk Factors” immediately following this summary may cause us to not realize the full benefits of our strengths or may cause us to be unable to successfully execute all or part of our strategy. These risks could materially and adversely impact our business, financial condition and results of operations, which could cause the trading price of our Class A common stock to decline and could result in a loss of all or part of your investment. Some of the more significant risks include the following:

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Our rapid revenue growth may not be indicative of our future revenue growth. Our rapid revenue growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

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We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

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We have a limited operating history operating at our current scale, and our future results of operations may fluctuate significantly due to a wide range of factors, which make it difficult to forecast our future results of operations.

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We have a history of operating losses and may not achieve or sustain profitability in the future.

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The estimates of market opportunity and forecasts of market growth included in this prospectus may prove to be inaccurate. Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.

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We face intense competition, including from well-established companies that offer products that compete with ours. We may lack sufficient financial or other resources to maintain or improve our competitive position, which may harm our ability to add new customers, retain existing customers, and grow our business.

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If we are unable to attract new customers and renew existing customers, our business, financial condition and results of operations will be adversely affected.

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If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, or changing regulations, or to changing customer or consumer needs, requirements or preferences, our platform may become less competitive.

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We are substantially dependent upon customers renewing their subscriptions to, and expanding their use of, our platform to maintain and grow our revenue, which requires us to scale our platform infrastructure and business quickly enough to meet our customers’ growing needs. If we are not able to grow in an efficient manner, our business, financial condition and results of operations could be harmed.

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Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to expand our customer base and achieve broader market adoption of our platform and products.

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We are dependent on a single platform, and the failure to achieve continued market acceptance of our platform could cause our results of operations to suffer.

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If our platform fails to perform properly or there are defects or disruptions in the rollout of our platform updates or enhancements, our reputation could be adversely affected, our market share could decline, and we could be subject to liability claims.

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We may need to reduce prices or change our pricing model to remain competitive.

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Our business depends on our ability to send consumer engagement messages, including emails, SMS and mobile and web notifications, and any significant disruption in service with our third-party providers or on mobile operating systems could result in a loss of customers or less effective consumer-brand engagement, which could harm our business, financial condition and results of operations.

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We rely upon third-party providers of cloud-based infrastructure, including Amazon Web Services, to host our products. Any disruption in the operations of these third-party providers or limitations on capacity or interference with our use could adversely affect our business, financial condition and results of operations.

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We are subject to stringent and changing laws and regulations, industry standards and contractual obligations related to privacy, data security and data protection. The restrictions and costs imposed by these requirements and our actual or perceived failure to comply with them, could harm our business.

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If we or our third-party service providers experience a security breach or unauthorized parties otherwise obtain access to our customers’ data, our data or our platform, our solution may be perceived as not being secure, our reputation may be harmed, demand for our platform and products may be reduced and we may incur significant liabilities.

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Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our platform and could have a negative impact on our business.

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We employ third-party licensed software for use in or with our platform, and the inability to maintain these licenses or errors or vulnerabilities in the software we license could result in increased costs, or reduced service levels, which would adversely affect our business.

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We have identified three material weaknesses in our internal control over financial reporting, and if we are unable to achieve and maintain effective internal control over financial reporting, the accuracy and timing of our financial reporting may be adversely affected.

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The dual class structure of our common stock will have the effect of concentrating voting control with our executive officers, directors and significant holders of our capital stock prior to the completion of this offering, which will limit the ability of holders of our Class A common stock to influence the outcome of important transactions.

Corporate Information

We were incorporated in Delaware in March 2011 under the name Appboy, Inc. We changed our corporate name to Braze, Inc. in October 2017. Our principal executive offices are located at 330 West 34th Street, Floor 18, New York, New York 10001, and our telephone number is (609) 964-0582. Our website address is www.braze.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus.

Implications of Being an Emerging Growth Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We may take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm under Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and any golden parachute payments. We may take advantage of these exemptions for up to five years or until we are no longer an emerging growth company, whichever is earlier. In addition, the JOBS Act provides that an “emerging growth company” can delay adopting new or revised accounting standards until those standards apply to private companies. We have elected to use the extended transition period under the JOBS Act until we can no longer avail ourselves of the exemptions applicable to emerging growth companies or until we affirmatively and irrevocably opt out of the extended transition period. Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.

THE OFFERING


Class A common stock offered by us		shares

Class A common stock offered by the selling stockholders		shares

Option to purchase additional shares of Class A common stock offered by us		shares

Class A common stock to be outstanding after this offering		shares ( shares if the option to purchase additional shares from us is exercised in full)

Class B common stock to be outstanding after this offering		shares

Total Class A common stock and Class B common stock to be outstanding after this offering		shares ( shares if the option to purchase additional shares from us is exercised in full)

Use of proceeds		We estimate that our net proceeds from the sale of our Class A common stock that we are offering will be approximately $ million (or approximately $ million if the underwriters’ option to purchase additional shares of our Class A common stock from us is exercised in full), assuming an initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares of our Class A common stock by the selling stockholders. The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our Class A common stock and facilitate our future access to the capital markets. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering. However, we currently intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures. We may also use a portion of the net proceeds we receive from this offering to acquire complementary businesses, products, services or technologies. However, we do not have agreements


		or commitments to enter into any acquisitions at this time. See the section titled “Use of Proceeds” for additional information.

Voting rights		Following this offering, we will have two classes of common stock: Class A common stock and Class B common stock. Class A common stock will be entitled to one vote per share and Class B common stock will be entitled to ten votes per share. In addition, all shares of Class B common stock will automatically convert into shares of Class A common stock in certain circumstances, including on the earlier of (i) the last trading day of the fiscal quarter during which the number of shares of Class B common stock then outstanding represents less than 10% of the aggregate number of shares of Class A common stock and Class B common stock then outstanding, or (ii) the last trading day of the fiscal quarter immediately following the fifth anniversary of this offering. Holders of Class A common stock and Class B common stock will generally vote together as a single class, unless otherwise required by law or our amended and restated certificate of incorporation that will be in effect upon the completion of this offering. See the section titled “Description of Capital Stock” for additional information.

Concentration of ownership		Following this offering, the holders of our outstanding Class B common stock will hold approximately % of our outstanding capital stock and control approximately % of the voting power of our outstanding capital stock, and our executive officers, directors and stockholders holding more than 5% of our outstanding shares, together with their affiliates, will hold, in the aggregate, approximately % of our outstanding capital stock and control approximately % of the voting power of our outstanding capital stock. As a result, these stockholders will have the ability to control the outcome of matters submitted to stockholders for approval, including the election of our directors and the approval of any change in control transactions. See the section titled “Principal and Selling Stockholders” for additional information.

Risk factors		You should carefully read the section titled “Risk Factors” beginning on page 18 and the other information included in this prospectus for a discussion of facts that you should consider before deciding to invest in shares of our Class A common stock.

Proposed Nasdaq Global Select Market trading symbol		“BRZE”

The number of shares of Class A common stock and Class B common stock that will be outstanding after this offering is based on no shares of Class A common stock outstanding and shares of Class B common stock outstanding as of July 31, 2021, and excludes:

•

12,859,821 shares of Class B common stock issuable on the exercise of stock options outstanding as of July 31, 2021 granted under our Amended and Restated 2011 Equity Incentive Plan, or 2011 Plan, with a weighted-average exercise price of $11.23 per share;

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654,167 shares of Class B common stock issuable upon the vesting and settlement of restricted stock units, or RSUs, outstanding as of July 31, 2021 granted under the 2011 Plan for which the vesting conditions will not be satisfied on or before the date of this offering;

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751,577 shares of Class B common stock issuable upon the vesting and settlement of outstanding RSUs granted after July 31, 2021 under the 2011 Plan for which the vesting conditions will not be satisfied on or before the date of this offering;

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211,200 shares of Class B common stock issuable upon the exercise of outstanding common stock warrants that will remain outstanding following the completion of this offering, with a weighted-average exercise price of $0.36 per share;

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shares of Class A common stock reserved for future issuance under our 2021 Equity Incentive Plan, or 2021 Plan, plus a number of shares of Class A common stock not to exceed (consisting of the number of shares that remain available under the 2011 Plan as of immediately prior to the effective date of the 2021 Plan and any shares underlying options and RSUs outstanding under the 2011 Plan that expire or otherwise terminate prior to exercise or settlement, as applicable, after the effective date of the 2021 Plan), as well as any future increases in the number of shares of common stock reserved for issuance thereunder, as more fully described in the section titled “Executive Compensation — Equity Incentive Plans”;

•

shares of Class A common stock reserved for issuance under our 2021 Employee Stock Purchase Plan, or ESPP, plus any future increases in the number of shares of common stock reserved for issuance thereunder, as more fully described in the section titled “Executive Compensation — Equity Incentive Plans”; and

•

964,647 shares of Class A common stock that we are reserving and may donate to fund our social impact and environmental, social, and governance initiatives, as more fully described in “Business —Our Culture — Social Responsibility and Community Initiatives.”

In addition, unless we specifically state otherwise, the information in this prospectus assumes:

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the filing of our amended and restated certificate of incorporation and the effectiveness of our amended and restated bylaws, each of which will occur immediately prior to the completion of this offering;

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the reclassification of our outstanding common stock into an equal number of shares of our Class B common stock and the authorization of our Class A common stock, each of which will occur immediately prior to the completion of this offering;

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the issuance of 49,201 shares of Class B common stock following the closing of this offering from the settlement of certain RSUs outstanding as of July 31, 2021 granted under the 2011 Plan for which the vesting conditions will be satisfied in connection with this offering;

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the issuance of 13,673 shares of Class B common stock following the closing of this offering from the settlement of certain outstanding RSUs granted after July 31, 2021 for which the vesting conditions will be satisfied in connection with this offering;

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the automatic conversion of all outstanding shares of convertible preferred stock into an aggregate of 62,830,697 shares of Class B common stock, which will occur immediately prior to the completion of this offering;

•

the automatic exercise of outstanding common stock warrants that, if not exercised prior to this offering, will be automatically exercised immediately prior to the completion of this offering, with an

exercise price of $3.46 per share, and the issuance of shares of Class B common stock pursuant thereto, assuming an initial public offering price of $ per share of Class A common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus;

•

no exercise of the underwriters’ option to purchase additional shares of Class A common stock from us; and

•

no exercise, forfeiture or expiration of the outstanding stock options, no settlement of outstanding RSUs described above for which the vesting conditions will not be satisfied on or before the date of this offering and no exercise of the outstanding common stock warrants that will remain outstanding following completion of this offering.

SUMMARY CONSOLIDATED FINANCIAL DATA

The summary consolidated statement of operations data for the fiscal years ended January 31, 2020 and 2021 and the summary consolidated balance sheet data as of January 31, 2021 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated statement of operations data for the six months ended July 31, 2020 and 2021 and the summary consolidated balance sheet data as of July 31, 2021 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our financial position and results of operations. You should read the consolidated financial data set forth below in conjunction with our consolidated financial statements and the accompanying notes and the information in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus. Our historical and interim results are not necessarily indicative of the results to be expected for our full 2022 fiscal year or any period in the future.


	Fiscal Year Ended January 31,						Six Months Ended July 31,
	2020			2021			2020			2021
	(in thousands, except share and per share data)

Consolidated Statement of Operations Data:
Revenue	$	96,364		$	150,191		$	67,929		$	103,633
Cost of revenue⁽¹⁾		35,686			54,511			24,801			34,562

Gross profit		60,678			95,680			43,128			69,071
Operating expenses:
Sales and marketing⁽¹⁾		57,348			70,661			31,061			51,843
Research and development⁽¹⁾		20,339			29,212			12,759			23,392
General and administrative⁽¹⁾		16,524			27,959			12,154			19,011

Total operating expenses		94,211			127,832			55,974			94,246

Loss from operations		(33,533	)		(32,152	)		(12,846	)		(25,175	)
Other income (expense):
Investment income		2,127			840			589			86
Other income (expense), net		48			(120	)		85			(351	)

Loss before provision for income taxes		(31,358	)		(31,432	)		(12,172	)		(25,440	)
Provision for income taxes		452			537			223			326

Net loss	$	(31,810	)	$	(31,969	)	$	(12,395	)	$	(25,766	)

Net loss attributable to redeemable noncontrolling interest	$	—		$	(217	)	$	—		$	(704	)

Net loss attributable to Braze, Inc.	$	(31,810	)	$	(31,752	)	$	(12,395	)	$	(25,062	)

Net loss per share attributable to Braze, Inc. common stockholders, basic and diluted⁽²⁾	$	(1.96	)	$	(1.77	)	$	(0.73	)	$	(1.25	)

Weighted-average shares used to compute net loss per share attributable to Braze, Inc. common stockholders, basic and diluted⁽²⁾		16,189,388			17,972,472			17,016,066			20,004,294

Pro forma net loss per share attributable to Braze, Inc. common stockholders, basic and diluted (unaudited)⁽³⁾				$						$

Weighted-average shares used to compute pro forma net loss per share attributable to Braze, Inc. common stockholders, basic and diluted (unaudited)⁽³⁾

(1)	Includes stock-based compensation expense as follows:


	Fiscal Year Ended January 31,				Six Months Ended July 31,
	2020		2021		2020		2021
	(in thousands)

Cost of revenue	$	276	$	650	$	200	$	367
Sales and marketing		6,365		2,892		1,055		4,295
Research and development		3,705		2,102		657		4,158
General and administrative		2,062		1,896		815		3,786

Total stock-based compensation expense	$	12,408	$	7,540	$	2,727	$	12,606

(2)

See Note 16 to our audited consolidated financial statements and Note 14 to our unaudited condensed consolidated financial statements included elsewhere in this prospectus for an explanation of the calculations of our basic and diluted net loss per share attributable to Braze, Inc. common stockholders for our fiscal years ended January 31, 2020 and 2021 and for the six months ended July 31, 2020 and 2021, respectively.

(3)

The pro forma weighted-average number of shares outstanding used to determine basic and diluted pro forma net loss per share attributable to Braze, Inc. common stockholders for the fiscal year ended January 31, 2021 and the six months ended July 31, 2021 gives effect to (a) the reclassification of our outstanding common stock into an equal number of shares of Class B common stock, which will occur immediately prior to the completion of this offering, (b) the automatic conversion of all outstanding shares of convertible preferred stock into an aggregate of 62,830,697 shares of Class B common stock, which will occur immediately prior to the completion of this offering, (c) the automatic exercise of outstanding common stock warrants that, if not exercised prior to this offering, will be automatically exercised immediately prior to the completion of this offering into an aggregate of shares of Class B common stock, assuming an initial public offering price of $ per share of Class A common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, (d) the filing and effectiveness of our amended and restated certificate of incorporation, which will occur immediately prior to the completion of this offering, and (e) the issuance of 62,874 shares of Class B common stock issuable upon the vesting and settlement of RSUs for which the vesting conditions will be satisfied in connection with this offering.


	As of July 31, 2021
	Actual			Pro Forma⁽¹⁾	Pro Forma As Adjusted⁽²⁾⁽³⁾
				(unaudited)	(unaudited)
				(in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and marketable securities	$	78,730		$	$
Total assets		174,149
Working capital⁽⁴⁾		14,611
Total liabilities		115,850
Convertible preferred stock		174,229
Total stockholders’ (deficit) equity		(117,459	)

(1)

The pro forma consolidated balance sheet data gives effect to (a) the reclassification of our outstanding common stock into an equal number of shares of Class B common stock, (b) the automatic conversion of all outstanding shares of convertible preferred stock into an aggregate of 62,830,697 shares of Class B common stock, (c) the automatic exercise of outstanding common stock warrants that, if not exercised prior to this offering, will be automatically exercised into an aggregate of shares of Class B common stock, assuming an initial public offering price of $ per share of Class A common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, (d) the filing and effectiveness of our amended and restated certificate of incorporation, each of which will occur immediately prior to the completion of this offering, (e) the issuance of 62,874 shares of Class B common stock issuable upon the vesting and settlement of RSUs for which the vesting conditions will be satisfied in connection with this offering and (f) stock-based compensation expense of approximately $ million related to RSUs for which the vesting conditions will be satisfied in connection with this offering.

(2)

The pro forma as adjusted consolidated balance sheet data gives effect to (a) the items described in footnote (1) above and (b) our receipt of estimated net proceeds from the sale of shares of Class A common stock that we are offering at an assumed initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

(3)	A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, working capital, total assets, and

total stockholders’ (deficit) equity by $ million, assuming that the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of Class A common stock offered by us would increase (decrease) each of cash and cash equivalents, working capital, total assets and total stockholders’ (deficit) equity by $ million, assuming the assumed initial public offering price of $ per share of Class A common stock remains the same, and after deducting the estimated underwriting discounts and commissions.

The pro forma as adjusted information discussed above is illustrative only and will be adjusted based on the actual public offering price and other terms of our initial public offering that will be determined at pricing.

(4)	Working capital is defined as current assets less current liabilities.

RISK FACTORS

Investing in our Class A common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including our consolidated financial statements and related notes, before deciding whether to purchase our Class A common stock. If any of the following risks is realized, our business, financial condition and results of operations could be materially and adversely affected. In that event, the price of our Class A common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Growth and Capital Requirements

Our revenue was $150.2 million and $96.4 million for the fiscal years ended January 31, 2021 and 2020, respectively, and $103.6 million and $67.9 million for the six months ended July 31, 2021 and 2020, respectively. You should not rely on our historical revenue growth as an indication of our future performance. Even if our revenue continues to increase, we expect that our annual revenue growth rate will decline in the future as a result of a variety of factors, including the maturation of our business. Overall growth of our revenue depends on several factors, including our ability to:

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expand subscriptions for our platform to our existing customers;

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expand the products for and functionality of our platform and achieve market acceptance for them;

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attract new customers, particularly in verticals and organizations where we have already experienced revenue growth;

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succeed in selling our products outside the United States;

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continue to partner with existing customers to improve our platform and its products and functionality;

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keep pace with technological developments;

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price our platform subscriptions effectively;

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provide our customers with support that meets their needs;

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successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our platform; and

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increase awareness of our brand on a global basis and successfully compete with other companies.

We may not successfully accomplish any of these objectives and, as a result, it is difficult for us to forecast our future results of operations. If the assumptions that we use to plan our business are incorrect or change in reaction to changes in our market, or if we are unable to maintain revenue growth, our stock price could be volatile, it may be difficult to achieve and maintain profitability, and our business, financial condition and results of operations may be adversely affected. The adverse effect on our results of operations resulting from a failure to achieve our revenue expectations may be particularly acute because of the significant research, development, marketing, sales and other expenses we expect to incur.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

We have funded our operations since inception primarily through equity financings and, more recently, sales of subscriptions to our platform. We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments to support our business and may require additional funds to respond to business challenges, including the need to

develop new features or enhance our platform, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. Additional financing may not be available on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, financial condition and results of operations. If we incur debt, the debt holders would have rights senior to holders of our Class A common stock to make claims on our assets, and the terms of any debt could include restrictive covenants relating to our capital raising activities and other financial and operational matters, any of which may make it more difficult for us to obtain additional capital and to pursue business opportunities. Furthermore, if we issue equity securities, stockholders will experience dilution, and the new equity securities could have rights senior to those of our Class A common stock. Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities. As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our Class A common stock and diluting their interests.

We were founded in 2011, but our business and revenue have grown rapidly over the last several years. As a result of our limited operating history operating at our current scale, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth. Our results of operations may fluctuate significantly from period to period due to many factors, many of which are outside of our control, including:

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failure to execute on our growth strategies;

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the level of demand for our platform;

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the rate of renewal of subscriptions with, and extent of sales of additional subscriptions to, existing customers;

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the size, timing, duration and pricing and other terms of our subscription agreements with existing and new customers;

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the introduction of new products and product enhancements by existing competitors or new entrants into our market, and changes in pricing for products offered by our competitors;

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network outages, security breaches and other cyber-attacks, technical difficulties with or interruptions to our platform;

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customers delaying purchasing decisions in anticipation of new developments or enhancements by us or our competitors or otherwise;

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changes in customers’ budgets;

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seasonal variations related to sales and marketing and other activities, such as expenses related to our customers’ increased usage of our platform and products during the fourth quarter;

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our ability to increase, retain and incentivize the strategic partners that market and sell our platform;

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the timing of growth of our business, in particular through our hiring of new employees and international expansion;

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our ability to control our operating expenses and other costs;

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our ability to hire, train and maintain our direct sales team;

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unforeseen litigation and inability to enforce, protect or defend our intellectual property, or claims of infringement by third parties;

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the timing of our adoption of new or revised accounting pronouncements applicable to us and the impact on our results of operations;

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fluctuations in our effective tax rate; and

•

general economic and political conditions, as well as economic conditions specifically affecting industries in which our customers operate.

Any one of these or other risks or uncertainties discussed elsewhere in this prospectus or the cumulative effect of some of these factors may result in fluctuations in our revenue, results of operations and cash flows, meaning that quarter-to-quarter comparisons of our revenue, results of operations and cash flows may not necessarily be indicative of our future performance, may cause us to miss our guidance and analyst expectations and may cause the price of our Class A common stock to decline. Additionally, if our assumptions regarding these risks and uncertainties are incorrect or change, including as a result of the ongoing COVID-19 pandemic, including the emergence of new variant strains of COVID-19, or the recovery therefrom, or if we do not address these risks successfully, our revenue and results of operations could differ materially from our expectations, and our business, financial condition and results of operations may be adversely affected.

We have a history of operating losses and may not achieve or sustain profitability in the future.

We have experienced net losses in each of our last several fiscal years. We generated a net loss of $32.0 million for the fiscal year ended January 31, 2021 and a net loss of $25.8 million for the six months ended July 31, 2021. As of July 31, 2021, we had an accumulated deficit of $163.3 million. While we have experienced significant revenue growth in recent periods, we are not certain whether or when we will achieve or maintain profitability in the future. We also expect our costs and expenses to increase in future periods, which could negatively affect our future results of operations if our revenue does not continue to increase. In particular, we intend to continue to expend substantial financial and other resources on:

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our technology infrastructure and operations, including systems architecture, scalability, availability, performance and security;

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our sales and marketing organization, to engage our existing and prospective customers, increase brand awareness and drive adoption of our products;

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platform development, including investments in our platform development team and the development of new products and functionality for our platform as well as investments in further improving our existing platform and infrastructure;

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acquisitions or strategic investments;

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international expansion; and

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general administration, including increased insurance, legal and accounting expenses associated with being a public company.

These investments may not result in increased revenue. If we are unable to maintain or increase our revenue at a rate sufficient to offset the expected increase in our costs, our business, financial condition and results of operations will be adversely affected, and we may not be able to achieve or maintain profitability over the long term.

Market estimates and growth forecasts are uncertain and based on assumptions and estimates that may be inaccurate. Our addressable market depends on a number of factors, including businesses’ desire to differentiate themselves through digital customer engagement, partnership opportunities, changes in the competitive

landscape, technological changes, data security or privacy concerns, customer budgetary constraints, changes in business practices, changes in the regulatory environment and changes in economic conditions. Our estimates and forecasts relating to the size and expected growth of our market may prove to be inaccurate, and our ability to produce accurate estimates and forecasts may be impacted by the economic uncertainty associated with the COVID-19 pandemic, including the emergence of new variant strains of COVID-19, and any uncertainties related to the recovery therefrom. Even if the market in which we compete meets the size estimates and growth rates we forecast, our business could fail to grow at similar rates, if at all.

Risks Related to Our Business and Our Brand

The market for customer engagement products is evolving and highly competitive. There are several established and emerging competitors that address specific aspects of customer engagement. We face intense competition from software companies that offer marketing solutions, such as legacy marketing clouds like Adobe and Salesforce, and point solutions like Airship, Iterable, Leanplum, MailChimp and MoEngage. Many of our existing competitors have, and our potential competitors could have, substantial competitive advantages, such as greater name recognition, longer operating histories, larger sales and marketing budgets and resources, greater customer support resources, lower labor and development costs, larger and more mature intellectual property portfolios and substantially greater financial, technical and other resources than we do. In addition, our competitors may have an advantage in markets where our policies regarding the use of customer data are more restrictive than local laws, regulations, policies and standards. For example, competitors willing to sell customer data in markets where such activity is permissible may have a pricing advantage over us in such markets. Any such pricing advantages that our competitors have may negatively affect our ability to gain new customers and retain existing customers. With the introduction of new technologies and the entry of new competitors into the market, we expect competition to persist and intensify in the future. In addition, merger and acquisition activity in the technology industry could increase the likelihood that we compete with other large technology companies. This could harm our ability to increase sales, maintain or increase subscription renewals, and maintain our prices.

Conditions in our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation. Some of our larger competitors also have substantially broader product lines and market focus and therefore may not be as susceptible to downturns in a particular market. New start-up companies that innovate, and large companies that are making significant investments in research and development, may invent similar or superior products and technologies that compete with one or more of our platform offerings. In addition, some of our competitors may enter into new alliances with each other or may establish or strengthen cooperative relationships with agency partners, technology and application providers in complementary categories, or other parties. Competitors may also consolidate with existing service providers or strategic partners that we rely on, and as a result we could lose partnerships that are difficult to replace. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure, a loss of market share or a smaller addressable share of the market and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our ability to compete.

Some of our larger competitors may use their broader product offerings to compete with us, including by bundling their competitive products with other products being purchased from that company by a customer or by restricting access to their technology platforms thereby making it more difficult for customers to integrate the use of our platform with other competitor products. Potential customers may prefer to purchase from their existing suppliers rather than a new supplier regardless of product performance or features. Furthermore, potential customers may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existing infrastructure with our platform and products. These competitive pressures in our

market, or our failure to compete effectively, may result in price reductions, fewer sales, reduced revenue and gross margins, increased net losses and loss of, or failure to expand, our market share. Any failure to address these challenges could harm our business, financial condition and results of operations.

If we are unable to attract new customers and renew existing customers, our business, financial condition and results of operations will be adversely affected.

To increase our revenue, we must continue to attract new customers and retain, and sell more products to, existing customers. Our success will depend to a substantial extent on the widespread adoption of our platform and products as an alternative to existing products in which many enterprises have invested substantial personnel and financial resources and, therefore, may be reluctant or unwilling to abandon. In addition, as our market matures, our products evolve and competitors introduce lower cost or differentiated products that are perceived to compete with our platform, products and services, our ability to sell subscriptions for our products could be impaired. Similarly, our subscription sales could be adversely affected if customers or users within these organizations perceive that features incorporated into competitive products reduce the need for our products or if they prefer to purchase other products that are bundled with products offered by other companies that operate in adjacent markets and compete with our products. In addition, the value of our products and services to our customers depends, in part, on our customers’ ability to use them as part of an overall effective marketing strategy. To the extent our customers’ marketing strategies are not effective, they may reduce the use of our products and services or fail to renew their existing contracts. As a result of these and other factors, we may be unable to attract new customers, which may have an adverse effect on our business, financial condition and results of operations.

Our ability to attract new customers and increase revenue from existing customers depends in large part on our ability to enhance and improve our platform and its products and functionality, increase adoption and usage of our platform, and introduce new products and functionality. The market in which we compete is relatively new and subject to rapid technological change, evolving industry standards and changing regulations, as well as changing customer and consumer needs, requirements and preferences, including changes in the use of channels through which consumers desire to communicate with brands. For instance, the SEC has recently indicated that it may increase regulatory focus on the use of customer engagement tools in the financial services industry, and we cannot predict if other regulators will take similar actions in other markets in the future. Any regulatory restrictions on the use of customer engagement tools from the SEC or other domestic or foreign regulators could have the effect of reducing demand for our platform in this and other markets. The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis. If we were unable to enhance our platform offerings to keep pace with rapid technological and regulatory change, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, more conveniently or more securely than our platform, our business, financial condition and results of operations may be adversely affected.

The success of our platform depends, in part, on our ability to continuously modify and enhance our platform to adapt to changes and innovation in existing and new technologies to maintain and grow our integrations. We expect that the number of integrations with our customers’ infrastructure that we will need to support will continue to expand as developers adopt new software solutions, and we will have to develop new versions of our platform to work with those new solutions. This development effort may require significant engineering, sales and marketing resources, all of which could adversely affect our business. Any failure of our platform to operate effectively with customer infrastructures could reduce the demand for our platform, and our business, financial condition and results of operations may be adversely affected.

As usage of our platform grows and as customers use it for more complex projects, we may need to devote additional resources to improving our platform architecture, updating our platform’s products and functionality, integrating with third-party systems and maintaining infrastructure performance. In addition, we will need to appropriately scale our internal business as well as grow our partner services network to serve our growing customer base, particularly as our customer base expands over time. Our ability to scale our business is dependent on our ability to maintain and grow our revenue through new and renewed customer subscriptions to our platform, from which we derive substantially all of our revenue. We cannot assure you that we will be able to renew subscriptions with any of our customers at the same or higher contract value. In addition, some customers have multiple order forms with different divisions of their entities, which could increase the complexity of negotiating renewals.

The market for customer engagement products is still evolving, and competitive dynamics may cause our pricing to change as the market matures and as existing and new market participants introduce new types of products and different approaches to enable customers to address their needs. As a result, we may be forced to reduce the prices we charge for our subscriptions and may be required to offer terms less favorable to us for new and renewal agreements, particularly for mid- to large-size enterprises that may demand substantial price discounts as part of the negotiation of subscription contracts.

Further, some of our contracts limit the amount we can increase prices from period to period or include pricing guarantees. In the past, we have made certain pricing concessions for customers that were significantly negatively impacted by the COVID-19 pandemic. If our customers do not renew their agreements, require pricing concessions, terminate their agreements as a result of a change of control or otherwise, renew their agreements on terms less favorable to us or fail to purchase additional product subscriptions, our revenue may decline, and as a result our ability to scale our business may be impaired and our business, financial condition and results of operations would likely be harmed as a result.

Any failure of or delay in efforts to scale our business could cause difficulty or delay in deploying our products or functionality to customers, could lead to impaired performance, other declines in quality or customer satisfaction, increased costs, difficulty in introducing new features or other operational inefficiencies or failures. These issues could reduce the attractiveness of our platform to customers, resulting in decreased subscriptions with existing and new customers, lower subscription renewal rates, the issuance of service credits or requests for refunds, which could hurt our revenue growth and our reputation. Even if we can upgrade our systems and expand our staff, any such expansion will be expensive and complex, requiring management time and attention, as well as improvements to our operational and financial controls and reporting systems and procedures. Because of these risks and other inherent risks associated with upgrading, improving and expanding our information technology systems, any needed expansion and improvements to our infrastructure and systems may not be fully or effectively implemented on a timely basis, if at all. Any such expansion efforts may reduce revenue or may not bring the benefits we anticipate, and our business, financial condition and results of operations may be adversely affected.

Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to expand our customer base and achieve broader market adoption of our platform and products.

Our ability to expand our customer base and achieve broader market adoption of our platform will depend on our ability to expand our sales and marketing operations. We plan to continue expanding our sales team and strategic partners, both domestically and internationally; however, there is no assurance that we will be successful in attracting and retaining talented sales personnel or strategic partners or that any new sales personnel

will be able to achieve productivity in a reasonable period of time or at all. We also plan to dedicate significant resources to sales and marketing programs to drive new customer acquisition, as well as engage with customers to promote upsell and cross-sell opportunities. We also engage with industry analysts, consulting firms, marketing service providers, data and technology partners, marketing agencies and other solution partners, business and trade press, and other industry experts who exert considerable influence in our market to promote our platform and our brand. Our business, financial condition and results of operations may be harmed if our sales and marketing efforts do not generate a corresponding increase in revenue. In addition, we may not achieve anticipated revenue growth from expanding our sales team if we are unable to hire, develop and retain talented sales personnel, if our new sales personnel are unable to achieve desired productivity levels in a reasonable period of time, or if our sales and marketing programs are not effective. If the cost of marketing our platform and products increases or competition reduces the effectiveness of our marketing efforts, our business, financial condition and results of operations may be adversely affected.

We are dependent on a single platform, and the failure to achieve continued market acceptance of our platform could cause our results of operations to suffer.

Substantially all of our revenue is attributable to subscriptions for our cloud-based platform. We expect that we will be substantially dependent on our platform to generate revenue for the foreseeable future. As a result, our results of operations could suffer due to:

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any decline in demand for our platform;

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the failure of our platform to achieve continued market acceptance;

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the market for our platform not continuing to grow, or growing more slowly than we expect;

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the introduction of products and technologies that serve as a replacement or substitute for, or represent an improvement over, our platform;

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technological innovations or new standards that our platform does not address;

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incidents or interruptions with third-party service providers, including Apple or Google services, that affect the ability of our customers to use our platform;

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sensitivity to current or future prices offered by us or our competitors;

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our inability to release enhanced versions of our platform on a timely basis;

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the development of new communication channels with which we are not able to adequately integrate our platform; and

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changes to mobile devices and platforms that prevent or degrade the functionality of our platform, or our inability to maintain interoperability of our platform with such mobile devices and platforms.

If the market for our platform grows more slowly than anticipated or if demand for our products does not grow as quickly as anticipated, whether as a result of competition, pricing sensitivities, product obsolescence, technological change, unfavorable economic conditions, uncertain geopolitical environment, budgetary constraints of our customers or other factors, we may not be able to grow our revenue, and our business, financial condition and results of operations may be adversely affected.

Our platform is inherently complex and may contain material defects or errors. Any defects or errors that impact functionality or that cause interruptions in the availability of our platform could result in:

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loss or delayed market acceptance and subscriptions;

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breach of warranty claims;

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breach of contract claims;

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sales credits or refunds for prepaid amounts;

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loss of customers;

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diversion of development and support resources; and

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injury to our reputation.

The costs we would be forced to incur to correct any material defects or errors could be substantial and could adversely affect our business, financial condition and results of operations.

Our customer agreements often provide service level commitments on a monthly basis. If we are unable to meet the stated service level commitments or suffer extended periods of unavailability of our platform, we may be contractually obligated to provide these customers with service credits or we could face contract terminations. We outsource substantially all the infrastructure relating to our cloud-based platform to third-party hosting providers and, as a result, our services may be impacted in the future, and have been impacted in the past, by unscheduled downtime at such providers that is beyond our control. Our revenue could be significantly affected if we suffer unscheduled downtime that exceeds the allowed downtimes under our agreements with our customers.

Because of the large amount of data that we collect, process, transmit, store and manage, it is possible that hardware failures or errors in our systems could result in data loss or cause the information that we collect to be incomplete which may result in breach of contract claims, damage our reputation or subject us to regulatory fines or investigations. Furthermore, the availability or performance of our platform could be adversely affected by a number of factors outside our control, including customers’ inability to access the internet, the failure of software systems caused by our third-party vendors, security breaches, cyberattacks or variability in user traffic for our services. For example, our customers access our platform through their internet service providers. If a customer’s service provider fails to provide sufficient capacity to support our platform or otherwise experiences service outages, such failure could interrupt our customers’ access to our platform and adversely affect their perception of our platform’s reliability. In addition to potential liability, if we experience interruptions in the availability of our cloud-based platform, our reputation could be adversely affected, and we could lose customers or have difficulty acquiring new customers.

We also provide frequent incremental releases of updates and functional enhancements to our platform. Despite extensive pre-release testing, such new versions occasionally contain undetected errors when first introduced or released. We have, from time to time, found errors in our platform, and new errors in our platform may be detected in the future. Since our customers use our products for important aspects of their business, any errors, defects, disruptions in our platform or other performance problems with our solutions could hurt our reputation and may damage our customers’ businesses. If that occurs, some of our customers may delay or withhold payment to us, elect not to renew their subscriptions with us, make service credit claims, warranty claims or other claims against us, and we could lose future sales. The occurrence of any of these events could result in an increase in our bad debt expense, an increase in collection cycles for accounts receivable or a decrease in future revenue and earnings, or could cause us to incur the risk or expense of litigation.

We may need to reduce prices or change our pricing model to remain competitive.

Our subscription fees are principally based on an upfront commitment by our customers for a specific number of monthly active users, volume of email, level of platform functionality, volume of SMS messages and certain add-on features. We expect that we may need to change our pricing from time to time. As new or existing competitors introduce products that compete with ours or reduce their prices, we may be unable to attract new customers or retain existing customers. We also must determine the appropriate price to enable us to compete effectively internationally. Customers may demand substantial price discounts as part of the negotiation of subscription agreements. As a result, we may be required or choose to reduce our prices or otherwise change our pricing model, which could adversely affect our business, financial condition and results of operations.

Our sales cycle with large enterprise customers can be long and unpredictable, and our sales efforts require considerable time and expense.

The timing of our sales cycles with our large enterprise customers and related revenue recognition is difficult to predict because of the length and unpredictability of the sales cycle for these customers. Large enterprise customers may have a lengthy sales cycle for the evaluation and procurement of our platform. Work-from-home arrangements resulting from, and continuing after, the COVID-19 pandemic may cause a lengthening of these sales cycles or a reduction in sales cycle win rates as we have historically benefited from using face-to-face selling techniques. Any delays in our sales cycles may cause a delay between increasing operating expenses for such sales efforts and, upon successful sales, the generation of corresponding revenue. We are often required to spend significant time and resources to better educate our potential large enterprise customers and familiarize them with the platform. The length of our sales cycle for these customers, from initial evaluation to contract execution, is generally three to six months but can vary substantially and sometimes extend for over 12 months. Large enterprise customers often view a subscription to our platform and products as a strategic decision with significant investment. As a result, customers frequently require considerable time to evaluate, test and qualify our platform prior to entering into or expanding a subscription. During the sales cycle, we expend significant time and money on sales and marketing and contract negotiation activities, which may not result in a sale. Additional factors that may influence the length and variability of our sales cycle include:

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the effectiveness of our sales team as we hire and train our new salespeople to sell to large enterprise customers;

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our ability to meet with customers in person during a sales cycle;

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the discretionary nature of purchasing and budget cycles and decisions;

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the obstacles placed by customers’ procurement process;

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economic conditions and other factors impacting customer budgets;

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customers’ familiarity with our products;

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customers’ evaluation of competing products during the purchasing process; and

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evolving customer demands.

Given these factors, it is difficult to predict whether and when a sale will be completed. Consequently, a shortfall in demand for our products and services or a decline in new or renewed contracts in a given period may not significantly reduce our revenue for that period but could negatively affect our revenue in future periods, which could have a material adverse effect on our business, financial condition and results of operations.

Our business and reputation could be adversely affected if our customers are not satisfied with the integration, implementation, or services provided by us or our partners.

The success of our business depends on our customers’ satisfaction with our platform, the support that we provide for our platform and the services that we provide to help integrate and utilize our platform. Onboarding services may be performed by our own staff, by a third party or by a combination of the two. We have partnered with third parties to increase the breadth, capability and depth of capacity for delivery of these onboarding services to our customers, and third parties provide a significant portion of such support. If a customer is not satisfied with the quality of work performed by us or a third party or with the solutions delivered, we could incur additional costs to address the deficiency, which would diminish the profitability of the customer relationship. If we do not help our customers quickly resolve issues and provide effective ongoing support, our ability to sell new products to existing and new customers will suffer and our reputation with existing or potential customers will be harmed, even if the dissatisfaction is with services provided by a third-party partner. Further, customer dissatisfaction with our services could impair our ability to expand the subscriptions within our customer base or adversely affect our customers’ renewal of existing subscriptions. In addition, negative publicity related to our customer relationships, regardless of accuracy, may further damage our business by affecting our ability to compete for new business with actual and prospective customers.

Because we generally recognize revenue ratably over the term of each subscription agreement, downturns or upturns in our sales may not be immediately reflected in our financial condition and results of operations.

We recognize revenue ratably over the term of each subscription agreement. Consequently, while a decline in new sales or renewals in any one period may not be reflected in our revenue for that period, this decline will negatively affect our revenue in future periods. Accordingly, the effect of significant downturns in sales and market acceptance of our products and potential changes in our rate of renewals may not be fully reflected in our results of operations until future periods. Our model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers generally is recognized over the term of the applicable agreement.

If we fail to maintain and enhance our brand, our ability to expand our customer base may be impaired and our business, financial condition and results of operations may suffer.

We believe that maintaining and enhancing our brand is important to support the marketing and sale of our existing and future products to new customers and expand sales of our platform and products to existing customers. We also believe that the importance of brand recognition will increase as competition in our market increases. Successfully maintaining and enhancing our brand will depend largely on the effectiveness of our marketing efforts, our ability to provide reliable products that continue to meet the needs of our customers at competitive prices, our ability to maintain our customers’ trust, our ability to continue to develop new functionality and use cases, and our ability to successfully differentiate our products and platform capabilities from competitive products. Our brand promotion activities may not generate customer awareness or yield increased revenue and, even if they do, any increased revenue may not offset the expenses we incur in building our brand. If we fail to successfully promote and maintain our brand, our business, financial condition and results of operations may be adversely affected.

If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service and customer satisfaction or adequately address competitive challenges.

We may continue to experience rapid growth and organizational change, which may continue to place significant demands on our management and our operational and financial resources. We have also experienced growth in the number of customers, the number of engagements we enable and the amount of data that our infrastructure supports. In particular, acquiring and supporting enterprise customers can require significant resources due to their size, volume of messaging and complexity. Our success will depend in part on our ability to manage this growth effectively. We will require significant capital expenditures and valuable management resources to grow without undermining our culture of innovation, teamwork and attention to customer success, which has been central to our growth so far.

We intend to continue to expand our international operations in the future. Our expansion will continue to place a significant strain on our managerial, administrative, financial and other resources. If we are unable to manage our growth successfully, our business, financial condition and results of operations may be adversely affected.

It is important that we maintain a high level of customer services, integration services, technical support and satisfaction as we expand our business. As our customer base continues to grow and as our penetration with existing customers expands, we will need to expand our account management, customer service and other personnel. Failure to manage growth could result in difficulty or delays in launching our platform, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features, or other operational difficulties. Any of these could adversely impact our business, financial condition and results of operations.

We anticipate that our operations will continue to increase in complexity as we grow, which will create management challenges.

Our business has experienced strong growth and is complex. We expect this growth to continue and for our operations to become increasingly complex. To manage this growth, we continue to make substantial investments to improve our operational, financial and management controls as well as our reporting systems and procedures. We may not be able to implement and scale improvements to our systems and processes in a timely or efficient manner or in a manner that does not negatively affect our results of operations. For example, we may not be able to effectively monitor certain contract requirements for specific products. We may have difficulty managing improvements to our systems, processes and controls or in connection with third-party software, which could impair our ability to provide our platform to our customers, causing us to lose customers, limiting our platform to less significant updates or increasing our technical support costs. If we are unable to manage this complexity, our business, financial condition and results of operations may be adversely affected.

As our customer base continues to grow, we will need to expand our services and other personnel, and maintain and enhance our partnerships, to provide a high level of customer service. We also will need to manage our sales processes as our sales personnel and partner network continue to grow and become more complex and as we continue to expand into new geographies and market segments. If we do not effectively manage this increasing complexity, the quality of our platform and customer service could suffer, and we may not be able to adequately address competitive challenges. These factors could impair our ability to attract and retain customers and expand our customers’ use of our platform.

We depend on our senior management team and the loss of one or more key employees or an inability to attract and retain highly skilled employees could adversely affect our business.

Our success depends largely upon the continued services of our executive officers, particularly our chief executive officer. We rely heavily on our chief executive officer’s vision, expertise and reputation. We rely on our leadership team for research and development, marketing, sales, services and general and administrative functions, and on mission-critical individual contributors. From time to time, our executive management team may change due to the hiring or departure of executives, which could disrupt our business. We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period; therefore, they could terminate their employment with us at any time. The loss of one or more of our executive officers, particularly our chief executive officer, or key employees (including any limitation on the performance of their duties or short-term or long-term absences as a result of illness or disability) could have a serious adverse effect on our business.

To execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense, especially for experienced software engineers and senior sales executives. In addition, partially in response to the COVID-19 pandemic, we have a large, remote workforce, which adds to the complexity and costs of our business operations. We expect to continue to experience difficulty in hiring and retaining employees with appropriate qualifications. Additional stay-at-home, business closure and other restrictive orders may also impact our ability to identify, hire and train new personnel. Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached legal obligations, resulting in a diversion of our time and resources. In addition, job candidates and existing employees often consider the value of the stock awards they receive in connection with their employment. If the perceived value of our stock awards declines, it may adversely affect our ability to recruit and retain highly skilled employees. If we fail to attract new personnel or fail to retain and motivate our current personnel, it could adversely affect our business and future growth prospects.

If we are unable to maintain our culture and core values as we grow, we could lose the innovation, teamwork, passion and focus on execution that we believe contribute to our success, and our business may be harmed.

We believe our culture and core values are critical to our success and have delivered tangible financial and operational benefits to our customers, employees and stockholders. We are a mission-driven company and have

designed our core values as a guiding set of principles for our employees and business. Accordingly, we have invested substantial time and resources in building a team that reflects our culture and core values. As we grow and develop our infrastructure as a public company, our operations may become increasingly complex. We may find it difficult to maintain these important aspects of our culture and core values. In addition, the growth of our remote workforce, partially in response to the COVID-19 pandemic, may impact our ability to preserve our culture and core values. Any failure to preserve our culture or core values could negatively affect our future success, including our ability to retain and recruit personnel, and to effectively focus on and pursue our corporate objectives.

Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, privacy law violations, data breaches and other losses.

Many of our agreements with customers and certain other third parties include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, violation of privacy and other applicable law or breaches of information security obligations, or other liabilities relating to or arising from our platform, products or other contractual obligations. Some of these agreements provide for uncapped liability for losses caused by intellectual property infringement or gross negligence or willful misconduct, and some indemnity provisions survive termination or expiration of the applicable agreement. While we cap all other liabilities, in some instances, the cap may represent a significant amount of potential liability, and such large indemnity payments could harm our business, financial condition and results of operations. Although we normally contractually limit our liability with respect to these obligations, we may still incur substantial liability related to them and we may be required to cease use of certain functions of our platform or products as a result of any such claims. Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer, other existing customers and new customers, which could adversely affect our business, financial condition and results of operations.

Our current operations are international in scope, and we plan further geographic expansion. This will create a variety of operational challenges.

A component of our growth strategy involves the further expansion of our operations and customer base internationally. In the case of each of our fiscal year ended January 31, 2021 and the six months ended July 31, 2021, approximately 40% of our revenue was generated from customers outside the United States. We currently have customers in the United States, Canada, Europe, the Middle East, the Asia-Pacific region and Latin America. We are continuing to adapt and develop strategies to address international markets, but such efforts may not be successful. In addition, the ongoing COVID-19 pandemic, including the emergence of new variant strains COVID-19, and related stay-at-home, business closure and other restrictive orders and travel restrictions outside the United States, may pose additional challenges for international expansion and may impact our ability to launch new locations and further expand geographically.

We expect that our international activities will continue to grow over the foreseeable future as we continue to pursue opportunities in existing and new international markets. This will require significant management attention and financial resources.

Our current international operations and future initiatives involve a variety of risks, including:

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changes in a country’s or region’s political or economic conditions, including in the United Kingdom as a result of the United Kingdom exiting the European Union, or Brexit;

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the need to adapt and localize our platform for specific countries;

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greater difficulty collecting accounts receivable and longer payment cycles;

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unexpected changes in laws, regulatory requirements, taxes or trade laws;

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more stringent regulations relating to privacy and data security and the unauthorized collection, processing, transmission or use of, or access to, commercial and personal information, particularly in Europe;

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differing labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations;

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potential changes in laws, regulations and costs affecting our U.K. operations and local employees due to Brexit;

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difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems and regulatory systems;

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increased travel, real estate, infrastructure and legal compliance costs associated with international operations;

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currency exchange rate fluctuations and the resulting effect on our revenue and expenses and the cost and risk of entering into hedging transactions if we chose to do so in the future;

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laws and business practices favoring local competitors or general preferences for local vendors;

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limited or insufficient intellectual property protection or difficulties enforcing our intellectual property;

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political instability or terrorist activities;

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risks related to global health epidemics, such as the COVID-19 pandemic, including the emergence of new variant strains COVID-19, and related restrictions on our ability and our customers’ ability to travel;

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exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the U.K. Bribery Act of 2010, the U.K. Proceeds of Crime Act 2002 and similar laws and regulations in other jurisdictions; and

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adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.

Failure to overcome any of these difficulties could negatively affect our results of operations. If we invest substantial time and resources to expand our international operations and are unable to do so successfully, our business, financial condition and results of operations may be adversely affected.

Acquisitions, strategic investments, partnerships or alliances could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value and adversely affect our business, financial condition and results of operations.

We have in the past and may in the future seek to acquire or invest in businesses, joint ventures, products and platform capabilities, or technologies that we believe could complement or expand our products and platform capabilities, enhance our technical capabilities or otherwise offer growth opportunities. Further, our anticipated proceeds from this offering increase the likelihood that we will devote resources to exploring larger and more complex acquisitions and investments than we have previously attempted. We may not be able to find and identify desirable acquisition targets or business opportunities or be successful in entering into an agreement with any particular strategic partner. Additionally, any such acquisition or investment may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable opportunities, whether or not the transactions are completed, and may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products and platform capabilities, personnel or operations of any acquired companies, particularly if the key personnel of an acquired company choose not to work for us, their software is not easily adapted to work with our platform or we have difficulty retaining the customers of any acquired business due to changes in ownership, management or otherwise. These transactions may also disrupt our business, divert our resources and require significant management attention that would otherwise be available for development of our existing business. Any such transactions that we are able to complete may not result in any synergies or other benefits we

had expected to achieve, which could result in impairment charges that could be substantial. These transactions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our business, financial condition and results of operations. In addition, if the resulting business from such a transaction fails to meet our expectations, our business, financial condition and results of operations may be adversely affected, or we may be exposed to unknown risks or liabilities.

Risks Related to Our Dependence on Third Parties

Our brand, reputation and ability to attract new customers depend on the reliable performance of our technology infrastructure and content delivery. Our platform engages with consumers through emails, SMS, mobile and web notifications. We are dependent on third-party services for delivery of emails and SMS, and we are dependent on Apple services and Google services for delivery of mobile and web notifications. Any incident broadly affecting the interaction of Apple or Android devices with necessary Apple or Google services (e.g., iCloud or Apple push notifications), including any delays or interruptions in such Apple or Google services, could adversely affect our business. Similarly, any cybersecurity events affecting Apple or Google Android devices could result in a disruption to Apple or Google services, regulatory investigations, reputational damage and a loss of sales and customers for Apple or Google, which could in turn impact our business. A prolonged disruption, cybersecurity event or any other negative event affecting Apple or Google could lead to customer dissatisfaction and could in turn damage our reputation with current and potential customers, expose us to liability and cause us to lose customers or otherwise harm our business, financial condition and results of operations.

We depend in part on mobile operating systems, such as Android and iOS, and their respective infrastructures to send notifications through various applications that utilize our platform. Any changes in such systems that negatively impact the functionality of our platform could adversely affect our ability to interact with consumers in a timely and effective fashion, which could adversely affect our ability to retain and attract new customers. For example, any anti-tracking features adopted by Apple or Google that require applications to obtain additional permissions to track end user data may impact our customers’ decisions relating to how to interact with users on our platform. Additionally, if such mobile operating systems change their policies or otherwise limit or prohibit us from sending notifications or otherwise make changes that degrade the functionality of our platform, such changes could adversely affect our business, financial condition and results of operations.

As new mobile devices and mobile, web and email platforms are released, there is no guarantee that these mobile devices and platforms will continue to support our platform or effectively roll out updates to our customers’ applications. The parties that control the operating systems for mobile devices and mobile, web and email platforms have no obligation to test the interoperability of new mobile devices or platforms with our platform, and third parties may produce new products that are incompatible with or not optimal for the operation of our platform. Additionally, in order to deliver high-quality consumer engagement, we need to ensure that our platform is designed to work effectively with a range of mobile technologies, systems, networks and standards. If consumers choose to use products or platforms that do not support our platforms, or if we do not ensure our platform can work effectively with such products or platforms, our business and growth could be harmed. We also may not be successful in developing or maintaining relationships with key participants in the mobile industry that permit such interoperability. If we are unable to adapt to changes in popular operating systems, we expect that our customer retention and customer growth would be adversely affected.

We outsource substantially all the infrastructure relating to our cloud-based platform to third-party hosting providers. Our customers need to be able to access our platform at any time, without interruption or degradation of performance, and we provide them with service-level commitments with respect to uptime and, occasionally, throughput. Our products depend on protecting the virtual cloud infrastructure hosted by third-party hosting providers by maintaining its configuration, architecture, features and interconnection specifications, as well as the information stored in these virtual data centers, which is transmitted by third-party internet service providers. Any limitation on the capacity or availability of our third-party hosting providers could impede our ability to onboard new customers or expand the usage of our existing customers, which could adversely affect our business, financial condition and results of operations. Currently, we rely on cloud computing infrastructure, particularly from Amazon Web Services, or AWS, to host our platform and support our operations and many of the internal products we use to operate our business. We do not have control over the operations of the facilities of AWS or other cloud providers. Each provider’s respective facilities may be vulnerable to damage or interruption from earthquakes, hurricanes, floods, fires, cybersecurity attacks, terrorist attacks, power losses, telecommunications failures and other events beyond our or their control. In the event that AWS’s or any other third-party provider’s systems or service abilities are hindered by any of the events discussed above, our ability to operate our platform may be impaired, our customers may be impacted, we may be subject to claims for refunds or terminations under our contracts, and our reputation and brand may be harmed. A decision to close these facilities without adequate notice, or other unanticipated problems, could result in lengthy interruptions to our platform. All of the aforementioned risks may be exacerbated if our or our partners’ business continuity and disaster recovery plans prove to be inadequate in such a scenario.

Additionally, AWS or other cloud providers may experience threats or attacks from computer malware, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks, employee error, theft or misuse and general hacking, including from state-sponsored or criminal hacking groups, which have become more prevalent in our industry. Any of these security incidents could result in unauthorized access or damage to, or the disablement, encryption, use or misuse, disclosure, modification, destruction or loss of our data or our partners’ data, including personal information, or disrupt our ability to provide our platform or service. Our platform’s continuing and uninterrupted performance is critical to our success. Users may become dissatisfied by any system failure that interrupts our ability to provide our platform to them and could make claims for refunds or terminations under our contracts. We may not be able to easily switch our AWS operations to another cloud or other data center provider if there are disruptions or interference with our use of any third-party provider’s services, and even if we do switch our operations, the process can require significant time and expense and other cloud and data center providers are subject to the same risks. Sustained or repeated system failures would reduce the attractiveness of our platform to our partners, thereby reducing revenue. Moreover, negative publicity arising from these types of disruptions could damage our reputation and may adversely impact use of our platform. We may not carry sufficient business interruption insurance or have sufficient contractual remedies to compensate us for losses that may occur as a result of any events that cause interruptions in our service.

In the event that our service agreements with our third-party hosting providers are terminated or there is a lapse of service, elimination of services or features that we utilize, interruption of internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our platform as well as significant delays and additional expense in arranging or creating new facilities and services and/or re-architecting our cloud solution for deployment on a different cloud infrastructure service provider, which could adversely affect our business, financial condition and results of operations.

Our agreement with AWS allows AWS to terminate for any reason with 30 days’ advance notice or in case of a breach of contract if such breach is uncured for 30 days. AWS may also terminate immediately upon notice

if (1) AWS determines that our use of its service poses a security risk to its services or any other third party, could otherwise adversely impact AWS’s systems, could subject AWS to liability or could be fraudulent, (2) we fail to pay AWS in accordance with our agreement, (3) we cease to operate in the ordinary course, make an assignment for the benefit of creditors or become the subject of any bankruptcy, reorganization, liquidation, dissolution or other similar proceeding, (4) AWS’s relationship with any third-party providers terminates or requires AWS to change the way it provides services or (5) termination is necessary to comply with the law or the requests of governmental entities. Although we expect that we could receive similar services from other third parties if any of our arrangements with AWS are terminated, transitioning the cloud infrastructure currently hosted by AWS to alternative providers would likely be disruptive, and we could incur significant one-time costs. If we are unable to renew our agreement with AWS on commercially reasonable terms or at all, our agreement with AWS is prematurely terminated or we add additional infrastructure providers, we may experience costs or downtime in connection with the transfer to, or the addition of, new data center providers. If AWS or other infrastructure providers increase the costs of their services, our business, financial condition and results of operations could be adversely affected.

Our growth depends in part on the success of our strategic relationships with third parties.

In order to grow our business, we anticipate that we will continue to depend on relationships with strategic partners, including cloud alliance/marketing, infrastructure and technology partners, to provide broader customer coverage and solution delivery capabilities, and also achieve product stickiness. While our strategic partners have not played a lead role in our customer generation process in the past, we intend to develop these relationships to rely more heavily on our partners to help us generate business going forward. Identifying partners, and negotiating, documenting and maintaining relationships with them, requires significant time and resources. Our agreements with our strategic partners are non-exclusive and do not prohibit them from working with our competitors or recommending competing products. Our competitors may be effective in providing incentives to such third parties to favor their products or services or to prevent or reduce subscriptions to our services. If our partners choose to place greater emphasis on products of their own or those offered by our competitors or do not effectively market and sell our platform, our ability to grow our business and sell our products and services may be adversely affected. In addition, acquisitions of our partners by our competitors could result in a decrease in the number of our current and potential customers, as our partners may no longer facilitate the adoption of our platform by potential customers.

We are highly dependent upon our relationship with the developer platforms, web browsers and operating systems provided by third-party technology companies such as Apple and Google. Changes to mobile device operating systems may diminish the usefulness of marketing providers or require significant modifications or demands on our business to continue supporting those operating systems. Changes to developer platform policies related to third-party software, such as Apple or Google creating restrictions on the ability of our existing or potential customers to use software development kits or cookies could similarly adversely affect our business.

If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our business, financial condition and results of operations may suffer. Even if we are successful, it is not assured that these relationships will result in increased customer usage of our platform or increased revenue.

Risks Related to Privacy, Data Security and Data Protection Laws

Operating our business and platform involves the collection, use, processing, storage, transfer and sharing of sensitive, proprietary, confidential, regulated and personal information, including such information that we handle on behalf of our customers. These activities are regulated by a variety of federal, state, local and foreign privacy, data security and data protection laws and regulations, and industry standards, which have become

increasingly stringent in recent years, are rapidly evolving and are likely to remain uncertain for the foreseeable future. Increasingly, privacy, data security and data protection laws are extra-territorial in their scope of application. As a provider of cloud computing services, the global nature of our customer base renders us particularly exposed to being subject to a wide range of such laws and the varying, potentially conflicting compliance obligations they impose on our business.

In the United States, the privacy and data security requirements that apply to us or our customers include the Federal Trade Commission Act, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the Health Insurance Portability and Accountability Act of 1996, or HIPAA, the Gramm-Leach-Bliley Act, the California Consumer Privacy Act of 2018, or the CCPA (including as amended by the recently adopted California Privacy Rights Act, or the CPRA, which will become effective January 1, 2023), the Telephone Consumer Protection Act, or TCPA, the Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003, or CAN-SPAM, and other state and federal laws relating to privacy and data security. Many states have adopted laws that regulate the online collection, processing, use and disclosure of personal information and require companies to implement data security measures. Laws in all 50 states and U.S. territories require businesses to notify affected individuals, governmental entities and/or credit reporting agencies of certain security breaches affecting personal information. The laws are not consistent, and compliance in the event of a widespread data breach could be costly. In addition, while we contractually limit the types of data our customers may process and store using our platform, we cannot fully control the actions of our customers. The failure of customers to comply with their contractual obligations may subject us to liability, and we may not have sufficient recourse to cover our related liabilities.

State legislatures also have been adopting new privacy laws or amending existing laws with increasing frequency, requiring attention to frequently changing regulatory requirements. For example, the CCPA, which took effect on January 1, 2020, imposes a number of requirements on covered businesses and gives California residents certain rights related to their personal information, including the right to access and delete their personal information, and receive detailed information about how their personal information is used and shared. The CCPA also created restrictions on “sales” of personal information that allow California residents to opt out of certain sharing of their personal information and may restrict the use of cookies and similar technologies for advertising purposes. The CCPA provides for civil penalties for violations of up to $7,500 for each intentional violation and creates a private right of action for certain data breaches that is expected to increase data breach litigation. Additionally, in November 2020 California voters passed a ballot measure adopting the CPRA, which will impose a number of new requirements on businesses effective January 1, 2023 with some requirements applying to data collected beginning January 1, 2022. The CPRA will further restrict use of certain categories of sensitive personal information; restrict the use of cross-context behavioral advertising techniques; require new disclosures in privacy notices; create limits on what personal information business can collect and how long they can retain it; require the addition of new privacy clauses to contracts with service providers and contractors; expand the types of data breaches subject to the private right of action; and establish the California Privacy Protection Agency to implement and enforce the new law, the first state agency in the United States focused solely on privacy. Virginia and Colorado also adopted comprehensive privacy laws. Virginia’s Consumer Data Protection Act will take effect concurrently with the CPRA on January 1, 2023, and the Colorado Privacy Act will take effect six months later on July 1, 2023. Both laws emulate the CCPA and the CPRA in many respects, but despite similarities each law includes its own unique compliance requirements. Comprehensive privacy laws have also been proposed in many other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States, though without a federal law that preempts contradicting provisions in state laws, companies like ours that operate on a national scale are responsible for monitoring and complying with the patchwork of state regulations. The interpretation and enforcement of these laws is not yet established, and our business operations may not be compatible with the eventual interpretations of these laws, and we may be required to modify such practices, which may harm our business.

Foreign privacy laws have become more stringent in recent years, are also undergoing a period of rapid change, and may increase the costs and complexity of offering our products and services in new and existing

geographies. For example, the European Union, or EU, adopted the General Data Protection Regulation, or GDPR, which came into effect in May 2018. The GDPR applies to processing operations carried out in the context of the activities of an establishment in the European Economic Area, or EEA, and any processing relating to the offering of goods or services to individuals in the EEA and/or the monitoring of their behavior in the EEA. Also, notwithstanding the United Kingdom’s withdrawal from the EU, by operation of the so-called U.K. GDPR, the GDPR continues to apply in substantially equivalent form to processing operations carried out in the context of an establishment in the United Kingdom, and any processing relating to the offering of goods or services to individuals in the United Kingdom and/or monitoring of their behavior in the United Kingdom. Accordingly, references in this section to the GDPR are also deemed to be references to the U.K. GDPR in the context of the United Kingdom, unless the context requires otherwise.

The GDPR also provides that EEA Member States may make their own further laws and regulations to introduce supplementary requirements related to the processing of “special categories of personal data,” as well as personal data related to criminal offenses or convictions. In the United Kingdom, the Data Protection Act 2018 complements the U.K. GDPR in this regard. This may lead to greater divergence in the law that applies to the processing of personal data across the EEA and/or United Kingdom, compliance with which, as and where applicable, may increase our costs and could increase our overall compliance risk. Such country-specific regulations could also limit our ability to collect, use and share data in the context of our EEA and/or United Kingdom operations, and/or could cause our compliance costs to increase, ultimately having an adverse impact on our business and harming our business and financial condition.

Under the GDPR, parties are either controllers, which are decision-makers that exercise overall control over the purposes and means of data processing, whether alone or jointly with one or more other persons, or processors, who act on behalf of, and only on the instructions of, the relevant controller. In the provision of our services to our customers, we generally act as a processor for our customers, and we rely on our processes to be compliant with applicable portions of the GDPR, but we cannot assure you that all customers will materially comply with their obligations as controllers under GDPR. As processors we may be contractually liable to our customers if we fail to meet the terms of our data processing agreements, we may be subject to investigation or administrative fines from supervisory authorities or subject to individual claims that we failed to comply with the applicable provisions of GDPR or that we acted without or against the controller’s lawful instructions. Companies that violate the GDPR, whether acting as a controller or a processor, can face more robust regulatory enforcement and greater penalties for noncompliance than under previously applicable data protection laws, including fines of up to the greater of €20 million or 4% of their worldwide annual revenue for the preceding financial year. In addition to administrative fines, a wide variety of other potential enforcement powers are available to competent supervisory authorities in respect of potential and suspected violations of the GDPR, including extensive audit and inspection rights, and powers to order temporary or permanent bans on all or some processing of personal data carried out by noncompliant actors. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR. Additionally, as noted above, the United Kingdom has transposed the GDPR into the laws of the United Kingdom by way of the U.K. GDPR, which could expose us to two parallel regimes, each of which potentially authorizes similar fines, with the U.K. GDPR permitting fines of up to the higher of £17.5 million or 4% of global annual revenue of any noncompliant organizations for the preceding financial year; as well as other potentially divergent enforcement actions for certain violations.

In addition to imposing substantial data protection governance requirements on companies, giving individuals extensive rights to control how companies handle their personal data and imposing data breach notification requirements in certain circumstances, the applicable data protection laws restrict the ability of companies to transfer personal data from Europe to the United States and other countries, known as “third countries,” in respect of which the European Commission or other relevant regulatory body has not issued a so-called ‘adequacy decision’. One of the mechanisms on which we previously relied in order to effect such transfers, the EU-U.S. Privacy Shield Framework, was invalidated by the Court of Justice of the European Union,

or CJEU, in a July 2020 decision, Data Protection Commissioner v. Facebook Ireland Limited, Maximillian Schrems, or Schrems II. The decision also called into question whether companies can lawfully use the European Commission’s standard contractual clauses, or SCCs, another compliance mechanism on which we have relied, for transfers of personal data from Europe to the United States and other third countries. Following this decision, the government of the United Kingdom has similarly invalidated use of the EU-U.S. Privacy Shield as a mechanism for lawful personal data transfers from the United Kingdom to the United States under the U.K. GDPR; and the Swiss Federal Data Protection and Information Commissioner issued guidance calling the Swiss-U.S. Privacy Shield Framework inadequate and raising similar questions about the SCCs.

On June 4, 2021, the European Commission published new versions of the SCCs. Beginning on September 27, 2021, these new versions of the SCCs went into effect and must be used for all new transfers of personal data from the EEA to third countries. Further, all then existing transfers of personal data from the EEA to third countries relying on the prior versions of the SCCs must be replaced by December 27, 2022. The ongoing implementation of the new SCCs will necessitate significant contractual overhaul of our data transfer arrangements with customers, sub-processors and vendors.

Use of both the existing and the new SCCs must, following Schrems II, be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular regarding applicable surveillance laws and relevant rights of individuals with respect to the transferred data. In the context of any given transfer, where the legal regime applicable in the destination country may or does conflict with the intended operation of the SCCs and/or applicable European law, the parties to that transfer must implement certain supplementary technical, organizational and/or contractual measures to rely on the SCCs as a compliant “transfer mechanism.” However, guidance from the European Data Protection Board, or EDPB, on such supplementary technical, organizational and/or contractual measures, appears to conclude that no combination of such measures could be sufficient to allow effective reliance on the SCCs in the context of transfers of personal data “in the clear” to recipients in countries where the power granted to public authorities to access the transferred data goes beyond what is “necessary and proportionate in a democratic society where in practice problematic legislation of the third country applies to the transfer in question” – which may, following the CJEU’s conclusions in Schrems II on relevant powers of United States public authorities and commentary in that EDPB guidance, include the United States in certain circumstances (e.g., where Section 702 of the US Foreign Intelligence Surveillance Act applies). At present, there are few, if any viable alternatives to the SCCs.

If we are unable to implement sufficient safeguards to ensure that our transfers of personal information from Europe are lawful, we may face increased exposure to regulatory actions, substantial fines and injunctions against processing personal information from Europe. Loss of our ability to lawfully transfer personal data out of Europe to the United States or any other jurisdictions may (1) restrict our activities in Europe, (2) limit our ability to collaborate with partners as well as other service providers, contractors and other companies subject to European data protection laws, (3) cause reluctance or refusal by current or prospective European customers to use our products and/or (4) require us to increase our data processing capabilities in Europe at significant expense or otherwise cause us to change the geographical location or segregation of our relevant systems and operations — any or all of which could adversely affect our financial results. Additionally, other countries outside of the EEA, United Kingdom and Switzerland have passed or are considering passing similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of delivering our services and operating our business and would require significant changes to how our services and customer support are delivered. The type of challenges we face in Europe will likely also arise in other jurisdictions that adopt laws similar in construction to the GDPR or regulatory frameworks of equivalent complexity.

In addition, while the United Kingdom data protection regime currently permits data transfers from the United Kingdom to the EEA and other third countries covered by a European Commission adequacy decision, and currently includes a framework to permit the continued use of the existing version of the EU SCCs and binding corporate rules for personal data transfers from the United Kingdom to third countries, this is subject to change in the future, and any such changes could have implications for our transfers of personal data from the United Kingdom to the EEA and other third countries. In particular, the UK Information Commissioner’s Office

has stated that it is working on its own bespoke version of SCCs and it is not clear whether the new SCCs published by the European Commission will be accepted, directly or indirectly, as a valid mechanism to permit the transfer of personal data from the United Kingdom to third countries and/or whether any UK version of SCCs will supersede the existing and/or new EU SCCs. This could necessitate the implementation of both UK and EU versions of SCCs, which could require significant resources and necessitate significant cost to implement and manage.

On June 28, 2021, the European Commission issued an adequacy decision under the GDPR which allows transfers (other than those carried out for the purposes of United Kingdom immigration control) of personal data from the EEA to the United Kingdom to continue without restriction for a period of four years ending June 27, 2025. After that period, the adequacy decision may be renewed, however, only if the United Kingdom continues to ensure an adequate level of data protection. During these four years, the European Commission will continue to monitor the legal situation in the United Kingdom and could intervene at any point if the United Kingdom deviates from the level of data protection in place at the time of issuance of the adequacy decision. If the adequacy decision is withdrawn or not renewed, transfers of personal data from the EEA to the United Kingdom will require a valid “transfer mechanism” and we may be required to implement new processes and put new agreements in place (such as the then current form of the SCCs) to enable transfers of personal data from the EEA to the United Kingdom to continue. This would require deployment of significant resources and necessitate significant cost to implement and manage.

In addition, other European data protection laws require that affirmative opt-in consent is procured to the placement of cookies and similar tracking technologies on users’ devices (other than those that are “strictly necessary” to provide services requested by the user), including those used for personalization of experiences and advertising. These requirements may increase our exposure to regulatory enforcement actions, increase our compliance costs and reduce demand for our products. A new regulation proposed in the EU, which would apply across the EEA, known as the ePrivacy Regulation, if and when enacted, may further restrict the use of cookies and other online tracking technologies on which our products rely, as well as increase restrictions on the types of direct marketing campaigns that our platform enables. The final version of the ePrivacy Regulation is yet to be agreed, but is likely to introduce regulatory enforcement powers akin to those available to supervisory authorities under the GDPR, including significant administrative fines and other penalties for non-compliance. The introduction of this regulation is likely to garner significant attention and could encourage and/or hasten the introduction of equivalent legislation regulating the use of tracking technologies in other jurisdictions. While no official time frame has been given for the implementation of the ePrivacy Regulation, there will be a transition period after the ePrivacy Regulation is agreed, and commentators consider it unlikely to come into force before 2023. Given the delay in finalizing the ePrivacy Regulation, certain regulators (including United Kingdom and French data protection regulators) have issued guidance on the requirement to seek strict opt-in, unbundled consent to use all non-essential cookies and similar technologies and the requirement to increase the standard of transparency relating to use of cookies and similar technologies. We are likely to need to invest significantly in compliance with these types of new legislation in order to attract and maintain customers in the EEA and globally.

In Canada, the Personal Information Protection and Electronic Documents Act, or PIPEDA, and various provincial laws require that companies give detailed privacy notices to consumers, obtain consent to use personal information, with limited exceptions, allow individuals to access and correct their personal information and report certain data breaches. In addition, Canada’s Anti-Spam Legislation, or CASL, prohibits email marketing without the recipient’s consent, with limited exceptions. Failure to comply with PIPEDA, CASL or provincial privacy or data protection laws could result in significant fines and penalties or possible damage awards. Canada is also considering sweeping changes to its privacy laws that would substantially increase fines and create a private right of action for violations.

Apart from the requirements of privacy and data security laws, we have obligations relating to privacy and data security under our published policies and documentation and certain of our contracts. Although we endeavor to comply with these obligations, we may have failed to do so in the past and may be subject to allegations that

we have failed to do so or have otherwise processed data improperly. Such failures or alleged failures could result in proceedings against us by governmental entities, private parties or others as well as negative publicity and reputational damage. In addition, privacy advocates and industry groups have regularly proposed, and may propose in the future, self-regulatory standards with which we must legally comply or that contractually apply to us. If we fail to follow these security standards even if no customer information is compromised, we may incur significant fines, negative publicity and reputational damage or experience a significant increase in costs.

Compliance with these and other applicable privacy, data security or data protection laws, regulations, policies and standards, many of which vary across jurisdictions, is a rigorous and time-intensive process, and we may be required to implement costly mechanisms to ensure compliance. The proliferation of privacy, data security and data protection laws, regulations, policies and standards increases the likelihood of differences in approaches across jurisdictions, which makes it difficult, and in some instances, impossible, to maintain a standardized global privacy program. Creating jurisdiction-specific approaches requires significant time and resources and the associated complexity increases the risk of potential non-compliance.

Our customers may implement compliance measures that do not align with our services, which could limit the scope and type of services we are able to provide. Our customers may also require us to comply with additional privacy and security obligations, causing us to incur potential disruption and expense related to our business processes. We may also be exposed to certain compliance and/or reputational risks if our customers do not comply with applicable privacy or data protection laws and/or their own privacy notices and terms of use in particular in connection with their processing of personal data, their sharing of personal data with us, the legal bases they rely on (where applicable) under applicable privacy and data protection legislation for the processing we carry out on their behalf and/or their management of data subject requests which pertain to the processing we carry out on their behalf. In addition, we may decide not to enter into new geographic markets where we determine that compliance with such laws, regulations, policies and standards would be prohibitively costly or difficult. Geographic markets in which we currently operate could require us to process or store regulated information within such markets only, and establishing hosting facilities in such markets could be disruptive to our business and costly. If our policies and practices, or those of our customers, service providers, contractors and/or partners, are, or are perceived to be non-compliant, we could face (1) litigation, investigations, audits, inspections and proceedings brought by governmental entities, customers, individuals or others; (2) additional reporting requirements and/or oversight, temporary or permanent bans on all or some processing of personal data, orders to destroy or not use personal data and imprisonment of company officials; (3) fines and civil or criminal penalties for us or company officials, obligations to cease offering or to substantially modify our solutions in ways that make them less effective in certain jurisdictions; and (4) negative publicity, harm to our brand and reputation and reduced overall demand for our platform. Such occurrences could adversely affect our business, financial condition and results of operations.

Because the interpretation and application of privacy and data protection laws, regulations, rules and other standards are still uncertain and likely to remain uncertain for the foreseeable future, it is possible that these laws, rules, regulations and other obligations, such as contractual or self-regulatory obligations, may be interpreted and applied in a manner that is inconsistent with our data management practices or the features of our software. If so, in addition to the possibility of fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify our software, which we may be unable to do in a commercially reasonable manner or at all, and which could have an adverse effect on our business. Any inability to adequately address privacy concerns, even if unfounded, or comply with applicable privacy or data protection laws, rules, regulations and other obligations, could result in additional cost and liability to us, damage our reputation, inhibit sales and adversely affect our business.

Operating our business and platform involves the collection, processing, storage and transmission of sensitive, regulated, proprietary and confidential information, including personal information of our customers, their users and our personnel and our and our customers’ proprietary and confidential information. Security incidents compromising the confidentiality, integrity and availability of this information and our systems could result from cyber-attacks, computer malware, viruses, social engineering (including phishing and ransomware attacks), credential stuffing, efforts by individuals or groups of hackers and sophisticated organizations (including state-sponsored and criminal organizations), errors or malfeasance of our personnel or our third-party service providers and security vulnerabilities in the software or systems on which we rely. Such incidents have occurred in the past and may occur in the future, resulting in unauthorized access to, inability to access, disclosure of, or loss of our or our customers’ information or our inability to provide our services.

We also rely on third-party service providers and technologies to operate critical business systems to process confidential and personal information in a variety of contexts, including, without limitation, encryption and authentication technology, employee email, content delivery to customers, back-office support and other functions. Our ability to monitor these third parties’ cybersecurity practices is limited. These third-party providers and technologies may not have adequate measures in place, and could experience or cause a security incident that compromises the confidentiality, integrity or availability of the systems or technologies they provide to us or the information they process on our behalf.

While we have taken steps designed to protect the proprietary, regulated, sensitive, confidential and personal information in our control, our security measures or those of the third parties on which we rely may not be effective against current or future security risks and threats. Cybercrime and hacking techniques are constantly evolving and a challenge of the modern global economy, and we or our third-party service providers may be unable to anticipate threats, detect or react in a timely manner, or implement adequate preventative measures, particularly given increasing use of hacking techniques designed to circumvent controls, avoid detection and remove or obfuscate forensic artifacts. Moreover, we or our third-party service providers may be more vulnerable to such attacks in remote work environments, which have increased in response to the COVID-19 pandemic.

If we or our third-party service providers suffer, or are perceived to have suffered, a security breach or other security incident, we may experience a loss of customer confidence in the security of our platform and damage to our brand, reduced demand for our products and disruption of normal business operations. Such a circumstance may also require us to spend material resources to investigate, remediate or correct the issue and prevent recurrence, notify regulators and affected customers and individuals, expose us to legal liabilities, including litigation, regulatory enforcement, indemnity obligations, fines and penalties, and adversely affect our business, financial condition and results of operations. These risks are likely to increase as we continue to grow and process, store and transmit increasingly large amounts of data.

Additionally, we cannot be certain that our insurance coverage will be adequate for data security liabilities actually incurred, will cover any indemnification claims against us relating to any incident or will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our reputation, business, financial condition and results of operations.

Our inability to comply with agreements we enter into with our customers regarding the collection, processing, use and disclosure of personal information could result in additional costs and liabilities to us or inhibit sales of our products.

We enter into agreements with our customers regarding our collection, processing, use, and disclosure of personal information in relation to the services we provide to them. Although we endeavor to comply with such agreements, we may at times fail to do so or may be perceived to have failed to do so, including due to the errors or omissions of our personnel and third-party service providers. Such failures or perceived failures can subject us to customer lawsuits, termination of customer agreements and governmental enforcement actions. Even if we eventually prevail in any such dispute, resolving them could be expensive and time-consuming to defend and could result in adverse publicity and reputational harm that could adversely affect our business, financial condition and results of operations.

Risks Related to Other Laws and Litigation

Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our platform and could have a negative impact on our business.

The future success of our business depends upon the continued use of smart cell phones, other mobile devices and the internet-connected devices as primary mediums for commerce, communication and business applications. Government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the internet and internet-connected devices and cell phones as commercial mediums. Changes in these laws or regulations could require us to modify our platform in order to comply with these changes. In addition, government agencies or private organizations may begin to impose taxes, fees or other charges for accessing the internet or commerce conducted via the internet. These laws or charges could limit the growth of internet-related commerce or communications generally, resulting in reductions in the demand for internet-based solutions such as ours.

In addition, the use of the internet as a business tool could be adversely affected due to delays in the development or adoption of new standards and protocols to handle increased demands of internet activity, security, reliability, cost, ease of use, accessibility and quality of service. The performance of the internet and its acceptance as a business tool have been adversely affected by “viruses,” “worms” and similar malicious programs, along with distributed denial of service and similar attacks. As a result, the internet has experienced a variety of outages and other delays as a result of such damage to or attacks on portions of its infrastructure. If the use of the internet is adversely affected by these issues, demand for our platform could suffer.

Any future litigation against us could be costly and time-consuming to defend.

We may become subject to legal proceedings and claims that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes or employment claims made by our current or former employees. Litigation might result in substantial costs and may divert management’s attention and resources, which might seriously harm our business, financial condition and results of operations. Insurance might not cover such claims, provide sufficient payments to cover all the costs to resolve one or more such claims or continue to be available on terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, and our business, financial condition and results of operations may be adversely affected.

If our platform fails to function in a manner that allows our customers to operate in compliance with regulations and/or industry standards, our revenue and results of operations could be harmed.

Since our customers are able to upload data into our platform, we may be hosting or otherwise processing substantial amounts of personally identifiable information. Some of our customers may require our platform to

comply with certain privacy, security and other certifications and standards. Our cloud platform holds various security certifications from industry organizations, designed to meet, in all material respects, the ISO 27001 and various HIPAA standards. Governments and industry organizations may also adopt new laws, regulations or requirements, or make changes to existing laws or regulations, that could impact the demand for, or value of, our applications. If we fail to maintain our current security certifications and/or to continue to meet security standards, or if we are unable to adapt our platform to changing legal and regulatory standards or other requirements in a timely manner, our customers may lose confidence in our platform, and our revenue, business, financial condition and results of operations could be adversely affected.

We are subject to anti-corruption, anti-bribery, anti-money laundering and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations.

We are subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the U.K. Bribery Act of 2010, the U.K. Proceeds of Crime Act 2002 and other anti-corruption laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit our company from authorizing, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. We use third-party law firms, accountants and other representatives for regulatory compliance, sales and other purposes in several countries. We can be held liable for the corrupt or other illegal activities of these third-party representatives, our employees, contractors, partners and other agents, even if we do not explicitly authorize such activities. In addition, although we have implemented policies and procedures to ensure compliance with anti-corruption laws, our employees, representatives, contractors, partners and agents may not comply with these laws at all times.

Noncompliance with these laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage and other collateral consequences. If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, financial condition and results of operations could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. Enforcement actions and sanctions could further harm our business, financial condition and results of operations.

Moreover, as an issuer of securities, we also are subject to the accounting and internal controls provisions of the FCPA. These provisions require us to maintain accurate books and records and a system of internal controls sufficient to detect and prevent corrupt conduct. Failure to abide by these provisions may have an adverse effect on our business, financial condition or results of operations.

We are subject to governmental export and import controls that could impair our ability to compete in international markets and subject us to liability if we violate the controls.

Our platform is subject to U.S. export controls, including the Export Administration Regulations and economic sanctions administered by the U.S. Treasury Department’s Office of Foreign Assets Control. We incorporate encryption technology into our platform. These encryption products and the underlying technology are currently considered “publicly available” by the Export Administration Regulations and may be exported outside of the United States. However, if they cease to be considered “publicly available,” then these encryption products and underlying technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception or other appropriate government authorizations.

Furthermore, our activities are subject to U.S. economic sanctions laws and regulations that prohibit the shipment of certain products and services to countries, governments and persons targeted by U.S. embargoes or sanctions. Obtaining the necessary export license or other authorization for a particular sale may be time-

consuming and may result in the delay or loss of sales opportunities even if the export license ultimately may be granted. While we take precautions to prevent our platform from being exported in violation of these laws, including obtaining authorizations for our platform and performing geolocation IP blocking and screenings against United States and other lists of restricted and prohibited persons, we cannot guarantee that the precautions we take will prevent violations of export control and sanctions laws. Violations of U.S. sanctions or export control laws can result in significant fines or penalties and possible incarceration for responsible employees and managers could be imposed for criminal violations of these laws.

If our partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected through reputational harm as well as other negative consequences, including government investigations and penalties. We presently incorporate export control compliance requirements into our strategic partner agreements, however, our partners may not comply with such requirements.

Various countries regulate the import and export of certain encryption and other technology, including import and export licensing requirements. Some countries have enacted laws that could limit our ability to distribute our platform or could limit our customers’ ability to implement our platform in those countries. Changes in our platform or future changes in export and import regulations may create delays in the introduction of our platform in international markets, prevent our customers with international operations from launching our platform globally or, in some cases, prevent the export or import of our platform to certain countries, governments or persons altogether. Various governmental agencies have proposed additional regulation of encryption technology, including the escrow and government recovery of private encryption keys. Any change in export or import regulations, economic sanctions or related legislation, or change in the countries, governments, persons or technologies targeted by such regulations, could limit our ability to export or sell our platform to existing or potential customers with international operations. Any decreased use of our platform or limitation on our ability to export or sell our platform would adversely affect our business, results of operations and prospects.

Our international operations may subject us to potential adverse tax consequences.

We are expanding our international operations and staff to better support our growth into international markets. Our corporate structure and associated transfer pricing policies contemplate future growth into the international markets, and consider the functions, risks and assets of the various entities involved in the intercompany transactions. The amount of taxes we pay in different jurisdictions may depend on (1) the application of the tax laws of the various jurisdictions, including the United States, to our international business activities, (2) changes in tax rates, (3) new or revised tax laws or interpretations of existing tax laws and policies and (4) our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. Taxing authorities may challenge the pricing methodologies of our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were to occur and our position were not sustained, we could be required to pay additional taxes, interest and penalties. This could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

As of January 31, 2021, we had net operating loss, or NOL, carryforwards for federal and state income tax purposes of approximately $118 million and $80 million, respectively, which may be available to offset taxable income in the future, and which expire in various years beginning in 2031 for federal purposes and 2034 for state purposes if not utilized. Under current law, U.S. federal NOLs incurred in tax years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of taxable income. Accordingly, $79 million of our NOLs may be carried forward indefinitely for federal tax purposes. It is uncertain if and to what extent various states will enact tax policies or rules that conform to federal tax laws. A lack of future taxable income would adversely affect our ability to utilize NOLs incurred in tax years beginning on or before December 31, 2017 before they expire. In general, under Section 382 of the Internal Revenue Code of 1986,

as amended, or the Code, a corporation that undergoes an “ownership change” (which generally is defined under Section 382 of the Code and applicable Treasury Regulations as a greater than 50% change, by value, in its equity ownership over a three-year period) is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. We may experience a future ownership change under Section 382 of the Code that could affect our ability to utilize the NOLs to offset our income, some of which may be outside of our control. Furthermore, our ability to utilize NOLs of companies that we have acquired or may acquire in the future may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheets, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our business, financial condition and results of operations.

Changes in our effective tax rate or tax liability may have an adverse effect on our results of operations.

Our effective tax rate could increase due to several factors, including:

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changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;

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changes in tax laws, tax treaties and regulations or the interpretation of them, including the Tax Cuts and Jobs Act of 2017 and the Coronavirus Aid, Relief, and Economic Security (CARES) Act;

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changes in our assessment of our ability to realize our deferred tax assets that are based on estimates of our future results, the advisability and feasibility of possible tax planning strategies and the economic and political environments in which we do business;

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the outcome of current and future tax audits, examinations or administrative appeals; and

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limitations or adverse findings regarding our ability to do business in some jurisdictions.

Any of these developments could adversely affect our business, financial condition and results of operations.

We could be required to collect additional sales taxes or be subject to other tax liabilities that may increase the costs our clients would have to pay for our products and adversely affect our results of operations.

An increasing number of states have considered or adopted laws that attempt to impose tax collection obligations on out-of-state companies. Additionally, the Supreme Court of the United States ruled in 2018 in South Dakota v. Wayfair, Inc. et al, or Wayfair, that online sellers can be required to collect sales and use tax despite not having a physical presence in the buyer’s state. In response to Wayfair, or otherwise, state or local governments may adopt, or begin to enforce, laws requiring us to calculate, collect and remit taxes on sales in their jurisdictions. In addition, we are subject to indirect taxes in foreign jurisdictions, such as value-added tax and goods and services tax, in connection with certain foreign sales transactions. A successful assertion by one or more tax authorities requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently do collect some taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest that we otherwise have not accounted for in our financial statements. The imposition by tax authorities of indirect tax collection obligations on out-of-jurisdiction sellers also could create additional administrative burdens for us, put us at a competitive disadvantage if similar obligations are not imposed on our competitors and decrease our future sales, which could adversely affect our business, financial condition and results of operations.

Risks Related to Intellectual Property

Our platform incorporates certain third-party software obtained under licenses from third parties. We anticipate that we will continue to rely on such third-party software and development tools from third parties in the future. Although we believe that there are commercially reasonable alternatives to the third-party software, we currently license, including open source software, this may not always be the case, or it may be difficult or costly to migrate to other third-party software. Our use of additional or alternative third-party software may require us to enter into new license agreements with third parties, which may not be available on as favorable terms as our current licenses. In addition, integration of the third-party software used in our software with new third-party software may require significant work and require substantial investment of our time and resources, or require downtime affecting our service level commitments. Also, any undetected errors or defects, or security vulnerabilities, in third-party software could prevent the deployment or impair the functionality of our software, delay new updates or enhancements to our platform, result in a failure of our platform and injure our reputation.

We use open source software in our products, which could negatively affect our ability to sell our services or subject us to litigation or other actions.

We use open source software in our products, and we expect to continue to incorporate open source software in our services in the future. Few of the licenses applicable to open source software have been interpreted by courts, and there is a risk that these licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our products or to maintain the confidentiality of our proprietary source code. Moreover, we may encounter instances in which we have incorporated additional open source software in our proprietary software in a manner that is inconsistent with the terms of the applicable license or our current policies and procedures. While we have adopted guidelines for the appropriate use of, and regularly audit our use of, open source software, these measures may not always be effective. If we were to combine or link our proprietary software products with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software products and allow others to use it at no cost. If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our products that contained the open source software and required to comply with onerous conditions or restrictions on these products, which could disrupt the distribution and sale of these products or put our proprietary source code at risk.

From time to time, there have been claims challenging the ownership rights in open source software against companies that incorporate it into their products and the licensors of such open source software provide no warranties or indemnities with respect to such claims. As a result, we and our customers could be subject to lawsuits by parties claiming ownership of what we believe to be open source software. Litigation could be costly for us to defend, have a negative effect on our business, financial condition and results of operations, or require us to devote additional research and development resources to change our products. Some open source projects have known vulnerabilities and architectural instabilities and are provided on an “as-is” basis which, if not properly addressed, could negatively affect the performance of our product. If we inappropriately use or incorporate open source software subject to certain types of open source licenses that challenge the proprietary nature of our products, we may be required to re-engineer such products, discontinue the sale of such products or take other remedial actions.

Any failure to protect our proprietary technology and intellectual property rights could substantially harm our business, financial condition and results of operations.

Our success and ability to compete depend in part on our ability to protect our proprietary technology and intellectual property. To safeguard these rights, we rely on a combination of patent, trademark, copyright and trade secret laws and contractual protections, all of which provide only limited protection and may not now or in the future provide us with a competitive advantage.

As of July 31, 2021, we had 19 granted patents and six patents pending related to our platform and its technology. Our patent applications may not result in the issuance of a patent, or the examination process may require us to narrow our claims. Any patents that issue from any patent applications may not give us the protection that we seek or may be challenged, invalidated or circumvented. Any patents that may issue in the future from our pending or future patent applications may not provide sufficiently broad protection and may not be valid and enforceable in actions against alleged infringers or provide us with a competitive advantage. Any patents we have obtained or may obtain in the future may be found to be invalid or unenforceable in light of recent and future changes in the law, or because of technology developed prior to the inventions we have sought to patent or because of defects in our patent prosecution process. The United States Patent and Trademark Office, or the USPTO, and various foreign governmental patent agencies also require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and after a patent has issued. There are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

We have registered the “Braze” name and logo and other marks as trademarks in the United Kingdom, United States, EU, Japan, Singapore and Tonga. We have registrations and/or pending applications for “Braze” and additional marks in Canada. However, any future trademark registrations for pending or future applications may not be issued, and any registered trademarks may not be enforceable or provide adequate protection of our proprietary rights. The USPTO and various foreign trademark offices also require compliance with a number of procedural, documentary, fee payment and other similar provisions during the trademark registration process and after a registration has issued. There are situations in which noncompliance can result in abandonment or cancellation of a trademark filing, resulting in partial or complete loss of trademark rights in the relevant jurisdiction. If this occurs, our competitors might be able to enter the market under identical or similar brands.

In order to protect our proprietary technologies and processes, we also rely on trade secret laws and confidentiality and invention assignment agreements with our employees, consultants, strategic partners, vendors and others. Also, despite our efforts to protect our proprietary technology and trade secrets, unauthorized parties may attempt to misappropriate, copy, reverse engineer or otherwise obtain and use them. In addition, others may independently discover our trade secrets. Further, the contractual provisions that we enter into may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual property rights. Moreover, policing unauthorized use of our technologies, trade secrets and intellectual property is difficult, expensive and time-consuming, particularly in countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. As we expand our activities outside of the United States, our exposure to unauthorized copying and use of our platform and proprietary information may increase. We may be unable to determine the extent of any unauthorized use or infringement of our platform, technologies or intellectual property rights.

The steps that we take may not be adequate to protect our proprietary technology and intellectual property, others may develop or patent similar or superior technologies, products or services, or our trademarks, patents and other intellectual property may be challenged, invalidated or circumvented by others. Furthermore, effective trademark, patent, copyright and trade secret protection may not be available or commercially feasible in every country in which our software is available or where we have employees or independent contractors.

In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Our failure to secure, protect and enforce our intellectual property rights could materially adversely affect our brand and business. An adverse determination of any litigation proceedings could put our intellectual property at risk of being invalidated or interpreted narrowly and could put our related patents, patent applications and trademark filings at risk of not issuing or being cancelled. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, some of our confidential or sensitive information could be compromised by disclosure in the event of litigation. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further sales or the implementation of our platform, impair the functionality of our platform, delay introductions of new functionality to our platform, result in our substituting inferior or more costly technologies into our platform or injure our reputation. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. If we fail to meaningfully protect our intellectual property and proprietary rights, our business, financial condition and results of operations could be adversely affected.

We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.

We cannot guarantee that the operation of our business does not infringe the intellectual property rights of third parties. Companies in the software and technology industries, including some of our current and potential competitors, own significant numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. In addition, many of these companies have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. Further, patent litigation may involve patent holding companies, commonly known as patent “trolls,” or other adverse patent owners that have no relevant product revenue and against which our patents may therefore provide little or no deterrence. In the past, we have been subject to allegations of patent infringement that were unsuccessful, and we may in the future be subject to claims that we have misappropriated, misused, or infringed other parties’ intellectual property rights, and, to the extent we gain greater market visibility or face increasing competition, we face a higher risk of being the subject of intellectual property infringement claims, which is not uncommon with respect to enterprise software companies. In addition, we may in the future be subject to claims that employees or contractors, or we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of our competitors or other parties. Because patent applications can take years to issue and are often afforded confidentiality for some period of time, there may currently be pending applications, unknown to us, that later result in issued patents that could cover one or more of our products. To the extent that intellectual property claims are made against our customers based on their usage of our technology, we have certain obligations to indemnify and defend such customers from those claims. The term of our contractual indemnity provisions often survives termination or expiration of the applicable agreement. Large indemnity payments, defense costs or damage claims from contractual breach could adversely affect our business, financial condition and results of operations.

Any intellectual property claims, with or without merit, could be very time-consuming, could be expensive to settle or litigate, could divert our management’s attention and other resources and could result in adverse publicity. These claims could also subject us to making substantial payments for legal fees, settlement payments and other costs or damages, potentially including treble damages if we are found to have willfully infringed patents or copyrights. Intellectual property claims could also result in our having to stop making, selling, offering for sale or using technology found to be in violation of a third party’s rights. We might be required to seek a license for the third-party intellectual property rights, which may not be available on reasonable terms or at all.

Even if a license is available to us, we may be required to pay significant upfront fees, milestone payments or royalties, which would increase our operating expenses. Moreover, to the extent we only have a license to any intellectual property used in our platform, there may be no guarantee of continued access to such intellectual property, including on reasonable terms. As a result, we may be required to develop alternative non-infringing technology, which could require significant effort and expense. If a third party is able to obtain an injunction preventing us from accessing such third-party intellectual property rights, or if we cannot license or develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of our products or cease business activities covered by such intellectual property and may be unable to compete effectively. Any of these results would adversely affect our business, financial condition and results of operations.

We could face liability, or our reputation might be harmed, as a result of the activities of our customers, the content sent through our platform or the data they store on our servers.

As a provider of cloud-based solutions, we may be subject to potential liability for the activities of our customers on or in connection with the content or data they store on or send through our servers. Although our customer terms of use and our acceptable use policy, or AUP, prohibit (1) illegal use of our services by our customers, (2) the use of our services for certain activities that do not comply with industry standards and guidelines outlined in our AUP or (3) the use of our services in any manner that would infringe, misappropriate or otherwise violate the intellectual property rights of third parties, customers may nonetheless engage in prohibited activities or upload or store content with us in violation of our agreement, our AUP, applicable law or the customer’s own policies, which could subject us to liability and/or harm our reputation.

We do not typically monitor the content, activities or messages of our customers in connection with their use of our services, so inappropriate content may be sent to third parties, which could subject us to legal liability. Even if we comply with legal obligations to remove or disable certain content, our customers may continue to send messages through our platform that third parties may find hostile, offensive or inappropriate. The activities of our customers or the content of our customers’ messages may lead us to experience adverse political, business and reputational consequences, especially if such use is high profile. Conversely, actions we take in response to the activities of our customers or users, up to and including suspending their use of our products or services, may harm our brand and reputation.

There are certain statutory and common law frameworks and doctrines that offer defenses against liability for customer activities, including the Digital Millennium Copyright Act, the Communications Decency Act, the fair use doctrine in the United States and the Electronic Commerce Directive in the EU. Although these and other statutes and case law in the United States offer certain defenses against liability from customer activities under U.S. copyright law or regarding secondary liability from TCPA or CAN-SPAM, they are subject to uncertain or evolving judicial interpretation and regulatory and legislative amendments, and in any event we cannot assure you that we will be successful in asserting them. In addition, pending or recently adopted legislation in the EU may impose additional obligations or liability on us associated with content uploaded by users to our platform. Laws governing these activities are unsettled in many international jurisdictions, or may prove difficult or impossible for us to comply with in some international jurisdictions. Even if ultimately resolved in our favor, we may become involved in related complaints, lawsuits or investigations which add cost to our doing business and may divert management’s time and attention or otherwise harm our reputation.

Risks Related to Socioeconomic Factors

Our future revenue and results of operations could be harmed if the increases in demand we have seen from certain industries as a result of the COVID-19 pandemic fail to continue after the pandemic ends.

In response to the COVID-19 pandemic, including the emergence of new variant strains of COVID-19, governments have instituted shelter-in-place orders, social distancing requirements and similar measures to slow infection rates. These restrictions have prompted shifts from physical commerce to ecommerce, from in room dining to take out and delivery, from gyms to at home health and fitness and from the theaters to in-home media

streaming services. Despite our penetration in these industries that have benefited from increased demand in the COVID-19 era, this trend may not continue. After the COVID-19 pandemic has abated, some of our customers may experience decreases or decreased growth rates in transactions, which would negatively affect our business, financial condition and results of operations. We may also experience decreases or decreased growth rates in sales of new subscriptions to some of our customers, which would adversely affect our business, financial condition and results of operations.

In light of the uncertain and rapidly evolving situation relating to the spread of COVID-19, we have taken measures intended to help minimize the risk of the virus to our employees and the communities in which we participate. These measures included temporarily requiring manager approval for travel for our employees, and limiting such approval to situations in which there is a valid business reason for such travel; canceling, postponing, or holding virtually Braze events; and encouraging employee attendance at industry events or work-related meetings to be done virtually, if possible. Although we have recently reopened and may continue to selectively reopen certain of our offices, permit some travel, and hold certain in-person meetings and events in compliance with applicable government orders and public health guidelines, the majority of our employees continue to work remotely.

We have a distributed workforce and our employees are accustomed to working remotely and working with others who are working remotely. However, the continued limitation on in-person travel and in-person meetings could negatively impact our marketing efforts or the length of our average recruiting cycle for employees across the organization. Further, operational or other challenges could arise as we and our customers, partners, suppliers and vendors and other parties with whom we do business continue to operate remotely. In addition, our management team has spent, and will likely continue to spend, significant time, attention, and resources monitoring the COVID-19 pandemic, including the emergence of new variant strains of COVID-19, and seeking to manage its effects on our business and workforce. The emergence of the delta and other new variant strains of COVID-19 could also adversely affect workforces, economies and financial markets globally, potentially leading to an economic downturn and a reduction in customer spending on our products or an inability for our customers, partners, suppliers or vendors or other parties with whom we do business to meet their contractual obligations.

While it is not possible at this time to predict the duration and extent of the impact that COVID-19 or the emergence of new variant strains of COVID-19 could have on worldwide economic activity and our business in particular, the continued spread of COVID-19, especially in light of the emergence of new variant strains of COVID-19, the timing, distribution, rate of public acceptance and efficacy of vaccines and other treatments, and the measures taken by governments, businesses and other organizations in response to COVID-19 could adversely impact our business, financial condition and results of operations. Moreover, to the extent the COVID-19 pandemic adversely affects our business, financial condition, and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including, but not limited to, those related to our ability to expand within our existing customer base, acquire new customers, develop and expand our sales and marketing capabilities, and expand internationally.

Natural catastrophic events and human-made problems such as power disruptions, computer viruses, global pandemics, data security breaches and terrorism may disrupt our business.

We rely heavily on our network infrastructure and information technology systems for our business operations. An online attack, damage as a result of civil unrest, earthquake, fire, terrorist attack, power loss, global pandemics (such as the COVID-19 pandemic, including the emergence of new variant strains of COVID-19), telecommunications failure or other similar catastrophic event could cause system interruptions, delays in accessing our service, reputational harm and loss of critical data. Such events could prevent us from providing our platform and products to our customers. A catastrophic event that results in the destruction or disruption of our data centers, or our network infrastructure, or information technology systems, including any errors, defects, or failures in third-party hardware, could affect our ability to conduct normal business operations and adversely affect our results of operations. In addition, many companies that provide cloud-based services have reported a significant increase in cyberattack activity since the beginning of the COVID-19 pandemic.

Risks Related to Being a Public Company

We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our Class A common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including the auditor attestation requirements of Section 404, or Section 404, of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our Class A common stock less attractive to investors. In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards.

We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year following the fifth anniversary of this offering, (2) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more, (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities and (4) the last day of the fiscal year in which the market value of our Class A common stock held by non-affiliates exceeded $700 million as of July 31 of such fiscal year.

We cannot predict if investors will find our Class A common stock less attractive if we choose to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard as a result of our election to use the extended transition period, our future results of operations may not be as comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock, and our share price may be more volatile.

Prior to this offering, we were a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. In connection with the audits of our consolidated financial statements as of and for the fiscal years ended January 31, 2020 and 2021 and the preparation of our unaudited condensed consolidated financial statements for the six months ended July 31, 2021, we identified three material weaknesses in our internal control, one over the financial statement close process specifically related to insufficient written policies and procedures for accounting and financial reporting and related controls, the second over the lack of properly designed controls related to accounting for revenue recognition in accordance with standards under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers and the third related to our inadequate information technology controls for systems that are relevant to the preparation of financial statements. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

We are working to remediate these material weaknesses through the development and implementation of processes and controls over the financial reporting process. Specifically, we have:

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invested in and continue to hire additional internal resources with appropriate knowledge and expertise to effectively operate financial reporting processes and internal controls;

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engaged external resources to assist with the remediation efforts and internal control execution, including the development of policies and procedures in certain areas;

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begun adopting new information security policies and procedures, including training for users to further educate them on best practices for information security procedures;

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begun developing program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are authorized and implemented appropriately;

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begun developing financial application user access controls designed to ensure appropriate segregation of duties, restriction and privileges to personnel;

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begun developing computer operations controls designed to ensure system interfaces and batch jobs process completely and accurately;

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begun training application users to further educate them on best practices for information security procedures; and

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begun implementing a revenue recognition system designed to reduce the number of manual controls required to recognize revenue.

We will also continue to invest in financial operations and reporting applications on an ongoing basis.

While we have designed and are implementing new controls to remediate these material weaknesses, they have not been in operation for a sufficient period of time to demonstrate that the material weaknesses have been remediated. We cannot assure you that the measures we have taken to date will be sufficient to remediate the material weaknesses we identified or avoid the identification of additional material weaknesses in the future. If the steps we take do not remediate the material weaknesses in a timely manner, there could continue to be a reasonable possibility that our internal control deficiencies or others could result in a material misstatement of our financial statements that would not be prevented or detected on a timely basis.

As a public company, we will be required to further design, document and test our internal control over financial reporting to comply with Section 404. We cannot be certain that additional material weaknesses and control deficiencies will not be discovered in the future. If material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results accurately on a timely basis or adequately reduce the risk of fraud, which could cause our reported financial results to be materially misstated and result in the loss of investor confidence or delisting and cause the market price of our Class A common stock to decline. If we have material weaknesses in the future, it could affect the financial results that we report or create a perception that those financial results do not fairly state our financial position or results of operations. Either of those events could have an adverse effect on the value of our Class A common stock.

Further, even if we conclude that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our future reporting obligations.

Risks Related to Ownership of Our Class A Common Stock and This Offering

We will have broad discretion in the use of the net proceeds to us from this offering and may not use them effectively.

We will have broad discretion in the application of the net proceeds that we receive from this offering, including for any of the purposes described in the section titled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds that we receive from this offering, our ultimate use may vary substantially from our currently intended use. Investors will need to rely upon the judgment of our management with respect to the use of such proceeds. Pending use, we may invest the net proceeds that we receive from this offering in short-term, investment-grade, interest-bearing securities, such as money market accounts, certificates of deposit, commercial paper and guaranteed obligations of the U.S. government that may not generate a high yield for our stockholders. If we do not use the net proceeds that we receive in this offering effectively, our business, financial condition, results of operations and prospects could be adversely affected, and the market price of our Class A common stock could decline.

We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our Class A common stock.

We have never declared or paid any cash dividends on our common stock and we do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors and governed by the limitations of any credit agreements we may become party to. Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

Our Class B common stock has ten votes per share and our Class A common stock, which is the stock we are offering in this offering, has one vote per share. As a result, holders of our Class B common stock will collectively beneficially own shares representing approximately % of the voting power of our outstanding capital stock following the completion of this offering, and our executive officers, directors and holders of 5% or more of our common stock will collectively beneficially own, in the aggregate, shares representing approximately % of the voting power of our outstanding capital stock immediately following completion of this offering, based on the number of shares outstanding as of July 31, 2021. As a result, the holders of our Class B common stock, and in particular our executive officers, directors and holders of 5% or more of our common stock, will be able to exercise considerable influence over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or our assets, even if their stock holdings represent less than 50% of the outstanding shares of our capital stock. This concentration of ownership will limit the ability of other stockholders to influence corporate matters and may cause us to make strategic decisions that could involve risks to holders of our Class A common stock or that may not be aligned with the interests of holders of our Class A common stock. This control may adversely affect the market price of our Class A common stock.

Further, future transfers by holders of our Class B common stock will generally result in those shares converting into shares of our Class A common stock, subject to limited exceptions, such as certain transfers effected for tax or estate planning purposes. See the section titled “Description of Capital Stock — Class A Common Stock and Class B Common Stock — Permitted Transfers of Class B Common Stock.” The conversion

of shares of our Class B common stock into shares of our Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term.

We cannot predict the impact our dual class structure may have on the market price of our Class A common stock.

We cannot predict whether our dual class structure, combined with the concentrated control of our stockholders who held our capital stock prior to the completion of this offering, including our executive officers, employees and directors, investors and their affiliates, will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple class share structures in certain of their indexes. In July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices. Under the announced policies, our dual class capital structure would make us ineligible for inclusion in either of these indices. Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as they will be in effect upon the completion of this offering, may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws will include provisions that:

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authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our board of directors that may be senior to our Class A common stock;

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require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

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specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors or our chief executive officer;

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establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;

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establish that our board of directors is divided into three classes, with each class serving three-year staggered terms;

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prohibit cumulative voting in the election of directors;

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provide that our directors may be removed for cause only upon the vote of at least 66 2/3% of our outstanding shares of voting stock;

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provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and

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require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of voting stock to amend our bylaws and certain provisions of our certificate of incorporation.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is

responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our Class A common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that holders of our Class A common stock would receive a premium for their shares of our Class A common stock in an acquisition.

The provision of our amended and restated certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.

Our amended and restated certificate of incorporation, as it will be in effect upon the completion of this offering, will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware be the sole and exclusive forum for:

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any derivative claim or cause of action brought on our behalf;

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any claim or cause of action asserting a breach of fiduciary duty;

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any claim or cause of action against us arising under the DGCL;

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any claim or cause of action arising under or seeking to interpret our amended and restated certificate of incorporation or our amended and restated bylaws; and

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any claim or cause of action against us that is governed by the internal affairs doctrine.

Our amended and restated certificate of incorporation will further provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolutions of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the Securities Act, including all causes of action asserted against any defendant named in such complaint. The exclusive forum clauses described above shall not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction. For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying this offering.

Although we believe these provisions benefit us by providing increased consistency in the application of applicable law in the types of lawsuits to which they apply, the provisions may have the effect of discouraging lawsuits against our directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and there is uncertainty as to whether a court would enforce such provisions. In addition, investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. It is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in such action. If so, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition and results of operations.

No public market for our Class A common stock currently exists, and an active public trading market may not develop or be sustained following this offering.

No public market for our Class A common stock currently exists. An active public trading market for our Class A common stock may not develop following the completion of this offering or, if developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

Future sales of our Class A common stock in the public market could cause the market price of our Class A common stock to decline.

Sales of a substantial number of shares of our Class A common stock in the public market following the completion of this offering, or the perception that these sales might occur, could depress the market price of our Class A common stock and could impair our ability to raise capital through the sale of additional equity securities. Many of our existing equity holders have substantial unrecognized gains on the value of the equity they hold, and therefore they may take steps to sell their shares or otherwise secure the unrecognized gains on those shares. We are unable to predict the effect that such sales may have on the prevailing market price of our Class A common stock.

All of the Class A common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities Act, except for any shares held by our affiliates as defined in Rule 144 under the Securities Act.

All of our directors, executive officers and the holders of substantially all of our capital stock are subject to lock-up agreements with the underwriters or agreements with market stand-off provisions with us that restrict their ability to transfer shares until the earlier of (a) the commencement of trading on the 180th day after the date of this prospectus or (b) the commencement of trading on the second full trading day following our second public release of quarterly or annual financial results (which for this purpose shall not include “flash” numbers or preliminary, partial earnings) following the date of this prospectus, subject to certain exceptions. This restricted period will end with respect to a number of shares and vested options equal to 20% of the then outstanding securities (including shares of Class A common stock, stock options and other equity) held by our current and former employees, contractors, consultants and advisors (excluding our directors, executive officers and individuals associated or affiliated with any of our institutional investors) at the commencement of trading on the 50th day after the date of this prospectus. This restricted period will end with respect to a number of shares and vested options equal to 20% of the then outstanding securities (including shares of Class A common stock, stock options and other equity) held by all other holders, or approximately shares based on outstanding securities held by such holders on July 31, 2021, at the commencement of trading on the date that is two trading days after the date that the closing price of our Class A common stock on the Nasdaq Global Select Market exceeds 120% of the initial public offering price of our Class A common stock on at least 10 trading days in any 15-day trading day period (including the last trading day of such period) ending on or after the 48th day after the date of this prospectus. We may, in our discretion, extend any such early release date as reasonably necessary for administrative proceeding. These agreements are further described in the sections titled “Shares Eligible for Future Sale” and “Underwriting.”

Goldman Sachs & Co. LLC may, in its sole discretion, permit our stockholders who are subject to these lock-up agreements to sell shares prior to the expiration of the lock-up agreements, subject to applicable notice requirements. If not earlier released, all such shares of capital stock will become eligible for sale upon expiration of the lock-up period, except for any shares held by our affiliates as defined in Rule 144 under the Securities Act.

As of July 31, 2021, there were 13,575,195 shares of Class B common stock subject to outstanding stock options and restricted stock units, or RSUs. We intend to register all of our common stock issuable upon exercise of outstanding stock options, settlement of outstanding RSUs or otherwise issuable pursuant to the terms of any equity incentives we may grant in the future, for public resale under the Securities Act. Such underlying common stock will become eligible for sale in the public market to the extent such options are exercised or RSUs are settled, subject to the lock-up agreements described above and compliance with applicable securities laws.

Further, based on shares outstanding as of July 31, 2021, holders of approximately 63,943,811 shares of our Class B common stock, or % of our outstanding capital stock after the completion of this offering (after giving effect to sales by selling stockholders in this offering and assuming no exercise of the underwriters’ option to purchase additional shares from us), will have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

You will experience immediate and substantial dilution in the net tangible book value of the Class A common stock you purchase in this offering.

The initial public offering price of our Class A common stock is substantially higher than the pro forma net tangible book value per share immediately after this offering. If you purchase Class A common stock in this offering, you will suffer immediate dilution of approximately $ per share, representing the difference between our pro forma as adjusted net tangible book value per share after giving effect to the sale of Class A common stock in this offering and the assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus. See the section titled “Dilution.”

General Risk Factors

The price of our Class A common stock may be volatile, and you may lose some or all of your investment.

The market price of our Class A common stock may be highly volatile and may fluctuate substantially as a result of a variety of factors. Factors that may affect the market price of our Class A common stock include:

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actual or anticipated fluctuations in our financial condition and results of operations;

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variance in our financial performance from expectations of securities analysts;

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changes in the prices of our products and services;

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changes in our projected financial condition and results of operations;

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changes in laws or regulations applicable to the provision of our products and services;

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announcements by us or our competitors of significant business developments, acquisitions or new offerings;

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security breaches impacting us or similar companies;

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our involvement in any litigation;

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future sales of our Class A common stock by us or our stockholders, as well as the anticipation of lock-up releases, or our sales of other securities in the future;

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changes in senior management or key personnel;

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the trading volume of our Class A common stock;

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changes in the anticipated future size and growth rate of our market; and

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general economic, regulatory and market conditions.

The stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may negatively impact the market price of our Class A common stock. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial costs and divert our management’s attention.

Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise will dilute all other stockholders.

We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors and consultants under our equity incentive plans. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in companies, products, services or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our Class A common stock to decline.

If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our share price and trading volume could decline.

The trading market for our Class A common stock depends, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. Our business results may vary significantly from such analyst estimates or any analyst consensus due to a number of factors, many of which are outside of our control, including due to the global economic uncertainty and financial market conditions caused by the COVID-19 pandemic, which could adversely affect our business, financial condition and results of operations. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to support compliance with our public company responsibilities and corporate governance practices.

As a public company, we will incur significant finance, legal, accounting and other expenses, including director and officer liability insurance, that we did not incur as a private company, which we expect to further increase after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, stock exchange listing requirements, and other applicable securities rules and regulations impose various requirements on public companies in the United States. Our management and other personnel devote a substantial amount of time to support compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

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our expectations regarding our revenue, expenses and other operating results;

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our ability to acquire new customers and successfully retain existing customers;

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our ability to increase usage of our platform and upsell and cross-sell additional products;

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our ability to achieve or sustain our profitability;

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future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;

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the costs and success of our marketing efforts, and our ability to promote our brand;

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our reliance on key personnel and our ability to identify, recruit and retain skilled personnel;

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our growth strategies for our platform and our ability to effectively manage our growth, including any international expansion;

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the estimated addressable market opportunity for our platform;

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our ability to protect and enforce our intellectual property rights and any costs associated therewith;

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the effect of the COVID-19 pandemic, including the emergence of new variant strains of COVID-19, or other public health crises on our business, industry and the global economy;

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our ability to compete effectively with existing competitors and new market entrants; and

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the size and growth rates of the markets in which we compete.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this prospectus and are inherently uncertain. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information.

The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this

prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

MARKET, INDUSTRY AND OTHER DATA

This prospectus contains statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. While we believe the industry and market data included in this prospectus are reliable and are based on reasonable assumptions, these data involve many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Among other items, certain of the market research included in this prospectus was published prior to the outbreak of the COVID-19 pandemic and did not anticipate the virus or the impact it has caused on our industry. We have utilized this pre-pandemic market research in the absence of updated sources. These and other factors could cause results to differ materially from those expressed in the projections and estimates made by the independent third parties and us.

The sources of certain statistical data, estimates and forecasts contained in this prospectus are the following independent industry publications or reports:

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IDC, Worldwide Marketing Campaign Management Software Forecast, 2020–2024: Flattening the Growth Curve by $6.6 Billion, published June 2020;

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Forrester, The Forrester Wave: Mobile Engagement Automation, Q3 2020, published August 2020; and

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Forrester, The Forrester Wave: Cross-Channel Campaign Management (Independent Platforms), Q3 2021, published August 2021.

In addition, certain information relating to customer engagement strategies and solutions are based on the following study that was commissioned by us:

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Forrester Consulting, Build Brand Humanity by Mastering Empathy at Scale, published October 2019.

USE OF PROCEEDS

We estimate that we will receive net proceeds from this offering of approximately $ million (or approximately $ million if the underwriters exercise their option to purchase additional shares of our Class A common stock from us in full) based on an assumed initial public offering price of $ per share of Class A common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any of the proceeds from the sale of Class A common stock in this offering by the selling stockholders identified in this prospectus.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share of Class A common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of Class A common stock offered by us would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming the assumed initial public offering price of $ per share of Class A common stock remains the same, and after deducting estimated underwriting discounts and commissions.

The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our Class A common stock and facilitate our future access to the capital markets. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds we receive from this offering. However, we currently intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures. We may also use a portion of the net proceeds we receive from this offering to acquire complementary businesses, products, services or technologies. However, we do not have agreements or commitments to enter into any acquisitions at this time.

We will have broad discretion over how to use the net proceeds we receive from this offering. We intend to invest the net proceeds we receive from this offering that are not used as described above in investment-grade, interest-bearing instruments.

DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business, and we do not anticipate declaring or paying any cash dividends in the foreseeable future. Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will be subject to requirements under Delaware law and depend on then-existing conditions, including our financial condition, operating results, contractual restrictions (including in our then-existing debt arrangements), capital requirements, business prospects and other factors our board of directors may deem relevant.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of July 31, 2021:

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on an actual basis;

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on a pro forma basis, giving effect to (1) the reclassification of our common stock into an equal number of shares of Class B common stock, (2) the automatic conversion of all outstanding shares of convertible preferred stock into an aggregate of 62,830,697 shares of Class B common stock, (3) the automatic exercise of outstanding common stock warrants that, if not exercised prior to this offering, will be automatically exercised into an aggregate of shares of Class B common stock, assuming an initial public offering price of $ per share of Class A common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, (4) the filing and effectiveness of our amended and restated certificate of incorporation, each of which will occur immediately prior to the completion of this offering, (5) the issuance of 62,874 shares of Class B common stock from the settlement of certain outstanding RSUs for which the vesting conditions will be satisfied in connection with this offering and (6) stock-based compensation expense of approximately $ million related to RSUs for which the vesting conditions will be satisfied in connection with this offering, in each case as if such events had occurred on July 31, 2021; and

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on a pro forma as adjusted basis, giving effect to (1) the pro forma adjustments described above and (2) our receipt of $ million in estimated net proceeds from the sale of shares of Class A common stock that we are offering at an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

You should read this table together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.


	As of July 31, 2021
	Actual		Pro Forma	Pro Forma As Adjusted
			(unaudited)	(unaudited)
	(in thousands except share and per share amounts)
Cash, cash equivalents and marketable securities	$	78,730	$	$

Convertible preferred stock, $0.0001 par value, 65,318,250 shares authorized, 62,830,697 shares issued and outstanding, actual, and no shares authorized, issued and outstanding, pro forma and pro forma as adjusted	$	174,229	$	$

Stockholders’ (deficit) equity:
Preferred stock, $0.0001 par value, no shares authorized, issued, and outstanding, actual, and shares authorized, no shares issued and outstanding, pro forma and pro forma as adjusted		—
Common stock, $0.0001 par value, 100,000,000 shares authorized, 20,657,118 shares issued and outstanding, actual, and no shares authorized, issued and outstanding, pro forma and pro forma as adjusted		—
Class A common stock, $0.0001 par value, no shares authorized, issued and outstanding, actual, shares authorized and no shares issued and outstanding, pro forma, shares authorized and shares issued and outstanding, pro forma as adjusted		—
Class B common stock, $0.0001 par value, no shares authorized, issued and outstanding, actual, shares authorized and shares issued and outstanding, pro forma and pro forma as adjusted		—
Additional paid-in capital		45,947
Accumulated other comprehensive loss		(102)
Accumulated deficit		(163,304)

Total stockholders’ (deficit) equity	$	(117,459)	$	$

Total capitalization	$	56,770	$	$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share of Class A common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) each of our pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders’ (deficit) equity and total capitalization by approximately $ million, assuming the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of Class A common stock offered by us would increase (decrease) each of our pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders’ (deficit) equity and total capitalization by approximately $ million, assuming the assumed initial public offering price of $ per share of Class A common stock remains the same, and after deducting estimated underwriting discounts and commissions.

•

12,859,821 shares of Class B common stock issuable on the exercise of stock options outstanding as of July 31, 2021 granted under the 2011 Plan with a weighted-average exercise price of $11.23 per share;

•

654,167 shares of Class B common stock issuable upon the vesting and settlement of RSUs outstanding as of July 31, 2021 granted under the 2011 Plan for which the vesting conditions will not be satisfied on or before the date of this offering;

•

shares of Class A common stock reserved for future issuance under our 2021 Plan, plus a number of shares of Class A common stock not to exceed (consisting of the number of shares that remain available under the 2011 Plan as of immediately prior to the effective date of the 2021 Plan and any shares underlying options and RSUs outstanding under the 2011 Plan that expire or otherwise terminate prior to exercise or settlement, as applicable, after the effective date of the 2021 Plan), as well as any future increases in the number of shares of common stock reserved for issuance thereunder, as more fully described in the section titled “Executive Compensation — Equity Incentive Plans”;

•

shares of Class A common stock reserved for issuance under our ESPP, plus any future increases in the number of shares of common stock reserved for issuance thereunder, as more fully described in the section titled “Executive Compensation — Equity Incentive Plans.”; and

•

964,647 shares of Class A common stock that we are reserving and may donate to fund our social impact and environmental, social, and governance initiatives, as more fully described in “Business—Our Culture—Social Responsibility and Community Initiatives.”

DILUTION

If you invest in our Class A common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share of Class A common stock and the pro forma as adjusted net tangible book value per share immediately after this offering.

Our pro forma net tangible book value as of July 31, 2021 was $ million, or $ per share of common stock. Our pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the number of our shares of common stock outstanding as of July 31, 2021, after giving effect to (1) the reclassification of our common stock into an equal number of shares of Class B common stock, (2) the automatic conversion of all outstanding shares of convertible preferred stock into an aggregate of 62,830,697 shares of Class B common stock, (3) the automatic exercise of outstanding common stock warrants that, if not exercised prior to this offering, will be automatically exercised immediately prior to the completion of this offering into an aggregate of shares of Class B common stock, assuming an initial public offering price of $ per share of Class A common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, each of which will occur immediately prior to the completion of this offering, and (4) the issuance of 62,874 shares of Class B common stock following the closing of this offering from the settlement of certain outstanding RSUs for which the vesting conditions will be satisfied in connection with this offering.

After giving effect to the sale by us of shares of Class A common stock in this offering at an assumed initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of July 31, 2021 would have been $ million, or $ per share. This amount represents an immediate increase in pro forma as adjusted net tangible book value of $ per share to our existing stockholders and an immediate dilution of $ per share to new investors purchasing Class A common stock in this offering. We determine dilution by subtracting the pro forma as adjusted net tangible book value per share after this offering from the initial public offering price per share paid by investors purchasing Class A common stock in this offering. The following table illustrates this dilution on a per share basis:


Assumed initial public offering price per share			$
Historical net tangible book value per share as of July 31, 2021	$	1.20
Increase per share attributable to the pro forma adjustments described above
Pro forma net tangible book value per share as of July 31, 2021
Increase in pro forma as adjusted net tangible book value per share attributable to new investors purchasing shares in this offering

Pro forma as adjusted net tangible book value per share after giving effect to this offering

Dilution per share to new investors in this offering			$

The dilution information discussed above is illustrative only and may change based on the actual initial public offering price and other terms of this offering. A $1.00 increase (decrease) in the assumed initial public offering price of $ per share of Class A common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering by $ per share and increase (decrease) the dilution to new investors by $ per share, in each case assuming the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of Class A common stock offered by us would increase our pro forma as adjusted net tangible book value by approximately $ per share and increase (decrease) the dilution to new investors by approximately $ per share, in each case assuming the assumed initial public offering price of $ per share of Class A common stock remains the same, and after deducting estimated underwriting discounts and commissions.

If the underwriters exercise their option to purchase additional shares of Class A common stock from us in full, our pro forma as adjusted net tangible book value would be $ per share, and the dilution in pro forma net tangible book value per share to new investors in this offering would be $ per share.

The following table summarizes, as of July 31, 2021, on a pro forma as adjusted basis as described above, the number of shares of our common stock, the total consideration and the average price per share (1) paid to us by existing stockholders and (2) to be paid by new investors acquiring our Class A common stock in this offering at an assumed initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.


	Shares Purchased				Total Consideration				Average Price Per Share
	Number	Percent			Amount	Percent
Existing stockholders				%				%	$
New investors

Totals			100.0	%			100.0	%

Sales by the selling stockholders identified in this prospectus will cause the number of shares held by existing stockholders to be reduced to shares, or % of the total number of shares of our capital stock outstanding following the completion of this offering, and will increase the number of shares held by new investors to shares, or % of the total number of shares of our capital stock outstanding following the completion of this offering.

Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors and total consideration paid by all stockholders by approximately $ million, assuming that the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of Class A common stock offered by us would increase (decrease) the total consideration paid by new investors and total consideration paid by all stockholders by $ million, assuming the assumed initial public offering price of $ per share of Class A common stock remains the same, and after deducting estimated underwriting discounts and commissions.

The number of shares of Class A common stock and Class B common stock that will be outstanding after this offering is based on no shares of Class A common stock and shares of Class B common stock outstanding as of July 31, 2021, and excludes:

•

12,859,821 shares of Class B common stock issuable on the exercise of stock options outstanding as of July 31, 2021 under the 2011 Plan with a weighted-average exercise price of $11.23 per share;

•

751,577 shares of Class B common stock issuable upon the vesting and settlement of outstanding RSUs granted after July 31, 2021 under the 2011 Plan for which the for which the vesting conditions will not be satisfied on or before the date of this offering;

•

964,647 shares of Class A common stock that we are reserving and may donate to fund our social impact and environmental, social, and governance initiatives, as more fully described in “Business—Our Culture—Social Responsibility and Community Initiatives.”

To the extent that any outstanding options are exercised, outstanding RSUs vest and settle or new options or RSUs are issued under our stock-based compensation plans, or that we issue additional shares of capital stock in the future, there will be further dilution to investors participating in this offering. If all outstanding options and RSUs under our 2011 Plan as of July 31, 2021 were exercised or settled, as applicable, then our existing stockholders, including the holders of these options and RSUs, would own %, and our new investors would own %, of the total number of shares of our capital stock outstanding following the completion of this offering.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. The objective of this section is to provide investors with an understanding of the financial drivers and levers in our business and describe the financial performance of the business.

Overview

Braze was founded in 2011 in New York, New York. Since that time we have developed and enhanced our platform, launched new products and expanded our operations. Key milestones and strategic initiatives on our journey include the following:


		2011:				Braze founded

		2012:				Launched Email and iOS SDK

		2013:				Launched Android SDK

		2014:				Launched Intelligence Suite, Unity SDK and Web SDK

		2015:				Added real-time responses via action-triggered Campaigns

		2016:				Opened first international office in London

						Launched Canvas, our drag-and-drop visual customer journey management environment

		2017:				Launched Braze Currents to facilitate the real-time streaming of data to third parties

		2018:				Opened first Singapore office, marking official entry into APAC market

						Launched Partnership Ecosystem, Braze Alloys

		2019:				Surpassed $100 million in ARR

						Channel expansion into SMS, AMP for Email, Content Cards and Roku

		2020:				Launched Tech for Black Founders

						Launched Braze Predictive Suite and Facebook Audience Sync, and went multi-cloud by expanding from Amazon Web Services to include full Azure hosting options

		2021:				Surpassed $200 million in ARR

						Expanded messaging capabilities with MMS and 2-way SMS conversations, and launched Google Audience Sync

We primarily generate revenue from the sale of subscriptions to customers for the use of our platform. The terms of our subscription agreements are primarily annual with a dollar weighted-average contract length of 24 months as of July 31, 2021. Our subscription fees are principally based on an upfront commitment by our customers for a specific number of monthly active users, on a cost-per-message basis for volume of email and/or SMS messages sent, platform access and/or support and certain add-on products. Additionally, we provide professional services, which better enable customers to successfully onboard and use our platform, including certain premium professional services such as email deliverability support and dedicated technical support staff. Subscription and professional services fees comprised 93.2% and 6.8% of our revenue, respectively, for fiscal year 2020, 93.9% and 6.1%, respectively, for fiscal year 2021, 93.1% and 6.9%, respectively, for the six months ended July 31, 2021 and 93.8% and 6.2%, respectively, for the six months ended July 31, 2020.

Our customers include many established global enterprises and leading technology innovators. Our customers span a wide variety of sizes and industries, including retail, eCommerce, media, entertainment and on-demand services.

We have a highly efficient go-to-market strategy focused on acquiring new customers and expanding use of our products for existing customers. As of July 31, 2021, we had 1,119 customers, up from 890 customers as of January 31, 2021 and 728 customers as of January 31, 2020. In addition, 82, 71 and 45 of our customers had annual recurring revenue, or ARR, of $500,000 or more (inclusive of customers with ARR of $1.0 million or more, described below) as of July 31, 2021, January 31, 2021 and January 31, 2020, respectively, accounting for approximately 50%, 50% and 41% of our ARR, respectively. Further, as of July 31, 2021, we had 41 customers with ARR of $1.0 million or more, up from 31 and 18 customers as of January 31, 2021 and 2020, respectively, accounting for approximately 37%, 33% and 25% of our ARR, respectively. As of July 31, 2021, January 31, 2021 and January 31, 2020, no single customer represented more than 5% of our ARR. For more information about how we calculate ARR, see the section titled “— Factors Affecting Our Performance — Expanding Within Our Existing Customer Base.”

We employ a land-and-expand business model centered around offering products that are easy to adopt and have a rapid time to value. We expand our reach within existing customers when our customers add new channels, purchase additional subscription products such as Braze Currents, implement new engagement strategies, or onboard new business units and geographies. We also grow as our customers grow because our pricing is based in large part on the number of consumers that our customers reach and the volume of messages our customers send. Accordingly, as our customers increase the use of our platform and increase the number of end users reached via our platform, the value of our contracts with such customers also increases. We believe our successful land-and-expand strategy is evidenced by our dollar-based net retention rate, which for the trailing 12 months ended July 31, 2021, January 31, 2021 and January 31, 2020 was 125%, 123% and 126%, respectively, for all our customers, and 135%, 133% and 127%, respectively, for our customers with ARR of $500,000 or more. For more information about how we calculate dollar-based net retention rate, see the section titled “— Factors Affecting Our Performance — Expanding Within Our Existing Customer Base.”

We have grown significantly in recent periods. We generated revenue of $150.2 million and $96.4 million in fiscal year 2021 and fiscal year 2020, respectively, representing year-over-year growth of 56%. We generated revenue of $103.6 million and $67.9 million in the six months ended July 31, 2021 and 2020, respectively, representing period-over-period growth of 53%. We had net losses of $32.0 million, $31.8 million, $25.8 million and $12.4 million in fiscal year 2021, fiscal year 2020 and the six months ended July 31, 2021 and 2020, respectively. We had net cash used in operating activities of $6.1 million, $7.4 million, $8.4 million and $0.2 million in fiscal year 2021, fiscal year 2020 and the six months ended July 31, 2021 and 2020, respectively. Our free cash flow was $(10.4) million, $(9.9) million, $(10.3) million and $(3.0) million in fiscal year 2021, fiscal year 2020 and the six months ended July 31, 2021 and 2020, respectively. See the section titled “— Non-GAAP Free Cash Flow” for additional information about how we calculate free cash flow, a non-GAAP financial metric, and a reconciliation to net cash used in operating activities, the most directly comparable measure calculated in accordance with accounting principles generally accepted in the United States, or GAAP.

Factors Affecting Our Performance

Acquiring New Customers

We believe there is substantial opportunity to continue to grow our customer base. We intend to continue to expand our customer base in verticals where we already have a strong presence, such as retail, eCommerce, media, entertainment and on-demand services, and to increase our presence in verticals where we are not yet strongly represented. Through our sales and marketing efforts, we plan to capitalize on the ongoing digital transformation in regulated industries like healthcare and financial services to further propel adoption of our technology. As of July 31, 2021, we had 1,119 customers across a broad range of sizes and industries, compared to 890 customers as of January 31, 2021 and 728 customers as of January 31, 2020. Our ability to attract new customers will depend on a number of factors, including the quality and pricing of our products, offerings of our competitors and the effectiveness of our marketing efforts.

We define a customer as the separate and distinct, ultimate parent-level entity that has an active subscription with us to use our products. A single organization could have multiple distinct contracting divisions or subsidiaries, all of which together would be considered a single customer.

Expanding Within Our Existing Customer Base

We believe we can achieve significant growth by expanding sales within our existing customer base. We expand the use of our platform by existing customers by, among others, adding new channels and increasing the messaging volume we sell to our customers as their businesses and needs continue to grow. We intend to continue to invest in developing and enhancing our products and functionality. Our ability to increase sales to existing customers will depend on a number of factors, including our customers’ satisfaction with our solutions, the ability of our customers to attract new end users, competition, pricing and overall changes in our customers’ spending levels.

Historically, we have experienced significant expansion within a customer’s business once our platform is deployed, with customers typically increasing the number of monthly active users, channels and use cases as well as purchasing additional products. A monthly active user is an end user of a customer who has engaged with the customer’s applications and websites in the previous calendar month. We include each distinguishable end user in our calculation of monthly active users, even though some users may access our customers’ applications and websites using more than one device, and multiple users may gain access using the same device. As of July 31, 2021, we had 3.3 billion monthly active users, up from 2.3 billion in January 2020 and 1.6 billion in January 2019.

In addition to monthly active users, we have a history of increasing ARR from our customer cohorts, which is illustrated in the chart below. We define ARR as the annualized value of customer subscription contracts, including certain premium professional services that are subject to contractual subscription terms, as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms (including contracts for which we are negotiating a renewal). Our calculation of ARR is not adjusted for the impact of any known or projected future events (such as customer cancellations, expansion or contraction of existing customers relationships or price increases or decreases) that may cause any such contract not to be renewed on its existing terms. Our ARR may decline or fluctuate as a result of a number of factors, including customers’ satisfaction or dissatisfaction with our products and professional services, pricing, competitive offerings, economic conditions or overall changes in our customers’ spending levels. ARR should be viewed independently of revenue and does not represent our GAAP revenue on an annualized basis or a forecast of revenue, as it is an operating metric that can be impacted by contract start and end dates and renewal rates.

For clarity, we use annualized invoiced amounts per customer subscription contract, including certain premium professional services that are subject to contractual subscription terms, as compared to revenue calculated in accordance with GAAP, to calculate our ARR. Our invoiced amounts are not matched to the

performance obligations associated with the underlying subscription contract and premium professional service obligations as they are with respect to our GAAP revenue. This can result in timing differences between our GAAP revenue and ARR calculations. For our revenue calculated in accordance with GAAP, we recognize revenue related to contracts with customers in an amount that reflects the consideration to which we expect to be entitled in exchange for subscription and professional services. See the section titled “— Critical Accounting Policies and Estimates” for additional information regarding how we recognize revenue on a GAAP basis. Investors should not place undue reliance on ARR as an indicator of our future or expected results. Moreover, ARR may differ from similarly titled metrics presented by other companies and may not be comparable to such other metrics.

Each cohort in the chart below represents customers that made their initial purchase from us in a given fiscal year. For example, the 2016 cohort includes all customers that had their initial purchase within the fiscal year 2016. This cohort increased their ARR from $6.4 million as of January 31, 2016 to $20.1 million as of January 31, 2021, representing a multiple of approximately 3.2x since fiscal year 2016.

LOGO

A further indication of the propensity of our customer relationships to expand over time is our dollar-based net retention rate. We calculate our dollar-based net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period-end, or the Prior Period ARR. We then calculate the ARR from these same customers as of the current period-end, or the Current Period ARR. Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time dollar-based net retention rate. We then calculate the weighted average point-in-time dollar-based net retention rates as of the last day of each month in the current trailing 12-month period to arrive at the dollar-based net retention rate. Our dollar-based net retention rate for the trailing 12 months ended July 31, 2021, January 31, 2021 and January 31, 2020 was 125%, 123% and 126%, respectively, for all our customers, and 135%, 133% and 127%, respectively, for our customers with ARR of $500,000 or more.

Our customers frequently increase the number of our channels they utilize over time. Today, our in-product messaging channels consist of Content Cards, which embed personalized content into a brand’s website or

application, and in-app and in-browser messages. Our out-of-product channels include, but are not limited to, mobile push notifications, web push notifications, email, SMS and MMS messages, webhooks, Facebook and Google advertisements and multiple over-the-top, or OTT, media services and connected TV channels.

Expanding Geographically

We believe there is a significant opportunity to continue to expand our presence in international markets we have already penetrated and by entering markets we have not yet penetrated. For each of the fiscal year ended January 31, 2021 and the six months ended July 31, 2021, approximately 40% of our revenue was generated outside of the United States. We expect to increase market penetration in regions including Europe and Asia-Pacific and to further capitalize on the greenfield opportunity in regions such as Latin America. For example, in the second half of fiscal year 2021, we entered into a joint venture with our partner Japan Cloud Computing Co., Ltd., to facilitate further expansion into the Japanese market. Although these investments in geographic regions may negatively affect our operating results in the near term, we believe that they will contribute to our long-term growth.

Sustaining Innovation and Technology Leadership

Our success is dependent on our ability to sustain innovation and technology leadership in order to maintain our competitive advantage. We are focused on investing in research and development to continue to enhance our platform. For example, we continue to develop our artificial intelligence capabilities to enable brands to better analyze and act on customer data. We believe our market-driven product development approach maximizes the return on new feature development and channel expansion. Our customers consistently volunteer to participate in the testing of new products, which indicates their appetite for new and innovative functionality. We believe our continued innovation will provide new avenues for growth through which we will continue to deliver differentiated outcomes for our customers. We intend to continue to invest in building additional products that expand our capabilities and facilitate the extension of our platform to new channels and use cases.

Impact of COVID-19 on Our Business

Beginning in January 2020, the COVID-19 pandemic has caused general business disruption worldwide. In response to the spread of COVID-19, we have required substantially all of our employees to work remotely to minimize the risk of the virus to our employees and the communities in which we operate, and we may continue to take actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, and business partners.

While we do not believe our results of operations, cash flows and financial condition have been materially impacted to date, we have experienced, and may continue to experience, a modest adverse impact on certain aspects of our business, including a lengthening of the sales cycle for some prospective customers. We have also experienced, and may continue to experience, a modest positive impact on other aspects of our business, including an increase in the volume of messaging utilized by our existing customers. Moreover, we have seen slower growth in certain operating expenses due to reduced business travel, the virtualization or cancellation of customer and employee events and reduced lease obligations. While a reduction in these operating expenses may have an immediate positive impact on our results of operations, we do not yet have visibility into the full impact this will have on our business and we do not know if or when these expenses will return to pre-pandemic levels, which could negatively impact our results of operations in the future.

Certain of our customers negatively impacted by the spread of COVID-19 have decreased or delayed their spending, requested pricing discounts, requested modified payment terms or sought to reduce their commitments when renewing subscriptions, and they may continue to do so, any of which may result in decreased revenue and cash receipts for us. In addition, we may experience customer losses, including due to bankruptcy or our customers ceasing operations, which may result in an inability to collect accounts receivable from these customers. Our customers that were positively impacted by increased demand during the COVID-19 pandemic

may have similar requests or experience similar issues if this increased demand does not continue in the recovery from the COVID-19 pandemic.

Additionally, we cannot predict what, if any, changes to our business and the global economy generally will persist following the COVID-19 pandemic or how our business or the global economy will be impacted as restrictions on in-person activities are relaxed and the world returns to pre-pandemic normalcy. Given the uncertainty, we cannot reasonably estimate the impact on our future results of operations, cash flows or financial condition. For additional details, see the section titled “Risk Factors.”

Components of Results of Operations

Revenue

Revenue is derived from two primary sources: (1) subscription services and (2) professional services and other.

Subscription services primarily consist of access to our customer engagement platform and related customer support. Our customers enter into a subscription for committed contractual entitlements. To the extent that our customers’ usage exceeds the committed contractual entitlements under their subscription plans, they are charged for excess usage, or they may exercise an option to purchase an incremental volume tier of committed contractual entitlements. Revenue associated with platform subscriptions is recognized ratably over the contract term, which is consistent with the period over which services are provided to the customer. Fees associated with excess usage and incremental volume are also treated as subscription revenue. To date, fees associated with excess usage have not been material.

Professional services and other revenue consists of fees for distinct services rendered in training and assisting our customers to configure our platform for their use at the onset of their initial contract or when a new product is purchased. Such revenue is generally recognized over a period of up to six months from providing access to the platform. We also provide additional platform and feature enhancement and optimization services which are generally recognized ratably over the contract term.

Deferred revenue consists of customer billings in advance of revenue being recognized. We generally invoice our customers for subscription services arrangements annually in advance and for professional services upfront.

Cost of Revenue

Cost of revenue consists of direct costs related to providing platform access to our customers and to performing onboarding and professional services including consulting services. These costs primarily include payments to third-party cloud infrastructure providers for hosting software solutions, costs associated with application service providers utilized to deliver the platform, personnel-related costs, including salaries, cash-based performance compensation, benefits and stock-based compensation, and overhead cost allocations, including rent, utilities, depreciation, information technology costs, amortization of internal use software and certain administrative personnel costs.

We intend to continue to invest additional resources in our platform infrastructure and our customer support and success organizations to expand the capabilities of our platform. The level, timing and relative investment in our infrastructure could affect our cost of revenue in the future. We expect our cost of revenue to increase for the foreseeable future as we continue to grow our business.

Gross Profit and Gross Margin

Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross margin may fluctuate from period to period as our revenue and cost of revenue fluctuates,

including as a result of the timing and amount of resources we dedicate to improving our platform and expanding our products.

Operating Expenses

Our operating expenses consist of sales and marketing, research and development and general and administrative expenses. Personnel costs, including salaries, cash-based performance compensation, benefits and stock-based compensation, are the most significant component of operating expenses. Operating expenses also include allocated overhead costs, which include rent, utilities, depreciation, information technology costs and certain administrative personnel costs.

Sales and Marketing

Sales and marketing expenses consist primarily of personnel costs for our sales and marketing organization, sales commissions, costs related to brand awareness, sponsorships, customer marketing events and advertising, agency costs, travel-related expenses and allocated overhead costs.

We intend to continue to invest in sales and marketing to help drive the growth of our business. During the short term, we expect travel expenses to remain lower than our historical norms as we focus our marketing and sales activities on virtual platforms. However, we expect our sales and marketing expenses will increase in absolute dollars as we continue to invest in sales and marketing activities to acquire new customers and increase sales to existing customers.

Research and Development

Research and development expenses consist primarily of personnel costs for our engineering, service, design and information technology teams. Additionally, research and development expenses include allocated overhead costs and contractor fees. Research and development costs are expensed as incurred. Capitalized internal-use software development costs are excluded from research and development expenses as they are capitalized as a component of property and equipment, net and amortized to cost of revenue over the software’s expected useful life, which is generally three years.

We expect to continue our investment in research and development to enhance the user experience of our current customers and attract new customers. We expect research and development expenses to increase in absolute dollars as we continue to invest in enhancing our platform.

General and Administrative

General and administrative expenses consist primarily of personnel costs for finance, legal, human resources and other administrative functions, as well as non-personnel costs such as legal, accounting and other professional service fees, software costs, certain tax, license and insurance-related expenses and allocated overhead costs.

We expect that general and administrative expenses will increase in absolute dollars and vary from period to period as a percentage of revenue for the foreseeable future but decrease as a percentage of revenue over the long term, as we focus on processes, systems, and controls to enable our internal support functions to scale with the growth of our business. We expect to incur additional expenses as a result of operating as a public company, including expenses to comply with the rules and regulations applicable to companies listed on a national securities exchange, expenses related to compliance and reporting obligations pursuant to the rules and regulations of the Securities and Exchange Commission, and higher expenses for directors’ and officers’ insurance, investor relations and professional services.

Investment Income

Investment income consists primarily of income earned on our investments, cash and cash equivalents and restricted cash.

Other Income (Expense), Net

Other income (expense), net, primarily consists of net exchange gains or losses on foreign currency transactions.

Provision for Income Taxes

Provision for income taxes consists of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.

Results of Operations

The following table sets forth our consolidated statement of operations data for each of the periods indicated:


	Fiscal Year Ended January 31,						Six Months Ended July 31,
	2020			2021			2020			2021
	(in thousands)
Revenue	$	96,364		$	150,191		$	67,929		$	103,633
Cost of revenue⁽¹⁾		35,686			54,511			24,801			34,562

Gross profit		60,678			95,680			43,128			69,071
Operating expenses:
Sales and marketing⁽¹⁾		57,348			70,661			31,061			51,843
Research and development⁽¹⁾		20,339			29,212			12,759			23,392
General and administrative⁽¹⁾		16,524			27,959			12,154			19,011

Total operating expenses		94,211			127,832			55,974			94,246

Loss from operations		(33,533	)		(32,152	)		(12,846	)		(25,175	)
Other income (expense):
Investment income		2,127			840			589			86
Other income (expense), net		48			(120	)		85			(351	)

Loss before provision for income taxes		(31,358	)		(31,432	)		(12,172	)		(25,440	)
Provision for income taxes		452			537			223			326

Net loss	$	(31,810	)	$	(31,969	)	$	(12,395	)	$	(25,766	)

(1)	Includes stock-based compensation expense as follows:


	Fiscal Year Ended January 31,				Six Months Ended July 31,
	2020		2021		2020		2021
	(in thousands)
Cost of revenue	$	276	$	650	$	200	$	367
Sales and marketing		6,365		2,892		1,055		4,295
Research and development		3,705		2,102		657		4,158
General and administrative		2,062		1,896		815		3,786

Total	$	12,408	$	7,540	$	2,727	$	12,606

The following table sets forth our consolidated statement of operations data expressed as a percentage of revenue:


	Fiscal Year Ended January 31,						Six Months Ended July 31,
	2020			2021			2020			2021
Revenue		100	%		100	%		100	%		100	%
Cost of revenue		37			36			37			33

Gross profit		63			64			63			67
Operating expenses:
Sales and marketing		60			47			45			51
Research and development		21			19			19			22
General and administrative		17			19			18			18

Total operating expenses		98			85			82			91

Loss from operations		(35	)		(21	)		(19	)		(24	)
Other income (expense):
Investment income		2			1			1			—
Other income (expense), net		—			—			—			(1	)

Loss before provision for income taxes		(33	)		(20	)		(18	)		(25	)
Provision for income taxes		—			—			—			—

Net loss		(33	)%		(20	)%		(18	)%		(25	)%

Comparison of the Six Months Ended July 31, 2020 and July 31, 2021

Revenue


	Six Months Ended July 31,
	2020		2021		Change		% Change
	($ in thousands)
Revenue	$	67,929	$	103,633	$	35,704		52.6	%

The increase in revenue of $35.7 million, or 52.6%, from the six months ended July 31, 2020 to the six months ended July 31, 2021 was primarily driven by an increase in subscription fees with existing customers as a result of expansion in committed entitlements and features, and an increase in the number of customers from 796 as of July 31, 2020 to 1,119 as of July 31, 2021. Approximately 54.5% of the increase in revenue was attributable to the growth from existing customers, and the remaining 45.5% was attributable to new customers. We also expanded our growth internationally, which contributed to an increase of $14.5 million in revenue.

Cost of Revenue, Gross Profit and Gross Margin


	Six Months Ended July 31,
	2020			2021			Change		% Change
	($ in thousands)
Cost of revenue	$	24,801		$	34,562		$	9,761		39.4	%
Gross profit	$	43,128		$	69,071		$	25,943		60.2	%
Gross margin		63.5	%		66.6	%

The increase in cost of revenue of $9.8 million, or 39.4%, from the six months ended July 31, 2020 to the six months ended July 31, 2021 was primarily driven by an increase of hosting, infrastructure and other third-party fees associated with delivering our platform of $8.3 million and an increase in personnel costs and overhead costs of $1.5 million. These increased infrastructure and personnel costs were incurred to support overall revenue growth.

Our gross profit increased $25.9 million, or 60.2%, from the six months ended July 31, 2020 to the six months ended July 31, 2021, and our gross margin increased from 63.5% in the six months ended July 31, 2020 to 66.6% in the six months ended July 31, 2021. These increases were due to economies of scale as our infrastructure costs to support our revenue growth did not increase at the same pace as our revenue.

Operating Expenses

Sales and Marketing Expense


	Six Months Ended July 31,
	2020		2021		Change		% Change
	($ in thousands)
Sales and marketing	$	31,061	$	51,843	$	20,782		66.9	%

The increase in sales and marketing expense of $20.8 million, or 66.9%, from the six months ended July 31, 2020 to the six months ended July 31, 2021 was primarily driven by an increase in personnel costs and overhead costs of $15.2 million, an increase in amortization of deferred contract costs of $3.0 million as a result of sales growth and an increase in advertising and marketing costs of $1.9 million. The increase in personnel costs was primarily due to an increase in headcount as we continue to expand our sales and marketing presence globally and was also related to a $3.2 million increase in stock-based compensation expense, including as a result of secondary transactions during the period in connection with the purchase by an existing investor of the company of shares of our common stock from certain employees.

Research and Development Expense


	Six Months Ended July 31,
	2020		2021		Change		% Change
	($ in thousands)
Research and development	$	12,759	$	23,392	$	10,633		83.3	%

The increase in research and development expense of $10.6 million, or 83.3%, from the six months ended July 31, 2020 to the six months ended July 31, 2021 was primarily driven by an increase of personnel and overhead costs of $9.8 million. The increase in personnel costs was primarily due to a period-over-period increase in headcount and was also related to a $3.5 million increase in stock-based compensation expense, including as a result of secondary transactions during the period in connection with the purchase by an existing investor of the company of shares of our common stock from certain employees. In addition, consulting and recruiting fees increased $0.5 million and infrastructure and software costs increased $0.3 million as part of our strategy to continue investing in our technology and to develop new functionalities for our platform.

General and Administrative Expense


	Six Months Ended July 31,
	2020		2021		Change		% Change
	($ in thousands)
General and administrative	$	12,154	$	19,011	$	6,857		56.4	%

The increase in general and administrative expenses of $6.9 million, or 56.4%, from the six months ended July 31, 2020 to the six months ended July 31, 2021 was primarily driven by an increase in personnel and overhead costs of $6.4 million. The increase in personnel costs was primarily due to a period-over-period increase in headcount as we continue to invest in our finance and administrative functions to support the growth of our business and also related to a $3.0 million increase in stock-based compensation expense, including as a result of secondary transactions during the period in connection with the purchase by an existing investor of the company of shares of our common stock from certain employees. In addition, there was an increase in costs associated with finance, legal and consulting services of $1.3 million incurred in connection with our public company readiness initiatives, including investments in our infrastructure to support our operations. These increases were offset by lower bad debt expense of $1.4 million as a result of prior period charges driven by the uncertainty related to the COVID-19 pandemic.

Other Income (Expense)


	Six Months Ended July 31,
	2020		2021			Change			% Change
	($ in thousands)
Investment income	$	589	$	86		$	(503	)		(85.4	)%
Other income (expense), net	$	85	$	(351	)	$	(436	)		n/m

n/m – not meaningful

Investment income, which primarily consisted of investment income from marketable securities in each period, was $0.6 million for the six months ended July 31, 2020 as compared to $0.1 million for the six months ended July 31, 2021. The decrease of $0.5 million was primarily related to a reduction in marketable securities held during the six months ended July 31, 2020 as compared to the six months ended July 31, 2021.

Other income (expense), net, which primarily consisted of gains and losses from foreign exchange, was not material for either the six months ended July 31, 2020 or the six months ended July 31, 2021.

Comparison of the Fiscal Years Ended January 31, 2020 and January 31, 2021

Revenue


	Fiscal Year Ended January 31,
	2020		2021		Change		% Change
	($ in thousands)
Revenue	$	96,364	$	150,191	$	53,827		55.9	%

The increase in revenue of $53.8 million, or 55.9%, from fiscal year 2020 to fiscal year 2021 was primarily driven by an increase in revenue from existing customers as a result of channel expansion, enhanced messaging features and adoption of new product offerings, and an increase in the number of customers from 728 in 2020 to 890 in 2021. Approximately 70% of the increase in revenue was attributable to the growth from existing customers, and the remaining 30% was attributable to new customers. We also expanded our growth internationally, which contributed to an increase of $22.1 million in revenue.

Cost of Revenue, Gross Profit and Gross Margin


	Fiscal Year Ended January 31,
	2020			2021			Change		% Change
	($ in thousands)
Cost of revenue	$	35,686		$	54,511		$	18,825		52.8	%
Gross profit		60,678			95,680			35,002		57.7	%
Gross margin		63.0	%		63.7	%

The increase in cost of revenue of $18.8 million, or 52.8%, from fiscal year 2020 to fiscal year 2021 was primarily driven by an increase of hosting, infrastructure and other third-party fees associated with delivering our platform of $13.4 million and an increase in personnel costs and overhead costs of $5.5 million. These increased infrastructure and personnel costs were incurred to support overall revenue growth.

Our gross profit increased $35.0 million, or 57.7%, from fiscal year 2020 to fiscal year 2021, and our gross margin increased from 63.0% in fiscal year 2020 to 63.7% in fiscal year 2021. These increases were due to economies of scale as our infrastructure costs to support our revenue growth did not increase at the same pace as our revenue.

Operating Expenses

Sales and Marketing Expense


	Fiscal Year Ended January 31,
	2020		2021		Change		% Change
	($ in thousands)
Sales and marketing	$	57,348	$	70,661	$	13,313		23.2	%

The increase in sales and marketing expense of $13.3 million, or 23.2%, from fiscal year 2020 to fiscal year 2021 was primarily driven by an increase in personnel costs, excluding stock-based compensation, and overhead costs of $16.0 million due to an increase in headcount as we continue to expand our sales and marketing presences globally and an increase in amortization of deferred contract costs of $4.5 million as a result of sales growth. The increase was partially offset by a reduction of $4.5 million in travel and conversion to virtual events due to COVID-19 travel and event restrictions, and a reduction in stock-based compensation expense of $3.4 million, primarily as a result of our fiscal year 2020 secondary transactions in which we recognized $5.0 million of stock-based compensation in connection with the purchase by an existing investor of shares of our common stock from certain employees.

Research and Development Expense


	Fiscal Year Ended January 31,
	2020		2021		Change		% Change
	($ in thousands)
Research and development	$	20,339	$	29,212	$	8,873		43.6	%

The increase in research and development expense of $8.9 million, or 43.6%, from fiscal year 2020 to fiscal year 2021 was primarily driven by an increase of personnel, excluding stock-based compensation, and overhead costs of $9.5 million as a result of a year-over-year increase in headcount and expanded lease space. In addition, infrastructure and software costs increased $1.4 million as part of our strategy to continue investing in our

technology and to develop new functionalities for our platform. The increase was partially offset by a reduction of $1.6 million in stock-based compensation expense primarily as a result of our fiscal year 2020 secondary transactions in connection with the purchase by an existing investor of shares of our common stock from certain employees.

General and Administrative Expense


	Fiscal Year Ended January 31,
	2020		2021		Change		% Change
	($ in thousands)
General and administrative	$	16,524	$	27,959	$	11,435		69.2	%

The increase in general and administrative expenses of $11.4 million, or 69.2%, from fiscal year 2020 to fiscal year 2021 was primarily driven by an increase in personnel, excluding stock-based compensation, and overhead costs of $6.0 million as a result of a year-over-year increase in headcount and expanded lease space as we continue to invest in our finance and administrative functions to support the growth of our business. In addition, the increase was also related to finance and legal services of $5.0 million incurred in connection with compliance costs and expenses in supporting our public company readiness initiatives, including investments in our infrastructure to support our operations.

Other Income (Expense)


	Fiscal Year Ended January 31,
	2020		2021			Change			% Change
	($ in thousands)
Investment income	$	2,127	$	840		$	(1,287	)		(60.5	)%
Other income (expense), net	$	48	$	(120	)	$	(168	)		(350.0	)%

Investment income was $2.1 million for the fiscal year ended January 31, 2020 as compared to $0.8 million for the fiscal year ended January 31, 2021, which primarily consisted of investment income from marketable securities in each period. The decrease from fiscal year 2020 to fiscal year 2021 was primarily related to a reduction in marketable securities and decrease in global interest rates during the fiscal year ended January 31, 2021 compared to fiscal year ended January 31, 2020.

Other income (expense), net was not material for either fiscal year 2020 or fiscal year 2021.

Quarterly Results of Operations

The following tables set forth selected unaudited quarterly statement of operations data for each of the six fiscal quarters ended July 31, 2021, as well as the percentage of revenues that each line item represents for each quarter. The information for each of these quarters has been prepared in accordance with GAAP on the same basis as our audited historical consolidated financial information included elsewhere in this prospectus and includes, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the results of operations for these periods. This data should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus. These quarterly results are not necessarily indicative of our results of operations to be expected for any future period.


	Three Months Ended (Unaudited)
	April 30, 2020			July 31, 2020			October 31, 2020			January 31, 2021			April 30, 2021			July 31, 2021
	($ in thousands)
Revenue	$	31,983		$	35,946		$	39,332		$	42,930		$	47,877		$	55,756
Cost of revenue ⁽¹⁾		11,760			13,041			14,431			15,279			15,807			18,755

Gross profit		20,223			22,905			24,901			27,651			32,070			37,001
Operating expenses:
Sales and marketing ⁽¹⁾		15,287			15,774			19,137			20,463			24,351			27,492
Research and development ⁽¹⁾		6,617			6,142			7,410			9,043			11,797			11,595
General and administrative ⁽¹⁾		5,610			6,544			7,142			8,663			8,947			10,064

Total operating expenses		27,514			28,460			33,689			38,169			45,095			49,151

Loss from operations		(7,291	)		(5,555	)		(8,788	)		(10,518	)		(13,025	)		(12,150	)
Other income (expense):
Investment income		375			214			147			104			63			23
Other income (expense), net		(40	)		125			(63	)		(142	)		(31	)		(320	)

Loss before provision for income taxes		(6,956	)		(5,216	)		(8,704	)		(10,556	)		(12,993	)		(12,447	)
Provision for income taxes		59			164			118			196			160			166

Net loss	$	(7,015	)	$	(5,380	)	$	(8,822	)	$	(10,752	)	$	(13,153	)	$	(12,613	)

Net loss attributable to redeemable noncontrolling interest	$	—		$	—		$	(9	)	$	(208	)	$	(319	)	$	(385	)

Net loss attributable to Braze, Inc.	$	(7,015	)	$	(5,380	)	$	(8,813	)	$	(10,544	)	$	(12,834	)	$	(12,228	)

(1)	Includes stock-based compensation as follows:


	Three Months Ended (Unaudited)
	April 30, 2020		July 31, 2020		October 31, 2020		January 31, 2021		April 30, 2021		July 31, 2021
	($ in thousands)
Cost of revenue	$	92	$	108	$	205	$	245	$	190	$	177
Sales and marketing		496		559		908		929		2,338		1,957
Research and development		308		349		627		818		2,587		1,571
General and administrative		397		418		535		546		1,841		1,945

Total stock-based compensation expense	$	1,293	$	1,434	$	2,275	$	2,538	$	6,956	$	5,650

The following table sets forth our consolidated statements of operations information as a percentage of total revenue for the three-month periods indicated below.


	Three Months Ended (Unaudited)
	April 30, 2020			July 31, 2020			October 31, 2020			January 31, 2021			April 30, 2021			July 31, 2021
Revenue		100	%		100	%		100	%		100	%		100	%		100	%
Cost of revenue		37			36			37			36			33			34

Gross profit		63			64			63			64			67			66
Operating expenses:
Sales and marketing		47			44			48			48			50			49
Research and development		21			17			19			21			25			21
General and administrative		18			18			18			20			19			18

Total operating expenses		86			79			85			89			94			88

Loss from operations		(23	)		(15	)		(22	)		(25	)		(27	)		(22	)
Other income (expense):
Investment income		1			—			—			—			—			—
Other income (expense), net		—			—			—			—			—			—

Loss before provision for income taxes		(22	)		(15	)		(22	)		(25	)		(27	)		(22	)
Provision for income taxes		—			—			—			—			—			1

					—			—

Net loss		(22	)		(15	)		(22	)		(25	)		(27	)		(23	)

Net loss attributable to redeemable noncontrolling interest		—			—			—			—			—			(1	)

Net loss attributable to Braze, Inc.		(22	)		(15	)		(22	)		(25	)		(27	)		(22	)

Quarterly Trends

Revenue has increased each quarter due to an increase in subscription fees with existing customers due to expansion in committed entitlements and features, an increase in the number of customers, and continued expansion of our growth internationally.

Gross profit increased each quarter, and gross margin fluctuated between 63% and 67% for the periods presented, generally due to economies of scale as our infrastructure costs to support our revenue growth did not increase at the same pace as our revenue.

Cost of revenue has generally increased as a result of growth in revenue. However, cost of revenue declined as a percentage of revenue as our infrastructure costs to support our revenue growth did not increase at the same pace as our revenue.

Operating expenses have generally increased with the growth in revenue, which drive a corresponding increase in commissions and other related expenses. The increases in operating expenses each quarter are also driven by higher personnel costs due to increased headcount to support our expanding operations.

Investment income for the periods presented represents investment income from marketable securities in each period. The changes between periods are generally driven by reductions or increases in marketable securities and changes to global interest rates.

Liquidity and Capital Resources

As of January 31, 2021 and July 31, 2021, our principal source of liquidity was cash, cash equivalents and

marketable securities of $86.5 million and $78.7 million, respectively.

Since our inception, we have financed our operations primarily through the net proceeds received from the issuances of our convertible preferred stock and common stock and cash generated from the sale of subscriptions to our platform. We have generated losses from our operations as reflected in our accumulated deficit of $138.2 million as of January 31, 2021 and $163.3 million as of July 31, 2021, and negative cash flows from operating activities for the fiscal year ended January 31, 2021 and the six months ended July 31, 2021 of $6.1 million and $8.4 million, respectively. Our future capital requirements will depend on many factors, including revenue growth and costs incurred to support customer usage and growth in our customer base, increased research and development expenses to support the growth of our business and related infrastructure and increased general and administrative expenses to support being a publicly traded company.

We assess our liquidity primarily through our cash on hand as well as the projected timing of billings under contract with our paying customers and related collection cycles. We believe our current cash, cash equivalents and marketable securities will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months.

A substantial source of our cash provided by operating activities is our deferred revenue, which is included on our consolidated balance sheets as a liability. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is recorded as revenue over the term of the subscription agreement. As of January 31, 2021 and July 31, 2021, we had $74.8 million and $91.2 million, respectively, of deferred revenue recorded as a current liability. This deferred revenue will be recognized as revenue when all of the revenue recognition criteria are met.

Cash Flows

The following table summarizes our cash flows for the periods presented:


	Fiscal Year Ended January 31,						Six Months Ended July 31,
	2020			2021			2020			2021
	(in thousands)
Net cash used in operating activities	$	(7,365	)	$	(6,080	)	$	(221	)	$	(8,414	)
Net cash (used in) provided by investing activities	$	(87,234	)	$	22,472		$	18,331		$	18,885
Net cash provided by financing activities	$	1,257		$	4,866		$	318		$	2,584

Operating Activities

For the six months ended July 31, 2021, net cash used in operating activities was $8.4 million, primarily due to a net loss of $25.8 million adjusted for non-cash charges of $22.4 million and net changes in our operating assets and liabilities of $5.0 million. The non-cash adjustments primarily relate to stock-based compensation of $12.6 million, amortization of deferred contract costs of $8.0 million and depreciation and amortization expense of $1.4 million. The cash outflow from changes in our operating assets and liabilities was primarily the result of an increase in deferred contract costs of $12.2 million, primarily due to higher commissions related to overall sales growth, a decrease in accrued expenses and other current liabilities of $5.8 million due to the timing payments to third-party vendors for software subscriptions and an increase in prepaid expenses and other assets of $4.2 million due to timing of payments. The cash outflows were partially offset by an increase of deferred revenue of $16.4 million due to timing of subscriptions and renewals and an overall increase in revenue and an increase in accounts payable of $1.1 million due to the timing of payments.

For the six months ended July 31, 2020, net cash used in operating activities was $0.2 million, primarily due to a net loss of $12.4 million adjusted for non-cash charges of $9.5 million and net changes in our operating assets and liabilities of $2.7 million. The non-cash adjustments primarily relate to amortization of deferred contract costs of $4.8 million, stock-based compensation of $2.7 million, provision for bad debt of $1.3 million and depreciation and amortization expense of $0.5 million. The cash inflow from changes in our operating assets and liabilities was primarily the result of an increase in accrued expenses and other current liabilities of $5.4

million incurred to support the growth of the business and an increase in each of deferred revenue and accounts receivable of $1.9 million, in each case due to timing of subscriptions and renewals, cash collections, and an overall increase in revenue. The increases were partially offset by an increase in deferred contract costs of $7.7 million due to higher commissions related to overall sales growth.

For the fiscal year ended January 31, 2021, net cash used in operating activities was $6.1 million, primarily due to a net loss of $32.0 million adjusted for non-cash charges of $21.2 million and net changes in our operating assets and liabilities of $4.7 million. The non-cash adjustments primarily relate to stock-based compensation of $7.5 million, amortization of deferred contract costs of $10.6 million and depreciation and amortization expense of $1.6 million. The cash inflow from changes in our operating assets and liabilities was primarily the result of an increase of deferred revenue of $23.4 million due to timing of subscriptions and renewals and an overall increase in revenue and an increase in accrued expenses and other current liabilities of $13.8 million incurred to support the growth of the business. The increases were partially offset by an increase in accounts receivable and deferred contract costs of $12.4 million and of $20.0 million, respectively, due to increases in revenue.

For the fiscal year ended January 31, 2020, net cash used in operating activities was $7.4 million, primarily due to a net loss of $31.8 million adjusted for non-cash charges of $19.2 million and net changes in our operating assets and liabilities of $5.2 million. The non-cash adjustments primarily relate to stock-based compensation of $12.4 million and amortization of deferred contract costs of $5.8 million. The cash inflow from changes in our operating assets and liabilities was primarily the result of an increase in deferred revenue of $28.5 million due to timing of subscriptions and renewals and an overall increase in revenue and an increase in accrued expenses and other current liabilities of $8.2 million due to increased third-party hosting and infrastructure fees and timing of invoices. This was partially offset by an increase in accounts receivable of $12.6 million due to increased revenue, an increase in prepaid and other current assets of $3.0 million primarily related to the growth of the business, an increase in deferred contract costs of $14.7 million due to increases in revenue, and a decrease in accounts payable of $2.6 million due to timing of invoices and payments.

Investing Activities

Net cash provided by investing activities was $18.9 million for the six months ended July 31, 2021, primarily consisting of maturities of marketable securities of $49.3 million, partially offset by purchases of marketable securities of $28.5 million and capitalized internal-use software costs of $1.2 million.

Net cash provided by investing activities was $18.3 million for the six months ended July 31, 2020, primarily consisting of maturities of marketable securities of $61.5 million, partially offset by purchases of marketable securities of $40.4 million, purchases of property and equipment of $1.8 million and capitalized internal-use software costs of $1.0 million.

Net cash provided by investing activities was $22.5 million for the fiscal year ended January 31, 2021, primarily consisting of maturities of marketable securities of $86.2 million, partially offset by purchases of marketable securities of $59.4 million and purchases of property and equipment and capitalized internal-use software costs of $2.5 million and $1.9 million, respectively.

Net cash used in investing activities was $87.2 million for the fiscal year ended January 31, 2020, primarily consisting of purchases of marketable securities of $123.1 million and $1.7 million in purchases of property and equipment, partially offset by cash inflows of $38.5 million from maturities of marketable securities.

Financing Activities

Net cash provided by financing activities was $2.6 million for the six months ended July 31, 2021, primarily consisting of the proceeds from the exercise of common stock options of $3.2 million, partially offset by the payment of deferred offering costs of $0.7 million.

Net cash provided by financing activities was $0.3 million for the six months ended July 31, 2020, primarily consisting of the proceeds from the exercise of common stock options.

Net cash provided by financing activities was $4.9 million for the fiscal year ended January 31, 2021, primarily consisting of the proceeds from the exercise of common stock options of $2.8 million and from an investment in redeemable noncontrolling interest of $2.5 million.

Net cash provided by financing activities was $1.3 million for the fiscal year ended January 31, 2020, primarily consisting of the proceeds from the exercise of common stock options.

Non-GAAP Free Cash Flow

We report our financial results in accordance with GAAP. To supplement our consolidated financial statements, we provide investors with the amount of free cash flow, which is a non-GAAP financial measure. Our management uses free cash flow to assess our operating performance and our progress towards our goal of positive free cash flow. We define free cash flow as net cash used in operating activities less cash used for purchases of property and equipment and amounts capitalized for internal-use software development costs. We believe that free cash flow is a useful indicator of liquidity as it measures our ability to generate cash, or our need to access additional sources of cash, to fund operations and investments.

Free cash flow has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are (1) it is not a substitute for net cash used in operating activities, (2) other companies may calculate free cash flow or similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a tool for comparison and (3) the utility of free cash flow is further limited as it does not reflect our future contractual commitments and does not represent the total increase or decrease in our cash balance for any given period.

The following table presents a reconciliation of free cash flow to net cash used in operating activities, the most directly comparable measure calculated in accordance with GAAP, for the periods presented:


	Fiscal Year Ended January 31,						Six Months Ended July 31,
	2020			2021			2020			2021
	(in thousands)

Net cash used in operating activities	$	(7,365	)	$	(6,080	)	$	(221	)	$	(8,414	)
Less:
Purchases of property and equipment		(1,724	)		(2,466	)		(1,800	)		(755	)
Capitalized internal-use software costs		(830	)		(1,886	)		(980	)		(1,172	)

Free cash flow	$	(9,919	)	$	(10,432	)	$	(3,001	)	$	(10,341	)


Net cash (used in) provided by investing activities	$	(87,234	)	$	22,472		$	18,331		$	18,885
Net cash provided by financing activities	$	1,257		$	4,866		$	318		$	2,584

Our free cash flow decreased during the six months ended July 31, 2021 as compared to the six months ended July 31, 2020, primarily as a result of continued investment in our sales and marketing function and in our infrastructure to support the growth of our business and our operations as a public company.

Our free cash flow decreased from fiscal year 2020 to fiscal year 2021, primarily as a result of continued investment in our sales and marketing function and in our infrastructure to support the growth of our business and our operations as a public company. We expect our free cash flow to fluctuate in future periods with changes in our operating expenses and as we continue to invest in our growth.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations as of January 31, 2021:


	Payments Due by Period
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
	(in thousands)
Operating lease commitments	$	26,509	$	6,844	$	14,432	$	4,457	$	776

The contractual commitment amounts in the table above are associated with agreements that are enforceable and legally binding. Obligations under contracts that we can cancel without a significant penalty are not included in the table above. For additional discussion on our operating leases and other commitments, see Note 14 to our audited consolidated financial statements appearing elsewhere in this prospectus.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

We believe that the following accounting policies involve a high degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. See Note 2 to our audited consolidated financial statements and our unaudited condensed consolidated interim financial statements appearing elsewhere in this prospectus for a description of our other significant accounting policies. The preparation of our consolidated financial statements in accordance with GAAP requires us to make estimates and judgments that affect the amounts reported in those consolidated financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, which we adopted as of February 1, 2019 on a modified retrospective basis. We generate revenue from fees related to subscription services and professional services and other. We recognize revenue related to contracts with customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those services. This is determined by following a five-step process, which includes (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price and (5) recognizing revenue when we satisfy a performance obligation.

We identify performance obligations in a contract based on the goods and services that will be transferred to the customer that are identifiable from other promises in the contract, or that are distinct. If not considered distinct, the promised goods or services are combined with other goods or services and accounted for as a combined performance obligation. Determining the distinct performance obligations in a contract requires judgment. Our performance obligations primarily include access to the platform, which includes subscription contracts, technical support and platform updates and professional services, which include onboarding services.

We allocate the transaction price of the contract to each distinct performance obligation on a relative standalone selling price basis. Estimating standalone selling prices for our performance obligations requires

judgment and is based on multiple factors, including, but not limited to, observable cost data, industry margin studies, historical selling prices, internal cost structure, internal pricing policies, and pricing practices in different regions and sales channels. We review the estimated standalone selling price for our performance obligations periodically and update, if needed, to ensure that the methodology utilized reflects our current pricing practices. The transaction price allocated to each performance obligation is recognized as revenue when or as the products or services are transferred to the customer.

Cost to Obtain a Contract with a Customer

We capitalize incremental costs of obtaining revenue contracts, which primarily consist of internal sales commissions and agent commissions. We amortize these commissions on a systematic basis, consistent with the pattern of transfer of the expected benefit period or services to which the contract relates, generally up to four years. Four years represents the estimated benefit period of the customer relationship taking into account factors such as peer estimates of technology lives and customer lives as well as our own historical data. Commissions paid for contract renewals are amortized over the renewal period.

Contract costs are amortized on a straight-line basis over up to four years, which reflects the expected period of benefit of the performance obligation, and may be longer than the initial contract period. We determine the estimated benefit period by considering both qualitative and quantitative factors, including the length of the subscription terms in our customer contracts and the anticipated life of our technology, among other factors.

Stock-Based Compensation

Accounting for stock-based compensation requires us to make a number of judgments, estimates and assumptions.

We estimate the fair value of stock options granted to employees and directors using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including (1) fair value of common stock, (2) expected volatility, (3) expected term of the award, (4) the risk-free interest rate and (5) expected dividends. We estimate forfeitures at the date of grant and revised, if necessary, in subsequent periods. These assumptions are estimated as follows:

•

Fair value of common stock. Because our common stock is not yet publicly traded, we are required to estimate the fair value of our common stock, as discussed in “— Common Stock Valuations” below.

•

Expected volatility. Due to the lack of historical and implied volatility data of our common stock, the expected stock price volatility has been estimated based on the historical volatilities of a specified group of companies in our industry for a period equal to the expected life of the option. We selected companies with comparable characteristics to us, including enterprise value, risk profiles and position within the industry, and with historical share price information sufficient to meet the expected term of the stock options. We compute the historical volatility data using the daily closing prices for the selected companies.

•

Expected term. We determine the expected term based on the average period the stock options are expected to remain outstanding using the simplified method, generally calculated as the midpoint of the stock options’ vesting term and contractual expiration period, as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.

•

Risk-free interest rate. We use the U.S. Treasury yield that corresponds with the expected term for our risk-free interest rate.

•

Expected dividends. We utilize a dividend yield of zero, as we do not currently issue dividends and do not expect to do so in the foreseeable future.

•

Forfeiture rate. We are required to estimate a forfeiture rate to calculate the stock-based compensation expense for our awards. Our forfeiture rate is based on an analysis of our actual forfeitures since the adoption of our equity award plan. We routinely evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover and expectations of future option exercise behavior.

The assumptions used in the Black-Scholes option-pricing model were as follows:


	Fiscal Year Ended January 31,		Six Months Ended July 31,
	2020	2021	2020	2021

Fair value of common stock	$3.46 – $5.14	$5.28 – $28.35	$5.28 – $8.95	$38.77 – $39.47
Expected volatility	55.1 – 57.3%	55.7– 62.5%	55.7% – 61.4%	61.8 – 66.1%
Expected term (in years)	5.6 – 6.1	5.5 – 6.1	5.8 – 6.1	5.9 – 6.7
Risk-free interest rate	1.4 – 2.6%	0.3 – 1.5%	0.4 – 1.5%	1.0 – 1.2%
Expected dividends	0%	0%	0%	0%

During the six months ended July 31, 2021, we granted 745,155 restricted stock units, or RSUs, at the grant date fair value of our common stock. Our RSUs contain both a service-based vesting condition and a performance-based vesting condition. The service-based vesting condition is satisfied over either a four-year or three-year period. Some RSUs vest on a quarterly basis and other RSUs have a one-year cliff vesting period with quarterly vesting thereafter. The performance-based vesting condition will be satisfied upon the occurrence of a qualifying liquidation event, which is defined as the earlier to occur of an initial public offering or an acquisition of the company in connection with a change of control. For the period ended July 31, 2021, we did not record stock-based compensation expense related to the RSUs since the performance-based vesting condition was not probable. If the performance condition was met, stock-based compensation expense will be recognized using the accelerated attribution method and the amount of the stock-based compensation expense that we would have recognized was $3.2 million.

Common Stock Valuations

The fair value of the shares of our common stock underlying the stock options has historically been determined by our board of directors, with input from management and contemporaneous third-party valuations, as there is no public market for our common stock. We believe that our board of directors has the relevant experience and expertise to determine the fair value of our common stock. In accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, our board of directors has exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock at each grant date. These factors include:

•

the prices of our common or preferred stock sold to third-party investors by us and in secondary transactions;

•

lack of marketability of our common stock;

•

our actual operating and financial performance;

•

current business conditions and projections;

•

hiring of key personnel and the experience of our management;

•

our history and the introduction of new services;

•

our stage of development;

•

likelihood of achieving a liquidity event, such as an initial public offering or a merger or acquisition given prevailing market conditions;

•

the market performance of comparable publicly traded companies; and

•

United States and global capital markets conditions.

Our board of directors determines the value of our common stock by probability-weighting different valuation approaches and methodologies, including both the income approach and select methodologies from the market approach. The income approach estimates value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using our weighted average cost of capital, or WACC. To derive our WACC, we calculate a cost of equity using the Capital Asset Pricing Model and comparable company betas while benchmarking to relevant equity return studies, and we calculate a cost of debt using our estimated cost of borrowing. The costs of equity and debt are then weighted based on our actual capital structure. The comparable company method is a market approach that estimates value based on a comparison of our company to comparable public companies in a similar line of business and based on acquisitions in the market. From the comparable companies, a representative market multiple is determined and subsequently applied to our historical and forecasted financial results to estimate our enterprise value. The recent security transaction method is a market approach that considers the recent price paid by market participants for a security issued by our company to estimate our enterprise value. While we have historically considered an income approach, we have never included or relied upon a discounted cash flow analysis due to the lack of historical and projected profitability.

Application of these approaches involves the use of estimates, judgment and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, and future cash flows, discount rates, market multiples, the selection of comparable companies, and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations as of each valuation date and may have a material impact on the valuation of our common stock.

For valuations after the completion of this offering, our board of directors will determine the fair value of each share of underlying common stock, based on the closing price of our common stock as reported on the date of grant. Future expense amounts for any particular period could be affected by changes in our assumptions or market conditions.

Based on the assumed initial public offering price per share of $ , which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, the aggregate intrinsic value of our outstanding stock options as of July 31, 2021, was $ , with $ million related to vested stock options.

Income Taxes

We account for income taxes using the asset and liability method. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

In evaluating our ability to recover our deferred income tax assets, we consider all available positive and negative evidence, including our operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, in the event that all or part of the net deferred tax assets are determined not to be realizable in the future, we would charge an adjustment to the valuation allowance to earnings in the period when such determination is made. As of July 31, 2021, we recorded a full valuation allowance on our federal and state deferred tax assets, which consist of net operating loss carryforwards and other basis differences, as we have concluded that it is more likely than not that our deferred tax assets will not be realized.

Recent Accounting Pronouncements

For a description of our recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted, see Note 2 to our audited consolidated financial statements and our unaudited condensed consolidated interim financial statements appearing elsewhere in this prospectus.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition, or results of operations, other than its impact on the general economy. Nonetheless, if our costs were to become subject to inflationary pressures, we might not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations.

Interest Rate Risk and Market Risk

We had cash, cash equivalents and marketable securities of $78.7 million as of July 31, 2021, of which $53.8 million was invested in money market funds, foreign government bonds, commercial paper, corporate debt securities and asset-backed securities. Our cash and cash equivalents are held for working capital and general corporate purposes. Our investments in marketable securities are made for capital preservation purposes. We do not enter into investments for trading or speculative purposes.

Our cash equivalents and our portfolio of marketable securities are subject to market risk due to changes in interest rates. Fixed rate securities may have their market value adversely affected due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. As of July 31, 2021, a hypothetical 10% change in interest rates would not have had a material impact on the value of our cash, cash equivalents, or available-for-sale investments. Because we classify our debt securities as “available for sale,” no gains or losses are recognized due to changes in interest rates unless such securities are sold prior to maturity or unless declines in fair value are determined to be non-temporary.

Foreign Currency Exchange Rate Risk

Our reporting and functional currency is the U.S. dollar, and the functional currency of our foreign subsidiaries is the respective local currency. Substantially all of our sales are denominated in U.S. dollars. Our only sales denominated in a currency other than the U.S. dollars are our sales in Japan, which are denominated in Yen. Therefore, our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily the United States, United Kingdom, Singapore and Japan. Our consolidated results of operations and cash flows are therefore subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. The assets and liabilities of each of our foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at each balance sheet date. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the consolidated statements of comprehensive loss. Gains or losses due to transactions in foreign currencies are included in interest and other income, net in our consolidated statements of operations.

The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. We have experienced and will continue to experience fluctuations in foreign exchange gains and losses related to

changes in foreign currency exchange rates. In the event our foreign currency denominated assets, liabilities, revenue, or expenses increase, our results of operations may be more greatly affected by fluctuations in the exchange rates of the currencies in which we do business. To date we have not engaged in the hedging of foreign currency transactions, although we may choose to do so in the future. A hypothetical 10% change in the relative value of the U.S. dollar to other currencies during any of the periods presented would not have had a material effect on our consolidated financial statements.

JOBS Act Accounting Election

Section 107(b) of the Jumpstart Our Business Startups Act of 2012 provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt some of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies. This may make comparison of our consolidated financial statements to those of other public companies more difficult.

BUSINESS

Mission

Our mission is to forge human connections between consumers and the brands they love through relevant and memorable experiences.

Overview

Today, consumers can interact with a seemingly unlimited number of brands anytime, anywhere, resulting in a dramatic increase in competitive pressure among brands. At the same time, the data generated from digital experiences and the increased number of consumer touchpoints have provided brands with new opportunities to reach consumers and personalize consumer experiences. But with this opportunity comes greater consumer expectations for highly relevant and seamless cross-channel interactions. These trends have led brands to increase their focus and investment on customer experience–the holistic impression that brands create across the customer journey–to differentiate themselves and form long-lasting customer relationships.

The real-time nature of the interactions we enable is made possible by our proprietary, enterprise-grade stream processing architecture. This architecture receives, contextualizes, and responds to first-party customer data in the moment. We have designed it to mimic the human ability to listen, process new information in context, and react instantaneously.

We enable brands to easily integrate our platform with both their in-house technical infrastructure and our expanding partner ecosystem of best-in-class technologies. Our customers can import data from other systems into any layer of our technology stack via our application programming interfaces, or APIs. They can also use Braze Currents to stream data in real time to those systems, which increases the return on our customers’ other technology investments. We support direct integrations with cloud data service providers such as Snowflake, customer data management platforms such as Segment, analytic solutions such as Amplitude and other components of the modern marketing technology ecosystem.

Our platform is designed to serve the needs of customers across sizes, stages of growth, industries, and geographies. As of July 31, 2021, we had 1,119 customers, up from 890 customers as of January 31, 2021 and 728 customers as of January 31, 2020. Our customers include many established global enterprises and leading technology innovators. We employ a land-and-expand business model centered around offering products that are easy to adopt and have a rapid time to value. We expand our reach within existing customers when our customers add new channels, purchase additional subscription products such as Braze Currents, implement new engagement strategies, or onboard new business units and geographies. We also grow as our customers grow because our pricing is based in large part on the number of consumers that our customers reach and the volume of messages our customers send. We believe our successful land-and-expand strategy is evidenced by our dollar-based net retention rate, which for the trailing 12 months ended July 31, 2021, January 31, 2021 and January 31, 2020 was 125%, 123% and 126%, respectively, for all our customers, and 135%, 133% and 127%, respectively, for our customers with annual recurring revenue, or ARR, of $500,000 or more. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors Affecting Our Performance” for additional information regarding our customers and our dollar-based net retention rate.

Industry Trends

Consumers Expect Real-Time, Personalized Brand Interactions Across Channels

In the last decade, rapid innovations in consumer communication technologies, primarily mobile devices and mobile applications, have enabled brands to increase their understanding of and access to consumers. These innovations have also raised consumer expectations around messaging relevance. If brands fail to meet consumers’ high expectations, consumers are likely to seek out different brands that will.

Expectations for relevance are no longer limited to including the customer’s name in the subject line of an email. Consumers now expect brands to recognize them as individuals with constantly evolving needs and desires, not as static database entries.

Companies that meet consumers’ cross-channel expectations see tangible improvements in customer engagement. Our research indicates that consumers who receive messages across two channels are 73% more likely to make a purchase and have a 4.2 times higher lifetime value (measured by the total spend in dollars divided by the total number of buyers), a 76% longer user lifetime, and a 58% increase in 30-day retention, in each case relative to consumers who receive messages in only a single channel. Sending messages across in-product and out-of-product channels as part of a coordinated, cross-channel strategy yields even greater engagement. Brands with such strategies benefit from 25% more buyers, 64% more purchases per user, 13% greater 30-day retention and 94% higher customer lifetime value relative to brands that only send messages across any two channels, according to our studies. Our research is based upon a third-party survey of 1,300 marketing executives at companies with minimum annual revenues of $10.0 million conducted in December 2020, and a review of anonymized and aggregated user behavioral data of over 5.0 billion user profiles among 770 of our customers between January 1, 2020 and December 31, 2020.

Customer Experience is the New Battleground for Brands

Given the permanent shift in consumer behavior toward digital and mobile transactions, which was significantly accelerated by the COVID-19 pandemic, today’s consumers can transact with a seemingly unlimited number of brands anytime, anywhere. The abundance of options available to consumers has resulted in a dramatic increase in competitive pressure among brands. What differentiates exceptional, enduring companies is the quality of their customer engagement, encompassing the full set of activities through which companies build direct relationships with their customers.

Meanwhile, the data generated from digital experiences provides brands with new opportunities to enhance customer experience via real-time personalization. Together, these forces have brought the customer experience to the forefront of brands’ strategic focus.

First-Party Data is Critical for Effective Customer Engagement

First-party data includes information consumers share directly with a brand, as well as individual behaviors and interests demonstrated through the actions consumers take within a brand’s applications, websites and other digital interfaces. Such data is typically reliable because a brand knows how it is collected and relevant because it relates directly to the consumer’s use of a brand’s products. It is also typically more current than third-party data because it does not need to travel through multiple parties. Importantly, use of first-party data tends to be more respectful of consumers because it is held only by brands with whom consumers have chosen to engage. As a result, brands who design their data-driven marketing strategies leveraging first-party sources may be more likely to maintain consumer trust and are better prepared to navigate the ever-evolving, privacy-focused regulatory environment. Moreover, third-party data is becoming increasingly aggregated or anonymized due to privacy concerns, devaluing it further. This increases the competitive advantage that first-party data provides.

Customer Engagement Demands Cross-Functional Collaboration

Further, we believe that organizations that embrace a culture of experimentation, and use our platform to continuously test the efficacy of these experiments, see improved customer engagement and greater return on investment. Cross-functional collaboration between marketing, product, and data science teams often enables brands to better conduct data-driven testing or run growth experiments designed to optimize experiences at any stage of the customer lifecycle.

Challenges with Existing Solutions

Today’s customer engagement landscape consists of legacy marketing clouds and emerging technologies, both of which generally lack the ability to facilitate effective cross-channel engagement at scale. Legacy marketing clouds also typically have high latency and are difficult to implement and use. Emerging technologies often lack comprehensiveness, interoperability, and enterprise-grade scale, stability and/or security.

Existing customer engagement solutions suffer from the following limitations:

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Initially Architected as Single-Channel Point Solutions: Most other marketing solutions were initially architected as single-channel point solutions, such as email marketing platforms. Marketing cloud platforms have added additional channels over time via bolt-on acquisitions. Emerging technology solutions have added additional channels themselves; however, new channels can be challenging to add and support, particularly when trying to combine in-product and out-of-product messaging. This results in siloed architectures and feature sets, leading to disjointed customer data and experiences. Furthermore, because the number of channels through which brands can engage customers continues to increase, a truly customer-centric platform must be designed intentionally to accommodate the complexity inherent to comprehensive cross-channel messaging and cannot be built one channel at a time. A truly cross-channel platform must be architected to be cross-channel from the ground up. In a study that we commissioned from Forrester Consulting in 2019, 38% of global marketing decision-makers cited coordinating messages and interactions across channels, devices and touchpoints as a top marketing challenge. When businesses use multiple, disparate solutions to enable customer engagement across multiple channels, they are less likely to bring insights or performance feedback from one channel to another and to understand and manage conversations in real time, across channels and devices.

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Lack of Comprehensiveness: Many customer engagement solutions, particularly point solutions, do not address engagement across the full customer journey. In particular, they do not have comprehensive capabilities that enable a marketer to understand the user’s context at each stage of their journey — prompting, guiding and nudging as appropriate and relevant, but waiting patiently when the customer is already on the right track. They lack the ability to connect the in-product and out-of-product message experiences required to continuously engage the consumer.

•

High Latency: Many customer engagement platforms, particularly legacy marketing clouds, are riddled with sources of latency. For legacy marketing clouds, drivers of such latency include systems

designs predicated on 2000s-era email-only strategies and reliance on old technologies, like batch processing of data. Batch processing technology, which processes data at fixed intervals, rather than in real time, precludes real-time engagement because the data is often no longer relevant by the time it is available for use. Without real-time data processing, brands cannot engage in the natural, high-quality interactions with consumers that underpin long-lasting relationships. For point solutions, latency often derives from lack of comprehensiveness and limited interoperability — the many additional, hard-to-integrate point solutions required add complexity that in turn add latency, hindering the ability to deliver experiences in the most critical moments.

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The Braze Platform

Our comprehensive customer engagement platform enables authentic, real-time relationships between consumers and the brands they love. Our customers trust us with their most valuable assets: their customer relationships. We enable brands to perform three core functions: listen to their customers better, understand them more deeply and act on that understanding by communicating with them in a way that is human, relevant and personal.

LOGO

Listen

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Data Ingestion: We enable brands to listen to their consumers. To implement our platform, brands integrate software directly into their digital consumer interfaces, such as their websites and mobile applications, enabling consumer data to flow automatically into our platform. Brands can then understand where, when and how consumers interact with them. This helps them to build comprehensive consumer profiles that evolve alongside each individual consumer’s personal journey. Real-time, first-party data provides brands with valuable insights regarding consumer behavior. With our platform, brands can engage with their consumers in ways that are relevant and actionable, driving enhanced consumer loyalty and improving long-term customer value. Additionally, brands can enhance this first-party data with insights they have generated elsewhere via direct integrations with our technology partners, including data warehouse companies, customer data platforms and cloud storage providers. Our flexible and comprehensive data ingestion methods ensure that no matter where in the technology stack they live or what form they take, data that is integral to the customer engagement cycle can be incorporated into our platform.

Understand

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Classification: Our customers can build granular audience segments based upon each consumer’s demographics, past behaviors, and current actions. Brands can create segments either from scratch or by importing and mapping together existing classifications from various data sources. Once created, audience segments in our platform are continuously updated in real time to reflect each consumer’s ongoing behaviors. This is designed to ensure that consumers receive only messages that are likely to be relevant to them at a particular point in time. It also reduces the cognitive load for marketers: by using real-time data and continuously updating segments, marketers never have to worry if they are targeting based on a data insight or classification that could be stale. Continuous live data enables marketers to focus on what matters most — the customer.

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Orchestration: Brands use our orchestration capabilities to deliver contextually relevant messages, whether as part of a single campaign or as part of a broader effort to engage with consumers throughout their brand relationships. Braze Canvas, our drag-and-drop visual customer journey management environment, allows marketers to seamlessly coordinate personalized messages across channels while leveraging our campaign optimization and experimentation capabilities. The Braze Intelligence and Predictive Suites, our set of artificial intelligence tools that optimize campaigns, include but are not limited to predictive audience creation, send-time optimization, channel affinity scores, and multi-armed bandit optimization. Our experimentation capabilities are designed to enable our customers to optimize the consumer journey by trying different variants of a campaign, gauging responses, and using machine learning to dynamically update the campaign strategy based on those responses.

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Personalization: Brands use our platform to customize their messaging content based on the information they learn in real time and on what they know already about each individual consumer, resulting in messages that are human, relevant and personal. For example, brands can use our platform to suggest local activities based on the current weather in a consumer’s geographic area, create personalized fitness regimens based on a consumer’s health goals and progress, customize onboarding messages based on activities the consumer has or has not already engaged in, or nudge a consumer to purchase a product they had previously viewed.

Act

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Action: Having listened to and understood their consumers, brands are then able to use our platform to execute marketing strategies that are focused and relevant. Brands can send messages to their consumers via both in-product and out-of-product channels. Today, our in-product messaging channels consist of Content Cards, which are pieces of personalized content embedded into a brand’s user interface, and in-app and in-browser messages. Our out-of-product channels include, but are not limited

to, mobile push notifications, web push notifications, email, SMS and MMS messages, webhooks, Facebook and Google advertisements, and multiple OTT media services and connected TV channels.

Our platform is organized into functional layers rather than into channels, with special attention paid to both points of integration and abstraction layers. The abstraction layers allow us to decouple data ingestion and action layers from the channels they support. We have purposely designed our technology stack to allow for modularity at the channel and platform levels, enabling our customers to layer in new strategies, channels, data sources, and platforms with ease. Our customers can flexibly ingest and export data, and can use the particular functionalities of the product that are most relevant to their needs.

Data created and processed by our platform can also be streamed to third-party partners. Braze Currents facilitates continuous and automatic high-volume data exports and extends the ability to stream data in real time through our customers’ technology stacks and through our third-party data partners. Braze Currents supports direct connections between our platform and cloud data storage providers, customer data management platforms, analytic solutions and other parts of the modern marketing technology ecosystem.

Our Competitive Strengths

Cross-Channel Approach, Enabling Customer-Centric Experiences

The most effective customer engagement strategies use multiple channels. According to a 2017 Braze analysis of over 300 million user profiles with a first session occurring in July 2017, while email significantly boosts engagement among recipients, when compared to individuals who received no messages, pairing email with other channels can unlock additional customer engagement. Consumers who only receive email see 45% higher engagement than those who receive no messages at all. Our analysis indicates that brands that are able to work effectively across teams to coordinate their email outreach with mobile messaging can reap even stronger results. Adding in-app messaging to email outreach, for instance, is associated with a 186% increase in engagement, while pairing in-app messages and mobile and web notifications with email results in consumers with engagement levels that are 54% higher than individuals who received cross-channel messages that included just email and in-app messages. For purposes of this analysis, engagement was defined as the number of app opens logged by a given user, and engagement statistics were calculated and averaged at the user level.

Data Streaming Architecture Processes First-Party Data in Real Time

The real-time nature of the interactions we enable is made possible by our proprietary, enterprise-grade stream processing architecture. This architecture receives, contextualizes and responds to first-party customer data in the moment. Our platform allows for high-volume, continuous data streaming, providing a live view of the various interactions that consumers are having with a brand. Unlike batch processing, where data is processed only when a specific time or threshold is hit, our data streaming architecture processes each unit of data as it is created. Real-time data processing enhances messaging relevance, while delayed data processing often leads to irrelevant messages and frustrated consumers.

Value Propositions Across the Organization

While for many brands the marketing organization has traditionally owned overall responsibility for customer engagement, cross-functional collaboration enhances the experience for the customer and improves the return on investment for the marketing organization. For brands that take a collaborative approach, marketing teams work hand-in-hand with other groups within the organization, including data, product and engineering teams to optimize customer engagement. In fact, according to a study we conducted, the Braze 2021 Global Customer Engagement Review, more than half of the companies surveyed in the United States reported that ancillary teams or departments are “highly involved” in customer engagement.

Braze unleashes the power of interdisciplinary teams by serving numerous stakeholders, beyond traditional marketers, including product and engineering teams, and business intelligence teams. Our platform produces valuable data that informs decisions and actions across the entire customer engagement spectrum. Our messaging capabilities transcend marketing use cases, often being used for product or transactional use cases that facilitate or enhance the customer’s experience with the brand or product. For example, brands can use our platform to run personalized product replenishment campaigns, let customers know that their food delivery is about to arrive, or to promote specific product features in the context of new user onboarding flows.

Braze gives teams across a company the power to imagine, create and evolve brilliant customer experiences. When designing campaigns, marketers use our composition tools to unlock new creative ideas that can be deployed across all appropriate channels and platforms. They can also leverage the strategic and creative insights of our Customer Success teams or find inspiration through engaging with our Braze Bonfire customer community as they brainstorm new approaches. When it comes time for execution, marketers and product engineers use Braze to orchestrate personalized messaging experiences directly into their products, and to ensure that all campaigns, regardless of channel, are highly coordinated and additive to the overall customer experience. Finally, data scientists and business intelligence teams analyze data gained from marketing and lifecycle campaigns, creating a rapid experimentation loop that compounds improvements and gains over time, and helps inspire new creative ideas. We serve as the unifying thread that enables brands to draw on the strength of multiple teams working in concert to bring creative, technical and business intelligence skills together, and unlock more value that any of them could achieve on their own.

Rapid Time to Value

Our platform’s ease of use and seamless integration into existing technologies, coupled with the high value data and insights that it generates, enables brands to develop and run campaigns that meet their strategic goals quickly and efficiently. Using our intuitive user interface, individuals across all roles and technical skill levels can design and quickly deploy multi-message, multi-channel, A/B-tested strategies, with the process of new campaign creation accelerating over time. For example, with a few clicks, brands can create variants of a marketing campaign and compare consumer responses to each. Brands can then select how many consumers will receive each campaign based on how the variants are performing.

High Performance at Scale

As brands continue to globalize and conduct more of their business digitally, they need a scalable customer engagement platform. Our platform enabled interactions with 3.3 billion monthly active users via our customers’ applications, websites and other digital interfaces in July 2021, up from 2.3 billion in January 2020 and 1.6 billion in January 2019. Our scalability distinguishes our platform from point solutions, and we can handle the biggest of enterprise needs. We facilitate the rapid delivery of a high volume of messages, which enables us to power a brand’s highest-volume events, whether they are expected, like Black Friday, or unexpected, like the sudden surge of food delivery demand during the COVID-19 pandemic. Forrester Research, Inc. has recognized the company as a Leader in “The Forrester Wave^TM: Cross-Channel Campaign Management (Independent Platforms), Q3 2021.” Braze received the highest score in the Strategy category. The company was also named a Leader in “The Forrester Wave^TM: Mobile Engagement Automation, Q3 2020,” where it earned the highest scores in both the Current Offering and Strategy (tied) categories.

Seamless, Real-Time Interoperability across the Customer Engagement Technology Stack

Customer Engagement Expertise and Highly Engaged Community

When brands partner with us, they get access to strategic and technical advice from our experts and from a community of like-minded, forward-thinking marketers and product leaders.

Market Opportunity

International Data Corporation estimates the market for marketing campaign management software to reach $15.0 billion in 2021 and $19.4 billion in 2024. We believe this understates our addressable market because in addition to marketing campaign management capabilities, we offer analytical tools that help companies better understand their consumers and improve the overall consumer experience.

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We estimate that, based on our current average customer spending levels, the annual market opportunity for our solution is currently $16 billion in the United States alone. We calculate this estimate using the total number of U.S. companies with 50 or more employees per the U.S. Census Bureau. We segment these companies into five cohorts based on the number of employees: companies that have between 50 and 99 employees, companies that have between 100 and 1,499 employees, companies that have between 1,500 and 9,999 employees, companies that have between 10,000 and 19,999 employees, and companies that have 20,000 or more employees. We refine the number of companies in the United States within certain cohorts by estimating the percentage of companies in such cohorts that are likely to need a sophisticated customer engagement platform like ours. Next, we multiply the number of companies in each cohort by the average ARR for our customers in fiscal year 2021 with a corresponding number of employees. For cohorts with fewer than 20,000 employees, we use the average ARR for all customers within each cohort. For the 20,000 and greater employee cohort, we use the average ARR for the top 25% of our customers in that cohort measured by ARR. We believe there is further potential to expand our market opportunity, because the average ARR is based on the current usage of our platform, which we believe will continue to increase as we further penetrate our existing customer base and release additional functionality. We believe there is also significant opportunity outside the United States. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors Affecting Our Performance” for additional information regarding our ARR.

Growth Strategy

The principal components of our growth strategy are:

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Acquire new customers: We intend to continue to expand our customer base in verticals where we already have a strong presence, such as retail, eCommerce, media, entertainment, and on-demand services, and to increase our presence in verticals where we are not yet strongly represented. Through our sales and marketing efforts, we plan to capitalize on the ongoing digital transformation in regulated industries like healthcare and financial services to further propel adoption of our technology.

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Expand within our existing customer base: We believe we can achieve significant growth by expanding sales within our existing customer base. We expand the use of our platform by existing customers by, among others, adding new channels and increasing the messaging volume we sell to our customers as their businesses and needs continue to grow and as they reach additional consumers, which in turn leads to a need for greater messaging capacity. Our successful land-and-expand strategy is evidenced by our dollar-based net retention rate, which for the trailing 12 months ended July 31, 2021, January 31, 2021 and January 31, 2020 was 125%, 123% and 126%, respectively, for all our customers, and 135%, 133% and 127%, respectively, for our customers with ARR of $500,00 or more.

We also anticipate that as more customers reach higher levels of digital sophistication, they will invest in additional data streaming and data management capabilities. We see an opportunity within our customers’ organizations to create new use cases for our platform as they broaden the use of our platform beyond the traditional marketing team, as marketers become more technically savvy, as technologists work more closely with marketing teams, and as data scientists become more influential within their organizations. Given that many of our customers are multinational conglomerates, we also see the opportunity to further penetrate our existing customer base by expanding to new brands and new geographies within those existing customer organizations.

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Expand geographically: We believe there is a significant opportunity to continue to expand usage of our platform outside the United States, both by expanding our presence in international markets where we operate today and by entering markets we have not yet penetrated. We expect to increase market penetration in regions like Europe and Asia-Pacific and to further capitalize on the greenfield opportunity in regions such as Latin America. For example, in the second half of our last fiscal year, we entered into a joint venture with Japan Cloud Computing Co., Ltd to facilitate further expansion into the Japanese market.

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Expand our technology leadership through continued investment and new products: We are focused on investing in research and development to continue to enhance our platform. For example, we continue to develop our artificial intelligence capabilities to enable brands to better analyze and act on customer data. We believe our market-driven product development approach maximizes the return on new feature development and channel expansion. Our customers consistently volunteer to participate in the testing of new products, which indicates their appetite for new and innovative functionality. We believe our continued innovation will provide new avenues for growth through which we will continue to deliver differentiated outcomes for our customers.

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Continue to increase and strengthen our partnerships: We have built and plan to continue investing in direct integrations with technology partners that augment our core offering with a broad range of complementary offerings, including data augmentation and enrichment, analytics, and channel extensions. We are also expanding our relationships with the ecosystem of solution partners, marketing agencies, and consultancies that offer opportunities for new customer referrals.

Our Products

We offer a single, vertically integrated platform that encompasses the major functionalities, or layers, required for modern customer engagement: data ingestion, classification, orchestration, personalization, and action.

Data Ingestion

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Braze SDKs: The primary way in which customers integrate our platform into their websites and applications is via our software development kits, or SDKs. SDKs are software libraries that reside within our customers’ applications or websites, automatically managing data ingestion and the delivery of mobile and web notifications, in-application / in-browser interstitial messages, and Content Cards. Our SDKs can be integrated into a wide variety of digital interfaces including iOS, Android, Desktop / Mobile Web, connected TVs, the Unity and Unreal game engines, and application development frameworks such as React Native and Cordova. By embedding new messaging capabilities directly in our SDKs, we can rapidly deploy new functionality to our customers, with little to no additional effort on their part.

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REST API: The majority of our customers also integrate via connecting to server-to-server APIs. The Braze REST API can be used to import or export data or to trigger workflows between Braze and brands’ existing technology stacks. For example, customers can send messages using Braze within internal business processes or connect Braze to third-party services such as customer data platforms or attribution providers.

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Partner Cohort Syncing: Brands can sync user cohorts from partners such as Amplitude or Mixpanel to our platform. They can then use membership in these user cohorts as additional criteria in the Braze Classification layer.

Classification

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Segmentation: Customers can define reusable segments of consumers based upon attributes, events, or predictive propensity scores from our machine learning algorithms. Braze Segments are updated in real-time as data is ingested, allowing them to stay up-to-date with the latest data inputs.

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Segment Insights: Segment Insights allows customers to analyze how segments are performing relative to each other across a set of pre-selected key performance indicators. Additionally, customers can use this tool to understand the factors that determine which consumers belong to a particular segment.

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Predictive Suite: Our Predictive Suite allows customers to identify groups of consumers that are of critical business value such as “consumers who are likely to churn.” Our platform uses machine learning to automatically identify consumers who have a propensity to behave similarly to the identified audience, allowing customers to preemptively engage these consumers and thereby encourage or discourage their predicted behaviors.

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Orchestration

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Canvas: Canvas is our flagship orchestration tool, allowing customers to create journeys, mapping out multi-step, cross-channel messaging experiences such as onboarding flows, nurture campaigns, win-back strategies, and more. Canvases are designed to be flexible and real-time, able to execute nearly any digital marketing campaign strategy that customers can envision. Canvas is natively cross-channel and customers use it to design and execute strategies that span all of the platforms and channels that our platform supports. Using Canvas, customers can create multiple variants of a journey and automatically optimize customer journeys based on the performance of the variants.

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The below graphic displays what a Braze customer sees when creating a Canvas. Each Canvas has entry rules that define when the journey should begin for each user and the set of users to whom the journey should apply. In addition to the entry criteria, there are additional rules for each individual step of the journey that define which users reach that step and when. The below graphic depicts the set of rules associated with a particular step.

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Campaigns: Campaigns allow customers to send one set of single-channel or multi-channel messages to be delivered to customers in a particular user segment. Campaigns can be one-time or recurring sends that are delivered on a time-based schedule, or can be sent in response to a user’s actions, or triggered by an API call. Campaigns support all of Braze’s messaging channels and offer experimentation such as A/B testing.

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Event and API Triggering: Messages, steps within a Canvas, or entire Canvas flows can be triggered in a variety of ways, such as when events of a certain type are received or when API calls are initiated from our customers’ servers.

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Frequency Capping and Rate Limiting: Customers can limit the number of messages sent from the platform by capping the frequency of message type (e.g., no more than three push notifications per week or no more than one promotional email per day), or by limiting the speed at which our platform sends messages (e.g., no more than 10,000 messages per minute).

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Intelligent Selection: Our platform can automatically run a multi-armed bandit optimization to improve the outcomes of a recurring Canvas or Campaign. Consumers can traverse different Canvas paths or receive different Campaign variations in a manner designed to maximize the total number of conversions.

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Reporting and Analytics: We provide a variety of analytics features to help our customers understand and improve their customer engagement strategies:

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Campaign and Canvas Analytics: Our platform provides analytics breakdowns for all Campaigns and Canvases, including tracking conversion rates. Customers can create multiple variants and results can be compared statistically against one another or a control.

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Funnel and Retention Reports: Customers can analyze the retention uplift caused by a messaging strategy, or create and analyze funnels of actions that were taken by consumers after receiving a message.

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Report Builder: Customers can create custom reports to analyze the total uplift and aggregate statistics from their usage of our platform.

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Global Holdout Groups: To allow customers to isolate the impact of their marketing efforts, customers can create global holdout groups, consisting of consumers who should only receive a subset of critical communications from the customer (e.g., password reset emails) and otherwise be held out from all communication. Lifetime value of this holdout group can be easily compared against that of consumers who received the full suite of Braze engagement.

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Personalization

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Liquid Templating: Customers can personalize messages using the Liquid Templating language to inject personalized content into their messages. Our platform allows customers to flexibly utilize a wide variety of data in this templating process, including data ingested and stored on consumer profiles, as well as contextual data, such as properties of a consumer action that triggered a message flow. Personalization options include use cases such as listing a set of consumer-specific recommendations or creating complex if/else logic inside of a message to conditionally determine what content to deliver.

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Connected Content: Customers can connect to remote servers (including both third-party and partners and first-party customer-owned endpoints) and pull back data for advanced personalization use cases. For example, customers can personalize messages on a one-to-one basis by connecting to a recommendation engine or modify messages to a user based upon the current weather at the user’s location.

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Content Blocks: Customers can store and reuse blocks of content (including Liquid Templating content) which can be used across multiple messages. Content Blocks can also be updated and managed via API, extending their functionality and connecting them to customer data sources dynamically.

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Intelligent Timing: Our platform will automatically calculate when consumers are most likely to engage with a particular messaging channel, and can send messages to consumers at the time that is optimal for them based upon their behavior patterns for a particular channel.

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Promotion Codes: Customers can store promotion codes within the platform, and use them to serve unique, one-time use promotional coupon codes to consumers.

Action

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In-Product Messaging:

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In-App and In-Browser Messages: Our platform offers a variety of interstitial messages that can be added to mobile applications and web browsers for engagement use cases – ranging from reminders, confirmation dialogs, promotions, surveys, and more. These in-experience messages can be built from templates or built from scratch with nearly infinite customizability.

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Content Cards: In addition to ephemeral messages, we offer Content Cards, a proprietary Braze product where a personalized feed of user-controllable content is embedded directly into applications and browsers for persistent viewing.

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Out-of-Product Messaging:

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Push Notifications: Our platform provides robust push notification messaging capabilities across both mobile and web. In addition to supporting push notifications on all major platforms, we have released advanced functionality such as Push Stories (paginated image carousels within notifications) to increase the power and flexibility of the channel.

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Email: Our platform provides a full suite of email engagement technology, including email template editing and management, link tracking and heatmap analytics, email preference centers, and seed lists. We also support advanced email content types such as Accelerated Mobile Pages, or AMP, which enables marketers to embed interactive elements.

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SMS and MMS: Our platform offers a native product for SMS and MMS messaging. In addition to sending messages via the SMS and MMS protocols, customers can manage links and analytics and respond to inbound keyword responses with an automated follow-up message.

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Ad Network Integrations: Using Braze Audience Sync with Facebook or Google, brands can sync user data from Braze to Facebook Custom Audiences and Google Display Network to deliver advertisements based upon behavioral triggers, segmentation and more.

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Webhooks: Our platform offers flexible webhooks, allowing customers to connect Braze to any external application via outbound web requests, using all of the targeting and templating mechanisms available on other channels. Customers can use webhooks for utility purposes (such as messaging to their own servers) as well as to build integrations with other third-party partner systems, such as to direct mail providers, extending the range and utility of our platform.

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Transactional Messaging: We offer an optional premium service with even higher speed and reliability guarantees for critical use cases.

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