Braze, Inc. (NASDAQ:BRZE) Q3 2023 Earnings Call Transcript

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And we saw a reversion of that and people got more comfortable with longer-term contracts once we got out of the depths of the COVID year in 2020. And so we’re not overly concerned about that for the long-term health of any of these customer contracts, but you certainly see the impact on RPO.

Operator: Our next question comes from Derrick Wood from Cowen. Please go ahead.

Derrick Wood: Can you hear me?

Operator: Yes, we hear you.

Derrick Wood: I wanted to ask about greenfield versus displacement activity in kind of this market environment I think we think of mobile and push being very kind of greenfield use cases while e-mail is often a displacement and often could be even a vendor consolidation message. Can you just talk about where you’re seeing greater demand or greater success across these different go-to-market motions in the market right now?

Bill Magnuson: Yes. I think that across — I would think about it more on the lens of established businesses versus emerging businesses because even within — and when I say that, I’m not specifically talking about young companies versus older companies, but rather new lines of business and new focuses. And so canonical examples would include streaming companies who — well, those are certainly displacements of other vendors that may have been sending e-mail for them in the past the use cases are new because the direct-to-consumer investment is net new within the business. And so those operate more like greenfield. And I think that broadly, when you look across our customer base, that, that characterization of mobile and push being more often greenfield than e-mail is broadly true.

But at this point, in the maturation of mobile, the vast majority of businesses have something up at this point. And so I think that displacement is something that our teams are very good at. Even if you go back to the early days, we — we’ve always operated in a highly competitive market. And so we’ve been replacing mobile push vendors since 2013 as well. And I think that throughout our lifetime, it will continue to be a mix of the two with both greenfield and replacement because our vision for Braze and the customer engagement platform and attacking these problems in a customer-centric way, that’s not channel siloed means that we’re always going to go into an environment that is going to be heterogeneous. There’s going to be certain channels and use cases that are not being covered or maybe not being handled in an advanced way or maybe they’re not being coordinated with other places.

So we can often simultaneously bring in more operational efficiency and better agility and execution on existing use cases, but unlock completely net new use cases. which are going to result in, in many cases, increased volume, even if they don’t, they definitely result in ROI for the business. And we’re always focused on the hybrid of those. I think it’s very rare that we go in even in a replacement, and we’re simply just doing the same use cases before, but with a new technology stack.

Derrick Wood: Great. And maybe just another go-to-market follow-up question. It sounds like you guys have a new initiative, maybe I got this wrong start anywhere go anywhere, and it’s maybe a do go-to-market tactic. And we know you guys have been working on some things to ship sales training. Is that part of that? And could you just elaborate a little bit more on what that change is and how that’s helping to maybe drive accelerated ramp to productivity on the rep side?

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