Braze, Inc.
For the period ended Jul 31, 2025. Filed Sep 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2025 · Filed Sep 5, 2025
BRZE$45.79-0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-04-30; filed 2025-06-06.
0001676238-25-000079
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-07-31; filed 2025-09-05.
0001676238-25-000134
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 103 previous paragraphs and 113 current paragraphs.
72 unchanged; 25 reworded; 11 added; 5 removed; 1 previous and 5 current paragraphs rearranged.
Tables are not compared: 11 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Tax legislation continues to evolve globally with new laws and regulations that create uncertainty in the global economy. The Organization for Economic Cooperation and Development reached agreement among over 140 countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two framework. Additionally, the U.S Congress enacted the OBBBA which includes significant provisions, including tax cut extensions and modifications to the international tax framework. While we continue to evaluate the impact of these legislative changes as additional guidance becomes available, uncertainty remains regarding the timing and interpretation by tax authorities in affected jurisdictions. These legislative changes could have an adverse impact on our future effective tax rate, tax liabilities, and cash tax.
Current report
Our gross profit increased $19.8 million, or 19.4%, in the three months ended July 31, 2025, compared to the three months ended July 31, 2024, and our gross margin decreased 2.5% to 67.7% in the three months ended July 31, 2025 from 70.2% in the three months ended July 31, 2024. The decrease was primarily due to expenses resulting from the acquisition, including personnel costs of acquired workforce and amortization expense of acquired technology, in addition to, increased costs related to our tech stack.
Current report
The increase in sales and marketing expense of $14.0 million, or 20.5%, for the three months ended July 31, 2025, compared to the three months ended July 31, 2024, was primarily driven by an increase in personnel and overhead costs of $9.7 million, which included $2.2 million of stock-based compensation costs. Additionally, the increase was driven in part by an increase of $2.3 million in promotional and product marketing, primarily related to the hosting of regional customer events and sales related events, and an increase of $1.7 million in deferred contract costs as a result of sales growth.
Current report
Comparison of the Six Months Ended July 31, 2025 and July 31, 2024
Current report
Revenue
Current report
Sales and Marketing Expense
Current report
The increase in sales and marketing expense of $18.3 million, or 13.2%, for the six months ended July 31, 2025, compared to the six months ended July 31, 2024, was primarily driven by an increase in personnel costs and overhead costs of $13.5 million, which included $2.8 million of stock-based compensation costs, as a result of a period-over-period increase in headcount. Additionally, the increase was primarily due to an increase in net amortization of deferred contract costs of $2.8 million as a result of sales growth and an increase of $1.0 million in travel, entertainment, and marketing expenses primarily related to the hosting of regional customer events and sales related events.
Current report
Research and Development Expense
Current report
The increase in research and development expense of $10.5 million, or 15.6%, for the six months ended July 31, 2025, compared to the six months ended July 31, 2024, was primarily driven by an increase of personnel and overhead costs of $8.6 million, which included $3.1 million of stock-based compensation costs, and an increase in software costs of $0.7 million. The increase in personnel costs and software costs were primarily due to a period-over-period increase in headcount to support our continued investment in the features and functionality of our platform.
Current report
General and Administrative Expense
Current report
The decrease in other income, net of $1.0 million, or 9.7%, for the six months ended July 31, 2025 compared to the six months ended July 31, 2024, was attributable to a $0.7 million decrease in investment income from marketable securities. The investment income decrease was driven primarily by the decrease in the marketable securities balance period-over-period.
Removed paragraphs (5)
Previous report
Operating Expenses
Previous report
Other Income, Net
Previous report
Operating Expenses
Previous report
The increase in sales and marketing expense of $4.3 million, or 6.2%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024, was primarily driven by an increase in sales and marketing personnel costs and overhead costs of $3.8 million, which included $0.6 million of stock-based compensation costs.
Previous report
Other Income, Net
Reworded paragraphs (25)
Previous wording
We have grown significantly in recent periods. We generated revenue of $162.1 million in the three months ended April 30, 2025, representing year-over-year growth of 19.6% from the three months ended April 30, 2024. We had net losses of $35.6 million and $35.7 million in the three months ended April 30, 2025 and 2024, respectively. We had net cash provided by operating activities of $24.1 million in the three months ended April 30, 2025 and net cash provided by operating activities of $19.4 million in the three months ended April 30, 2024. Our Non-GAAP free cash flow was $22.9 million and $11.4 million in the three months ended April 30, 2025 and 2024, 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 provided by operating activities, the most directly comparable measure calculated in accordance with accounting principles generally accepted in the United States, or U.S. GAAP.
Current wording
We have grown significantly in recent periods. We generated revenue of $180.1 million and $145.5 million in the three months ended July 31, 2025, and 2024, respectively, representing year-over-year growth of 23.8%, and $342.2 million and $281.0 million in the six months ended July 31, 2025 and 2024, respectively. We had net losses of $27.8 million and $23.1 million in the three months ended July 31, 2025 and 2024, respectively, and $63.4 million and $58.9 million in the six months ended July 31, 2025 and 2024, respectively. We had net cash provided by operating activities of $31.1 million in the six months ended July 31, 2025 and net cash provided by operating activities of $31.0 million in the six months ended July 31, 2024, respectively. Our Non-GAAP free cash flow was $26.4 million and $18.7 million in the six months ended July 31, 2025 and 2024, 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 provided by operating activities, the most directly comparable measure calculated in accordance with accounting principles generally accepted in the United States, or U.S. GAAP.
Previous wording
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 and consumer goods, media and entertainment, telecommunications, restaurants and on-demand services, healthcare and life sciences, technology, manufacturing, education, government and public services, and financial services — and to increase our presence in verticals where we are not yet strongly represented. Through our sales and marketing efforts, we also plan to capitalize on industries subject to ongoing digital transformation and where direct-to-consumer relationships are accelerating, to further propel adoption of our technology. As of April 30, 2025, we had 2,342 customers across a broad range of sizes and industries. 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.
Current wording
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 and consumer goods, media and entertainment, telecommunications, restaurants and on-demand services, healthcare and life sciences, technology, manufacturing, education, government and public services, and financial services — and to increase our presence in verticals where we are not yet strongly represented. Through our sales and marketing efforts, we also plan to capitalize on industries subject to ongoing digital transformation and where direct-to-consumer relationships are accelerating, to further propel adoption of our technology. As of July 31, 2025, we had 2,422 customers across a broad range of sizes and industries. 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.
Previous wording
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 thirty-day period. 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 April 30, 2025, we had approximately 7.2 billion monthly active users, in line with the approximately 7.2 billion monthly active users as of January 31, 2025.
Current wording
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 thirty-day period. 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, 2025, we had approximately 7.4 billion monthly active users, up from approximately 7.2 billion monthly active users as of January 31, 2025.
Previous wording
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 April 30, 2025 and April 30, 2024 was 109% and 117%, respectively, for all our customers, and 112% and 119%, respectively, for our customers with ARR of $500,000 or more. In addition, 262 and 212 of our customers had ARR of $500,000 or more as of April 30, 2025 and April 30, 2024, respectively.
Current wording
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, 2025 and July 31, 2024 was 108% and 114%, respectively, for all our customers, and 111% and 117%, respectively, for our customers with ARR of $500,000 or more. In addition, 282 and 222 of our customers had ARR of $500,000 or more as of July 31, 2025 and July 31, 2024, respectively.
Previous wording
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 the three months ended April 30, 2025 and 2024, approximately 46% and 44% of our revenue was generated outside of the United States, respectively. 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. 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.
Current wording
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 the six months ended July 31, 2025 and 2024, approximately 45% and 45% of our revenue was generated outside of the United States, respectively. 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. 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.
Previous wording
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.
Current wording
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, information technology costs, depreciation and amortization related to the amortization of acquired intangibles and internal use software and certain administrative personnel costs.
Previous wording
Provision for Income Taxes
Current wording
Benefit from and Provision for Income Taxes
Previous wording
Provision for income taxes consists of state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We maintain a full valuation allowance in jurisdictions where we had net deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.
Current wording
The provision for income taxes and the benefit related to the release of the valuation allowance due to the acquisition of OfferFit consists of state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We maintain a valuation allowance in jurisdictions where we had net deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.
Previous wording
The increase in revenue of $26.6 million, or 19.6%, for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, was primarily driven by a $24.8 million, or 19.0%, increase in subscription revenue. Approximately 39.2% of the increase in subscription revenue was attributable to the growth from existing customers, an increase in monthly active users, expansion across channels, and committed entitlements and features, and the remaining 60.8% was attributable to new customers. Total customers grew to 2,342 as of April 30, 2025, from 2,102 as of April 30, 2024. Professional services revenue increased $1.8 million or 35% due to an increase in deliverability services, technical account management, and support engagement services, as well as onboarding revenue. Additionally, in the three months ended April 30, 2025, our international revenue increased by $14.3 million as we continued to expand market penetration in regions such as Europe and Asia-Pacific.
Current wording
The increase in revenue of $34.6 million, or 23.8%, for the three months ended July 31, 2025, compared to the three months ended July 31, 2024, was primarily driven by a $31.8 million, or 22.7%, increase in subscription revenue, including acquisition derived revenue. Approximately 41.2% of the increase in subscription revenue was attributable to the growth from existing customers, an increase in monthly active users, expansion across channels, and committed entitlements and features, and the remaining 58.8% was attributable to new customers. Total customers grew to 2,422 as of July 31, 2025 from 2,163 as of July 31, 2024. Professional services revenue, including acquisition derived revenue, increased $2.8 million, or 50.6%, due to an increase in deliverability services, technical account management, and support engagement services, as well as onboarding revenue. Additionally, in the three months ended July 31, 2025, our international revenue increased by $16.1 million as we continued to expand market penetration in regions such as Europe and Asia-Pacific.
Previous wording
The increase in cost of revenue of $6.3 million, or 14.2%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024, was primarily driven by an increase of $1.0 million in hosting, infrastructure and other third-party fees associated with delivering our platform and a $4.0 million increase in third-party messaging fees associated with growth in premium messaging channels. In addition, we had an increase in personnel costs and overhead costs of $1.3 million. The increased infrastructure, messaging, and personnel costs were incurred to support overall revenue growth.
Current wording
The increase in cost of revenue of $14.8 million, or 34.1%, for the three months ended July 31, 2025, compared to the three months ended July 31, 2024, was primarily driven by an increase of $4.7 million in hosting, infrastructure, and other third-party fees associated with delivering our platform, and a $5.9 million increase in third-party messaging fees associated with growth in premium messaging channels. In addition, we had an increase in personnel costs and overhead costs of $2.3 million. The increased infrastructure, messaging, and personnel costs were incurred to support overall revenue growth. Additionally, amortization expense primarily related to acquired technology increased $1.6 million contributing to the increase in cost of revenue.
Previous wording
The increase in research and development expense of $2.4 million, or 7.1%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024, was primarily driven by an increase of research and development personnel and overhead costs of $1.8 million, which included $0.5 million of stock-based compensation costs. The increase in personnel costs was primarily due to a period-over-period increase in headcount to support our continued investment in the features and functionality of our platform.
Current wording
The increase in research and development expense of $8.1 million, or 24.5%, for the three months ended July 31, 2025, compared to the three months ended July 31, 2024, was primarily driven by an increase of personnel and overhead costs of $6.8 million, which included $2.6 million of stock-based compensation costs, and an increase in software costs of $0.6 million. The increase in personnel and software costs was primarily due to a period-over-period increase in headcount to support our continued investment in the features and functionality of our platform.
Previous wording
The increase in other income, net of $0.5 million, or 9.3%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024, was attributable to a $0.5 million increase in investment income from marketable securities. The investment income increase was driven primarily by the graded maturation of the portfolio positions at higher interest rates and the reinvestment of proceeds in a high interest rate environment.
Current wording
The decrease in other income, net of $1.5 million, or 27.6%, for the three months ended July 31, 2025, compared to the three months ended July 31, 2024, was attributable to a $1.2 million decrease in investment income from marketable securities. The investment income decrease was driven primarily by the decrease in the marketable securities balance period-over-period.
Previous wording
Our gross profit increased $20.3 million, or 22.3%, in the three months ended April 30, 2025, compared to the three months ended April 30, 2024, and our gross margin increased 1.5% to 68.6% in the three months ended April 30, 2025 from 67.1% in the three months ended April 30, 2024. The increases were due primarily to efficiency gains on our tech stack. Additionally, the gross margin in the three months ended April 30, 2024 was impacted by a one-time charge to revenue related to our April 2024 service disruption.
Current wording
Our gross profit increased $40.1 million, or 20.8%, in the six months ended July 31, 2025, compared to the six months ended July 31, 2024, and our gross margin decreased 0.6% to 68.1% in the six months ended July 31, 2025, compared to the six months ended July 31, 2024. The decrease was primarily due to expenses resulting from the acquisition of OfferFit, including personnel costs of acquired workforce and amortization expense of acquired technology, in addition to increased costs related to our tech stack. Additionally, the gross margin in the six months ended July 31, 2025 was impacted by a one-time charge to revenue related to our April 2024 service disruption.
Previous wording
The increase in general and administrative expenses of $13.7 million, or 51.2%, for the three months ended April 30, 2025, compared to the three months ended April 30, 2024, was primarily driven by an increase of $10.0 million in professional services and legal costs associated with acquisition-related expenses. In addition, the increase was partially related to an increase in general and administrative personnel and overhead costs of $2.4 million, which included $0.9 million of stock-based compensation costs. The increases in personnel and overhead costs were primarily due to investments in our finance and administrative functions to continue to scale our processes, systems, and controls, to enable our ongoing compliance with public company legal and regulatory requirements.
Current wording
The increase in general and administrative expenses of $22.2 million, or 40.3%, for the six months ended July 31, 2025, compared to the six months ended July 31, 2024, was primarily driven by an increase of $11.2 million in professional services and legal costs primarily associated with acquisition-related expenses. In addition, the increase was partially related to an increase in personnel and overhead costs of $9.3 million, which included $5.5 million of stock-based compensation costs. The increases were primarily due to investments in our finance and administrative functions to continue to scale our processes, systems, and controls, to enable our ongoing compliance with public company legal and regulatory requirements.
Previous wording
As of April 30, 2025, our principal source of liquidity was cash, cash equivalents, and marketable securities of $539.8 million. Our cash and cash equivalents consist of deposit accounts, interest-bearing money market accounts and U.S. government and corporate securities that are stated at fair value. Our marketable securities positions consist mostly of highly liquid short-term investments. The investment income that we generate on these investments is not material to our overall cash balance, but may be adversely affected due to volatility in interest rates.
Current wording
As of July 31, 2025, our principal source of liquidity was cash, cash equivalents, and marketable securities of $368.3 million. Our cash and cash equivalents consist of deposit accounts, interest-bearing money market accounts, and U.S. government and corporate securities that are stated at fair value. Our marketable securities positions consist mostly of highly liquid short-term investments. The investment income that we generate on these investments is not material to our overall cash balance, but may be adversely affected due to volatility in interest rates.
Previous wording
Since our inception, we have financed our operations primarily through the net proceeds received from the sales of equity securities 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 $622.6 million as of April 30, 2025. We had cash flows provided by operating activities for the three months ended April 30, 2025 of $24.1 million.
Current wording
Since our inception, we have financed our operations primarily through the net proceeds received from the sales of equity securities 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 $650.5 million as of July 31, 2025. We had cash flows provided by operating activities for the six months ended July 31, 2025 of $31.1 million.
Previous wording
A substantial source of our cash provided by operating activities is our deferred revenue, which is included on the 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 April 30, 2025, we had total deferred revenue of $265.4 million, of which $265.0 million was recorded as a current liability. Deferred revenue will be recognized as revenue when all of the revenue recognition criteria are met.
Current wording
A substantial source of our cash provided by operating activities is our deferred revenue, which is included on the 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 July 31, 2025, we had total deferred revenue of $262.3 million, of which, $262.1 million was recorded as a current liability. Deferred revenue will be recognized as revenue when all of the revenue recognition criteria are met.
Previous wording
For the three months ended April 30, 2024, net cash provided by operating activities was $19.4 million, primarily due to a net loss of $35.7 million adjusted for non-cash charges of $39.1 million and net changes in our operating assets and liabilities of $16.0 million. The non-cash adjustments primarily relate to stock-based compensation of $28.6 million and amortization of deferred contract costs of $8.3 million. The cash inflow from changes in our operating assets and liabilities were primarily due to a decrease in accounts receivable of $9.9 million and increase in deferred revenue of $25.3 million as a result of billings for new bookings and renewals. The cash inflow was offset by cash outflows primarily from an increase in deferred contract costs of $10.7 million as a result of commissions on new bookings and renewals.
Current wording
For the six months ended July 31, 2025, net cash provided by operating activities was $31.1 million, primarily due to a net loss of $63.4 million, adjusted for non-cash charges of $97.1 million, and net changes in our operating assets and liabilities of $2.6 million. The non-cash adjustments primarily relate to stock-based compensation of $68.2 million and amortization of deferred contract costs of $19.5 million. The cash inflow from changes in our operating assets and liabilities were primarily due to a decrease in accounts receivable of $11.5 million and increase in deferred revenue of $14.5 million as a result of billings for new bookings and renewals. The cash inflow was offset by cash outflows primarily from an increase in deferred contract costs of $24.8 million as a result of commissions on new bookings and renewals.
Previous wording
For the three months ended April 30, 2025, net cash provided by operating activities was $24.1 million, primarily due to a net loss of $35.6 million adjusted for non-cash charges of $43.8 million and net changes in our operating assets and liabilities of $15.9 million. The non-cash adjustments primarily relate to stock-based compensation of $30.6 million and amortization of deferred contract costs of $9.4 million. The cash inflow from changes in our operating assets and liabilities were primarily due to a decrease in accounts receivable of $9.1 million and increase in deferred revenue of $24.5 million as a result of billings for new bookings and renewals. The cash inflow was offset by cash outflows primarily from an increase in deferred contract costs of $11.9 million as a result of commissions on new bookings and renewals.
Current wording
For the six months ended July 31, 2024, net cash provided by operating activities was $31.0 million, primarily due to a net loss of $58.9 million, adjusted for non-cash charges of $80.8 million, and net changes in our operating assets and liabilities of $9.1 million. The non-cash adjustments primarily relate to stock-based compensation of $58.8 million and amortization of deferred contract costs of $17.0 million. The cash inflow from changes in our operating assets and liabilities were primarily due to a decrease in accounts receivable of $20.7 million and increase in deferred revenue of $7.8 million as a result of billings for new bookings and renewals. The cash inflow was offset by cash outflows primarily from an increase in deferred contract costs of $22.0 million as a result of commissions on new bookings and renewals.
Previous wording
Net cash provided by investing activities was $122.8 million for the three months ended April 30, 2025, primarily consisting of the return of principal on marketable securities of $113.3 million and maturities of marketable securities of $63.2 million, partially offset by purchases of marketable securities of $52.4 million.
Current wording
Net cash used in investing activities was $37.7 million for the six months ended July 31, 2025, primarily consisting of cash paid for the acquisition of OfferFit, net of cash acquired of $181.2 million, purchases of marketable securities of $75.1 million, purchases of property and equipment of $2.8 million, and capitalization of internal-use software costs of $1.9 million, offset by return of principal on marketable securities of $120.8 million and maturities of marketable securities of $102.5 million.
Previous wording
Net cash used in investing activities was $10.6 million for the three months ended April 30, 2024, primarily consisting of purchases of marketable securities of $59.7 million and purchases of property and equipment of $6.9 million, partially offset by maturities of marketable securities of $57.0 million.
Current wording
Net cash used in investing activities was $27.4 million for the six months ended July 31, 2024, primarily consisting of purchases of marketable securities of $142.1 million, purchases of property and equipment of $10.2 million, and capitalization of internal-use software costs of $2.1 million, partially offset by maturities of marketable securities of $127.0 million.
Previous wording
Net cash provided by financing activities was $0.6 million for the three months ended April 30, 2025, consisting of proceeds from the exercise of common stock options of $0.6 million.
Current wording
Net cash provided by financing activities was $8.1 million for the six months ended July 31, 2025, consisting of proceeds from the exercise of common stock options of $3.2 million and proceeds from stock associated with employee stock purchase plan of $4.9 million.
Previous wording
Net cash used in financing activities was $1.9 million for the three months ended April 30, 2024, primarily consisting of payments of deferred purchase consideration of $2.9 million, partially offset by proceeds from the exercise of common stock options of $1.0 million.
Current wording
Net cash provided by financing activities was $4.0 million for the six months ended July 31, 2024, primarily consisting of proceeds from the exercise of common stock options of $2.2 million and proceeds from stock associated with the employee stock purchase plan of $4.8 million, partially offset by payments of deferred purchase consideration of $2.9 million,
Previous wording
Our free cash flow increased for the three months ended April 30, 2025 from the three months ended April 30, 2024, primarily due to higher collections as a result of an increase in billings that are aligned with new contracts and contract renewals. 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. Additionally, our free cash flow may be influenced by macroeconomic factors that impact our collection efforts for customer payments. If we experience collection pressure it may lengthen the time to collect on accounts receivable and increase our bad debt expense, either of which could negatively impact our free cash flow.
Current wording
Our free cash flow increased for the six months ended July 31, 2025 from the six months ended July 31, 2024, primarily due to higher collections as a result of an increase in billings that are aligned with new contracts and contract renewals. 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. Additionally, our free cash flow may be influenced by macroeconomic factors that impact our collection efforts for customer payments. If we experience collection pressure, it may lengthen the time to collect on accounts receivable and increase our bad debt expense, either of which could negatively impact our free cash flow.
Previous wording
Purchase commitments for business operations are predominately related to cloud hosting, infrastructure, and other software-based services and due primarily over the next three years. Our future funding requirements to settle our obligations in foreign jurisdictions are subject to fluctuations due to changes in foreign exchange rates.
Current wording
Our most significant funding requirements are principally comprised of employee compensation and related taxes and benefits, non-cancelable purchase commitments, and operating lease obligations. Non-cancelable purchase commitments for business operations and operating lease obligations total $169.5 million and $109.1 million, respectively, as of July 31, 2025. Purchase commitments for business operations are predominately related to cloud hosting, infrastructure, and other software-based services and due primarily over the next three years. Our future funding requirements to settle our obligations in foreign jurisdictions are subject to fluctuations due to changes in foreign exchange rates.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report — wording carried from elsewhere
The increase in general and administrative expenses of $8.5 million, or 29.9%, for the three months ended July 31, 2025, compared to the three months ended July 31, 2024, was primarily driven by an increase of personnel and overhead costs of $6.9 million, which included $4.6 million of stock-based compensation costs. The increases were primarily due to investments in our finance and administrative functions to continue to scale our processes, systems, and controls, to enable our ongoing compliance with public company legal and regulatory requirements. Additionally, professional services and legal costs increased $1.2 million primarily due to acquisition-related expenses.
Current report — wording carried from elsewhere
The increase in revenue of $61.2 million, or 21.8%, for the six months ended July 31, 2025, compared to the six months ended July 31, 2024, was primarily driven by a $56.6 million, or 20.9%, increase in subscription revenue, including acquisition derived revenue. Approximately 46.0% of the increase in subscription revenue was attributable to the growth from existing customers, increase in monthly active users, expansion across channels, and committed entitlements and features, and the remaining 54.0% was attributable to new customers. Total customers grew to 2,422 as of July 31, 2025 from 2,163 as of July 31, 2024. Professional services revenue, including acquisition derived revenue, increased $4.6 million, or 42.8%, due to an increase in deliverability services, technical account management, and support engagement services, as well as onboarding revenue. Additionally, in the six months ended July 31, 2025, our international revenue increased by $30.5 million, as we continued to expand market penetration in regions such as Europe and Asia-Pacific.
Current report — wording carried from elsewhere
Cost of Revenue, Gross Profit and Gross Margin
Current report — wording carried from elsewhere
The increase in cost of revenue of $21.1 million, or 24.0%, for the six months ended July 31, 2025, compared to the six months ended July 31, 2024, was primarily driven by an increase of $5.7 million in hosting, infrastructure and other third-party fees associated with delivering our platform and a $9.8 million increase in third-party messaging fees associated with growth in premium messaging channels. In addition, we had an increase in personnel costs and overhead costs of $3.6 million. The increased infrastructure, messaging, and personnel costs were incurred to support overall revenue growth. Additionally, amortization expense primarily related to acquired technology increased $1.6 million in association with the acquisition of OfferFit.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Our most significant funding requirements are principally comprised of employee compensation and related taxes and benefits, non-cancelable purchase commitments, and operating lease obligations. Non-cancelable purchase commitments for business operations and operating lease obligations total $196.8 million and $113.9 million, respectively, as of April 30, 2025.