Business Combination |
6 Months Ended |
|---|---|
Jul. 31, 2025 | |
| Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] | |
| Business Combination | Business Combination Acquisition of OfferFit, Inc. On June 2, 2025 the Company acquired OfferFit, Inc. The acquisition aims to deepen the integration of OfferFit’s multi-agent decisioning engine into Braze’s Customer Engagement Platform. The total preliminary purchase price consideration of $304.0 million consisted of cash payments of $195.3 million, and $108.7 million in issuances of Braze Class A common stock. The purchase price accounting adjustments primarily included the adjustment to reflect the portion of the fair value of the replacement awards attributable to post-combination service as compensatory. Refer to Note 12 for further details of the replacement awards. Due to the proximity of the closing date of the acquisition to the balance sheet date, the preliminary purchase price was allocated to the assets acquired and liabilities assumed based on the Company’s best estimate of the fair value at the acquisition date. The Company recognized the estimated fair value of $(1.9) million of net tangible assets. The preliminary purchase price was allocated to intangible assets in the amount of $66.6 million and goodwill in the amount of $239.3 million based on the respective estimated fair values. The intangible assets acquired in the business combination were developed technology, $56.7 million, customer relationships, $9.0 million, and trademarks, $0.9 million. The developed technology was valued using an excess earnings method and the key assumptions include the estimates of forecasted sales to be generated from the acquired business, expected obsolescence rate, and technology related expenses. The Company began amortizing the acquired technology on the date of acquisition over a period of six years on a straight-line basis. The amortization expense is recorded to cost of revenue in the consolidated statements of operations. The customer relationships were valued using the with and without method and the key assumptions include the forecasted amount of time and expenses required to recreate the existing customer base. The Company began amortizing the customer relationships on the date of acquisition over a period of six years on a straight-line basis. The amortization expense is recorded to sales and marketing expenses in the consolidated statements of operations. The trademarks were valued using the relief of royalty method and the key assumptions include the forecasted sales to be generated from the acquired business and a comparable royalty rate. The Company began amortizing the customer relationships on the date of acquisition over a period of two years on a straight-line basis. The amortization expense is recorded to sales and marketing expenses in the consolidated statements of operations. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets and liabilities acquired was recorded as goodwill. The goodwill is primarily attributable to expected synergies to the Company’s ongoing Artificial Intelligence initiatives. The resulting goodwill is not deductible for income tax purposes. Several indemnification escrows, maintained at an escrow agent, of cash and stock in the total amount of $6.0 million, were recorded within accrued expenses and other current liabilities on the consolidated balance sheets. The indemnification accounts represent security for potential indemnification claims against the seller. The indemnification escrows will be released subject to amounts withheld for actual, pending or potential claims. A working capital escrow amount of cash and stock in the total amount of $1.3 million, maintained at an escrow agent, has been recorded within accrued expenses and other current liabilities on the consolidated balance sheets. The working capital escrow will be released subject to the completion of post-close adjustment procedures. Acquisition-related costs totaled $1.4 million and $11.4 million for the three and six months ended July 31, 2025, respectively. These costs are expensed as incurred. Acquisition-related costs are presented within general and administrative expense in the Company’s consolidated statements of operations. The results of operations of OfferFit from the date of acquisition, which were not material, have been included in the Company’s consolidated statements of operations for the six months ended July 31, 2025. Acquisition of North Star Y, Pty Ltd On June 1, 2023, the Company acquired all the outstanding stock of North Star Y, Pty Ltd (“North Star”), Braze’s then exclusive reseller in Australia and New Zealand. The total purchase price consideration, as adjusted, of $26.8 million consisted of cash payments of $20.6 million, $6.1 million in issuances of Braze Class A common stock, and contingent consideration payments, the fair value of which was $1.8 million as of the acquisition date. The preliminary purchase price, as adjusted, was allocated to intangible assets in the amount of $3.8 million and goodwill in the amount of $28.4 million based on the respective estimated fair values. The resulting goodwill is not deductible for income tax purposes. The Company reduced the contingent consideration liability to zero as it was determined that the sellers did not satisfy the earn-out qualifications. The results of operations of North Star, which are not material, have been included in our consolidated financial statements from the date of purchase.
|