Braze, Inc.
For the period ended Jan 31, 2026. Filed Mar 25, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Mar 25, 2026
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Item 8. Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Braze, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Braze, Inc. (the Company) as of January 31, 2026 and 2025, the related consolidated statements of operations, comprehensive loss, redeemable non-controlling interest and stockholders’ equity and cash flows for each of the three years in the period ended January 31, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2026, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 24, 2026 expressed an adverse opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| Revenue Recognition | |
| Description of the Matter | During the year ended January 31, 2026, the Company recognized revenue of $738.2 million and recorded deferred revenue of $304.6 million as of January 31, 2026. As discussed in Note 2 to the consolidated financial statements, the Company derives revenue primarily from subscriptions to their platform, including associated support, and professional services. Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Auditing management’s recognition of revenue was challenging due to the extent of effort required as a result of the high volume of revenue contracts and the use of multiple applications and data sources in the revenue recognition process. In addition, as described in Management’s Report on Internal Control Over Financial Reporting, management identified a material weakness in the Company’s internal control over financial reporting associated with the information technology general controls of various information systems, including those that affect the revenue recognition process, which required changes to the extent of our audit procedures. |
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| How We Addressed the Matter in Our Audit | We performed audit procedures that included, among others, testing the completeness and accuracy of data used within the Company’s revenue recognition process. For a sample of customer contracts, we compared the contractual terms per the executed agreement to reports derived from the Company’s systems, recalculated the amount of revenue recognized and related deferred revenue, and reviewed evidence of the related billings and cash receipts. In response to the material weakness discussed above, we increased the extent of revenue contract samples tested. |
| Valuation of Developed Technology acquired in the OfferFit, Inc. Business Combination | |
| Description of the Matter | As disclosed in Note 19, the Company completed the acquisition of OfferFit, Inc. ("OfferFit") which is now known as AI Decisioning Studio for total consideration of $303.2 million. The Company accounted for the acquisition as a business combination. Auditing the Company’s accounting for the acquisition was complex due to the significant estimation required by management in determining the fair value of developed technology intangible assets totaling $56.7 million. The Company used an income approach to measure the developed technology. The significant assumptions used to estimate the fair value of the developed technology included revenue and the associated growth rates, earnings before interest, tax and amortization, and discount rate. These significant assumptions are forward looking and could be affected by future economic and market conditions. |
| How We Addressed the Matter in Our Audit | To test the estimated fair value of the developed technology intangible asset, our audit procedures included, among others, evaluating the Company's selected valuation methodology, testing the significant assumptions discussed above utilized by management in the valuation model, and testing the completeness and accuracy of the underlying data supporting the significant assumptions. Our testing included evaluating the reasonableness of management’s estimate of revenue growth by comparing revenue forecast assumptions to internal communication with the Board of Directors and other information obtained during the audit, including identifying subsequent sales. We involved our valuation specialists to assist in evaluating the valuation methodologies and discount rates used. We also performed sensitivity analyses of the significant assumptions to evaluate the change in fair value resulting from changes in the assumptions. |
/s/Ernst & Young LLP
We have served as the Company’s auditor since 2019.
New York, New York
March 24, 2026
To the Stockholders and the Board of Directors of Braze, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Braze, Inc.’s internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria). In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Braze, Inc. (the Company) has not maintained effective internal control over financial reporting as of January 31, 2026, based on the COSO criteria.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management’s assessment. Management has identified a material weakness in controls related to the operation of information technology (IT) general controls for IT applications supporting the Company’s internal control over financial reporting.
As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of OfferFit (now known as AI Decisioning Studio), which is included in the 2026 consolidated financial statements of the Company and constituted 1.4% of total consolidated assets (excluding acquired goodwill and intangible assets) as of January 31, 2026 and 1.8% of revenues for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of AI Decisioning Studio.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 31, 2026 and 2025, the related consolidated statements of operations, comprehensive loss, redeemable non-controlling interest and stockholders’ equity (deficit), and cash flows for each of the three years in the period ended January 31, 2026, and the related notes. This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2026 consolidated financial statements, and this report does not affect our report dated March 24, 2026, which expressed an unqualified opinion, thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
March 24, 2026
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