Boston-based Solel Partners disclosed a new stake in Braze (BRZE +1.88%), adding 745,900 shares valued at approximately $21.2 million during the third quarter, according to an SEC filing on Friday.
What Happened
On Friday, Solel Partners LP reported a new equity position in Braze, acquiring 745,900 shares with an estimated value of $21.2 million. The transaction, disclosed in a Securities and Exchange Commission (SEC) filing, reflects activity as of the quarter ended September 30. The new holding accounted for 4.1% of the fund’s $519.8 million in reportable U.S. equity assets.
What Else to Know
Top holdings after the filing:
- NYSE: UNH: $71.3 million (13.7% of AUM)
- NYSE: BRSL: $59 million (11.4% of AUM)
- NYSE: CVS: $53.8 million (10.4% of AUM)
- NYSE: SYF: $52.5 million (10.1% of AUM)
- NYSE: TNL: $46.8 million (9.0% of AUM)
As of Friday's market close, shares of Braze were priced at $28.74, down 21.2% over the past year and underperforming the S&P 500, which is up nearly 15% over the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Friday) | $28.74 |
| Market Capitalization | $3.2 billion |
| Revenue (TTM) | $654.6 million |
| Net Income (TTM) | ($108.8 million) |
Company Snapshot
- Braze offers a customer engagement platform with products including data ingestion, segmentation, predictive analytics, personalization, orchestration tools, and reporting for digital brands.
- The company operates on a subscription-based software-as-a-service (SaaS) model, providing recurring revenue streams.
- It serves enterprise and mid-market clients globally, focusing on organizations seeking to enhance digital marketing and customer engagement.
Braze, Inc. is a technology company specializing in customer engagement solutions for enterprises worldwide. The company leverages a comprehensive software platform to help brands deliver personalized, cross-channel messaging and optimize user journeys at scale. With a robust suite of analytics and automation tools, Braze positions itself as a strategic partner for organizations aiming to drive retention and maximize lifetime value in increasingly digital markets.
Foolish Take
For a fund whose largest holdings include stable, cash-rich names, Solel Partners’ decision to open a sizable position in Braze is interesting. The mid-sized Boston firm added roughly $21.2 million of shares during the third quarter—a perhaps unusual move given Braze’s stock is still trading near multi-year lows after sliding more than 20% over the past year and far below its 2021 high of $94.16.
What may have caught Solel’s attention is that Braze’s fundamentals are seemingly strengthening beneath the surface. Revenue in the latest quarter jumped nearly 24% to $180.1 million, fueled by subscription growth and solid customer expansion (upsells and renewals). The company also posted another quarter of non-GAAP profitability even as GAAP losses widened to $27.8 million. Free cash flow also weakened, but Braze still operates with over $360 million in cash and cash equivalents and continues to win enterprise accounts.
So what's the biggest takeaway for long-term investors? Braze may still be trying to prove itself: growing fast but not yet consistently profitable. But if it can convert its expanding customer base and AI-driven product investments into durable cash flow, the current valuation may represent an attractive entry point rather than a value trap.
Glossary
Stake: The amount of ownership or shares an investor holds in a company.
Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
Reportable Assets: Investments that must be disclosed in regulatory filings, such as those required by the SEC.
13F Assets: U.S. equity securities that institutional investment managers must report quarterly to the SEC on Form 13F.
Top Holdings: The largest investments in a fund's portfolio, usually by market value.
Trailing Twelve Months (TTM): The 12-month period ending with the most recent quarterly report.
Customer Engagement Platform: Software that helps businesses interact with and retain customers through personalized communication and analytics.
Predictive Analytics: The use of data and statistical algorithms to forecast future outcomes or trends.
Orchestration Tools: Software features that coordinate and automate marketing or customer communication across multiple channels.
