Braze — Fiscal Second Quarter 2027 Earnings Summary

Financial Performance

• Revenue reached $227.2 million for the quarter ended July 31, 2026, a 26.2% year-over-year increase from $180.1 million in the prior year period.
• Subscription revenue was $207.7 million, up from $171.8 million year-over-year; professional services and other revenue was $19.6 million, up from $8.3 million.
• GAAP operating loss was $18.1 million, improved from a loss of $38.8 million in the prior year period.
• Non-GAAP operating income was $22.0 million, compared to $6.0 million in the prior year period.
• GAAP net loss per share (basic and diluted) was $0.17, compared to $0.26 in the prior year period.
• Non-GAAP net income per share (diluted) was $0.19, compared to $0.15 in the prior year period.
• Net cash provided by operating activities was $24.2 million, up from $7.0 million in the prior year period.
• Free cash flow was $21.7 million, up from $3.5 million in the prior year period.
• GAAP gross margin was 66.8%, down from 67.7% in the prior year period; Non-GAAP gross margin was 68.6%, down from 69.3%.
• Dollar-based net retention for all customers was 110% for the trailing 12 months ended July 31, 2026, compared to 108% in the prior year period.
• Dollar-based net retention for customers with ARR of $500,000 or more was 112%, compared to 111% in the prior year period.
• Remaining performance obligations were $1,092.5 million as of July 31, 2026, with $691.1 million classified as current.
• Total customers increased to 2,789 as of July 31, 2026, from 2,422 in the prior year period; customers with ARR of $500,000 or more increased to 361 from 282.
• Total cash, cash equivalents, restricted cash, and marketable securities were $413.9 million as of July 31, 2026, compared to $415.9 million as of January 31, 2026.

Guidance and Future Outlook

• Fiscal Q3 2027 revenue guidance is set at $229.0 million to $230.0 million.
• Fiscal Q3 2027 Non-GAAP operating income guidance is $16.0 million to $17.0 million.
• Fiscal Q3 2027 Non-GAAP net income guidance is $15.0 million to $16.0 million.
• Fiscal Q3 2027 Non-GAAP net income per share (diluted) guidance is $0.13 to $0.14.
• Full fiscal year 2027 revenue guidance is $910.0 million to $913.0 million.
• Full fiscal year 2027 Non-GAAP operating income guidance is $75.5 million to $76.5 million.
• Full fiscal year 2027 Non-GAAP net income guidance is $72.5 million to $73.5 million.
• Full fiscal year 2027 Non-GAAP net income per share (diluted) guidance is $0.64 to $0.65.
• Guidance for Non-GAAP operating income, net income, and net income per share is not reconciled to GAAP due to uncertainty regarding stock-based compensation expense variability.

Business Segments and Product Lines

• Revenue growth was driven primarily by new customers, upsells, and renewals.
• Adoption of AI solutions, including BrazeAI Operator™, BrazeAI Agent Console™, and BrazeAI Decisioning Studio™, is accelerating.
• BrazeAI Operator™ was expanded to allow users to build new Canvas steps from conversational prompts and deploy pre-built Agents with Operator.
• Braze Surveys' native, code-free surveys were brought to landing pages and in-app messages.
• New business wins and expansions included Boots Thailand, Chime, David Jones, Foxtel Group, Insurify, Omaze UK, Property Finder, and Wilson Sporting Goods.
• Ten startups were welcomed to the sixth cohort of the "Tech for an Equitable Future" product grant program.

Market and Competitive Landscape

• Braze entered a 3-year Strategic Collaboration Agreement (SCA) with AWS, featuring a dedicated co-sell motion and joint go-to-market commitment.
• Braze was recognized as an AWS Media & Entertainment Competency Partner.
• A broader bi-directional integration with Databricks CustomerLake was announced to enable governed audience activation and engagement signal sharing.
• Braze was named Snowflake's 2026 Asia-Pacific & Japan (APJ) Product Growth Partner of the Year.
• Braze was recognized as a Leader in Snowflake's Modern Marketing Data Stack (MMDS) report for the fifth consecutive year.

Risks and Challenges

• Forward-looking statements are subject to risks including the potential for actual results to differ materially from expectations due to market conditions, economic factors, and competition.
• Risks include the company's history of operating losses, limited operating history at current scale, and the ability to successfully manage growth.
• Uncertainty exists regarding the ability to achieve anticipated financial targets and realize broader strategic objectives.
• The company faces risks related to evolving cybersecurity, data privacy risks, and changing regulations.
• There is reliance on third-party providers of cloud-based infrastructure.
• Revenue growth may not be indicative of future performance, and market opportunity estimates may be inaccurate.

Management Commentary and Tone

• CEO Bill Magnuson stated that strong results underscore the essential role Braze plays for brands globally, highlighting improving operating leverage and record free cash flow.
• Management noted that customers across all sizes and regions are demanding proof of ROI, driving AI adoption.
• The company expressed confidence in becoming the global standard for cultivating long-term customer loyalty by turning engagement into measurable business impact.
• Management emphasized the company's readiness for the upcoming Forge 2026 conference, describing the technology as "made for this moment."

Other Key Points

• Pearce Dolan joined the company as Chief Product Officer on August 24, 2026, bringing nearly 20 years of experience in product and technology.
• The company released its fifth annual Environmental, Social, and Governance (ESG) Report, noting an 18% reduction in emissions year-over-year in FY'26 and over $4.4 million in charitable grants.
• Braze Forge 2026, the flagship customer engagement conference, is scheduled for September 28-30 in Las Vegas.
• The company received multiple workplace recognitions, including Fortune Best Large Workplaces in New York™ 2026 and UK's Best Large Workplaces for Development™ 2026.
• During the six months ended July 31, 2026, the company repurchased $50.0 million of common stock.
• The company reported a net loss attributable to Braze, Inc. of $45.4 million for the six months ended July 31, 2026, compared to $63.7 million in the prior year period.