Braze (Nasdaq: BRZE), the leading customer engagement platform that empowers brands to be Absolutely Engaging™, recently announced the results for its fiscal quarter ended July 31, 2025.
“We presented a solid second quarter, with 24% year-over-year revenue growth, while driving greater efficiency in our business, expanding our non-GAAP operating and net revenue, and generating strong free cash flow. Our results also demonstrate our consistent execution and ongoing demand for our AI-based customer engagement platform,” said Bill Magnuson, co-founder and CEO of Braze. “Looking ahead, Braze is focused on AI solutions that will empower brands to transform the customer engagement experience for marketers and end-users, generating high ROI for our clients and for Braze itself.”
Financial Highlights of the Second Fiscal Quarter of 2026
- Revenue was180.1 million dollars, compared to 145.5 million dollars in the second quarter of the fiscal year ending January 31, 2025, an increase of 23.8% year over year, driven primarily by new customers, upsells and renewals.
- Subscription revenue for the quarter was171.8 million dollars, compared to 140.0 million dollars in the previous fiscal second quarter; professional services and other revenue was8.3 million dollars, compared to 5.5 million dollars in the same period of the previous year.
- Remaining performance obligations as of July 31, 2025 totaled862.2 million dollars, of which558.2 million dollars are current (less than one year).
- GAAP gross margin was67.7%, compared to 70.2% in the prior year’s second quarter.
- Non-GAAP gross margin was69.3%, compared to 70.9% in the same period of the previous year.
- The net retention rate based on revenue from all customers over the past 12 months was108% as of July 31, 2025 (114% in the same period in 2024); for customers with ARR of $500,000 or more it was111%, compared to 117% in the previous fiscal year.
- The total number of customers reached2,422 as of July 31, 2025, compared to 2,163 as of July 31, 2024; 282 customers had ARR of $500,000 or more, compared to 222 in the same period of the previous year.
- GAAP operating loss was38.8 million dollars, compared to a loss of 28.0 million dollars in the same period of the prior year. The main factor was an expense of39.5 million dollars for stock-based compensation.
- Non-GAAP operating profit was6.0 million dollars, compared to 4.2 million dollars in the same period of the previous year.
- GAAP net loss per common share, basic and diluted, was$0.26, based on 106.8 million weighted average shares outstanding, compared to $0.23 in the same quarter of the prior fiscal year.
- Non-GAAP net income per diluted share was$0.15, based on 109.8 million weighted average shares outstanding, compared to $0.09 with 105.9 million shares in the same period of the previous year.
- Operating cash flow was 7.0 million dollars, compared to 11.6 million dollars in the prior year’s second quarter.
- Free cash flow was3.5 million dollars, compared to $7.2 million in the same period of the prior year.
- Total cash, cash equivalents, restricted cash, and marketable securities amounted to368.3 million dollars as of July 31, 2025, compared to $514.0 million as of January 31, 2025.
Recent Business Highlights
- New relevant accounts and expansions of existing customers includedDocMorris, Fogo de Chão, Gopuff, Kleinanzeigen, Laundryheap, Little Caesars, Metcash, Saily, Sweetgreen and Wix.
- Announced theBraze Model Context Protocol (MCP) Server, a simple and effective way to connect LLMs with Braze data.
- Published its2025 ESG Report, reaffirming commitments to help brands create, cultivate, and maintain relationships with customers around the world.
Financial Outlook
Braze is initiating guidance for the third fiscal quarter ending October 31, 2025, and updating its guidance for the fiscal year ending January 31, 2026.
| Metric (in millions, except per share) | FY26 T3 Projection | FY26 Projection | |
|---|---|---|---|
| Revenue | $183.5 – $184.5 | $717.0 – $720.0 | |
| Non-GAAP operating income | $3.5 – $4.5 | $24.5 – $25.5 | |
| Non-GAAP net income | $6.5 – $7.5 | $45.5 – $46.5 | |
| Non-GAAP net income per diluted share | $0.06 – $0.07 | $0.41 – $0.42 | |
| Weighted average common shares (diluted) | ~113.5 | ~112.0 |
Supplemental Financial Information and Other
Additional information, including a supplemental financial presentation and other data, can be accessed at Braze’s investor website at investors.braze.com.
Non-GAAP Financial Measures
This press release and the attached tables contain the following non-GAAP financial measures: non-GAAP gross profit and margin, non-GAAP sales and marketing expenses, non-GAAP research and development expenses, non-GAAP general and administrative expenses, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share, basic and diluted, and non-GAAP free cash flow.
Braze defines non-GAAP gross profit and margin, non-GAAP sales and marketing expenses, non-GAAP research and development expenses, non-GAAP general and administrative expenses, non-GAAP operating income (loss), non-GAAP operating margin, and non-GAAP net income (loss) as the respective GAAP balances adjusted for stock-based compensation expenses, employer taxes related to stock-based compensation, donation expenses, contingent consideration adjustments, acquisition-related expenses, and amortization of intangible assets.
Braze defines non-GAAP free cash flow as the net cash generated from operating activities, less purchases of property and equipment and less capitalized costs for internal-use software.
The company encourages investors to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.
Braze uses these non-GAAP financial information internally in analyzing its financial results and believes that this information, when considered together with GAAP measures, can be helpful to investors as it provides consistency and comparability with past financial performance and aids in comparison with other companies that use similar information to complement their GAAP results.
This information is presented solely for supplemental purposes and should not be considered a substitute for information presented in accordance with generally accepted accounting principles in the United States (GAAP), which may differ from similar measures used by other companies.
The primary limitation of these non-GAAP measures is that they exclude relevant expenses that, under GAAP principles, must be recorded in Braze’s financial statements. Additionally, they are subject to inherent limitations as they reflect Braze management’s judgments about which expenses should be included or excluded.
Reconciliation is provided in the financial tables attached to this release for each non-GAAP financial measure in relation to the most directly comparable financial measure presented in accordance with GAAP.
Braze encourages investors to review the related GAAP financial measures and the reconciliations of non-GAAP measures to the most directly comparable GAAP measures included in quarterly and annual financial results press releases like this one, and not to rely on a single financial metric to evaluate the company’s business.
Definition of Other Business Metrics
Customer: Braze defines a customer, at the end of a period, as the distinct, end entity at the corporate level that has an active subscription with Braze for the use of its products. A single organization may have multiple distinct contracting divisions or subsidiaries, all considered one customer.
Annual Recurring Revenue (ARR): Braze defines ARR as the annualized value of customer subscription contracts, including certain premium professional services that are subject to subscription contractual terms, as of the measurement date, assuming that any contract expiring in the following 12 months will be renewed on its existing terms (including contracts under negotiation).
The calculation of ARR is not adjusted for the impact of known or projected future events (such as cancellations, expansions or reductions in relationship, or price adjustments) that may cause the contract not to be renewed on its current terms. ARR may decline or fluctuate due to various factors, including customer satisfaction or dissatisfaction with Braze’s products and services, pricing, competition offerings, economic conditions, or general changes in customer spending levels.
ARR should be viewed independently of revenue and does not represent annualized GAAP revenue or revenue forecast, as it is an operational metric affected by the start and end dates of contracts and renewal rates.
Net Revenue Retention Rate: Braze calculates the net revenue retention rate at the end of a period starting with the ARR of a cohort of customers from 12 months prior (Prior Period ARR). It then calculates the ARR of the same cohort at the end of the current period (Current Period ARR), including expansions and deducting contractions or cancellations that occurred in the past 12 months, but excluding ARR from new customers in the period.
The Current Period ARR is divided by the Prior Period ARR to arrive at the point-in-time net retention rate. Braze then calculates the weighted average of the point-in-time net retention rates at the end of each month over the past 12 months, to arrive at the net revenue retention rate.
Remaining Performance Obligations: The transaction price allocated to remaining performance obligations represents amounts under non-cancelable contracts expected to be recognized as revenue in future periods. This amount may be influenced by factors such as seasonality, renewal terms, service delivery schedules, and contractual terms.
Unbilled portions of these obligations are subject to future economic risks, including bankruptcies, regulatory changes, and other market factors.
Forward-Looking Statements
This announcement contains “forward-looking statements” within the meaning of the “safe harbor” provisions of thePrivate Securities Litigation Reform Act of 1995, including, among others, statements about Braze’s financial outlook for the third quarter and for the fiscal year ending January 31, 2026.
These statements are based on current expectations, estimates, forecasts, and projections. Words such as “anticipate,” “believe,” “may,” “estimate,” “expect,” “target,” “intend,” “should,” “might,” “potential,” “project,” “goal,” “will,” and similar variations are intended to identify forward-looking statements, although not all forward-looking statements contain these words.
Forward-looking statements are based on current assumptions and beliefs of Braze and are subject to risks, uncertainties, and changes in circumstances that could cause actual results to differ materially from those expressed or implied.
These risks include, but are not limited to: (1) achieving the projected financial goals; (2) ability to achieve strategic and operational objectives; (3) unstable economic conditions that may adversely impact Braze’s business and stock; (4) recent accelerated revenue growth that may not recur; (5) history of operating losses; (6) limited operating history at current scale; (7) ability to successfully manage growth; (8) accuracy of market estimates and impact of socio-economic events; (9) ability of the platform to adapt to changing customer needs; (10) attracting new customers and renewing existing ones; (11) intense competition; (12) ability to keep up with technological changes, cybersecurity, and privacy risks, industry standards, and regulations; (13) reliance on third-party cloud infrastructure providers.
Other risks are detailed in the “Risk Factors” section of the Annual Report on Form 10-K filed with the SEC on March 31, 2025 and in subsequent documents, including the Quarterly Report on Form 10-Q for the quarter ended July 31, 2025.
The forward-looking statements contained in this announcement reflect Braze’s views only as of the date of its issuance. The company undertakes no obligation to update such statements, except as required by law.
