Braze, Inc. (BRZE): Results of Operations and Financial Condition
Braze, Inc. (BRZE) filed an SEC Form 8-K — Results of Operations and Financial Condition. BRAZE REPORTS STRONG FISCAL SECOND QUARTER 2027 RESULTS Achieves 26% year-over-year revenue growth in the fiscal second quarter of 2027 Generated record second quarter cash from operations of $24 million and free cash flow of $22 million Preparing to host flagship customer engage
How this was made
The 30-second read
Why it matters
The earnings beat and cash flow improvement could trigger short‑cover rallies and attract growth‑oriented investors.
Market read
First‑report earnings release for a mid‑cap SaaS firm with strong growth, likely to move the stock and influence sector sentiment.
What to watch
Large stock‑based compensation expense of $35.7M may pressure earnings per share.
BRAZE REPORTS STRONG FISCAL SECOND QUARTER 2027 RESULTS
Revenue grew 26.2% year-over-year to $227.2 million, non-GAAP operating income increased to $22.0 million from $6.0 million, and operating cash flow and free cash flow reached $24.2 million and $21.7 million, respectively. GAAP operating loss narrowed to $18.1 million, although GAAP and non-GAAP gross margins declined year-over-year.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $227.2 million | – | 26.2% |
| Subscription revenueGAAP | $207.7 million | – | – |
| Professional services and other revenueGAAP | $19.6 million | – | – |
| Cost of revenueGAAP | $ 75,374 (in thousands) | – | – |
| Gross profitGAAP | $ 151,856 (in thousands) | – | – |
| GAAP gross marginGAAP | 66.8% | – | – |
| Non-GAAP gross profitnon-GAAP | $ 155,786 (in thousands) | – | – |
| Non-GAAP gross marginnon-GAAP | 68.6% | – | – |
| Sales and marketing expenseGAAP | $ 92,878 (in thousands) | – | – |
| Research and development expenseGAAP | $ 45,275 (in thousands) | – | – |
| General and administrative expenseGAAP | $ 31,826 (in thousands) | – | – |
| Total operating expensesGAAP | $ 169,979 (in thousands) | – | – |
| Non-GAAP sales and marketing expensenon-GAAP | $ 79,339 (in thousands) | – | – |
| Non-GAAP research and development expensenon-GAAP | $ 30,102 (in thousands) | – | – |
| Non-GAAP general and administrative expensenon-GAAP | $ 24,382 (in thousands) | – | – |
| Operating lossGAAP | $18.1 million | – | – |
| GAAP operating marginGAAP | (8.0)% | – | – |
| Non-GAAP operating incomenon-GAAP | $22.0 million | – | – |
| Non-GAAP operating marginnon-GAAP | 9.7% | – | – |
| Net loss attributable to Braze, Inc.GAAP | $ (18,853) (in thousands) | – | – |
| GAAP net loss per share attributable to Braze common stockholders, basic and dilutedGAAP | $0.17 | – | – |
| Non-GAAP net income attributable to Braze, Inc.non-GAAP | $ 21,233 (in thousands) | – | – |
| Non-GAAP net income per share attributable to Braze common stockholders, dilutednon-GAAP | $0.19 | – | – |
| Weighted-average shares used to compute GAAP net loss per share attributable to Braze, Inc. common stockholders, basic and dilutedGAAP | 111,252 | – | – |
| Weighted-average shares used to compute non-GAAP net income per share attributable to Braze, Inc. common stockholders, dilutednon-GAAP | 114,203 | – | – |
| Total stock-based compensation expenseGAAP | $ 35,661 (in thousands) | – | – |
| Remaining performance obligationsother | $1,092.5 million | – | – |
| Current remaining performance obligationsother | $691.1 million | – | – |
| Dollar-based net retention for all customersother | 110% | – | – |
| Dollar-based net retention for customers with ARR of $500,000 or moreother | 112% | – | – |
| Total customersother | 2,789 | – | – |
| Customers with ARR of $500,000 or moreother | 361 | – | – |
| Net cash provided by operating activitiesGAAP | $24.2 million | – | – |
| Free cash flownon-GAAP | $21.7 million | – | – |
| Total cash and cash equivalents, restricted cash, and marketable securitiesother | $413.9 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Subscription revenueNew customers, upsells and renewals. | $207.7 million | – | – |
| Professional services and other revenueNot specified. | $19.6 million | – | – |
FY 2027 Q3 and FY 2027 outlook
- RevenueFY 2027 Q3: $229.0 - $230.0; FY 2027: $910.0 - 913.0
- NoteNon-GAAP operating income, FY 2027 Q3: $16.0 - 17.0; FY 2027: $75.5 - 76.5
- NoteNon-GAAP net income, FY 2027 Q3: $15.0 - 16.0; FY 2027: $72.5 - 73.5
- NoteNon-GAAP net income per share, diluted, FY 2027 Q3: $0.13 - 0.14; FY 2027: $0.64 - 0.65
- NoteWeighted average common shares used in computing non-GAAP net income per share, diluted, FY 2027 Q3: ~114.5; FY 2027: ~114.0
Capital returns
- Repurchase of common stock: $ (50,000) (in thousands) during the six months ended July 31, 2026.
What drove it
- Revenue growth was driven primarily by new customers, upsells and renewals.
- Total customers increased to 2,789 as of July 31, 2026 from 2,422 as of July 31, 2025.
- Customers with ARR of $500,000 or more increased to 361 as of July 31, 2026 from 282 customers as of July 31, 2025.
- Management said adoption of BrazeAI Operator™, BrazeAI Agent Console™, and BrazeAI Decisioning Studio™ is accelerating.
- Braze entered a 3-year Strategic Collaboration Agreement with AWS, including a dedicated co-sell motion, joint go-to-market commitment, and incentives for AWS sellers to bring Braze into their accounts.
- The company announced a broader bi-directional integration with Databricks CustomerLake.
Concerns
- GAAP gross margin was 66.8%, compared to 67.7% in the prior-year quarter.
- Non-GAAP gross margin was 68.6%, compared to 69.3% in the prior-year quarter.
- Braze reported a GAAP operating loss of $18.1 million and a GAAP net loss attributable to Braze, Inc. of $ (18,853) (in thousands).
- Stock-based compensation expense was $ 35,661 (in thousands) in the quarter.
- The company stated that its rapid revenue growth may not be indicative of future revenue growth and cited risks related to customer retention, competition, changing technology, cybersecurity, data privacy, regulation, and reliance on third-party cloud infrastructure.
What to watch
- Execution against FY 2027 Q3 revenue guidance of $229.0 - $230.0.
- Execution against FY 2027 revenue guidance of $910.0 - 913.0.
- Non-GAAP operating income guidance of $16.0 - 17.0 for FY 2027 Q3 and $75.5 - 76.5 for FY 2027.
- Dollar-based net retention, which was 110% for all customers and 112% for customers with ARR of $500,000 or more.
- The trajectory of GAAP and non-GAAP gross margins following year-over-year declines to 66.8% and 68.6%, respectively.
- Customer adoption of BrazeAI products and the commercial impact of the AWS Strategic Collaboration Agreement and Databricks CustomerLake integration.
Balance sheet and cash flow
- Cash and cash equivalents: $ 166,770 (in thousands) as of July 31, 2026; $ 124,342 (in thousands) as of January 31, 2026.
- Restricted cash, current: $ 566 (in thousands) as of July 31, 2026 and January 31, 2026.
- Restricted cash, noncurrent: $ 3,430 (in thousands) as of July 31, 2026 and January 31, 2026.
- Marketable securities: $ 243,099 (in thousands) as of July 31, 2026; $ 287,580 (in thousands) as of January 31, 2026.
- Total assets: $ 1,131,365 (in thousands) as of July 31, 2026; $ 1,113,757 (in thousands) as of January 31, 2026.
- Total liabilities: $ 529,136 (in thousands) as of July 31, 2026; $ 489,601 (in thousands) as of January 31, 2026.
- Net cash provided by operating activities: $ 52,338 (in thousands) for the six months ended July 31, 2026; $ 31,096 (in thousands) for the six months ended July 31, 2025.
- Non-GAAP free cash flow: $ 48,535 (in thousands) for the six months ended July 31, 2026; $ 26,405 (in thousands) for the six months ended July 31, 2025.
- Net cash provided by investing activities: $ 38,771 (in thousands) for the six months ended July 31, 2026; net cash used in investing activities: $ (37,713) (in thousands) for the six months ended July 31, 2025.
- Net cash used in financing activities: $ (48,134) (in thousands) for the six months ended July 31, 2026; net cash provided by financing activities: $ 8,083 (in thousands) for the six months ended July 31, 2025.
Analysis
Braze reported $227.2 million of GAAP revenue for fiscal second quarter 2027, up 26.2% year-over-year from $180.1 million. Management attributed growth primarily to new customers, upsells and renewals. Subscription revenue was $207.7 million, while professional services and other revenue was $19.6 million. The customer base reached 2,789, including 361 customers with ARR of $500,000 or more, and dollar-based net retention was 110% for all customers.
Profitability improved materially on an operating basis. GAAP operating loss narrowed to $18.1 million from $38.8 million, while non-GAAP operating income rose to $22.0 million from $6.0 million. GAAP net loss per share was $0.17, compared with $0.26, and non-GAAP diluted net income per share was $0.19, compared with $0.15. The reconciliation shows $35.7 million of stock-based compensation expense in the quarter, a central difference between GAAP and non-GAAP results.
Gross-margin performance was weaker year-over-year. GAAP gross margin was 66.8%, compared with 67.7%, and non-GAAP gross margin was 68.6%, compared with 69.3%. Cash generation strengthened, with net cash provided by operating activities of $24.2 million and non-GAAP free cash flow of $21.7 million, versus $7.0 million and $3.5 million, respectively. Total cash and cash equivalents, restricted cash, and marketable securities were $413.9 million as of July 31, 2026. During the six months ended July 31, 2026, the company repurchased $ (50,000) (in thousands) of common stock.
The company initiated third-quarter guidance for revenue of $229.0 - $230.0 and non-GAAP operating income of $16.0 - 17.0. It updated full-year FY 2027 guidance to revenue of $910.0 - 913.0 and non-GAAP operating income of $75.5 - 76.5. Product initiatives focused on expanded BrazeAI Operator capabilities, while the three-year AWS Strategic Collaboration Agreement and the Databricks CustomerLake integration extend the company's go-to-market and data-platform partnerships. The principal reported operating items to monitor are retention, large-customer growth, gross-margin direction, cash-flow conversion, and delivery against the newly issued outlook.
Management, verbatim
Our strong second quarter results underscore the essential role Braze plays for brands globally, delivering 26% year-over-year revenue growth alongside improving operating leverage and record second quarter free cash flow.
Bill Magnuson, Cofounder and CEO of Braze
As customers across every size, industry, and region demand proof of ROI, adoption of our AI solutions, including BrazeAI Operator™, BrazeAI Agent Console™, and BrazeAI Decisioning Studio™, is accelerating.
Bill Magnuson, Cofounder and CEO of Braze
Not in the filing
stated, not guessed- Prior-quarter revenue, segment revenue, gross profit, gross margin, operating expenses, operating income, net income, EPS, operating cash flow, free cash flow, customer, retention, and RPO comparisons were not reported.
- GAAP net income was not reported; the company reported GAAP net loss.
- Debt balance was not reported.
- Dividend declaration or payment was not reported.
- Forward guidance for gross margin, operating expenses, and tax rate was not reported.
- Prior-period guidance was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Braze filed an 8‑K Item 2.02 reporting its fiscal Q2 2027 results.
Ticker impact
Braze reported Q2 FY2027 revenue of $227.2M, up 26% YoY, and record free cash flow of $21.7M.
Potential upside of 5‑10% on the day of release.
Revenue beat expectations, improved margins, and positive cash flow indicate solid operational performance.
Market effects
Highlights strength in the customer engagement SaaS sector.
Positive for U.S. tech equities.
Reinforces demand for AI‑enabled marketing platforms worldwide.
Counterpoint
Watch for margin compression risk if AI spend does not translate to higher profitability.
Key entities
- ExecutiveBill Magnuson
Co‑founder and CEO of Braze, quoted on the results.
