TLDR
- Q2 FY2026 revenue rose 23.8% to $180.1M, topping analyst expectations.
- Non-GAAP EPS of $0.15 beat the $0.03 estimate, up from $0.09 last year.
- Customer base grew to 2,422, including 282 with ARR above $500K.
- FY2026 revenue outlook raised to $717M–$720M, above prior guidance.
- CEO Bill Magnuson said AI will fuel Braze’s next growth wave.
Braze Inc. (NASDAQ: BRZE) stock climbed 15.18% to $31.86 on Friday, September 5, 2025, after reporting fiscal second-quarter 2026 results.
Revenue reached $180.1 million, up 23.8% from $145.5 million last year, surpassing the $170.1 million analyst estimate. Subscription revenue accounted for $171.8 million, while professional services and other revenue totaled $8.3 million.
The company’s GAAP net loss widened to $27.9 million, or $0.26 per share, from $23.0 million, or $0.23 per share, in the prior year. Non-GAAP net income came in at $16.9 million, or $0.15 per diluted share, far ahead of the $0.03 estimate and up from $0.09 last year.
Profitability and Margins
Braze posted a GAAP operating loss of $38.8 million, largely due to $39.5 million in stock-based compensation. On a non-GAAP basis, operating income improved to $6.0 million from $4.2 million. Non-GAAP gross margin slipped slightly to 69.3% from 70.9%.
Dollar-based net retention declined to 108% from 114% for all customers, and to 111% from 117% for customers with annual recurring revenue above $500,000.
Expanding Customer Base
The customer base expanded to 2,422, compared with 2,163 a year earlier. Of these, 282 customers had ARR above $500,000, up from 222 in the prior year. Notable client wins and expansions included DocMorris, Fogo de Chão, Gopuff, Kleinanzeigen, Little Caesars, Metcash, Sweetgreen, and Wix.
Monthly active users reached 7.4 billion by July 31, 2025, compared with 7.2 billion at the start of the year.
Cash Flow and Liquidity
Operating cash flow declined to $7.0 million from $11.6 million, while free cash flow fell to $3.5 million from $7.2 million. The company ended the quarter with $368.3 million in cash, cash equivalents, restricted cash, and marketable securities.
AI Strategy and Outlook
CEO Bill Magnuson highlighted Braze’s focus on AI-powered solutions, including the launch of the Model Context Protocol Server, which connects large language models with Braze data. He emphasized that AI will drive Braze’s next growth wave in customer engagement.
For Q3 FY2026, Braze expects revenue of $183.5 million to $184.5 million and non-GAAP net income of $6.5 million to $7.5 million. For the full year, revenue guidance was raised to $717 million to $720 million, above the prior $697.7 million outlook. Non-GAAP net income is now projected between $45.5 million and $46.5 million, or $0.41 to $0.42 per share, compared with earlier guidance of $0.15 to $0.18.
