Braze, a leading customer engagement platform, announced its financial results for the second quarter of fiscal year 2026, ending July 31, 2025. The company achieved significant revenue growth and enhanced profitability, fueled by strong demand for its AI-powered solutions and strategic customer expansions across diverse industries.
Revenue: $180.1M, up 23.8% year-over-year, driven by new customers and upsells.
Subscription Revenue: $171.8M, up from $140.0M in Q2 FY2025.
ARR: $1.723B, with 108% dollar-based net retention for all customers.
Profitability: Non-GAAP operating income of $6.0M; GAAP operating loss of $38.8M.
Free Cash Flow: $3.5M, with $368.3M in cash and equivalents.
Customer Growth: Total customers rose to 2,422, with 282 having ARR of $500,000+.
Braze reported revenue of $180.1 million, a 23.8% increase from $145.5 million in Q2 FY2025, driven by new customers, upsells, and renewals. Subscription revenue reached $171.8 million, up from $140.0 million, while professional services and other revenue grew to $8.3 million from $5.5 million. Annual recurring revenue (ARR) was $1.723 billion, with a dollar-based net retention rate of 108% for all customers and 111% for those with ARR of $500,000 or more, reflecting robust customer retention and expansion.
GAAP Gross Margin: 67.7%, compared to 70.2% in Q2 FY2025.
Non-GAAP Gross Margin: 69.3%, compared to 70.9% in Q2 FY2025.
GAAP Operating Loss: $38.8 million, impacted by $39.5 million in stock-based compensation, compared to a $28.0 million loss in Q2 FY2025.
Non-GAAP Operating Income: $6.0 million, up from $4.2 million in Q2 FY2025.
GAAP Net Loss per Share: $0.26 (106.8 million shares), compared to $0.23 (101.4 million shares) in Q2 FY2025.
Non-GAAP Net Income per Share: $0.15 (109.8 million shares), up from $0.09 (105.9 million shares).
Net cash provided by operating activities was $7.0 million, down from $11.6 million in Q2 FY2025. Non-GAAP free cash flow was $3.5 million, compared to $7.2 million in the prior year. Total cash, cash equivalents, restricted cash, and marketable securities stood at $368.3 million as of July 31, 2025, compared to $514.0 million as of January 31, 2025.
For Q3 FY2026, Braze expects:
Revenue: $183.5M–$184.5M.
Non-GAAP Operating Income: $3.5M–$4.5M.
Non-GAAP Net Income: $6.5M–$7.5M.
Non-GAAP Net Income per Share: $0.06–$0.07 (113.5 million shares).
For full-year FY2026, Braze projects:
Revenue: $717.0M–$720.0M.
Non-GAAP Operating Income: $24.5M–$25.5M.
Non-GAAP Net Income: $45.5M–$46.5M.
Non-GAAP Net Income per Share: $0.41–$0.42 (112.0 million shares).
Braze’s strong performance was driven by notable customer wins and expansions, including DocMorris, Fogo de Chão, Gopuff, and Wix. The company introduced the Braze Model Context Protocol (MCP) Server, enhancing AI integration with large language models. Additionally, Braze released its 2025 ESG Report, reaffirming its commitment to sustainable customer relationships. CEO Bill Magnuson stated, “We reported a strong second quarter, delivering 24% year-over-year revenue growth while driving continued efficiency in our business, expanding our non-GAAP operating income and net income profitability, and generating strong free cash flow.”
Braze is the leading customer engagement platform that empowers brands to Be Absolutely Engaging.™ Braze allows any marketer to collect and take action on any amount of data from any source, so they can creatively engage with customers in real time, across channels from one platform. From cross-channel messaging and journey orchestration to AI-powered experimentation and optimization, Braze enables companies to build and maintain absolutely engaging relationships with their customers that foster growth and loyalty. The company has been recognized as a 2024 U.S. News & World Report Best Companies to Work For, 2024 Best Small & Medium Workplaces in Europe by Great Place to Work®, 2024 Fortune Best Workplaces for Women™ by Great Place to Work® and was named a Leader by Gartner® in the 2024 Magic Quadrant™ for Multichannel Marketing Hubs and a Strong Performer in The Forrester Wave™: Email Marketing Service Providers, Q3 2024. Braze is headquartered in New York with 15 offices across AMER, LATAM, EMEA, and APAC.
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