Summary
Braze opened fiscal 2026 with revenue of $162.1 million in the quarter ended April 30, 2025, up 19.6% from $135.5 million in the prior-year quarter. Gross profit rose 22.3% to $111.2 million from $90.9 million, and GAAP gross margin expanded to 68.6% from 67.1%. Management credited efficiency gains on the tech stack and pointed out that the year-ago quarter absorbed a one-time revenue charge tied to an April 2024 service disruption. Braze also leans on overseas demand: international markets produced approximately 46% of revenue, up from 44% a year earlier.
GAAP profitability barely budged. The operating loss was $40.2 million, essentially flat against the $40.1 million loss a year earlier, and the net loss attributable to Braze widened slightly to $35.8 million from $35.6 million. GAAP operating margin improved to negative 24.8% from negative 29.6%. Diluted loss per share improved to $0.34 from $0.35. Stock-based compensation of $30.4 million remains the single biggest reason the GAAP operating loss stays so wide. General and administrative expense jumped 51.2% to $40.5 million from $26.8 million, driven by $10.0 million of professional services and legal costs tied to the OfferFit acquisition. Sales and marketing rose 6.2% and research and development 7.1%. Non-GAAP operating income was $2.8 million, versus a non-GAAP operating loss of $10.0 million a year ago, and non-GAAP diluted net income per share was $0.07 compared with a non-GAAP loss per share of $0.05.
Cash generation improved, though part of the lift comes from a much lighter capital spend. Operating cash flow was $24.1 million, up 24.5% from $19.4 million. Capital expenditures fell 96.9% to $0.2 million from $6.9 million. Free cash flow, which the company reports on a non-GAAP basis, was $22.9 million against $11.4 million. Cash, cash equivalents, restricted cash, and marketable securities totaled $539.8 million at April 30, 2025, up from $514.0 million at January 31, 2025.
Backlog and customer counts moved in the right direction. Remaining performance obligations were $829.3 million, up 26.2% from $657.3 million, and $522.2 million of that is current. Current deferred revenue was $265.0 million, up 15.6% from $229.3 million. Total customers reached 2,342 from 2,102, and the cohort with ARR of $500,000 or more grew to 262 from 212. Monthly active users held at roughly 7.2 billion, in line with January 31, 2025.
Retention is the soft spot. Trailing-12-month dollar-based net retention fell to 109% from 117% across all customers, and to 112% from 119% for the $500,000-plus cohort. Braze attributes the drop to customer turnover and renewals signed at lower subscription levels, as buyers commit to current needs instead of anticipated future demand.
Guidance covers the next quarter and the full fiscal year. For the fiscal second quarter ending July 31, 2025, the company guides to non-GAAP operating income of $0.5 million to $1.5 million and non-GAAP diluted net income per share of $0.02 to $0.03. For the full fiscal year ending January 31, 2026, Braze guides to non-GAAP operating income of $5.5 million to $9.5 million and non-GAAP diluted net income per share of $0.15 to $0.18. Revenue guidance was issued for both periods and will be updated on the next call. Braze did not reconcile the non-GAAP outlook to GAAP, citing uncertainty around stock-based compensation.
The risk list stays familiar. Braze has a history of operating losses, competes in a crowded customer engagement market, and depends on third-party cloud infrastructure. The OfferFit integration carries retention and execution risk, including the impact of management and organizational changes on that business. Non-cancelable purchase commitments of $196.8 million and operating lease obligations of $113.9 million are the largest funding needs. The new chief revenue officer, Ed McDonnell, starts in early July and is the operational variable to watch.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $162.1M | $160.4M | +1.0% | $135.5M | +19.6% |
| Gross profit | $111.2M | $111.1M | +0.1% | $90.9M | +22.3% |
| Gross margin | 68.6% | 69.3% | -0.6 pp | 67.1% | +1.5 pp |
| Research & development | $36.8M | $33.6M | +9.5% | $34.4M | +7.1% |
| Sales & marketing | $74.1M | $69.3M | +7.0% | $69.8M | +6.2% |
| General & administrative | $40.5M | $29.8M | +36.0% | $26.8M | +51.2% |
| Total operating expenses | $151.4M | $132.6M | +14.2% | $131.0M | +15.6% |
| Operating income (loss) | -$40.2M | -$21.6M | -86.6% | -$40.1M | -0.4% |
| Operating margin | -24.8% | -13.4% | -11.4 pp | -29.6% | +4.8 pp |
| Net income (loss) | -$35.8M | -$17.1M | -109.7% | -$35.7M | -0.2% |
| Net margin | -22.1% | -10.6% | -11.4 pp | -26.4% | +4.3 pp |
| Diluted EPS | -$0.34 | -$0.17 | -$0.17 | -$0.35 | +$0.01 |
| Customers | 2,342 | 2,296 | +2.0% | 2,102 | +11.4% |
| Net retention rate | 117.0% | — | — | 122.0% | -5.0 pp |
Risks
Braze identified a material weakness in internal control over financial reporting associated with certain Information Technology General Controls, and remediation may not be complete or successful. This could impair timely and accurate financial reporting and investor confidence.
In June 2025 Braze completed the $325 million acquisition of OfferFit, funded with cash and approximately 42% Class A common stock. Integration, key personnel retention, customer retention, dilution, and unforeseen liabilities could adversely affect results.
Unstable economic conditions, inflation, elevated interest rates, and banking-sector volatility may extend sales cycles and reduce customer spending. MD&A reports that the trailing 12-month dollar-based net retention rate declined to 109% from 117% for all customers and to 112% from 119% for customers with ARR of $500,000 or more, due to customer turnover and renewals at lower subscription levels.
Braze faces risk that generative AI disrupts customer engagement and that competitors incorporate AI and machine learning more quickly or successfully. Its AI features may be flawed, biased, or subject to evolving laws such as the EU AI Act, exposing it to liability and reputational harm.
Large enterprise sales cycles are long and unpredictable, generally three to six months but sometimes extending over 12 months, and macroeconomic pressure can delay wins and increase upfront sales and marketing costs.
Braze faces intense competition from legacy marketing clouds Adobe and Salesforce and point solutions including Airship, Iterable, Klaviyo, CleverTap, and MoEngage. Competitors may lower prices, bundle products, or use broader resources to lure customers.
The platform depends on third-party providers and mobile operating systems, including Apple and Google, for delivery of messages and notifications. Policy changes, suspensions, or extended outages could cause customer dissatisfaction and liability.
SaaS KPIs
All quarters →Monthly Active Users
Total Customers
Current Remaining Performance Obligations
Remaining Performance Obligations
Free Cash Flow
Customers with ARR of $500,000 or more
Non-GAAP Operating Margin
Summary, forecast, risks and KPIs are extracted from Braze, Inc.'s SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.