Summary
Braze opened fiscal 2027 with accelerating top-line growth. Revenue for the fiscal first quarter ended April 30, 2026 was $211.0 million, up 30.2% from $162.1 million in the prior-year quarter. The company reported 30% reported revenue growth and 27% organic revenue growth, which marked the fourth straight quarter of organic revenue acceleration. Remaining performance obligations reached $1,079.2 million, up 30.1% from $829.3 million a year earlier. Deferred revenue was $342.5 million, up 29.2% from $265.0 million. Those balances suggest that booked demand remains healthy even as the company works through a changing macro backdrop. Braze pointed to new customers, upsells, and renewals as the main drivers of revenue growth. Notable new business wins and expansions included Bondora Group, ClassPass, Denny's, Deuna, Kueski, NRMA, Regal Cinemas, Salomon, and Subway.
Profitability improved on a GAAP basis, though gross margin compressed. Gross profit was $138.7 million, up 24.7% from $111.2 million. Gross margin was 65.7%, down from 68.6%, a decline of 2.9 percentage points. The operating loss was $27.5 million, up from a loss of $40.2 million in the prior-year quarter. Operating margin was negative 13.0%, up from negative 24.8%, an improvement of 11.8 percentage points. Net loss attributable to Braze was $26.6 million, up from $35.8 million a year earlier. Diluted loss per share was $0.24, up from $0.34. Non-GAAP operating income was $10.5 million, compared with $2.8 million. Non-GAAP operating margin was 5.0%, compared with 1.8%. Non-GAAP gross margin was 67.4%, down from 69.3%. Non-GAAP net income per share, diluted, was $0.10, compared with $0.07. The company said stock-based compensation expense remained a primary contributor to the GAAP operating loss. Gross margin pressure came from acquisition-related operating costs, personnel costs of acquired workforce, amortization expense of acquired technology, and increased costs related to the tech stack.
Cash generation and customer metrics showed steady progress. Operating cash flow was $28.1 million, up 16.5% from $24.1 million. Capital expenditures were $0.11 million, down 50.2% from $0.22 million. Free cash flow was $26.8 million, compared with $22.9 million. Total customers grew to 2,713 as of April 30, 2026 from 2,342 as of April 30, 2025. Customers with annual recurring revenue of $500,000 or more increased to 349 from 262. Dollar-based net retention for all customers for the trailing 12 months ended April 30, 2026 was 110%, up from 109% a year earlier. For customers with annual recurring revenue of $500,000 or more, dollar-based net retention was 111%, down from 112%. Monthly active users reached approximately 8.5 billion as of April 30, 2026, up from approximately 8.0 billion as of January 31, 2026. The company also released a Forrester Total Economic Impact study that estimated a 457% return on investment over three years for a composite organization using the Braze platform, with a net present value of $23.5 million and payback in less than six months.
Management initiated guidance for the fiscal second quarter ending July 31, 2026 and updated guidance for the full fiscal year ending January 31, 2027. The company targets non-GAAP operating income of $17.0 million to $18.0 million for the fiscal second quarter and $70.0 million to $74.0 million for the full fiscal year. Non-GAAP net income guidance is the same range. Non-GAAP net income per share, diluted, is guided to $0.15 to $0.16 for the fiscal second quarter and $0.61 to $0.65 for the full fiscal year. Weighted average common shares used in computing non-GAAP net income per share, diluted, are expected to be 114.0 million. Braze also pointed to several risks. Those include unstable market and economic conditions, a high interest rate climate that has led customers to renew at lower levels, a history of operating losses, limited operating history at scale, intense competition, reliance on third-party cloud infrastructure, and evolving cybersecurity and data privacy rules. Tax legislation, including the Pillar Two framework and the One Big Beautiful Bill Act, adds further uncertainty to the company's future effective tax rate, tax liabilities, and cash tax. Braze announced management updates: Chris Lal joined as General Counsel on May 15, 2026, Nick Rockwell will join as Chief Information Officer effective June 1, 2026, and Pankaj Malik, currently Chief Accounting Officer, was appointed Interim Chief Financial Officer effective May 29, 2026.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2027 | Q4 FY2026 | QoQ | Q1 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $211.0M | $205.2M | +2.8% | $162.1M | +30.2% |
| Gross profit | $138.7M | $134.4M | +3.2% | $111.2M | +24.7% |
| Gross margin | 65.7% | 65.5% | +0.2 pp | 68.6% | -2.9 pp |
| Research & development | $46.1M | $45.0M | +2.4% | $36.8M | +25.3% |
| Sales & marketing | $89.2M | $81.7M | +9.2% | $74.1M | +20.3% |
| General & administrative | $30.9M | $35.9M | -13.9% | $40.5M | -23.7% |
| Total operating expenses | $166.2M | $162.6M | +2.2% | $151.4M | +9.7% |
| Operating income (loss) | -$27.5M | -$28.2M | +2.6% | -$40.2M | +31.6% |
| Operating margin | -13.0% | -13.8% | +0.7 pp | -24.8% | +11.8 pp |
| Net income (loss) | -$25.5M | -$31.6M | +19.3% | -$35.8M | +28.8% |
| Net margin | -12.1% | -15.4% | +3.3 pp | -22.1% | +10.0 pp |
| Diluted EPS | -$0.24 | -$0.29 | +$0.05 | -$0.34 | +$0.10 |
| Customers | 2,713 | 2,609 | +4.0% | 2,342 | +15.8% |
| Net retention rate | 110.0% | — | — | 117.0% | -7.0 pp |
Risks
The company identified a material weakness in internal control over financial reporting associated with certain Information Technology General Controls (ITGCs) in its FY2026 Form 10-K, and remediation is ongoing. Failure to remediate could impair timely and accurate financial reporting and lead to loss of investor confidence or SEC sanctions.
Recent advances in generative and agentic AI are a significant disruptor in consumer engagement and marketing, and competitors may incorporate AI tools more quickly or successfully. The company also faces evolving AI regulation, including the EU AI Act, and risks from flawed, biased, or hallucinatory AI outputs.
Unstable market and economic conditions, including inflation, higher interest rates, tariffs, and trade restrictions, have affected customer spending behavior and could extend sales cycles or reduce demand. MD&A notes dollar-based net retention is influenced by macroeconomic factors and renewals at lower subscription levels.
The company depends on renewals and expansion; trailing 12-month dollar-based net retention for customers with ARR of $500,000 or more decreased to 111% from 112% for periods ended April 30, 2026 and 2025. Customer turnover and renewals at lower subscription levels, plus loss of large enterprise customers, could disproportionately harm revenue.
The market for customer engagement products is highly competitive, with established competitors such as Adobe, Salesforce, Iterable, and Klaviyo, and competitors may bundle products or lower prices. This could lead to price reductions, fewer sales, reduced revenue and gross margins, and loss of market share.
The platform depends on third-party providers and mobile operating systems, including Apple and Google services, for delivery of messages and notifications. Policy changes, filtering technologies, or service outages at these providers could disrupt customer communications and harm the business.
Sales cycles with large enterprise customers are long and unpredictable, generally three to six months but sometimes over 12 months, and require significant upfront sales and marketing expense before revenue is recognized. Macroeconomic pressure may further extend cycles or reduce win rates.
The company depends on its senior management team, particularly its chief executive officer, and on highly skilled software engineers and senior sales executives. Competition for these personnel is intense, and the hybrid/remote work model adds complexity to hiring, training, and retention.
The June 2025 acquisition of OfferFit poses integration challenges, including assimilating technology and personnel, retaining customers, and potential impairment charges. A significant portion was funded with Class A common stock, which has had a dilutive impact.
SaaS KPIs
All quarters →Monthly Active Users
Total Customers
Current Remaining Performance Obligations
Remaining Performance Obligations
Free Cash Flow
Non-GAAP Operating Margin
Customers with ARR $500,000 or more
Summary, forecast, risks and KPIs are extracted from Braze, Inc.'s SEC filings for Q1 FY2027 (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.