Summary
Braze reported fiscal second quarter revenue of $145.5 million, up 26.4% from $115.1 million in the prior-year quarter. Gross profit rose 28.2% to $102.1 million, and gross margin improved to 70.2% from 69.2%. The company still posted a GAAP operating loss of $28.0 million, narrower than the $35.4 million loss in the prior-year quarter. GAAP net loss attributable to Braze narrowed to $23.0 million from $31.7 million a year earlier. Diluted GAAP loss per share narrowed to negative $0.23 from negative $0.33. Operating margin improved to negative 19.2% from negative 30.7%. On a non-GAAP basis, Braze reached its first quarter of non-GAAP operating income profitability, with non-GAAP operating income of $4.2 million versus a $7.6 million loss in the prior-year quarter. Non-GAAP net income per diluted share was $0.09, compared with a non-GAAP net loss per share of $0.04 a year earlier.
Cash generation improved sharply. Operating cash flow turned positive at $11.6 million, up from negative $17.5 million in the prior-year quarter. For the first six months of fiscal 2025, operating cash flow was $31.0 million, up from $5.0 million in the first six months of fiscal 2024. Capital expenditures were $3.3 million, up from $0.4 million a year earlier. Free cash flow, a non-GAAP measure, was $7.2 million, compared with negative $18.7 million in the prior-year quarter. Deferred revenue, current portion, was $212.1 million, up 20.0% from $176.8 million a year earlier. Remaining performance obligations were $689.6 million, up 31.7% from $523.5 million.
Customer metrics showed steady expansion but also some moderation. Total customers grew to 2,163 as of July 31, 2024, from 1,958 as of July 31, 2023. Customers with annual recurring revenue of $500,000 or more increased to 222 from 173. Dollar-based net retention for all customers was 114% for the trailing 12 months ended July 31, 2024, down from 120% in the prior-year period. For customers with ARR of $500,000 or more, dollar-based net retention was 117%, down from 123%. Monthly active users rose to approximately 6.7 billion as of July 31, 2024, from approximately 6.2 billion as of January 31, 2024. Recent wins and upsells included Asiana Airlines, Bell Media, Gumtree, LoanDepot, Papa Johns Pizza, Strawberry Hotels, Supercell, TF1, and Zalando. Braze also introduced the Braze Data Platform, launched Braze for Startups, and announced a 14-day free trial.
Management provided guidance for the fiscal third quarter ending October 31, 2024, and updated guidance for the full fiscal year ending January 31, 2025. The fiscal third quarter outlook includes a non-GAAP operating loss of $3.5 million to $4.5 million and a non-GAAP net loss of $0.5 million to $1.5 million. For the full fiscal year, the company guided to non-GAAP net income of $6.5 million to $7.5 million and non-GAAP diluted EPS of $0.06 to $0.07. The main risks remain familiar. They include unstable market and economic conditions, a history of operating losses, the company's limited operating history at its current scale, and the challenge of managing rapid growth. Braze also faces intense competition, the need to attract new customers and renew existing ones, rapid changes in technology, cybersecurity and data privacy risks, evolving regulations, and reliance on third-party cloud infrastructure. The MD&A also notes a one-time charge to revenue related to an April service disruption, and seasonality in cost of revenue tied to fourth-quarter messaging volume.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $145.5M | $135.5M | +7.4% | $115.1M | +26.4% |
| Gross profit | $102.1M | $90.9M | +12.3% | $79.6M | +28.2% |
| Gross margin | 70.2% | 67.1% | +3.0 pp | 69.2% | +1.0 pp |
| Research & development | $33.1M | $34.4M | -3.6% | $29.1M | +13.8% |
| Sales & marketing | $68.6M | $69.8M | -1.8% | $60.4M | +13.5% |
| General & administrative | $28.3M | $26.8M | +5.7% | $25.5M | +11.3% |
| Total operating expenses | $130.0M | $131.0M | -0.7% | $115.0M | +13.1% |
| Operating income (loss) | -$27.9M | -$40.1M | +30.3% | -$35.4M | +21.0% |
| Operating margin | -19.2% | -29.6% | +10.4 pp | -30.7% | +11.5 pp |
| Net income (loss) | -$23.1M | -$35.7M | +35.2% | -$32.0M | +27.8% |
| Net margin | -15.9% | -26.4% | +10.4 pp | -27.8% | +11.9 pp |
| Diluted EPS | -$0.23 | -$0.35 | +$0.12 | -$0.33 | +$0.10 |
| Customers | 2,163 | 2,102 | +2.9% | 1,958 | +10.5% |
| Net retention rate | 120.0% | 122.0% | -2.0 pp | 120.0% | ±0.0 pp |
Risks
Braze faces intense competition from legacy marketing clouds like Adobe and Salesforce and point solutions such as Airship, Iterable, Klaviyo, CleverTap and MoEngage. Competitors may bundle products, restrict platform access, or lower prices, which could pressure Braze's pricing, sales, and gross margins.
Risk factors and MD&A cite instability in banking, inflation, higher interest rates, declines in consumer confidence, and geopolitical conflict as pressures that could reduce customer engagement technology spending and extend sales cycles. Braze says it cannot estimate the ongoing effects on results.
Braze's dollar-based net retention rate for the trailing 12 months ended July 31, 2024 was 114%, compared with 120% for the trailing 12 months ended July 31, 2023. For customers with ARR of $500,000 or more, the rate was 117%, compared with 123% in the prior-year period.
The risk factors highlight generative AI as a potential disruptor and note that competitors may incorporate AI and machine learning into their products more quickly or successfully than Braze. Braze's AI features also expose it to evolving regulation, bias, hallucination, and intellectual property claims.
The sales cycle for large enterprise customers is generally three to six months but can extend over 12 months, and macroeconomic uncertainty may further lengthen it or reduce win rates. This can delay revenue recognition and increase upfront sales costs.
MD&A notes that gross margin was partially offset by a one-time charge to revenue related to Braze's April service disruption. Risk factors warn that future outages could trigger service credits, contract terminations, or delayed renewals.
Braze is subject to stringent and changing privacy, data security, and data protection laws, and its AI and machine learning features may face new or heightened legal, ethical, and regulatory scrutiny. Noncompliance could harm demand and increase costs.
SaaS KPIs
All quarters →Monthly Active Users
Total Customers
Current Remaining Performance Obligations
Remaining Performance Obligations
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Non-GAAP Free Cash Flow
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from Braze, Inc.'s SEC filings for Q2 FY2025 (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.