Summary
Braze reported fiscal 2025 third-quarter revenue of $152.1 million, up 22.7% from the prior-year quarter. Gross profit rose 21.2% to $106.1 million. Gross margin was 69.8%, down 0.8 percentage points. The company still posted an operating loss of $32.6 million. Net loss attributable to Braze, Inc. was $27.9 million. Diluted EPS was negative $0.27. Operating margin was negative 21.4%, up 6.9 percentage points from the prior-year quarter. Stock-based compensation was a primary contributor to the operating loss, management said. Growth came primarily from new customers, upsells and renewals.
Operating cash flow was negative $11.4 million for the quarter, down 469.6% year over year. Year to date operating cash flow was $19.6 million, up 547.0%. Capital expenditures were $1.9 million for the quarter, down 36.2%, and $12.1 million year to date, up 253.2%. Free cash flow was negative $14.2 million for the quarter and $4.4 million for the nine months. Deferred revenue was $223.7 million, up 25.3% from the prior-year quarter. Remaining performance obligations were $716.8 million, up 28.0%. On a non-GAAP basis, operating loss was $2.2 million, compared with a loss of $8.9 million in the prior-year quarter. Non-GAAP gross margin was 70.5%, compared with 71.4%. Non-GAAP net income per share was $0.02, compared with a non-GAAP net loss per share of $0.05. Cash, cash equivalents, restricted cash, and marketable securities totaled $493.1 million as of October 31, 2024, compared with $480.0 million as of January 31, 2024.
Total customers increased to 2,211 as of October 31, 2024 from 2,011 a year earlier. Customers with ARR of $500,000 or more rose to 234 from 189. Dollar-based net retention for all customers for the trailing 12 months ended October 31, 2024 was 113%, down from 118% a year earlier. For customers with ARR of $500,000 or more, net retention was 116%, down from 121%. Monthly active users reached approximately 6.9 billion, up from approximately 6.2 billion as of January 31, 2024. Braze hosted over 1,000 attendees at Forge 2024 and announced a BrazeAI agent codenamed Project Catalyst. It expanded channel offerings with LINE, RCS Business in Beta, and new WhatsApp features. The company was named a Leader in the 2024 Gartner Magic Quadrant for Multichannel Marketing Hubs for the second consecutive year. The decline in trailing 12-month dollar-based net retention was primarily due to customer turnover and renewals at lower subscription levels, according to the filing.
For the fiscal fourth quarter ending January 31, 2025, Braze initiated guidance with a top line of $155.0 million to $156.0 million, non-GAAP operating income of $2.0 million to $3.0 million, non-GAAP net income of $5.0 million to $6.0 million, and non-GAAP net income per share of $0.05 to $0.06, on 107.5 million weighted average diluted shares. Full-year guidance for the period ending January 31, 2025 puts the top line at $588.0 million to $589.0 million, with non-GAAP operating loss of $5.0 million to $6.0 million, non-GAAP net income of $11.0 million to $12.0 million, and non-GAAP net income per share of $0.10 to $0.11, on 107.0 million weighted average diluted shares. Management said the company is on track to meet profitability targets for the fourth quarter and the full fiscal year 2025.
Risks include unstable market and economic conditions, a high interest rate climate, customer renewals at lower subscription levels, a history of operating losses, intense competition, reliance on third-party cloud infrastructure, cybersecurity and data privacy risks, and international expansion risks. Purchase commitments for business operations total $170.9 million and operating lease obligations total $121.6 million as of October 31, 2024. The company also expects seasonality in cost of revenue from higher messaging volume and compute needs in the fourth quarter. The accumulated deficit stood at $569.6 million as of October 31, 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $152.1M | $145.5M | +4.5% | $124.0M | +22.7% |
| Gross profit | $106.1M | $102.1M | +4.0% | $87.6M | +21.2% |
| Gross margin | 69.8% | 70.2% | -0.3 pp | 70.7% | -0.8 pp |
| Research & development | $32.9M | $33.1M | -0.9% | $29.9M | +10.0% |
| Sales & marketing | $74.7M | $68.6M | +8.9% | $66.4M | +12.4% |
| General & administrative | $31.2M | $28.3M | +10.2% | $26.4M | +18.0% |
| Total operating expenses | $138.7M | $130.0M | +6.7% | $122.7M | +13.0% |
| Operating income (loss) | -$32.6M | -$27.9M | -16.5% | -$35.1M | +7.3% |
| Operating margin | -21.4% | -19.2% | -2.2 pp | -28.3% | +6.9 pp |
| Net income (loss) | -$28.1M | -$23.1M | -21.5% | -$31.0M | +9.2% |
| Net margin | -18.5% | -15.9% | -2.6 pp | -25.0% | +6.5 pp |
| Diluted EPS | -$0.27 | -$0.23 | -$0.04 | -$0.31 | +$0.04 |
| Customers | 2,211 | 2,163 | +2.2% | 2,011 | +9.9% |
| Net retention rate | 118.0% | 120.0% | -2.0 pp | 118.0% | ±0.0 pp |
Risks
MD&A reports the trailing 12-month dollar-based net retention rate declined to 113% at October 31, 2024 from 118% a year earlier, and to 116% from 121% for customers with ARR of $500,000 or more, primarily due to customer turnover and renewals at lower subscription levels in an uncertain macroeconomic and high interest rate climate.
The company depends on customers renewing and expanding subscriptions; risk factors state customers may renew at levels aligned with current needs rather than larger commitments, and MD&A notes the decline in dollar-based net retention was driven by customer turnover and lower-level renewals.
Risk factors newly emphasize AI and machine learning, including generative AI, and state competitors may incorporate AI tools more quickly or successfully; the EU AI Act entered into force on August 1, 2024, creating potential new legal and regulatory obligations.
Risk factors name Adobe, Salesforce, Airship, Iterable, Klaviyo, CleverTap, and MoEngage as competitors and warn that larger competitors may bundle products or restrict platform access, leading to pricing pressure and loss of market share.
Risk factors state large enterprise sales cycles are generally three to six months but can extend over 12 months, and a sustained economic downturn may extend sales cycles or reduce win rates due to customer budgetary constraints.
MD&A reports gross margin decreased 0.9 percentage points to 69.8% in the quarter ended October 31, 2024 from 70.7% a year earlier, primarily due to increased expenses from greater adoption of premium messaging channels; for the nine months, gross margin decreased 0.2 percentage points to 69.1% partly from service disruption related charges to revenue.
Operating cash flow was negative $11.41 million in the quarter ended October 31, 2024, down 469.6% from negative $2.00 million a year earlier, though it was $19.60 million for the nine months, up 547.0%; risk factors note collection pressure could lengthen receivables collection and increase bad debt expense.
Risk factors state the business relies on third-party cloud infrastructure providers including Amazon Web Services and Rackspace, and on mobile operating systems and messaging channels; disruptions or capacity limits could reduce customer engagement effectiveness and harm results.
Risk factors state success depends on the chief executive officer and key employees, and competition for experienced software engineers and senior sales executives is intense; the hybrid and remote workforce adds complexity and may affect hiring, training, and culture.
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 Gross Margin
Non-GAAP Operating Margin
Non-GAAP Operating Loss
Summary, forecast, risks and KPIs are extracted from Braze, Inc.'s SEC filings for Q3 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 1, 2026.