Summary
Braze closed FY2026 Q3 with revenue of $190.8 million, up 25.5% from $152.1 million in FY2025 Q3. Year-to-date revenue reached $533.0 million, up 23.1% from $433.0 million. The top line came from new customers, upsells and renewals, with total customers rising to 2,528 from 2,211 and large customers rising by 29%. Gross profit was $128.2 million, up 20.8% from $106.1 million, but GAAP gross margin slipped to 67.2% from 69.8%. Management tied the margin decline to OfferFit acquisition costs, including acquired workforce and amortization of acquired technology, plus higher tech stack costs.
Profitability remains the weak spot. GAAP operating loss widened to $37.5 million from $32.6 million, and GAAP net loss widened to $36.0 million from $27.9 million. Diluted GAAP loss per share was $0.33, compared with $0.27. On a non-GAAP basis, operating income was $5.1 million, compared with a non-GAAP operating loss of $2.2 million. Non-GAAP net income per diluted share was $0.06, compared with $0.02. The company generated $21.0 million of operating cash flow, compared with $11.4 million used in operating activities in the prior-year quarter. Free cash flow, a non-GAAP measure, was $17.8 million, compared with negative $14.2 million.
Operational momentum was mixed. Remaining performance obligations were $891.4 million as of October 31, 2025, up 24.4% from $716.8 million. Deferred revenue, current portion only, was $271.4 million, up 21.3% from $223.7 million. Trailing 12-month dollar-based net retention for all customers stabilized at 108%, compared with 113% in the prior-year period. Retention for customers with ARR of $500,000 or more was 110%, compared with 116%. The company had 303 customers with ARR of $500,000 or more, compared with 234. Monthly active users reached about 7.8 billion, up from about 7.2 billion as of January 31, 2025. Braze delivered a record 102.5 billion messages over the seven-day Cyber Week period and nearly 60 billion messages from Black Friday to Cyber Monday, with 100% uptime.
Guidance points to continued growth but does not reconcile non-GAAP figures to GAAP. For FY2026 Q4, Braze guided to non-GAAP operating income of $12.0 million to $13.0 million, non-GAAP net income of $15.0 million to $16.0 million, and non-GAAP diluted net income per share of $0.13 to $0.14 on 113.0 million weighted average diluted shares. For the full FY2026 year, the company guided to non-GAAP operating income of $26.0 million to $27.0 million, non-GAAP net income of $46.0 million to $47.0 million, and non-GAAP diluted net income per share of $0.42 to $0.43 on 110.0 million weighted average diluted shares. The company said it cannot reconcile the non-GAAP guidance to the closest GAAP measures because of uncertainty around items such as stock-based compensation tied to stock price.
Risks remain familiar. The dollar-based net retention decline reflects customer turnover and renewals at lower subscription levels, which management linked to an uncertain macroeconomic environment and high interest rates. Braze has a history of operating losses, and its recent revenue growth may not be indicative of future growth. Competition is intense, and the company relies on third-party cloud infrastructure. Data privacy and cybersecurity risks, evolving regulations, and the challenge of managing rapid growth all remain material. Seasonality adds another variable: Braze expects the highest sequential increase in messaging volume and compute and storage requirements in the fourth quarter because of holiday activity and year-end customer engagement.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2026 | Q2 FY2026 | QoQ | Q3 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $190.8M | $180.1M | +6.0% | $152.1M | +25.5% |
| Gross profit | $128.2M | $121.9M | +5.2% | $106.1M | +20.8% |
| Gross margin | 67.2% | 67.7% | -0.5 pp | 69.8% | -2.6 pp |
| Research & development | $44.1M | $41.3M | +6.8% | $32.9M | +34.1% |
| Sales & marketing | $88.6M | $82.6M | +7.3% | $74.7M | +18.7% |
| General & administrative | $33.1M | $36.8M | -10.1% | $31.2M | +6.1% |
| Total operating expenses | $165.8M | $160.6M | +3.2% | $138.7M | +19.5% |
| Operating income (loss) | -$37.5M | -$38.8M | +3.1% | -$32.6M | -15.3% |
| Operating margin | -19.7% | -21.5% | +1.8 pp | -21.4% | +1.8 pp |
| Net income (loss) | -$35.8M | -$27.8M | -28.9% | -$28.1M | -27.3% |
| Net margin | -18.8% | -15.4% | -3.4 pp | -18.5% | -0.3 pp |
| Diluted EPS | -$0.33 | -$0.26 | -$0.07 | -$0.27 | -$0.06 |
| Customers | 2,528 | 2,422 | +4.4% | 2,211 | +14.3% |
| Net retention rate | 108.0% | 114.0% | -6.0 pp | 118.0% | -10.0 pp |
Risks
Risk factors and MD&A describe continued macroeconomic uncertainty, including inflation, high interest rates, and customer budget constraints, that can reduce customer engagement technology spending and extend sales cycles. MD&A attributes the decline in trailing 12-month dollar-based net retention rate to customer turnover and renewals at lower subscription levels in this environment.
Trailing 12-month dollar-based net retention rate declined to 108% from 113% for all customers, and to 110% from 116% for customers with ARR of $500,000 or more. MD&A states the decline was primarily due to customer turnover and renewals at lower subscription levels.
The market for customer engagement products is highly competitive, with named competitors including Adobe, Salesforce, Airship, Iterable, Klaviyo, CleverTap, and MoEngage. Competitors may lower prices, bundle products, or consolidate, which could pressure pricing, renewals, and market share.
Recent advances in generative and agentic AI may disrupt consumer engagement and marketing strategies, and competitors may incorporate AI tools more quickly or successfully. The company also faces AI-related legal, ethical, and regulatory risks, including evolving frameworks such as the EU AI Act.
Gross margin was down 2.6 percentage points to 67.2% in the current quarter from 69.8% in the prior-year quarter, and down 1.3 percentage points to 67.8% year to date from 69.1%. MD&A attributes the decrease primarily to OfferFit acquisition expenses, including acquired workforce personnel costs and amortization of acquired technology, and increased tech stack costs.
The company identified a material weakness in internal control over financial reporting associated with certain ITGCs for the fiscal year ended January 31, 2025, and remediation is ongoing. The risk factor states that failure to remediate or new material weaknesses could impair timely and accurate financial reporting and harm investor confidence.
The sales cycle for large enterprise customers is generally three to six months but can extend over 12 months, and macroeconomic pressure may further extend cycles or reduce win rates. This can delay revenue while operating expenses for sales efforts are incurred.
The OfferFit acquisition contributed to lower gross margin through acquired workforce personnel costs and amortization of acquired technology, and MD&A also cites acquisition-related expenses in general and administrative costs. Risk factors note that acquisitions can pose integration challenges, divert management attention, and dilute stockholders.
MD&A highlights uncertainty from global tax legislation, including the OECD Pillar Two minimum 15% tax rate framework and the U.S. OBBBA. These changes could adversely affect the company's future effective tax rate, tax liabilities, and cash tax.
The company has a history of operating losses, with net loss attributable to the company widened to $36.0 million in the current quarter from $27.9 million in the prior-year quarter and to $99.7 million year to date from $86.6 million. As of October 31, 2025, accumulated deficit was $686.5 million, and risk factors state profitability may not be achieved or sustained.
SaaS KPIs
All quarters →Monthly Active Users
Total Customers
Current Remaining Performance Obligations
Remaining Performance Obligations
Free Cash Flow
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from Braze, Inc.'s SEC filings for Q3 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.