Summary
Braze closed fiscal 2025 with what management called record customer bookings, and the income statement shows a business still adding revenue at a healthy clip. Revenue for the fourth quarter ended January 31, 2025 was $160.40 million, up 22.5% from $130.96 million in the prior-year quarter. Full-year revenue reached $593.41 million, up 25.8% from $471.80 million. Remaining performance obligations totaled $793.10 million at year end, up 24.1% from $639.20 million a year earlier, and current deferred revenue rose 17.5% to $239.98 million. Management framed the quarter around bookings rather than billings, and the backlog metrics support that framing.
Profitability improved across the board even though the company remains in the red. Fourth-quarter gross profit was $111.09 million, up 26.3%, and gross margin was 69.3%, up 2.1 percentage points from 67.2%. The full-year gross margin was 69.1%, up 0.4 percentage points from 68.7%, on gross profit of $410.22 million, up 26.5%. The fourth-quarter operating loss was $21.56 million against a $32.29 million loss a year earlier, a 33.2% improvement, and the full-year operating loss narrowed 15.6% to $122.16 million. Net loss for the quarter was $17.19 million, narrower than $28.28 million in the prior-year quarter, and the full-year net loss narrowed 19.7% to $103.74 million. Diluted loss per share for the fiscal year was $1.02, an improvement of $0.30 from $1.32.
Cash generation was the standout. Operating cash flow came to $17.08 million in the quarter, up 347.1% from $3.82 million a year earlier, and $36.68 million for the full year, up 435.5% from $6.85 million. Capital expenditures fell 82.8% in the quarter to $1.09 million from $6.32 million, but they were $13.23 million for the year to date, up 35.6%. The MD&A reports non-GAAP free cash flow of $19.6 million for fiscal 2025, compared with negative free cash flow of $6.5 million in fiscal 2024. Cash, cash equivalents and marketable securities totaled $514.0 million at January 31, 2025.
Cost discipline explains much of the margin story. Full-year sales and marketing expense rose 14.2% to $282.3 million, research and development rose 11.8% to $133.97 million, and general and administrative expense rose 13.8% to $116.09 million. Total stock-based compensation for the year was $114.3 million. Engagement metrics kept climbing: 2,296 customers as of January 31, 2025, up from 2,044 a year earlier, and roughly 7.2 billion monthly active users against about 6.2 billion. The company ended the year with 247 customers generating at least $500,000 in annual recurring revenue, compared with 202.
Retention is the soft spot. Braze's dollar-based net retention rate for the trailing 12 months ended January 31, 2025 slipped to 111% from 117% a year earlier, and the rate for customers with ARR of $500,000 or more fell to 114% from 120%. Management tied the decline to customer turnover and renewals at lower subscription levels, noting that an uncertain macroeconomic environment and high interest rates are pushing customers to renew closer to current needs instead of committing to larger volumes. That matters because about 73.8% of the subscription revenue increase came from existing customers. Braze also lists competition, pricing, customer spending levels and general macro conditions as swing factors, and it keeps a full valuation allowance against net deferred tax assets.
Leadership is changing. President and Chief Commercial Officer Myles Kleeger will step down after 10 years, staying available to the company until June 1, 2025, and Braze will hire a chief revenue officer reporting to CEO Bill Magnuson. The earnings release included no quantitative guidance for the first quarter or the full fiscal year, so the plan for scaling growth has to be judged from commentary. Committed obligations are sizeable: $224.4 million of purchase commitments and $114.8 million of operating lease obligations as of January 31, 2025. Messaging volume and compute requirements typically peak in the fourth quarter, which the company says it has seen in the seasonality of its cost of revenue.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $160.4M | $152.1M | +5.5% | $131.0M | +22.5% |
| Gross profit | $111.1M | $106.1M | +4.7% | $88.0M | +26.3% |
| Gross margin | 69.3% | 69.8% | -0.5 pp | 67.2% | +2.1 pp |
| Research & development | $33.6M | $32.9M | +2.3% | $31.1M | +8.0% |
| Sales & marketing | $69.3M | $74.7M | -7.2% | $63.1M | +9.9% |
| General & administrative | $29.8M | $31.2M | -4.5% | $26.1M | +14.1% |
| Total operating expenses | $132.6M | $138.7M | -4.4% | $120.3M | +10.3% |
| Operating income (loss) | -$21.6M | -$32.6M | +33.8% | -$32.3M | +33.2% |
| Operating margin | -13.4% | -21.4% | +8.0 pp | -24.7% | +11.2 pp |
| Net income (loss) | -$17.1M | -$28.1M | +39.3% | -$28.6M | +40.3% |
| Net margin | -10.6% | -18.5% | +7.9 pp | -21.8% | +11.2 pp |
| Diluted EPS | -$0.17 | -$0.27 | +$0.10 | -$0.29 | +$0.12 |
| Customers | 2,296 | 2,211 | +3.8% | 2,044 | +12.3% |
Risks
Unstable market and economic conditions, including inflation, higher interest rates, and banking-sector volatility, may reduce customer engagement technology spending, extend sales cycles, and pressure collections. MD&A reports the trailing 12-month dollar-based net retention rate declined to 111% for the period ended January 31, 2025 from 117% a year earlier, and to 114% from 120% for customers with ARR of $500,000 or more.
Generative AI may disrupt consumer engagement and marketing, and competitors may incorporate AI more quickly or successfully. Braze is adding AI/ML features and announced a planned $325 million acquisition of OfferFit, an agentic AI company, but AI outputs may be flawed, biased, or subject to new rules such as the EU AI Act.
Braze announced a planned $325 million acquisition of OfferFit, funded partly with Class A stock (about 42%), which will be dilutive and uses a significant portion of IPO proceeds. Integration may divert management, disrupt the business, and expose Braze to unknown liabilities or impairment if OfferFit does not meet expectations.
Braze identified a material weakness in internal control over financial reporting as of January 31, 2025 related to certain ITGCs. Remediation may burden management and, if unsuccessful, could impair timely and accurate financial reporting and investor confidence.
Revenue depends on customers renewing and expanding subscriptions, and the dollar-based net retention rate declined to 111% for the trailing 12 months ended January 31, 2025 from 117% a year earlier, with $500,000+ ARR customers at 114% from 120%. Customers are renewing at levels aligned with current needs rather than larger commitments amid macroeconomic uncertainty.
Braze faces intense competition from legacy marketing clouds like Adobe and Salesforce and point solutions like Airship, Iterable, Klaviyo, CleverTap, and MoEngage. Competitors may have greater resources, bundle products, or lower prices, which could reduce Braze's sales, renewals, and pricing.
The sales cycle for large enterprise customers is long and unpredictable, generally three to six months but sometimes over 12 months, and macroeconomic pressure may extend it or reduce win rates. Delays can increase operating expenses before corresponding revenue is recognized.
Braze may need to reduce prices or change its pricing model to remain competitive, and some contracts limit price increases or include pricing guarantees. This could cause revenue from those contracts not to keep pace with costs, especially inflation-driven labor and benefit costs.
Braze depends on senior management, particularly its CEO, and competition for experienced software engineers and senior sales executives is intense. Its hybrid and remote work model adds complexity and may affect hiring, training, culture, and retention.
International revenue was approximately 45% of revenue in FY2025, and further expansion into Europe, Asia-Pacific, and Latin America involves regulatory, tax, currency, and collection risks. Failure to expand successfully could incur additional losses and harm revenue growth.
Braze relies on third-party cloud infrastructure providers, including Amazon Web Services and Rackspace, to host its products. Any disruption, capacity limitation, or interference could harm platform availability, trigger service credits, or cause customers to terminate or not renew.
Braze is subject to stringent and changing privacy, data security, and data protection laws, and a security breach or perceived failure to comply could reduce demand and create significant liabilities. The risk is heightened by the large amount of customer data the platform processes.
SaaS KPIs
All quarters →Monthly Active Users
Total Customers
Customers with ARR $500,000 or more
Summary, forecast, risks and KPIs are extracted from Braze, Inc.'s SEC filings for Q4 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.