Summary
Braze closed fiscal 2026 with fourth-quarter revenue of $205.17 million, up 27.9% from $160.40 million in the prior-year quarter. Full-year revenue was $738.18 million, up 24.4% from $593.41 million. Fourth-quarter gross profit was $134.35 million, up 20.9% from a year earlier, but gross margin slipped to 65.5%, down 3.8 percentage points. Full-year gross margin was 67.1%, down 2.0 percentage points.
Profitability moved the other way. The fourth-quarter operating loss was $28.24 million, wider than the $21.56 million loss reported a year earlier. Net loss for the quarter was $31.60 million, wider than the $17.19 million loss in the prior-year quarter. For the full year, the operating loss was $144.76 million against $122.16 million, and net loss attributable to the company was $131.29 million against $103.74 million. Diluted loss per share for the fiscal year was $1.22, compared with $1.02 in fiscal 2025. The full-year operating margin was -19.6%, an improvement of 1.0 percentage point, while the fourth-quarter operating margin of -13.8% was down 0.3 percentage points. Management tied the annual gross margin compression to acquisition-related operating costs, including personnel costs from the acquired workforce and amortization of acquired technology, plus higher tech stack costs.
Billed commitments remain the strongest part of the story. Remaining performance obligations were $1.03 billion at January 31, 2026, up 30.2% from $793.10 million a year earlier, and current deferred revenue was $304.56 million, up 26.9% from $239.98 million. The customer base reached 2,609 as of January 31, 2026, and monthly active users were approximately 8.0 billion, up from approximately 7.2 billion. Customers spending at least $500,000 in annual recurring revenue numbered 333, up from 247 and 202 at the two prior fiscal year ends.
Retention is where the cracks show. The trailing-twelve-month dollar-based net retention rate was 109% for all customers as of January 31, 2026, down from 111% and 117% at the prior two fiscal year ends, and 110% for customers with ARR of $500,000 or more, down from 114% and 120%. Management pointed to customer turnover and renewals at lower subscription levels. In an uncertain macroeconomic environment and a high interest rate climate, customers renewed closer to their current needs rather than committing to larger volumes based on expected demand. Revenue generated outside the United States was approximately 45% of the total in fiscal 2026, compared with 45% in fiscal 2025 and 43% in fiscal 2024.
Cash generation improved. Full-year operating cash flow was $71.44 million, up 94.8% from $36.68 million in fiscal 2025. Fourth-quarter operating cash flow was $19.38 million, up 13.4% from $17.08 million. Capital expenditures were $4.82 million in the quarter, up 343.4% from $1.09 million, while full-year capital expenditures of $9.59 million were down 27.6% from $13.23 million. Non-GAAP free cash flow, which the company defines as net cash provided by operating activities less purchases of property and equipment and capitalized internal-use software costs, was $58.1 million for fiscal 2026, compared with $19.6 million in fiscal 2025 and negative $6.5 million in fiscal 2024. Braze reported cash, cash equivalents and marketable securities of $415.9 million as of January 31, 2026 and said that balance will cover working capital and capital expenditure requirements for at least the next 12 months. The OfferFit acquisition used $181.9 million in cash, net of cash acquired, and net cash used in investing activities was $50.9 million for the fiscal year.
Risks center on the macroeconomic backdrop and cost structure. Braze flagged instability in banking and financial services, inflationary pressure, interest rate increases, declines in consumer confidence, supply chain risks and geopolitical unrest as sources of uncertainty. Tax legislation is another moving part: the Pillar Two framework sets a minimum 15% tax rate on certain multinational enterprises, and the One Big Beautiful Bill Act could affect the company's future effective tax rate, tax liabilities and cash tax. Seasonality adds a wrinkle, since messaging volume and compute and storage requirements typically peak in the fourth quarter around the holiday season. The annual report carries no forward revenue guidance, so the outlook rests on billed commitments, retention trends and renewal behavior.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2026 | Q3 FY2026 | QoQ | Q4 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $205.2M | $190.8M | +7.5% | $160.4M | +27.9% |
| Gross profit | $134.4M | $128.2M | +4.8% | $111.1M | +20.9% |
| Gross margin | 65.5% | 67.2% | -1.7 pp | 69.3% | -3.8 pp |
| Research & development | $45.0M | $44.1M | +2.2% | $33.6M | +34.0% |
| Sales & marketing | $81.7M | $88.6M | -7.8% | $69.3M | +17.9% |
| General & administrative | $35.9M | $33.1M | +8.4% | $29.8M | +20.4% |
| Total operating expenses | $162.6M | $165.8M | -1.9% | $132.6M | +22.6% |
| Operating income (loss) | -$28.2M | -$37.5M | +24.8% | -$21.6M | -31.0% |
| Operating margin | -13.8% | -19.7% | +5.9 pp | -13.4% | -0.3 pp |
| Net income (loss) | -$31.6M | -$35.8M | +11.8% | -$17.1M | -85.1% |
| Net margin | -15.4% | -18.8% | +3.4 pp | -10.6% | -4.8 pp |
| Diluted EPS | -$0.29 | -$0.33 | +$0.04 | -$0.17 | -$0.12 |
| Customers | 2,609 | 2,528 | +3.2% | 2,296 | +13.6% |
Risks
The company identified a material weakness in internal control over financial reporting associated with certain ITGCs as of January 31, 2026. If remediation is unsuccessful, timely and accurate financial reporting could be impaired.
Unstable economic conditions and high interest rates have led customers to renew contracts at levels aligned with current needs rather than larger commitments; the trailing 12-month dollar-based net retention rate declined to 109% at January 31, 2026 from 111% a year earlier.
Substantially all revenue depends on renewals and expansion, and the dollar-based net retention rate for customers with ARR of $500,000 or more declined to 110% at January 31, 2026 from 114% a year earlier.
Generative and agentic AI are disrupting consumer engagement and marketing, and competitors may incorporate AI more quickly or successfully. Evolving rules such as the EU AI Act add compliance and liability risk.
The company faces intense competition from Adobe, Salesforce, Iterable, Klaviyo, and other established or emerging providers that may use bundling, lower prices, or broader product lines to win customers.
The June 2025 acquisition of OfferFit poses integration, key-personnel, and customer-retention risks, and was funded partly with Class A common stock, creating dilution risk.
Gross margin decreased to 67.1% in FY2026 from 69.1% in FY2025, and cost of revenue increased 32.4%, partly due to acquisition-related operating costs and higher tech stack costs.
Large enterprise sales cycles are long and unpredictable, generally three to six months but sometimes over 12 months, and macroeconomic pressure can extend cycles or reduce win rates.
Tax legislation including the Pillar Two minimum 15% framework and the OBBBA creates uncertainty and could adversely affect the company's future effective tax rate, tax liabilities, and cash tax.
The business depends on senior management, particularly the CEO, and faces intense competition for experienced software engineers and senior sales executives.
Approximately 45% of FY2026 revenue was generated outside the United States, exposing the company to international expansion, regulatory, tax, currency, and geopolitical risks.
The business depends on sending consumer engagement messages over multiple channels; disruption with third-party providers or mobile operating systems such as Apple or Google could reduce platform effectiveness and customer retention.
SaaS KPIs
All quarters →Monthly Active Users
Total Customers
Customers with ARR of $500,000 or more
Summary, forecast, risks and KPIs are extracted from Braze, Inc.'s SEC filings for Q4 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.