Braze, Inc. ((BRZE)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Braze, Inc. painted a picture of robust growth and strategic advancements, despite some challenges. The sentiment was largely positive, driven by strong revenue growth, positive operating income, and successful expansions in both customer base and product offerings. The integration of OfferFit and advancements in AI technology were highlighted as key contributors to the company’s optimistic outlook, despite a slight decrease in gross margin and moderate net retention rate.
Strong Revenue Growth
Braze reported impressive revenue figures for Q2 2026, with $180 million in revenue, marking a 24% increase year-over-year and an 11% rise from the previous quarter. The company also surpassed $700 million in committed annual recurring revenue, underscoring its strong market position and growth trajectory.
Positive Operating Income
The company achieved $6 million in non-GAAP operating income and $17 million in non-GAAP net income for the quarter. This marks the third consecutive quarter of positive non-GAAP operating income and free cash flow, highlighting Braze’s effective financial management and operational efficiency.
Customer Expansion
Braze’s customer base saw significant growth, increasing by 80 sequentially and 259 year-over-year, reaching a total of 2,422 customers. Notably, the number of large customers spending $500,000 or more annually grew by 27% year-over-year to 282, reflecting the company’s ability to attract and retain high-value clients.
Successful Integration of OfferFit
Following the acquisition of OfferFit, Braze has smoothly integrated the new entity, contributing approximately $12 million to RPO and $10.5 million to CRPO. This integration is expected to enhance Braze’s product offerings and customer engagement strategies.
AI and Technology Advancements
Braze is heavily investing in AI, deploying new AI solutions and integrating OfferFit’s AI decisioning engine. These advancements are aimed at enhancing customer engagement strategies, positioning Braze at the forefront of technological innovation in its field.
Decrease in Gross Margin
The earnings call noted a decrease in non-GAAP gross margin from 70.9% in the prior year to 69.3% this quarter. This decline was primarily attributed to higher premium messaging volumes, which the company is addressing through strategic adjustments.
Moderate Dollar-Based Net Retention
Braze reported a dollar-based net retention rate of 108%, indicating a slight decrease compared to previous periods. However, the rate has shown signs of stabilization over recent months, suggesting potential for future improvement.
Forward-Looking Guidance
Looking ahead, Braze’s guidance for fiscal year 2026 projects revenue between $717 million and $720 million, with a non-GAAP operating income range of $24.5 million to $25.5 million. The company aims to leverage AI-driven innovations to enhance customer engagement and continues to see competitive strength and robust market opportunities.
In conclusion, Braze, Inc.’s earnings call highlighted a period of strong growth and strategic advancements, with positive sentiment surrounding its financial performance and future prospects. Despite some challenges, the company’s focus on AI and customer engagement strategies positions it well for continued success.