Braze Q2 Earnings Beat; Shares Fall After Guidance

Braze Inc. (BRZE) reported strong fiscal second-quarter 2027 results and raised full-year guidance in a Sept. 8, 2026 press release, but shares declined after the release amid focus on near-term earnings per share (EPS) signals.

Quarter Results and Profitability

Braze reported fiscal second-quarter 2027 results for the three months ended July 31, 2026. Total revenue reached $227.2 million, up 26.2% year over year from $180.1 million and about 7.7%–8% sequentially. Subscription revenue was $207.7 million, while professional services and other revenue totaled $19.6 million. Organic revenue growth excluding $6.6 million from BrazeAI Decisioning Studio was approximately 24%. The company generated record cash from operations of about $24 million and record free cash flow near $22 million. Management said, “Our strong second quarter results underscore the essential role Braze plays for brands globally, delivering 26% year-over-year revenue growth alongside improving operating leverage and record second quarter free cash flow.”

On profitability, non-GAAP operating income rose to $22.0 million, a 9.7% margin, up from $6.0 million and 3.4% a year earlier, reflecting improved operating leverage. On a GAAP basis, Braze recorded an operating loss of $18.1 million, influenced by $35.7 million in stock-based compensation. GAAP net loss attributable to Braze was $18.9 million, or a diluted loss per share of $(0.17). Adjusted diluted EPS was $0.19, above analyst consensus near $0.15–$0.16.

Cash Flow, Customers, and Guidance

At the quarter end, Braze held $413.9 million in cash, cash equivalents, restricted cash, and marketable securities, slightly down from $415.9 million six months earlier. The company repurchased $50.0 million of common stock during that period, signaling confidence in cash generation.

Total customers rose about 15% year over year to 2,789, adding 367 customers from the prior year and 76 sequentially. Large customers—those with annual recurring revenue of at least $500,000—increased 28% to 361. Dollar-based net retention was 110% overall and 112% for large customers, with large-customer retention improving by 100 basis points quarter over quarter.

Remaining performance obligations (RPO) totaled $1.0925 billion, up roughly 27% year over year. Current RPO, defined as obligations expected to be recognized within one year, was $691.1 million, up about 24% year over year.

Management attributed the quarter’s momentum to contract expansions, renewals, and new business, highlighting rising adoption of Braze’s AI tools. Paid adoption reached about one-third of the large-customer base, up roughly 900 basis points from the prior quarter. Executives also noted upmarket enterprise expansion, bookings momentum, and recent signings including Wilson Sporting Goods and DraftKings. The company announced a three-year collaboration with Amazon Web Services focused on co-selling and expanding market reach.

Braze raised its third-quarter revenue outlook and lifted full-year fiscal 2027 guidance to a revenue range of $910 million to $913 million, with non-GAAP operating income guidance of $75.5 million to $76.5 million. Management said the updated outlook reflects continued customer expansions, renewals, and accelerating AI-driven product adoption. Despite the beat and raised guidance, shares fell following the release amid reports of softer third-quarter EPS guidance.