Core Insights - Braze Inc (NYSE:BRZE) shares increased significantly in pre-market trading after the company raised its FY2026 adjusted EPS and sales guidance due to better-than-expected third-quarter revenue [1] - The company reported quarterly adjusted earnings of $0.06 per share, meeting analyst estimates, while quarterly revenue reached $190.84 million, surpassing the Street estimate of $184.08 million [1] - Following these announcements, Braze shares jumped 14.2% to $35.00 in pre-market trading [1] Company Performance - Braze's quarterly adjusted earnings were $0.06 per share, aligning with analyst expectations [1] - The reported quarterly revenue of $190.84 million exceeded the anticipated $184.08 million [1] - The positive financial results led to a 14.2% increase in share price during pre-market trading [1]

With U.S. stock futures trading mixed this morning on Wednesday, some of the stocks that may grab investor focus today are as follows:Wall Street expects Chewy Inc. (NYSE:CHWY) to report quarterly earnings at 12 cents per share on revenue of $3.10 billion before the opening bell, according to data from Benzinga Pro. Chewy shares rose 0.9% to $35.16 in after-hours trading.Braze Inc. (NASDAQ:BRZE) posted better-than-expected revenue for the third quarter and raised its fiscal 2026 guidance. Quarterly revenue ...

For the quarter ended October 2025, Braze, Inc. (BRZE) reported revenue of $190.84 million, up 25.5% over the same period last year. EPS came in at $0.06, compared to $0.02 in the year-ago quarter.The reported revenue represents a surprise of +3.69% over the Zacks Consensus Estimate of $184.06 million. With the consensus EPS estimate being $0.06, the company has not delivered EPS surprise.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare ...

Braze, Inc. (BRZE) came out with quarterly earnings of $0.06 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.02 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this company would post earnings of $0.03 per share when it actually produced earnings of $0.15, delivering a surprise of +400%.Over the last four quarters, the company has surpassed consensus EPS estimates three times.Braze, which belongs to the Zack ...

Revenue Performance - Revenue for the three months ended October 31, 2025, was $190.8 million, a 25.5% increase from $152.1 million in the same period of 2024[153]. - Revenue for the three months ended October 31, 2025, was $190,842,000, representing a $38,790,000 increase or 25.5% compared to $152,052,000 for the same period in 2024[187]. - Revenue for the nine months ended October 31, 2025, increased by $100.0 million, or 23.1%, to $533.0 million compared to $433.0 million for the same period in 2024, driven primarily by a $92.0 million increase in subscription revenue[194]. Customer Metrics - Monthly active users increased to approximately 7.8 billion as of October 31, 2025, up from approximately 7.2 billion as of January 31, 2025[157]. - The company had 2,528 customers as of October 31, 2025, across various industries[154]. - Total customers grew to 2,528 as of October 31, 2025, from 2,211 as of October 31, 2024, indicating strong customer acquisition[194]. Financial Losses - Net losses for the three months ended October 31, 2025, were $35.8 million, compared to $28.1 million in the same period of 2024[153]. Cash Flow and Liquidity - Non-GAAP free cash flow was $44.2 million for the nine months ended October 31, 2025, compared to $4.4 million for the same period in 2024[153]. - Net cash provided by operating activities was $52.1 million for the nine months ended October 31, 2025, compared to $19.6 million for the same period in 2024[206]. - Free cash flow increased to $44.2 million for the nine months ended October 31, 2025, from $4.4 million in the same period in 2024, reflecting higher collections from new contracts[216]. - Cash, cash equivalents, and marketable securities totaled $387.3 million as of October 31, 2025, providing a solid liquidity position for the company[203]. - The company anticipates that its current cash and marketable securities will be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months[218]. Operating Expenses - Operating expenses are expected to increase as the company expands its operations and personnel headcount[176]. - Sales and marketing expenses rose to $88,596,000, an increase of $13,938,000 or 18.7% compared to $74,658,000 in 2024, driven by higher personnel and promotional costs[190]. - Research and development expenses increased by $11,212,000 or 34.1% to $44,067,000, primarily due to higher personnel costs and an increase in software costs[191]. - General and administrative expenses were $33,093,000, up $1,894,000 or 6.1% from $31,199,000 in 2024, largely due to increased personnel costs[192]. - Operating expenses for sales and marketing rose by $32.3 million, or 15.1%, to $245.3 million, primarily due to increased personnel and overhead costs[198]. - Research and development expenses increased by $21.7 million, or 21.7%, to $122.1 million, driven by higher personnel and software costs[199]. - General and administrative expenses rose by $24.1 million, or 27.9%, to $110.4 million, largely due to increased personnel costs and acquisition-related expenses[200]. Profitability Metrics - Gross profit for the three months ended October 31, 2025, was $128,211,000, a $22,069,000 increase or 20.8% from $106,142,000 in 2024, with a gross margin of 67.2%[188][189]. - Gross profit increased by $62.2 million, or 20.8%, to $361.3 million, while gross margin decreased to 67.8% from 69.1% due to increased costs related to the acquisition of OfferFit and a one-time charge related to a service disruption[197]. Retention and Growth Metrics - The dollar-based net retention rate for the trailing 12 months ended October 31, 2025, was 108%, down from 113% for the same period in 2024[161]. - Subscription revenue increased by $35,400,000, or 24.2%, with 44.8% of this growth coming from existing customers and 55.2% from new customers, bringing total customers to 2,528[187]. Future Outlook and Investments - The company plans to continue investing in research and development to enhance its platform and expand channel offerings[165]. - The company expects to continue investing in sales and marketing to drive growth, anticipating an increase in absolute dollars for these expenses[178]. - Research and development expenses are also expected to rise in absolute dollars as the company enhances its platform to attract new customers[180]. - General and administrative expenses are projected to increase in absolute dollars but decrease as a percentage of revenue over the long term as the company scales its internal support functions[182]. Market and Economic Factors - The company has experienced seasonality in revenue costs, with the highest usage typically occurring in the fourth quarter due to holiday season activities[221]. - A hypothetical 10% change in interest rates would not have a material impact on the company's consolidated financial statements as of October 31, 2025[228]. - The company’s revenue is primarily denominated in U.S. dollars, with minimal exposure to foreign currency risk, except for sales in Japan denominated in Yen[229]. - The company uses derivative financial instruments, such as forward exchange contracts, to hedge against foreign currency exchange rate fluctuations[230]. - The company does not believe inflation has materially affected its financial condition, but rising costs could harm its operations if not offset by price increases[226]. Commitments and Obligations - The company has non-cancelable purchase commitments totaling $134.1 million and operating lease obligations of $84.1 million as of October 31, 2025[219]. - The company’s future funding requirements may lead to seeking additional equity or debt if current estimates prove inaccurate[220].

Financial Data and Key Metrics Changes - The company reported revenue of $191 million for the fiscal third quarter 2026, representing a year-over-year increase of 25.5% and a sequential increase of 6% [7][23] - Non-GAAP operating margins improved by over 400 basis points year-over-year, with non-GAAP operating income of $5 million, or 2.7% of revenue, compared to a non-GAAP operating loss of $2 million in the prior year quarter [7][28] - Free cash flow for the quarter was $18 million, a significant improvement from a negative free cash flow of $14 million in the prior year quarter [7][29] - The total remaining performance obligation (RPO) was $891 million, up 24% year-over-year, while current RPO was $573 million, up 25% year-over-year [26] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 95% of total revenue, with the remaining 5% from professional services and one-time fees [23] - The company added 106 new customers sequentially and 317 year-over-year, bringing the total customer count to 2,528, a 14% increase [8][23] - Large customers (those spending at least $500,000 annually) grew by 29% year-over-year to 303, contributing 63% to total annual recurring revenue (ARR) [24] Market Data and Key Metrics Changes - Revenue outside the U.S. contributed 45% of total revenue, consistent with previous quarters [24] - Dollar-based net retention was 108% overall and 110% for large customers, indicating strong customer retention and expansion [24] Company Strategy and Development Direction - The company aims to position itself as the global standard for omnichannel customer engagement, leveraging AI-driven solutions to enhance customer experiences [7][8] - The introduction of new AI capabilities and the Braze AI Decisioning Studio is expected to drive future growth and customer engagement [19][31] - The company is focused on innovation and product development, particularly in AI, to maintain competitive advantage in the customer engagement landscape [14][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued market demand and strong pipeline generation, indicating a positive outlook for fiscal year 2027 [7][8] - The company anticipates revenue for the fourth quarter to be in the range of $197.5–$198.5 million, representing a year-over-year growth rate of approximately 23% [30] - Management highlighted the importance of first-party data and customer engagement strategies in navigating the evolving market landscape [70][74] Other Important Information - The company achieved a record of 102.5 billion messages delivered during Cyber Week, showcasing the platform's scalability and reliability [10][12] - The integration of Braze with ChatGPT apps is expected to enhance customer engagement and provide new monetization opportunities [20][70] Q&A Session Summary Question: Insights on the Braze healthcare customer using the AI agent - Management highlighted the agility of deploying AI solutions within the Braze Canvas, allowing for enhanced customer interactions and support [35][39] Question: Drivers of improving trends in key metrics - Management attributed improvements to ongoing productivity enhancements, mitigation of downsell activity, and effective sales strategies [40][42] Question: Factors driving momentum in legacy replacement cycles - Management noted that the competitive landscape is shifting, with increased awareness and differentiation for Braze, leading to more enterprise replacements [45][47] Question: Impact of AI on growth strategy - Management discussed the monetization of AI, emphasizing the potential for real-time AI functionalities to enhance customer engagement and operational efficiency [54][56] Question: Customer interest in ChatGPT integration - Management explained that the evolution of app ecosystems will determine the role of Braze in enhancing customer engagement through first-party data [68][70]

Financial Data and Key Metrics Changes - The company reported revenue of $191 million for the fiscal third quarter 2026, representing a year-over-year increase of 25.5% and a sequential increase of 6% [7][23] - Non-GAAP operating margins improved by over 400 basis points year-over-year, with non-GAAP operating income of $5 million, or 2.7% of revenue, compared to a non-GAAP operating loss of $2 million in the prior year quarter [7][28] - Free cash flow for the quarter was $18 million, compared to a negative free cash flow of $14 million in the prior year quarter [29] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 95% of total revenue, with the remaining 5% from professional services and onboarding fees [23] - The Braze AI Decisioning Studio contributed $4.8 million in revenue, indicating a growing impact of AI-driven solutions on overall revenue [23] Market Data and Key Metrics Changes - The total customer count increased by 14% year-over-year to 2,528, with 317 new customers added compared to the same period last year [23][24] - Revenue outside the U.S. contributed 45% of total revenue, consistent with previous quarters [24] Company Strategy and Development Direction - The company aims to position itself as the global standard for omnichannel customer engagement, leveraging AI technology to enhance customer experiences [7][9] - There is a focus on expanding into new customer verticals and enhancing product offerings through AI capabilities [4][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding continued market demand and strong pipeline generation, indicating a positive outlook for fiscal year 2027 [7][8] - The company anticipates a revenue range of $197.5-$198.5 million for the fourth quarter, reflecting a year-over-year growth rate of approximately 23% [30] Other Important Information - The company achieved its strongest quarter of customer additions in three years, with significant growth in large customers spending over $500,000 annually [8][24] - The company reported a total remaining performance obligation of $891 million, up 24% year-over-year, indicating strong future revenue visibility [26] Q&A Session Summary Question: Insights on the Braze healthcare customer using Braze Agent Console - Management highlighted the agility of deploying AI agents within the Canvas environment, allowing for enhanced customer interactions and real-time processing [35][37] Question: Drivers of improving trends in key metrics - Management attributed improvements to ongoing productivity enhancements within the sales organization and effective mitigation of downsell and churn [40][42] Question: Factors driving momentum in legacy replacement cycle - Management noted strong competitive positioning and regional investments as key drivers of momentum in customer acquisition [78] Question: Impact of AI on growth algorithm - Management discussed the monetization of AI, indicating potential upside as AI capabilities are integrated into the platform [54][56] Question: Customer interest in ChatGPT integration - Management emphasized the importance of first-party data and customer engagement strategies in the evolving app ecosystem, highlighting the potential for new channels [68][70]

Financial Data and Key Metrics Changes - The company reported revenue of $191 million for the fiscal third quarter 2026, representing a year-over-year increase of 25.5% and a 6% increase from the prior quarter [6][22] - Non-GAAP operating margins improved by over 400 basis points year-over-year, with non-GAAP operating income of $5 million, or 2.7% of revenue, compared to a non-GAAP operating loss of $2 million in the prior year quarter [6][26] - Free cash flow for the quarter was $18 million, a significant improvement from a negative free cash flow of $14 million in the prior year quarter [6][27] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 95% of total revenue, with the remaining 5% from professional services and onboarding fees [22] - The company added 106 new customers sequentially and 317 year-over-year, bringing the total customer count to 2,528, a 14% increase [6][22] - Large customers, defined as those spending at least $500,000 annually, grew by 29% year-over-year to 303, contributing 63% to total ARR [23] Market Data and Key Metrics Changes - Revenue outside the U.S. contributed 45% of total revenue, consistent with previous quarters [23] - The company achieved a dollar-based net retention rate of 108% across all customers and 110% for large customers [23][24] - The total remaining performance obligation was $891 million, up 24% year-over-year, indicating strong future revenue visibility [24] Company Strategy and Development Direction - The company aims to position itself as the global standard for omnichannel customer engagement, leveraging AI-driven solutions to enhance customer experiences [6][10] - The introduction of new AI capabilities, such as the Braze AI Decisioning Studio, is expected to drive future growth and customer engagement [19][22] - The company is focused on innovation and product development, particularly in AI, to maintain a competitive edge in the customer engagement landscape [10][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued market demand and strong bookings across various verticals and geographies [6] - The company anticipates a revenue range of $197.5-$198.5 million for the fourth quarter, reflecting a year-over-year growth rate of approximately 23% [28] - Management highlighted the importance of first-party data and customer engagement strategies in navigating the evolving market landscape [57] Other Important Information - The company delivered 102.5 billion messages during Cyber Week, showcasing the scalability and reliability of its platform [10] - The integration of AI into customer engagement strategies is seen as a key driver for future growth and operational efficiency [11][12] - The company is committed to maintaining a long-term profitability framework, targeting a non-GAAP operating income margin of 8% for fiscal year 2027 [29] Q&A Session Summary Question: Insights on the Braze healthcare customer using Braze Agent Console - Management highlighted the agility of deploying purpose-built agent frameworks into existing systems, enhancing customer interactions through AI [31][32] Question: Drivers of improving trends in key metrics - Management attributed improvements to ongoing productivity enhancements, effective mitigation of downsell activity, and strong sales organization performance [36] Question: Factors driving momentum in legacy replacement cycle - Management noted that the current market environment is conducive to enterprise replacement cycles, with increased awareness and differentiation for Braze [37][39] Question: Early reception of AI Decisioning Studio - Management reported strong pipeline generation and customer wins, indicating positive early traction for the AI Decisioning Studio [64]

Core Insights - Braze, Inc. reported strong third-quarter earnings, exceeding revenue estimates and raising fiscal 2026 guidance [1][4] Financial Performance - Adjusted earnings per share for the quarter were six cents, meeting analyst expectations [2] - Quarterly revenue reached $190.84 million, surpassing the Street estimate of $184.08 million, reflecting a revenue growth of 25.5% [2][4] - Subscription revenue was $181.6 million, up from $146.3 million in the same quarter of the previous fiscal year [6] - Professional services and other revenue increased to $9.2 million from $5.8 million year-over-year [6] - Non-GAAP gross margin was 69.1%, slightly down from 70.5% in the same quarter last year [6] Guidance and Outlook - The company raised its fiscal 2026 adjusted EPS guidance to a range of 42 to 43 cents, compared to the analyst estimate of 41 cents [4] - Fiscal revenue outlook was increased to between $730.5 million and $731.5 million, exceeding the previous estimate of $717.7 million [4] Customer Metrics - Total customer count grew by 14%, with large customers increasing by 29% [6] - Trailing 12-month dollar-based net retention stabilized at 108% [6] Stock Performance - Following the earnings report, Braze's stock price increased by 8.12%, reaching $33.14 in extended trading [5]

Financial Performance - Braze's quarterly revenue run rate is $763 million [3] - Q3'26 revenue reached $1908 million, a 255% year-over-year increase [14, 22] - GAAP gross margin was 672%, a decrease of 260 basis points year-over-year, while non-GAAP gross margin was 691%, down 140 basis points year-over-year [14, 25] - The dollar-based net retention rate was 108% [4, 14, 27] - GAAP operating loss was $375 million, compared to a loss of $326 million in the prior year quarter; non-GAAP operating income was $51 million, compared to a loss of $22 million in the prior year quarter [14] - Net cash provided by operating activities was $210 million, compared to net cash used in operating activities of $114 million in the prior year quarter [14] - Free cash flow was $178 million, compared to $(142) million in the prior year quarter [14, 33] Customer Growth - The customer count increased to 2,528 as of October 31, 2025, from 2,211 in the prior year quarter, representing a 14% year-over-year growth [4, 14, 31] - Customers with over $500K ARR experienced a 29% year-over-year growth [31] Future Guidance - For Q4'26, revenue is projected to be between $1975 million and $1985 million; for the full fiscal year 2026, revenue is expected to be between $7305 million and $7315 million [38] - Non-GAAP operating income for Q4'26 is guided to be $120 million - $130 million, and for the full year, $260 million - $270 million [38]