Financial Data and Key Metrics Changes - The company reported revenue of $180 million for Q2 2026, representing a 24% year-over-year increase and an 11% increase from the prior quarter [6][18] - Committed annual recurring revenue surpassed $700 million, indicating strong demand for the Braze Customer Engagement Platform [6] - Non-GAAP operating income was $6 million, with non-GAAP net income of $17 million, and free cash flow of $4 million for the quarter [6][24] - Dollar-based net retention was 108%, with large customers showing a retention rate of 111% [19] 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 [18] - The number of large customers (spending at least $500,000 annually) increased by 27% year-over-year to 282 [19] - The company added 80 new customers sequentially and 259 year-over-year, bringing the total customer count to 2,422 [7][18] Market Data and Key Metrics Changes - Revenue outside the U.S. contributed 45% of total revenue, down approximately 60 basis points sequentially but consistent with the prior year [19] - The company experienced strong bookings across various verticals and geographies, with significant wins against legacy marketing clouds [9][10] Company Strategy and Development Direction - The company aims to enhance profitability while reinvesting in business growth and maintaining its competitive edge in customer engagement [7][12] - The integration of OfferFit is expected to accelerate the AI roadmap and enhance customer engagement strategies [13][14] - The focus on AI-driven solutions is seen as a key differentiator, with plans to leverage generative AI and reinforcement learning to improve customer experiences [10][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year, citing strong pipeline generation and competitive strength despite global economic concerns [7][34] - The integration of OfferFit is progressing well, contributing positively to the company's outlook [34][43] - Management noted that the demand environment remains stable, with improvements in downsell activity contributing to better performance [32][74] Other Important Information - The company ended the quarter with approximately $368 million in cash and marketable securities, including the impact of the OfferFit acquisition [25] - Non-GAAP gross profit was $125 million, with a gross margin of 69.3%, slightly down from the previous year due to increased messaging volumes [21][22] Q&A Session Summary Question: What has changed in the demand environment? - Management noted that there hasn't been a significant change in the macro environment, but execution has improved globally, leading to better performance [32][34] Question: How is OfferFit performing post-acquisition? - The integration is going well, with strong early wins across all regions and high levels of trust from enterprise customers [41][43] Question: Can you discuss the usage trends for AI products? - Adoption of AI features is increasing, with strong usage across various verticals, enhancing customer engagement capabilities [51][52] Question: How is sales execution improving? - Improved sales execution is attributed to better pipeline management and strong competitive positioning, allowing for more judicious resource allocation [56][58] Question: What are the expectations for customer engagement in the AI landscape? - The company believes that AI will enhance the capabilities of customer engagement teams, allowing them to focus on strategic initiatives rather than routine tasks [66][67]

Financial Performance - Braze's quarterly revenue run rate is $720 million[3] - Q2 2026 revenue reached $1801 million, a 238% year-over-year increase and an 111% sequential growth[10, 14] - The GAAP gross margin was 677%, while the non-GAAP gross margin was 693%[10, 16] - The dollar-based net retention rate was 108%[4, 10, 18] - GAAP operating loss was $388 million, compared to a $280 million loss in the prior year quarter, while non-GAAP operating income was $60 million, compared to $42 million in the prior year quarter[10] - Net cash provided by operating activities was $70 million, compared to $310 million in the prior year quarter[10] - Free cash flow was $35 million, compared to $72 million in the prior year quarter[10, 23] Customer Growth - The customer base increased to 2,422 as of July 31, 2025, from 2,163 in the prior year quarter, representing a 12% year-over-year growth[4, 10, 20] Guidance - Q3 2026 revenue is projected to be between $1835 million and $1845 million, and full-year 2026 revenue is expected to be between $7170 million and $7200 million[29]

Revenue and Growth - Revenue for the fiscal second quarter 2026 was $180.1 million, a 23.8% increase year-over-year from $145.5 million[2] - Subscription revenue was $171.8 million, up from $140.0 million in the same quarter last year, while professional services and other revenue increased to $8.3 million from $5.5 million[2] - Revenue for the three months ended July 31, 2025, was $180,111,000, representing a 23.7% increase from $145,499,000 in the same period of 2024[24] - Gross profit for the six months ended July 31, 2025, was $233,092,000, up from $192,990,000 in 2024, indicating a growth of 20.8%[24] - The company reported a non-GAAP net income of $24.169 million for the six months ended July 31, 2025, compared to $3.585 million in the same period of 2024, indicating a significant improvement[35] Customer Metrics - Total customers increased to 2,422 from 2,163 year-over-year, with 282 customers having ARR of $500,000 or more, up from 222[2] - Dollar-based net retention rate for all customers was 108%, down from 114% a year ago; for customers with ARR of $500,000 or more, it was 111%, down from 117%[2] Financial Performance - GAAP gross margin decreased to 67.7% from 70.2% year-over-year, while non-GAAP gross margin fell to 69.3% from 70.9%[2] - GAAP operating loss was $38.8 million, compared to a loss of $28.0 million in the same quarter last year, primarily due to $39.5 million in stock-based compensation[2] - Non-GAAP operating income was $6.0 million, an increase from $4.2 million year-over-year[2] - Net loss attributable to Braze, Inc. for the three months ended July 31, 2025, was $27,899,000, compared to a net loss of $22,999,000 in 2024, showing an increase in losses of 21.3%[24] - For the six months ended July 31, 2025, Braze, Inc. reported a net loss of $63.404 million, compared to a net loss of $58.856 million for the same period in 2024, reflecting an increase in losses of approximately 7.5%[31] Cash Flow and Assets - Free cash flow was $3.5 million, down from $7.2 million in the same quarter last year[8] - Cash and cash equivalents as of July 31, 2025, were $80,979,000, a slight decrease from $83,062,000 as of January 31, 2025[28] - Total assets increased to $1,022,537,000 as of July 31, 2025, from $870,998,000 as of January 31, 2025, marking a growth of 17.4%[28] - Total stockholders' equity rose to $598,881,000 as of July 31, 2025, compared to $474,861,000 as of January 31, 2025, indicating a 26.2% increase[28] - The company generated net cash provided by operating activities of $31.096 million for the six months ended July 31, 2025, slightly up from $31.007 million in the prior year[31] Expenses - Total operating expenses for the three months ended July 31, 2025, were $160,643,000, compared to $130,029,000 in 2024, reflecting a 23.5% increase[24] - Research and development expenses for the three months ended July 31, 2025, were $41,250,000, up from $33,141,000 in 2024, reflecting a 24.5% increase[24] - The company reported a total stock-based compensation expense of $39,549,000 for the three months ended July 31, 2025, compared to $29,822,000 in 2024, an increase of 32.7%[25] - Braze's total sales and marketing expenses for the six months ended July 31, 2025, were $156.726 million, up from $138.396 million in the prior year, reflecting a 13.2% increase[34] Guidance - Guidance for fiscal Q3 2026 revenue is projected between $183.5 million and $184.5 million, with full fiscal year guidance set at $717.0 million to $720.0 million[5]

Group 1 - The article discusses the potential growth opportunities for Braze in the marketing tech space, suggesting it could be a significant player in the industry [1] - Expert analysts provide insights into market trends and investment opportunities related to Braze, indicating a positive outlook for the company's future [1] Group 2 - The video associated with the article offers valuable insights, emphasizing the importance of understanding market dynamics for potential investors [1]

Core Insights - VNET Group is currently viewed as a more attractive investment compared to Braze, Inc. based on valuation metrics and earnings estimate revisions [3][7] Valuation Metrics - VNET has a forward P/E ratio of 92.72, while Braze, Inc. has a significantly higher forward P/E of 145.57 [5] - The PEG ratio for VNET is 1.70, indicating a more favorable growth outlook compared to Braze's PEG ratio of 4.85 [5] - VNET's P/B ratio stands at 2.62, compared to Braze's P/B of 5.93, further highlighting VNET's relative undervaluation [6] Analyst Outlook - VNET holds a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions, while Braze has a Zacks Rank of 4 (Sell) [3] - The stronger estimate revision activity for VNET suggests a more favorable analyst outlook compared to Braze [7] Value Grades - VNET has been assigned a Value grade of B, while Braze has received a Value grade of F, reflecting their respective valuation attractiveness [6]

Group 1: Company Overview - Braze, Inc. (BRZE) is experiencing significant activity in the options market, particularly with the Oct 17, 2025 $22.50 Call showing high implied volatility, indicating potential for a major price movement [1] - Currently, Braze holds a Zacks Rank 3 (Hold) in the Internet - Software Industry, which is in the top 25% of the Zacks Industry Rank [3] Group 2: Analyst Sentiment - Over the past 60 days, no analysts have increased their earnings estimates for Braze for the current quarter, while six analysts have revised their estimates downward, leading to a decrease in the Zacks Consensus Estimate from eight cents per share to three cents [3] Group 3: Options Market Insights - The high implied volatility surrounding Braze suggests that options traders are anticipating a significant price movement, which could indicate an upcoming event that may lead to a rally or sell-off [2][4] - Options traders often seek to sell premium on options with high implied volatility, aiming to benefit from the decay of the option's value if the underlying stock does not move as much as expected [4]

Group 1 - The individual investor focuses on managing personal capital accumulated over the years, utilizing a diverse range of investment strategies including fundamental, technical, and momentum investing [1] - The investor aims to leverage the strengths of various investment approaches to refine their investment process [1] - The purpose of writing on Seeking Alpha is to track the performance of investment ideas and connect with like-minded investors [1] Group 2 - There is no stock, option, or similar derivative position held by the analyst in any mentioned companies, nor are there plans to initiate such positions in the near future [2] - The article reflects the author's personal opinions and is not influenced by compensation from any company [2] - Seeking Alpha does not provide recommendations or advice regarding the suitability of investments for particular investors [3]

Core Insights - Braze reported a 20% year-over-year revenue increase to $162.1 million for fiscal Q1 2026, with a non-GAAP operating margin improvement of over 900 basis points and a non-GAAP net income of $7 million [1][5] Financial Performance - The company achieved a non-GAAP operating margin of 2%, a significant turnaround from a negative 7% in the prior-year period, and generated free cash flow of $23 million, despite acquisition-related expenses [4][5] - Non-GAAP R&D spending rose by $2 million to $25 million, representing 15% of revenue, while sales and marketing expenses increased by $4 million to $64 million, accounting for 39% of revenue [4] Strategic Developments - Braze acquired OfferFit, an AI decisioning platform, which is expected to contribute approximately $11 million to $12 million in fiscal 2026 revenue, equating to about 2% incremental growth [2][3] - The acquisition enhances Braze's AI product suite and positions the company for increased wallet share capture against competitors [3] Pricing Strategy - The company implemented a new pricing model in May, shifting from data point-based limits to API rate-based usage, which has already shown positive results in sales cycles and customer satisfaction [6][7] - This pricing overhaul is expected to facilitate workload expansion and strengthen Braze's competitive differentiation [8] Future Outlook - For fiscal Q2 2026, management projects revenue between $171 million and $172 million, reflecting an 18% year-over-year growth rate, with a non-GAAP operating margin of approximately 1% [9] - The fiscal 2026 revenue guidance is set at $702 million to $706 million, indicating a 19% growth at the midpoint, with OfferFit contributing an estimated 2% incremental uplift [9]

Core Insights - Braze, Inc. reported better-than-expected earnings for Q1, with earnings of 7 cents per share, surpassing the analyst consensus estimate of 5 cents per share [1] - The company achieved quarterly sales of $162.06 million, exceeding the analyst consensus estimate of $158.66 million [1] Financial Guidance - Braze lowered its FY2026 adjusted EPS guidance from 31 cents to 35 cents, while raising its FY2026 sales outlook from a range of $686 million-$691 million to $702 million-$706 million [2] Leadership and Growth - CEO Bill Magnuson expressed optimism about the company's strong start in fiscal year 2026, highlighting revenue growth, profitability, and free cash flow [3] - Ed McDonnell will join Braze in July to lead global revenue operations, bringing a strong track record in high-growth public SaaS businesses [3] Stock Performance - Following the earnings announcement, Braze shares dipped 12.6% to trade at $31.50 [3] Analyst Ratings and Price Targets - Stephens & Co. analyst Brett Huff maintained an Overweight rating on Braze, lowering the price target from $51 to $41 [9] - UBS analyst Taylor McGinnis maintained a Buy rating, cutting the price target from $51 to $48 [9] - JMP Securities analyst Patrick Walravens reiterated a Market Outperform rating, maintaining a price target of $68 [9]

Core Insights - Braze, Inc. reported quarterly earnings of $0.07 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, compared to a loss of $0.05 per share a year ago, representing a 40% earnings surprise [1] - The company achieved revenues of $162.06 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 2.12% and showing an increase from $135.46 million year-over-year [2] - Braze has consistently surpassed consensus EPS estimates over the last four quarters [2] Financial Performance - The earnings surprise of 40% this quarter follows a previous quarter where Braze delivered a 140% surprise by posting earnings of $0.12 per share against an expected $0.05 [1] - The current consensus EPS estimate for the upcoming quarter is $0.08, with projected revenues of $168.37 million, and for the current fiscal year, the EPS estimate is $0.33 on revenues of $688.81 million [7] Market Position - Despite the positive earnings report, Braze shares have underperformed the market, losing about 12.6% since the beginning of the year, while the S&P 500 has gained 1.5% [3] - The Zacks Industry Rank places the Internet - Software sector in the top 23% of over 250 Zacks industries, indicating a favorable outlook for companies within this sector [8] Future Outlook - The sustainability of Braze's stock price movement will depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current estimate revisions trend for Braze is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6]