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]

Revenue and Growth - Revenue for the three months ended April 30, 2025, was $162.1 million, representing a year-over-year growth of 19.6% from $135.5 million in the same period of 2024[129] - Revenue for the three months ended April 30, 2025, was $162.1 million, a 19.6% increase from $135.5 million in the same period of 2024, primarily driven by a $24.8 million increase in subscription revenue[162] - Total customers grew to 2,342 as of April 30, 2025, from 2,102 as of April 30, 2024, indicating a strong customer acquisition strategy[162] - As of April 30, 2025, the company had 2,342 customers, with a dollar-based net retention rate of 109% for the trailing 12 months[137] - Approximately 46% of revenue for the three months ended April 30, 2025, was generated outside of the United States, compared to 44% in the same period of 2024[139] Financial Performance - Net losses for the three months ended April 30, 2025, were $35.6 million, compared to $35.7 million in the same period of 2024[129] - The company incurred a net loss of $35.6 million for the three months ended April 30, 2025, compared to a net loss of $35.7 million in the same period of 2024[160] - Gross profit increased by $20.3 million, or 22.3%, to $111.2 million, with a gross margin improvement to 68.6% from 67.1%[164] - Operating cash flow for the three months ended April 30, 2025, was $24.1 million, up from $19.4 million in the prior year[172] - Other income, net, increased by $0.5 million, or 9.3%, to $5.7 million, driven by higher investment income from marketable securities[168] Cash Flow and Liquidity - Non-GAAP free cash flow was $22.9 million for the three months ended April 30, 2025, up from $11.4 million in the same period of 2024[129] - Free cash flow for the three months ended April 30, 2025, was $22.9 million, an increase from $11.4 million for the same period in 2024, driven by higher collections from new contracts and renewals[180] - As of April 30, 2025, the company had cash, cash equivalents, and marketable securities totaling $539.8 million, with $307.8 million invested in government and corporate debt securities[191] - The company assesses liquidity primarily through cash on hand and projected timing of billings under contracts, believing current resources will meet requirements for at least the next 12 months[181] Expenses and Investments - Operating expenses are expected to increase as the company expands its operations and invests in sales and marketing to drive growth[152] - Research and development expenses rose by $2.4 million, or 7.1%, to $36.8 million, reflecting continued investment in platform enhancements[166] - General and administrative expenses surged by $13.7 million, or 51.2%, to $40.5 million, largely due to increased professional services and legal costs related to acquisitions[167] - The cost of revenue increased by $6.3 million, or 14.2%, to $50.9 million, primarily due to higher hosting and messaging fees[163] Future Outlook - The company plans to continue investing in research and development to enhance its platform and expand its channel offerings, particularly in artificial intelligence capabilities[140] - The company expects free cash flow to fluctuate in future periods due to changes in operating expenses and macroeconomic factors affecting collection efforts[180] Customer Retention and Turnover - The decline in the dollar-based net retention rate from 117% to 109% was attributed to customer turnover and renewals at lower subscription levels due to macroeconomic conditions[138] - The company employs a land-and-expand business model, which allows for growth as customers increase their usage of the platform[128] Foreign Currency and Risk Management - The company does not currently face significant foreign currency risk as most sales are denominated in U.S. dollars, with only sales in Japan denominated in Yen[193] - The company uses derivative financial instruments, primarily forward exchange contracts, to hedge against foreign currency exchange rate fluctuations[194] Seasonality - The company experienced seasonality in cost of revenue, with the highest increase in messaging volume typically occurring in the fourth quarter due to holiday season activity[185]

Financial Data and Key Metrics Changes - The company reported revenue of $162.1 million for Q1 2026, representing a nearly 20% year-over-year increase [7][19] - Non-GAAP operating margin improved by over 900 basis points year-over-year, with non-GAAP net income of over $7 million and free cash flow of nearly $23 million [7][24] - Total remaining performance obligation (RPO) was $829.3 million, up 26% year-over-year, while current RPO increased by 24% year-over-year to $522 million [21] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 96% of total revenue, with the remaining 4% from professional services and onboarding fees [19] - The customer count rose to 2,342, an increase of 240 year-over-year and 46 sequentially [19] - Large customers (those spending at least $500,000 annually) grew by 24% year-over-year to 262, contributing 62% to total ARR [20] Market Data and Key Metrics Changes - Revenue outside the U.S. contributed 46% of total revenue, up from 45% in the previous quarter and 44% year-over-year [21] - Dollar-based net retention (DBNR) was 109 overall and 112 for large customers, indicating strong customer engagement [20] Company Strategy and Development Direction - The company aims to become the leading customer engagement platform globally, focusing on AI-driven solutions and first-party data utilization [7][10] - The acquisition of OfferFit is expected to enhance the company's AI capabilities and customer engagement strategies [13][14] - The company is investing in community engagement and marketing strategies to elevate customer experience and drive growth [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that global trade concerns have not materially affected deal cycles, and strong bookings were achieved in Q1 [7][8] - The competitive landscape is viewed positively, with the company continuing to gain market share against legacy competitors [10][35] - Management expressed confidence in improving churn rates and overall business health through strategic investments and operational efficiencies [36][37] Other Important Information - The company expects Q2 revenue to be in the range of $171 million to $172 million, representing approximately 18% year-over-year growth [26] - The OfferFit acquisition is anticipated to add approximately two percentage points to year-over-year revenue growth for the full fiscal year [28] - The company plans to integrate OfferFit's technology into its platform to enhance customer engagement and decision-making capabilities [14][15] Q&A Session Summary Question: Reconciling prepared remarks on sequential growth and CRPO - Management indicated that CRPO is sensitive to renewal dollars and emphasized revenue as a key metric to track macro stability [32][34] Question: Insights on Project Catalyst performance - Management noted that Project Catalyst is in private beta and is expected to automate decision-making processes, enhancing customer engagement [42][44] Question: Renewal cadence and OfferFit pricing - Management confirmed that Q1 was a heavy renewal quarter, with expectations for a drop in Q2 and Q3, followed by another increase in Q4 [63] - OfferFit will maintain its pricing model initially, with potential for future integration into Braze's pricing structure [66] Question: Customer reception of flexible credits model - Management reported positive customer feedback on the flexible credits model, which has shortened negotiation times and increased usage flexibility [81][84] Question: Commentary on macro uncertainty and marketing spend - Management acknowledged that while macro conditions are uncertain, marketing dollars continue to be spent on consolidation and optimization [90][91]