Braze, Inc.: Growth Strength Remains Healthy

Core Viewpoint - Braze, Inc. (NASDAQ:BRZE) is expected to maintain a strong growth trajectory despite recent share price declines, which are deemed unjustified given the company's operational performance and market demand [2][6][8] Financial Performance - In 2Q25, Braze reported total revenue of $145.5 million, with $140 million from subscription and $5.5 million from services, reflecting a 26.4% year-over-year growth, and subscription revenue grew by 28% year-over-year [3] - The adjusted gross margin improved by 90 basis points to 70.9% in 2Q25, attributed to cost optimization and personnel efficiencies [3] - For the first time, Braze achieved an adjusted EBIT margin of 3%, leading to an adjusted EPS of $0.12 [3] Growth Metrics - Billings growth was reported at 15.9% year-over-year, a decline from previous quarters, primarily due to a decrease in net-new business and the impact of an acquisition in the prior year [4][5] - On a two-year stack basis, billings growth remains robust at 50.1%, indicating sustained demand [5] - The number of customers generating over $500k in annual recurring revenue (ARR) grew by 28% year-over-year, highlighting strong demand in the enterprise segment [5] Strategic Initiatives - Braze launched a free trial program for new customers, aimed at lowering adoption barriers and enhancing customer engagement with the platform [5][8] - The company continues to focus on sophisticated marketing campaigns, leveraging its decade-long experience in customer engagement [5] Valuation Perspective - The recent decline in Braze's share price is viewed as unjustified, with expectations that growth metrics will rebound, potentially leading to a re-rating of the company's valuation multiples back to pre-results levels [6]