Braze Grows Revenue and Expands AI Suite

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]