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]