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] - Non-GAAP operating income was $6 million, with a non-GAAP net income of $17 million, and free cash flow of $4 million [6][24] - The company achieved three consecutive quarters of positive non-GAAP operating income and free cash flow, and five consecutive quarters of positive non-GAAP net income [7] 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 total customer count increased by 12% year-over-year to 2,422, with large customers (spending at least $500,000 annually) growing by 27% year-over-year to 282 [18][19] - Dollar-based net retention was 108% overall and 111% for large customers, indicating strong expansion across industries and regions [20] Market Data and Key Metrics Changes - Revenue outside the U.S. contributed 45% of total revenue, down approximately 60 basis points sequentially but in line with the prior year [20] - The total remaining performance obligation was $862 million, up 25% year-over-year, with current RPO at $558 million, up 27% year-over-year [21] Company Strategy and Development Direction - The company aims to drive higher profitability while reinvesting in business growth and maintaining its competitive advantage in customer engagement [7][17] - The integration of OfferFit is expected to enhance the company's AI capabilities and customer engagement strategies, with a focus on autonomous personalization [12][13] - The company is committed to improving customer engagement through AI-driven innovations and enhancing the user experience [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 trade and economic concerns [7][32] - The company noted that the demand environment remains stable, with improved execution and high competitive win rates contributing to positive performance [32][33] - Management highlighted the importance of AI in transforming customer engagement and enhancing marketer productivity [66] Other Important Information - The company expects Q3 2026 revenue to be in the range of $183.5 million to $184.5 million, representing a year-over-year growth rate of approximately 21% [26] - For the full fiscal year 2026, total revenue is expected to be in the range of $717 million to $720 million, with OfferFit contributing approximately two percentage points to year-over-year growth [28][29] Q&A Session Summary Question: What has changed in the demand environment and the appetite for Braze? - Management noted that there hasn't been a meaningful change in the macro or demand environment, but execution has improved globally, leading to high competitive win rates and efficient late-stage pipeline operations [32] Question: What are the expectations for OfferFit's integration and its impact on ACV? - Management reported strong early wins from OfferFit across all regions and expressed confidence in high attach rates for the offering, which is priced around $300,000 annually [41][45] Question: How is the usage of AI products trending? - Management indicated rapid adoption of AI features across various verticals, enhancing customer engagement and closing the gap between capability and accessibility for customers [52][53] Question: How has sales execution improved? - Management highlighted synchronization of operational changes and investments leading to improved sales efficiency and better prioritization of late-stage pipeline opportunities [56][57] Question: What changes have been observed in the demand environment across geographies? - Management noted strong performance globally, with contributions from all regions, particularly from the ANZ region due to investments like the new data center [80]

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 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]