Braze Revenue Growth Slowed to 26% From 30%
The customer-engagement platform posted $227.2 million of sales and $22.0 million of non-GAAP operating income in the fiscal second quarter.
Braze (BRZE) reported that year-over-year revenue growth slowed to 26.2% in the fiscal second quarter ended July 31, 2026, after 30.2% growth in the prior quarter.
The customer-engagement platform said sales were $227.2 million, compared with $180.1 million a year earlier, driven primarily by new customers, upsells and renewals. In the fiscal first quarter, revenue had been $211.0 million, up 30.2% from $162.1 million a year earlier. In the fiscal fourth quarter of 2026, growth had been 27.9%. The company had described the first quarter as the fourth straight period of organic revenue acceleration.
Subscription revenue was $207.7 million, versus $171.8 million a year earlier. Professional services and other revenue was $19.6 million, versus $8.3 million. Remaining performance obligations were $1,092.5 million as of July 31, of which $691.1 million was current, versus $1,079.2 million as of April 30 and $1.0 billion as of January 31.
Non-GAAP operating income was $22.0 million, versus $6.0 million a year earlier. GAAP operating loss narrowed to $18.1 million from $38.8 million. A primary contributor to the GAAP loss was $35.7 million of stock-based compensation. Diluted non-GAAP net income per share was $0.19, versus $0.15 a year earlier. GAAP net loss per share was $0.17, versus $0.26.
GAAP gross margin was 66.8%, versus 67.7% a year earlier. Non-GAAP gross margin was 68.6%, versus 69.3%. Dollar-based net retention for all customers for the trailing 12 months ended July 31, 2026, was 110%, versus 108% a year earlier. For customers with annual recurring revenue of $500,000 or more, retention was 112%, versus 111%.
Total customers increased to 2,789 as of July 31 from 2,422 a year earlier. Customers with ARR of $500,000 or more numbered 361, versus 282.
Net cash provided by operating activities was $24.2 million, versus $7.0 million a year earlier. Free cash flow was $21.7 million, versus $3.5 million. Both were record second-quarter results. Cash and cash equivalents, restricted cash and marketable securities were $413.9 million as of July 31.
Chief Executive Bill Magnuson said adoption of BrazeAI Operator, BrazeAI Agent Console and BrazeAI Decisioning Studio is accelerating as customers demand proof of ROI. The company expanded Operator to take action across the full platform, including building Canvas steps from conversational prompts. It entered a three-year strategic collaboration with AWS, announced a bidirectional integration with Databricks CustomerLake, and named Pearce Dolan chief product officer on August 24.
Braze is initiating guidance for the fiscal third quarter ending October 31, 2026, of revenue of $229.0 million to $230.0 million and non-GAAP operating income of $16.0 million to $17.0 million. It is updating guidance for the fiscal year ending January 31, 2027, to revenue of $910.0 million to $913.0 million and non-GAAP operating income of $75.5 million to $76.5 million. Non-GAAP net income for the full year is guided at $72.5 million to $73.5 million, or $0.64 to $0.65 a share on about 114.0 million diluted shares.
The company said it has not reconciled non-GAAP operating income, non-GAAP net income or non-GAAP net income per share guidance to GAAP because of uncertainty around stock-based compensation tied to equity awards affected by stock-price fluctuations. It is preparing to host Braze Forge 2026 in Las Vegas September 28–30.