Braze 2026 Q1 Earnings Beats Expectations as Revenue Grows 19.6%

Braze (BRZE) reported its fiscal 2026 Q1 earnings on June 6, 2025. The total revenue of Braze increased by 19.6% to $162.06 million in 2026 Q1, up from $135.46 million in 2025 Q1. The company successfully narrowed its net loss to $-35.64 million in 2026 Q1, reducing losses by 0.2% compared to the $-35.71 million net loss reported in 2025 Q1. Braze expects revenue for the second quarter of fiscal 2026 to be between $171 million and $172 million, representing approximately 18% year-over-year growth at the midpoint. Analysts had forecast lower numbers, so this performance is a positive surprise.

Revenue

Braze's revenue for fiscal 2026 Q1 saw a 19.6% year-over-year increase, reaching $162.06 million. Subscription services were the primary driver, contributing $154.90 million, while professional services and other segments added $7.16 million. This growth highlights Braze's strong market position and expanding customer base.

Earnings/Net Income

Braze narrowed its losses to $0.34 per share in 2026 Q1, showing a slight improvement from a loss of $0.35 per share in 2025 Q1. The net income figures indicate that while Braze is still operating at a loss, the company is making modest progress in reducing these deficits.

Price Action

The stock price of Braze has dropped 5.47% during the latest trading day, plummeted 19.21% during the most recent full trading week, and decreased 5.41% month-to-date.

Post-Earnings Price Action Review

Braze's strategy of buying BRZE when there is a revenue miss and holding for 30 days has proven ineffective, as evidenced by a significant backtested loss of -64.23% and an excess return of -91.35%. The negative Sharpe ratio of -0.39 further underscores the unfavorable risk-adjusted returns. The strategy also faced a substantial maximum drawdown of -72.15%, highlighting its high-risk nature. Overall, this approach failed to yield positive returns and consequently is not recommended based on these findings.

CEO Commentary

William Magnuson, Co-Founder and CEO of Braze, expressed pride in the company's strong first-quarter performance, highlighting a 20% year-over-year revenue growth to $162.1 million. He noted that this growth was driven by diverse customer wins and a rising customer count, with large customers increasing by 24% year-over-year. Magnuson emphasized the importance of ongoing investments in AI and first-party data to enhance customer engagement strategies. He acknowledged the challenging macro environment but remained optimistic about the company's ability to capitalize on legacy replacement cycles, stating, "We are confident that the legacy replacement cycle and vendor consolidation trends will persist."

Guidance

For the second quarter of fiscal 2026, Braze expects revenue between $171 million and $172 million, representing approximately 18% year-over-year growth at the midpoint. The second quarter's non-GAAP operating income is projected to range from $0.5 million to $1.5 million, with a non-GAAP net income forecast of $2.5 million to $3.5 million. For the full fiscal year 2026, total revenue is anticipated to be between $702 million and $706 million, with an expected contribution of $11 million to $12 million from the recently acquired OfferFit.

Additional News

Braze completed the acquisition of OfferFit, an AI decisioning company, to bolster its customer engagement platform. This strategic move integrates OfferFit's multi-agent decisioning engine with Braze's real-time platform, enhancing AI capabilities for personalized customer experiences. Furthermore, Ed McDonnell will join Braze as the Chief Revenue Officer in July, bringing extensive SaaS industry experience. These developments are expected to strengthen Braze's market position and drive future growth.