Braze 2026 Q3 Earnings Revenue Surges 25.5% Amid Widening Losses

Braze (BRZE) reported third-quarter 2026 earnings marked by a 25.5% revenue increase to $190.84 million, exceeding expectations by $6.76 million. The company raised full-year revenue guidance to $730.5–$731.5 million, reflecting confidence in customer growth and AI-driven solutions. However, net losses widened by 27.3% year-over-year to $35.80 million, highlighting ongoing profitability challenges. Analysts responded positively, with Mizuho and Barclays raising price targets, while Cantor Fitzgerald maintained an Overweight rating.

Revenue

Subscription revenue accounted for the majority at $181.66 million, while professional services and other revenue contributed $9.18 million, totaling $190.84 million. This 25.5% year-over-year growth underscores strong demand for Braze’s AI-powered customer engagement platform, driven by new client acquisitions and upsells.

Earnings/Net Income

Braze’s losses deepened to $0.33 per share in Q3 2026 from $0.27 per share in Q3 2025, a 22.2% worsening. The net loss expanded to $35.80 million, a 27.3% increase from $28.13 million in the prior-year period. The company has posted losses for five consecutive years in the corresponding quarter, underscoring persistent financial headwinds.

Post-Earnings Price Action Review

The strategy of buying BRZE when revenues beat expectations and holding for 30 days resulted in a significant loss. The strategy returned -70.74%, underperforming the benchmark by 117.59%. With a maximum drawdown of 64.59% and a Sharpe ratio of -0.41, the strategy exhibited high risk and volatility, reflecting the stock’s erratic post-earnings performance.

CEO Commentary

William Magnuson, CEO, highlighted Q3’s 25.5% revenue growth, 400+ bps improvement in non-GAAP operating margins, and $18 million in free cash flow. He emphasized AI-driven omnichannel engagement, noting 106 sequential and 317 yearly customer additions. Strategic priorities include embedding AI into workflows and expanding premium channels like SMS/WhatsApp, which grew 90% year-over-year.

Guidance

CFO Isabelle Winkles provided Q4 revenue guidance of $197.5–$198.5 million (23% YoY growth at midpoint) and non-GAAP operating income of $12–$13 million. For FY2026, revenue is expected to reach $730.5–$731.5 million, with non-GAAP operating margins targeting 6%.

Additional News

Braze’s recent strategic moves include the acquisition of AI-driven decisioning company OfferFit for $303.2 million and a partnership with Google Cloud to launch BrazeAI Decisioning Studio on Google Cloud Marketplace. These steps aim to enhance AI capabilities in customer engagement. Analysts from Mizuho, Barclays, and Cantor Fitzgerald raised price targets, citing improved margins and growth potential. The company also announced a $37.6 million stock-based compensation expense and $18 million in free cash flow, signaling disciplined capital allocation amid expansion efforts.