Braze 2026 Q3 Earnings Strong Revenue Growth Amid Widening Losses

Braze (BRZE) reported mixed results in its fiscal 2026 Q3, with revenue beating expectations but losses deepening. The company raised full-year guidance to 23% revenue growth, driven by robust customer additions and AI-driven product adoption. Analysts upgraded price targets following the earnings release, citing improved margins and strategic AI investments.

Revenue

Braze’s total revenue surged 25.5% year-over-year to $190.84 million, outpacing the $184.06 million consensus estimate. Subscription revenue, the core of its business, rose to $181.66 million, while professional services and other revenue added $9.18 million. This reflects strong demand for its AI-powered omnichannel solutions, particularly in customer acquisition and retention.

Earnings/Net Income

The company’s losses widened significantly, with a net loss of $35.80 million in Q3 2026, a 27.3% increase from $28.13 million in Q3 2025. Earnings per share turned negative at -$0.33, a 22.2% wider loss compared to the prior year. Despite revenue growth, Braze has sustained losses for five consecutive years, underscoring ongoing challenges in achieving profitability.

Price Action

Following the earnings release, Braze’s stock price gained 2.84% in a single trading day and surged 29.30% month-to-date. However, post-earnings strategies underperformed: buying BRZE when revenues beat expectations and holding for 30 days resulted in a -70.74% return, underperforming the benchmark by 117.59%. The strategy’s high volatility is evident in a 64.59% maximum drawdown and a Sharpe ratio of -0.41.

CEO Commentary

William Magnuson, CEO, highlighted a 25.5% year-over-year revenue increase and a 400-basis-point improvement in non-GAAP operating margins. He emphasized AI-driven solutions, including the Braze AI Decisioning Studio and Agent Console, as key growth drivers. The company added 106 customers sequentially, its highest in three years, and 21 large customers with $500K+ ARR. Magnuson expressed confidence in FY2027, citing AI adoption and vendor consolidation trends.

Guidance

Braze raised FY2026 revenue guidance to $730.5–$731.5 million (23% growth at midpoint) and projected Q4 revenue of $197.5–$198.5 million. Non-GAAP operating income is expected to reach $26–$27 million, reflecting a 3.5% margin. For FY2027, the company anticipates an 8.0% non-GAAP operating margin, surpassing the 6.3% consensus.

Additional News

Recent strategic moves include the acquisition of AI-driven decisioning company OfferFit for $303.2 million, bolstering Braze’s AI capabilities. The company also partnered with Google Cloud to launch the BrazeAI Decisioning Studio on Google Cloud Marketplace, enhancing deployment flexibility for joint customers. Analysts upgraded price targets, with Mizuho raising its target to $50 and Barclays to $45, citing strong customer growth and AI momentum.

Key Metrics

• Revenue: $190.84M (25.5% YoY)

• Net Loss: -$35.80M (27.3% YoY increase)

• Customer Additions: 106 sequential, 317 YoY

• Guidance: FY2026 revenue of $730.5M–$731.5M (23% growth at midpoint)