Is Braze Poised for a Turnaround as Earnings Season Approaches?

The question of whether Braze (NASDAQ: BRZE) can engineer a meaningful turnaround as it approaches its December 9, 2025, earnings report hinges on three critical pillars: earnings expectations, the strength of its guidance, and its position relative to peers in the customer engagement SaaS sector. While the company has demonstrated resilience in revenue growth and strategic innovation, its path to profitability remains fraught with challenges.

Earnings Expectations: A Mixed Bag

Braze's Q4 2025 earnings report is expected to show a non-GAAP EPS of -$0.07, a significant decline from its Q4 2024 performance, which included a $0.02 EPS and non-GAAP net income of $17 million according to the company's financial report. This anticipated loss contrasts sharply with the company's broader revenue momentum. For Q4 2025, Braze reported $160.4 million in revenue, a 22.5% year-over-year increase, driven by new customers, upsells, and renewals. However, the EPS miss-despite revenue growth-raises concerns about cost management and the sustainability of its business model. Analysts project $184.22 million in revenue for Q4 2025, a 23.8% increase from the prior year according to market analysis, but this optimism is tempered by the risk of margin compression.

The company's recent acquisition of OfferFit, an AI decisioning platform, underscores its ambition to leverage agentic AI for competitive differentiation according to investor announcements. Yet, such strategic bets often come with short-term financial drag, as integration costs and R&D expenses weigh on profitability.

Guidance Strength: Optimism Amid Uncertainty

Braze's guidance for Q1 2026 and full-year 2026 reflects cautious optimism. It forecasts Q1 2026 revenue between $158 million and $159 million and full-year 2026 revenue between $686 million and $691 million according to the latest earnings release. These figures imply a year-over-year revenue growth rate of approximately 14–15%, aligning with the broader SaaS sector's decelerating growth trends according to industry reports. While the guidance is credible, it lacks the aggressive upward revisions seen in some peers, such as Klaviyo, which recently raised its full-year 2025 revenue guidance by 30% after reporting 32% year-over-year revenue growth in Q3 2025 according to investor updates.

Braze's conservative approach may reflect its focus on operational efficiency. Its Q2 2026 results, for instance, included non-GAAP operating income of $6 million and non-GAAP net income of $17 million, demonstrating that profitability is achievable under the right conditions according to financial analysis. However, the path to consistent profitability remains unclear, particularly as AI-driven initiatives like OfferFit require sustained investment.

Peer Comparison: A Sector in Transition

The customer engagement SaaS sector is undergoing a strategic shift toward AI-powered personalization and flexible pricing models according to market analysis. Braze's peers, including Klaviyo, Iterable, and MoEngage, are navigating similar dynamics but with varying degrees of success.

Klaviyo, for example, has outperformed Braze in both revenue growth and margin discipline. Its Q3 2025 results included $310.9 million in revenue (32% YoY growth) and a 76% gross margin, with Q4 guidance projecting 23–24% year-over-year growth according to company announcements. Iterable, meanwhile, has scaled its Annual Recurring Revenue (ARR) to $200 million by 2023, achieving a 38% YoY increase according to company data, though its valuation multiple (1.25x revenue in 2025) suggests investors are prioritizing growth over immediate profitability according to investment insights.

Braze's 26% revenue growth for FY2025 ($593.4 million in revenue) according to earnings results is robust but lags behind the 32% growth seen at Klaviyo. More concerning is the lack of detailed gross margin data for Braze. Industry benchmarks suggest that SaaS companies with gross margins above 85% are considered highly efficient according to market benchmarks, but Braze's margins are not explicitly disclosed. If its margins are below this threshold, it could face pressure to optimize costs as cloud infrastructure and AI workloads become more expensive.

The Road Ahead: Balancing Innovation and Profitability

Braze's long-term prospects depend on its ability to monetize its AI investments while maintaining disciplined cost management. The acquisition of OfferFit is a strategic move to enhance its agentic AI capabilities, but the company must demonstrate that these innovations translate into tangible revenue streams. For instance, its 2025 Global Customer Engagement Review highlights how leading brands use AI for predictive analytics and customer retention according to company insights, suggesting that Braze's platform is well-positioned to capitalize on these trends.

However, the near-term outlook remains uncertain. The anticipated Q4 2025 EPS loss and mixed fundamentals-such as a 23.8% revenue increase to $180.11 million-indicate that Braze is still in a transitional phase according to earnings analysis. Investors will need to weigh the company's growth potential against its current profitability challenges.

Conclusion

Braze's earnings report on December 9, 2025, will be a pivotal moment. While its revenue growth and AI-driven strategy offer a compelling narrative, the anticipated EPS loss and conservative guidance suggest that a full-scale turnaround is not yet in sight. In a sector where peers like Klaviyo are outpacing it in both growth and margin efficiency, Braze must deliver not just incremental improvements but a clear and credible path to consistent profitability. Until then, the jury remains out on whether the company can transform its strategic ambitions into sustained financial success.