Braze’s second quarter results were met with a distinctly positive market reaction, reflecting management’s emphasis on operational discipline and expanding product capabilities. CEO William Magnuson credited the strong performance to improved execution in global sales, enhanced competitive win rates in enterprise segments, and ongoing customer demand for Braze’s AI-powered engagement solutions. The company highlighted solid bookings across key verticals, successful integration of the OfferFit acquisition, and continued growth in large enterprise clients. CFO Isabelle Winkles noted, “Sustained performance in net retention and disciplined resource deployment gave us greater confidence into the back half of the year.”
Is now the time to buy BRZE? Find out in our full research report (it’s free).
Braze (BRZE) Q2 CY2025 Highlights:
- Revenue: $180.1 million vs analyst estimates of $171.6 million (23.8% year-on-year growth, 5% beat)
- Adjusted EPS: $0.15 vs analyst estimates of $0.03 (significant beat)
- Adjusted Operating Income: $6.04 million vs analyst estimates of $1.17 million (3.4% margin, significant beat)
- The company lifted its revenue guidance for the full year to $718.5 million at the midpoint from $704 million, a 2.1% increase
- Management raised its full-year Adjusted EPS guidance to $0.42 at the midpoint, a 152% increase
- Operating Margin: -21.5%, down from -19.2% in the same quarter last year
- Customers: 2,422, up from 2,342 in the previous quarter
- Net Revenue Retention Rate: 108%, down from 109% in the previous quarter
- Annual Recurring Revenue: $687.2 million vs analyst estimates of $662.8 million (22.7% year-on-year growth, 3.7% beat)
- Billings: $177.2 million at quarter end, up 38.1% year on year
- Market Capitalization: $3.35 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Braze’s Q2 Earnings Call
- Brent Bracelin (Piper Sandler) asked about the drivers behind stronger demand and improved profitability. CEO William Magnuson cited efficient pipeline execution and vertical focus, while CFO Isabelle Winkles highlighted improved downsell trends and successful OfferFit integration.
- Sitikantha Panigrahi (Mizuho) inquired about revenue uplift and margin expansion from OfferFit. Magnuson pointed to high enterprise interest and rapid pipeline growth, with Winkles noting OfferFit’s neutral impact on gross margin and potential for future operating efficiency.
- Brett Huff (Stephens) sought details on AI product usage and the impact on Braze’s competitive position. Magnuson explained that AI features are seeing rapid adoption, closing usability gaps and enhancing value, particularly in key verticals.
- Raimo Lenschow (Barclays) questioned shifts in customer understanding and the impact of AI on marketing strategy. Magnuson described Braze’s long-standing focus on enabling small teams with scalable automation, noting that AI is making these strategies more accessible and strategic.
- Brian Schwartz (Oppenheimer) asked about the effect of AI and labor arbitrage on margins. Winkles responded that most recent leverage comes from cost-optimized talent locations, with internal AI tooling’s impact expected to increase over time.
Catalysts in Upcoming Quarters
Looking forward, StockStory analysts will be closely monitoring (1) the pace of OfferFit by Braze adoption and its impact on upsell opportunities; (2) customer engagement with new AI-driven features announced at the Forge conference; and (3) further expansion in large enterprise accounts across international markets. The trajectory of net revenue retention rates and ongoing sales productivity improvements will also be key indicators of Braze’s ability to sustain profitable growth.
Braze currently trades at $30.18, up from $27.70 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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