Braze Inc. Class A Common Stock Q2 2027 Earnings Recap

Braze shares fell 25.8% after earnings, indicating investors were disappointed despite reported revenue growth and raised guidance. The transcript points to concerns around still-moderating growth—revenue increased 26% year over year—and the early, not-yet-material monetization of AI, which may have outweighed improving margins and cash flow.

Key Takeaways

• Fiscal Q2 revenue was $227 million, up 26% year over year and 8% sequentially.
• Large-customer dollar-based net retention improved 100 basis points to 112%, while customers spending at least $500,000 annually rose 28% year over year.
• Paid adoption of Braze AI tools reached roughly one-third of the large-customer cohort, increasing about 900 basis points from Q1; management acknowledged AI monetization remains early.
• Non-GAAP operating margin improved by more than 600 basis points year over year, and free cash flow reached a record second-quarter $22 million.
• Management raised third-quarter and full-year revenue guidance, as well as full-year operating income guidance, while targeting at least 400 basis points of operating-margin improvement.