Braze NASDAQ: BRZE reported a strong start to fiscal 2027, with executives pointing to accelerating revenue growth, improving retention and rising demand for its AI-driven customer engagement tools.
The company generated fiscal first-quarter revenue of $211 million, up 30% year over year and 3% from the prior quarter. Co-founder and Chief Executive Officer Bill Magnuson said the quarter marked Braze’s “fourth straight quarter of organic and total revenue growth acceleration.”
Chief Financial Officer Isabelle Winkles said revenue growth was driven by “existing customer contract expansions, renewals, and new business.” Braze AI Decisioning Studio contributed $5.7 million of revenue in the quarter, implying organic year-over-year growth of 26.7%, according to Winkles.
Customer Growth and Retention Improve
Braze ended the quarter with 2,713 customers as of April 30, 2026, up 16% year over year and up 104 sequentially. The company’s large-customer base also continued to expand. Customers spending at least $500,000 annually rose 33% year over year to 349, and those customers represented 65% of total annual recurring revenue, compared with 62% a year earlier.
Magnuson said bookings were “robust,” citing competitive takeaways, particularly in enterprise accounts. He also said Braze completed six deals worth more than $1 million and increased its number of eight-figure customers to five.
Dollar-based net retention improved to 110% across all customers, up about 100 basis points sequentially. For large customers, dollar-based net retention rose to 111%, also up about 100 basis points from the prior quarter.
Notable new business wins and expansions included Bondora Group, ClassPass, Denny’s, Deuna, Kueski, NRMA, Regal Cinemas, Salomon and Subway, according to Magnuson. He also noted a “milestone new business win” with a prominent AI lab, which he said expanded Braze’s presence in high-scale, data-intensive workloads.
AI Products Drive Management Commentary
Much of the call centered on Braze’s AI roadmap, including BrazeAI Operator, BrazeAI Agent Console and BrazeAI Decisioning Studio. Magnuson said Operator and Agent Console reached general availability early in the quarter, ahead of schedule, and that “hundreds of customers” are already using the tools.
Magnuson framed Braze’s AI strategy around first-party data, real-time processing and customer engagement workflows. He said customers are looking for tools that operate “directly on their first-party data, inside their existing workflows, and against their specific goals.”
The company highlighted several customer examples:
- Cleo used BrazeAI Operator to rebuild a member welcome series, with Magnuson citing an 81% decline in unsubscribes, a 97% drop in opt-outs on the first email and a 284% increase in app opens.
- Luxury Escapes used BrazeAI Agent Console to route new users into welcome cohorts based on behavioral signals, producing a 10% lift in revenue per user, a 7% increase in total transaction value and a 6% increase in purchase volume.
- A large hotel franchisee used BrazeAI Decisioning Studio to replace a manual testing process with continuous automated experimentation, achieving double-digit increases in click-through rate.
In the question-and-answer session, Magnuson said AI is affecting both marketer productivity and personalization performance. He said Braze is seeing more campaign creation and experimentation as customers use Operator and other agentic tools, but that increased output is also raising demand for quality assurance and workflow automation.
Decisioning Studio Capacity Improves
Winkles said Braze had faced supply constraints in the prior quarter that forced the company to limit Decisioning Studio bookings in some regions and delay start dates by several months. She said Braze has since accelerated hiring and ramping of forward-deployed delivery personnel, enabling faster Decisioning Studio start dates.
As a result, Winkles said Braze expects Decisioning Studio revenue in the second quarter to grow 15% to 20% sequentially from the first quarter.
In response to analyst questions, Magnuson said some Decisioning Studio deployment start dates had been pushed out by more than four months at the end of the fourth quarter, depending on region. He said Braze cut that delay “about in half” during the first quarter through hiring, ramping and onboarding improvements.
Margins, Cash Flow and RPO
Non-GAAP gross profit was $142 million, representing a non-GAAP gross margin of 67.4%, down from 69.3% a year earlier. Winkles said the decrease was primarily due to higher premium messaging volumes and headcount tied to BrazeAI Decisioning Studio.
Total operating expenses were $132 million, or 62% of revenue, compared with $110 million, or 68% of revenue, in the prior-year period. Non-GAAP operating income was $10.5 million, or 5% of revenue, compared with $2.8 million, or 2% of revenue, a year earlier.
Non-GAAP net income attributable to Braze shareholders was $11.4 million, or $0.10 per share, compared with $7.3 million, or $0.07 per share, in the prior-year quarter.
Braze ended the quarter with approximately $392 million in cash equivalents, restricted cash and marketable securities. Cash provided by operations was $28 million, and free cash flow was a record $27 million, up from $23 million a year earlier.
Total remaining performance obligation was $1.1 billion, up 30% year over year and 4% sequentially. Current RPO was $670 million, up 28% year over year.
Guidance Raised as CFO Search Continues
For the second quarter of fiscal 2027, Braze guided for revenue of $219.5 million to $220.5 million, representing approximately 22% growth at the midpoint. The company expects non-GAAP operating income of $17 million to $18 million and non-GAAP net income per share of $0.15 to $0.16.
For the full fiscal year, Braze expects revenue of $895 million to $899 million, also representing approximately 22% growth at the midpoint. The company guided for non-GAAP operating income of $70 million to $74 million and non-GAAP earnings per share of $0.61 to $0.65.
Magnuson said Braze is raising revenue guidance for both the second quarter and full year while reiterating that it remains on track to deliver 400 basis points of operating margin expansion for the fiscal year.
The call also addressed Winkles’ planned departure. Magnuson said Braze is actively engaged in a CFO search and thanked Winkles for her work over the past six years, including guiding the company through its IPO and helping scale the business.
Winkles said building and leading the finance team at Braze had been “one of the most rewarding experiences” of her career and said she was “excited to witness Braze’s continued success ahead.”
About Braze NASDAQ: BRZE
Braze, Inc is a publicly traded software company NASDAQ: BRZE that offers a customer engagement platform designed to help brands build personalized relationships with their users. Founded in 2011 as Appboy by Bill Magnuson, Jon Hyman and Mark Ghermezian, the company adopted the Braze name in 2017 to underscore its focus on fostering strong connections between businesses and consumers. Its cloud-based platform consolidates messaging channels including push notifications, in-app messages, email and SMS, enabling companies to deliver timely, context-driven communications at scale.
The core functionality of Braze's platform centers on data-driven segmentation, customer journey orchestration and real-time analytics.
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