Braze (NASDAQ:BRZE) Surprises With Q2 CY2026 Sales But Stock Drops 12.1%
Customer engagement platform Braze (NASDAQ:BRZE) reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 26.2% year on year to $227.2 million. Guidance for next quarter’s revenue was better than expected at $229.5 million at the midpoint, 0.6% above analysts’ estimates. Its non-GAAP profit of $0.19 per share was 22.4% above analysts’ consensus estimates.
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Braze (BRZE) Q2 CY2026 Highlights:
- Revenue: $227.2 million vs analyst estimates of $220.4 million (26.2% year-on-year growth, 3.1% beat)
- Adjusted EPS: $0.19 vs analyst estimates of $0.16 (22.4% beat)
- Adjusted Operating Income: $21.96 million vs analyst estimates of $17.66 million (9.7% margin, 24.3% beat)
- The company lifted its revenue guidance for the full year to $911.5 million at the midpoint from $897 million, a 1.6% increase
- Management raised its full-year Adjusted EPS guidance to $0.65 at the midpoint, a 2.4% increase
- Operating Margin: -8%, up from -21.5% in the same quarter last year
- Free Cash Flow Margin: 9.6%, down from 12.7% in the previous quarter
- Customers: 2,789, up from 2,713 in the previous quarter
- Net Revenue Retention Rate: 110%, in line with the previous quarter
- Billings: $231.5 million at quarter end, up 30.6% year on year
- Market Capitalization: $3.6 billion
Company Overview
With its technology powering interactions with 6.2 billion monthly active users across the digital landscape, Braze (NASDAQ:BRZE) provides a platform that helps brands build and maintain direct relationships with their customers through personalized, cross-channel messaging and engagement.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, Braze’s 35% annualized revenue growth over the last five years was excellent. Its growth beat the average software company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Braze’s annualized revenue growth of 24.8% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Braze reported robust year-on-year revenue growth of 26.2%, and its $227.2 million of revenue topped Wall Street estimates by 3.1%. Company management is currently guiding for a 20.3% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 16.5% over the next 12 months, a deceleration versus the last two years. Still, this projection is above average for the sector and suggests the market sees some success for its newer products and services.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Braze’s billings punched in at $231.5 million in Q2, and over the last four quarters, its growth was fantastic as it averaged 30.2% year-on-year increases. This alternate topline metric grew faster than total sales, meaning the company collects cash upfront and then recognizes the revenue over the length of its contracts - a boost for its liquidity and future revenue prospects. 
Customer Retention
One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company’s products and services over time.
Braze’s net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 110% in Q2. This means Braze would’ve grown its revenue by 10% even if it didn’t win any new customers over the last 12 months.
Braze has a decent net retention rate, showing us that its customers not only tend to stick around but also get increasing value from its software over time.
Key Takeaways from Braze’s Q2 Results
We were impressed by how significantly Braze blew past analysts’ billings expectations this quarter. We were also excited its adjusted operating income outperformed Wall Street’s estimates by a wide margin. On the other hand, its EPS guidance for next quarter missed and its customer growth decelerated. Overall, this print was mixed but still had some key positives. The market seemed to be hoping for more, and the stock traded down 12.1% to $27.33 immediately following the results.
Big picture, is Braze a buy here and now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).