Braze Reports Strong Q2 Results, Raises Outlook as AI Integration Drives Growth

Braze Reports Strong Q2 FY2026 Results

Braze Inc. (NASDAQ: BRZE), a leader in customer engagement software, has reported impressive results for the second quarter of fiscal year 2026. The company's performance exceeded both its own guidance and analyst estimates, showcasing strong growth and an increased focus on AI-driven solutions 1

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Financial Highlights

• Revenue reached $180.1 million, up 23.8% year-over-year, surpassing the $170.1 million analyst estimate 1

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• Subscription revenue grew to $171.8 million, while professional services and other revenue totaled $8.3 million 1

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• Non-GAAP net income was $16.9 million, or 15 cents per diluted share, beating the 3-cent estimate 1

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• Annual recurring revenue (ARR) surpassed $700 million 3

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Despite these positive results, the company reported a GAAP net loss of $27.9 million, or 26 cents per share, wider than the loss in the previous year 1

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Customer Growth and Retention

Braze's customer base expanded to 2,422, a 12% increase year-over-year 2

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. Notably, the number of customers with annual recurring revenue above $500,000 grew by 27% to 282, now representing 62% of total ARR 3

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. This growth in high-value enterprise customers enhances Braze's revenue stability and multi-year contract visibility.

However, the company faced some challenges in customer retention:

• Dollar-based net retention rate declined to 108% from 114% for all customers 1

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• For customers with ARR of $500,000 or more, the rate dropped to 111% from 117% 1

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AI Integration and Product Development

Braze has placed a strong emphasis on integrating AI capabilities into its platform:

• Launched the Model Context Protocol (MCP) Server to connect large language models with Braze data 2

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• Acquired OfferFit to enhance targeting and automation for marketing campaigns 2

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• Reported rapid adoption of AI-powered features across various verticals 3

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CEO William Magnuson highlighted the potential of AI in driving future growth: "Looking ahead, Braze is focused on AI solutions that will empower brands to transform the customer engagement experience for marketers and end users alike, driving high ROI for our customers and Braze" 1

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Outlook and Guidance

Following the strong Q2 results, Braze has raised its financial outlook for both the next quarter and the full fiscal year:

• Q3 FY2026 revenue projected at $183.5 million to $184.5 million 2

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• Full fiscal year revenue forecast increased to $717.0 million to $720.0 million 1

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• Non-GAAP earnings per share for the full year expected to be 41 to 42 cents, up from previous guidance of 15 to 18 cents 1

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Market Response

The market reacted positively to Braze's results, with shares surging 21.11% to $33.50 in premarket trading following the announcement 1

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. Piper Sandler analyst Brent Bracelin maintained an Overweight rating on Braze and raised the price forecast from $38 to $50 1

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As Braze continues to integrate AI capabilities and expand its customer base, the company appears well-positioned for future growth in the competitive customer engagement software market.