0001676238-26-000027
SEC filingRevenue grew 30.2% YoY to $211.0M, but gross margin contracted 2.9 points to 65.7%; net loss narrowed to $25.5M from $35.6M.
For the three months ended April 30, 2026, Braze reported revenue of $211.0 million, up 30.2% year-over-year from $162.1 million. The growth was driven by both existing customers (55.9% of the increase) and new customer additions (44.1%). Gross profit rose 24.7% to $138.7 million, but gross margin contracted 2.9 percentage points to 65.7% from 68.6% in the prior year. The margin compression was primarily due to acquisition-related operating costs, including personnel costs from the acquired workforce and amortization of acquired technology, as well as higher infrastructure and messaging costs to support revenue growth. Operating loss improved to $27.5 million from $40.2 million, and net loss narrowed to $25.5 million from $35.6 million, reflecting operating leverage in sales and marketing and general and administrative expenses. Non-GAAP free cash flow increased to $26.8 million from $22.9 million, driven by higher collections from new and renewal billings.
Braze operates as a single reporting segment, with all revenue derived from subscription and professional services. Geographically, international revenue accounted for approximately 45% of total revenue, consistent with 46% in the prior year. Key operating metrics underscore the land-and-expand strategy: the number of customers grew to 2,713, and customers with ARR of $500,000 or more increased to 349 from 262. Dollar-based net retention rate for all customers was 110%, down slightly from 112% for large customers, reflecting macro-driven renewal caution. Monthly active users reached approximately 8.5 billion, up from 8.0 billion as of January 31, 2026.
Braze expects to continue investing in sales and marketing, research and development, and international expansion, which will likely keep operating expenses elevated in absolute dollars. Management highlighted macroeconomic uncertainty and cautious renewal behavior, but believes current liquidity of $391.5 million in cash, cash equivalents, and marketable securities is sufficient for at least 12 months. The company also initiated a $50 million share repurchase program in March 2026. No formal forward guidance was provided, but the emphasis on innovation (especially AI capabilities) and international growth suggests sustained investment for long-term market share gains.
As of April 30, 2026, Braze held $145.3M in cash and cash equivalents, $242.2M in marketable securities (primarily U.S. government and corporate debt securities), and $4.0M in restricted cash. Total current assets were $546.7M, with working capital of $105.2M. The company's investment portfolio has a weighted-average remaining maturity of approximately one year, and no credit losses were recognized on marketable securities. Accounts receivable, net of allowance, stood at $118.5M, with one customer representing 12% of the balance. Deferred revenue increased to $342.5M from $304.6M at year-end, reflecting strong upfront collections.
Braze disclosed total remaining performance obligations (RPO) of $1,079.2M as of April 30, 2026, with $670.3M expected to be recognized within one year and $408.9M in years 1-5. Operating lease liabilities totaled $81.5M (undiscounted $103.4M), with weighted-average remaining lease term of 6.1 years. The company also recognized $1.5M in indirect tax contingencies. No material purchase commitments or supply agreements were disclosed.
In March 2026, the Board authorized a $100.0M share repurchase program. During Q1 FY2027, Braze executed a $50.0M accelerated share repurchase (ASR), taking initial delivery of 1,716,002 shares, which were immediately retired. As of April 30, 2026, $50.0M remained available for future repurchases. No dividends were declared or paid. Capital expenditures totaled $1.3M (including $1.2M capitalized internal-use software), representing 0.6% of revenue. The company has no outstanding debt.
Braze operates as a single reportable segment: the customer engagement platform. The CODM (CEO) reviews consolidated financial information for resource allocation and performance assessment. Revenue is disaggregated by type: subscription ($195.2M) and professional services ($15.8M). Geographically, U.S. revenue was $115.5M (54.7% of total) and international revenue was $95.5M (45.3%). No individual country outside the U.S. exceeded 10% of total revenue.
Operating cash flow of $28.1M significantly exceeded the net loss of $25.5M, indicating strong cash generation relative to GAAP earnings. The primary non-cash add-backs were stock-based compensation ($35.8M), amortization of deferred contract costs ($12.3M), and depreciation/amortization ($6.3M). Working capital was a net source of cash, led by a $38.2M increase in deferred revenue, partially offset by a $20.9M decrease in accrued expenses.
Capital expenditures were minimal at $1.3M (including $1.2M of capitalized software), representing a capex intensity of 4.7% of operating cash flow. This underscores the asset-light nature of the business.
Braze returned $50.0M to shareholders via common stock repurchases, which was fully covered by operating cash flow and supplemented by $42.8M from investing activities (primarily net maturities of marketable securities). No dividends were paid.
The $50.0M repurchase is a significant use of cash in the quarter. The large swing in accrued expenses (-$20.9M) and deferred revenue (+$38.2M) warrant monitoring for seasonality or business mix shifts. Cash paid for income taxes was $2.2M, a modest outflow relative to the net loss.