0001676238-26-000013
SEC filingBraze revenue grew 24.4% to $738.2M, driven by existing customer expansion, though gross margin contracted 200 bps to 67.1%.
Braze describes itself as a leading customer engagement platform. Its core purpose is to help brands build and maintain direct, meaningful relationships with their customers by using first-party data, composable intelligence (models, agents, and operators), and real-time orchestration across multiple channels. The platform enables interactions with 8.0 billion monthly active users as of January 2026, up from 7.2 billion a year earlier. Braze serves 2,609 customers globally across industries such as retail, media, gaming, and financial services. The company was founded in 2011 and is headquartered in New York, New York.
Braze does not disclose separate reporting segments in its Business section. The company presents its operations as a single, integrated customer engagement platform with no segment-level revenue breakdown.
Braze’s platform is vertically integrated, combining data, AI, and interaction capabilities. Key offerings include: (1) BrazeAI – a suite encompassing BrazeAI Decisioning Studio (a multi-agent decisioning engine for personalization), BrazeAI Agent Console (a marketer-facing environment to build and deploy custom AI agents), and BrazeAI Operator (an LLM-powered assistant for strategic guidance and routine tasks); (2) Braze Data Platform – a set of capabilities for data ingestion, transformation, and export, including Braze SDKs, REST API, Braze Cloud Data Ingestion, Braze Currents, and Snowflake Data Sharing; (3) Canvas – a no-code journey orchestration tool for designing, visualizing, and launching multi-step, cross-channel customer journeys; and (4) Cross-Channel Messaging – email, SMS/MMS/RCS, push notifications, in-app and in-browser messages, Content Cards, Landing Pages, Feature Flags, and integrations with ad networks (Meta, Google, TikTok, etc.), WhatsApp, and LINE. The platform also provides analytics, segmentation, and reporting capabilities.
Braze sells subscriptions primarily through a direct sales force operating in North America, South America, Europe, the Middle East, and the Asia-Pacific region. It also leverages a joint venture in Japan and resellers in certain strategic markets. The company employs a land-and-expand business model: pricing is largely based on the number of consumers reached and message volume, and expansion occurs as customers add channels, purchase additional products, or onboard new business units and geographies. No single customer concentration is disclosed; customers include established global enterprises and technology innovators.
Braze faces competition from established software companies offering marketing solutions, specifically naming Adobe, Salesforce, Iterable, and Klaviyo. The filing notes that many competitors have greater name recognition, larger sales and marketing budgets, and more mature intellectual property portfolios. The competitive landscape is evolving rapidly, with potential threats from new entrants, AI advancements, and consolidation. Competitors may leverage broader product portfolios to bundle or integrate competing offerings, potentially pressuring Braze’s pricing and market share.
Braze outlines five strategic growth pillars: (1) Acquire new customers in verticals where it already has strong presence (retail, media, gaming, sports, restaurants, healthcare, technology, financial services) and increase penetration in less represented verticals; (2) Expand within existing customers by adding channels, increasing messaging consumption, and broadening use beyond marketing to include product, engineering, and data science teams; (3) Expand geographically in existing international markets and enter new ones (e.g., South America, Middle East); (4) Continue technology leadership through R&D investment, particularly in AI and product innovation; and (5) Strengthen partnerships with technology partners, solution providers, agencies, and global system integrators to drive new customer referrals and platform integration.
As of January 31, 2026, Braze employed 1,988 full-time employees. The company has not experienced work stoppages and considers employee relations to be good. Braze emphasizes a mission-driven culture anchored in six core values ("Take Your Seat at the Table," "Don't Ignore Smoke," "Shape the Future," "Embrace Curiosity," "Seek the Truth," and "Be a Human"). It offers professional development opportunities and a performance-driven environment to encourage retention and engagement.
For fiscal year ended January 31, 2026, Braze reported total revenue of $738.2 million, representing 24.4% growth compared to $593.4 million in the prior fiscal year. Revenue growth was driven primarily by existing customer expansion (65.5% of the increase), with new customers contributing the remaining 34.5%. Gross profit increased 20.8% to $495.7 million, but gross margin contracted 200 basis points to 67.1% from 69.1% in the prior year. The margin compression was attributed to acquisition-related operating costs from the OfferFit acquisition, including personnel costs and amortization of acquired technology, as well as increased costs related to the company's tech stack. Operating expenses grew 20.3% overall, with sales and marketing (+15.8%), research and development (+24.8%), and general and administrative (+26.0%) all increasing in absolute dollars as Braze continued to invest in headcount and platform development. Net loss widened to $130.8 million from $104.0 million, primarily due to higher operating expenses and a $5.0 million decline in other income net, partly offset by revenue growth. Non-GAAP free cash flow improved significantly to $58.1 million (from $19.6 million), driven by higher collections from increased billings on new and renewal contracts.
The MD&A does not break out segment-level financial performance by geographic region or customer vertical, but provides key operating metrics. Revenue geography remained stable, with approximately 45% generated outside the United States for both fiscal 2026 and 2025. Dollar-based net retention rate declined to 109% for all customers (from 111% in the prior year) and to 110% for customers with ARR of $500,000 or more (from 114%). The decline was attributed to macro uncertainty and high interest rates leading customers to renew at levels more aligned with current needs rather than anticipated future demand. The number of customers with ARR of $500,000 or more grew to 333 from 247, reflecting strong land-and-expand momentum, while total customers reached 2,609. Monthly active users increased to approximately 8.0 billion from 7.2 billion, indicating continued platform adoption. Annual recurring revenue (ARR) growth and customer expansion remain central to the business model.
The MD&A does not include explicit forward guidance for revenue, margins, or earnings. Management's strategic priorities include continuing to invest in sales and marketing to acquire new customers and expand within existing accounts, sustaining innovation in research and development (particularly in artificial intelligence capabilities), and expanding geographically into regions such as Europe and Asia-Pacific. The company expects cost of revenue and operating expenses to increase in absolute dollars as it scales, though it anticipates general and administrative expenses will decrease as a percentage of revenue over the long term. Braze plans to fund these investments through existing cash, cash equivalents, and marketable securities of $415.9 million, supplemented by cash generated from operations. The company believes its liquidity is sufficient for at least the next 12 months, but may seek additional equity or debt if estimates prove inaccurate. Seasonality in cost of revenue is expected to persist, driven by higher messaging volumes during the fourth quarter holiday period.
As of January 31, 2026, Braze held $124.3 million in cash and cash equivalents and $287.6 million in marketable securities, totaling $411.9 million in liquid assets. This compares to $513.5 million a year earlier ($83.1M cash + $430.5M marketable securities), a decline driven largely by the $181.9 million net cash outlay for the OfferFit acquisition. The company has no debt. Stockholders' equity rose to $623.8 million from $474.9 million, supported by $143.7 million in stock-based compensation and $73.8 million in common stock issued for the acquisition. Deferred revenue grew to $304.6 million from $240.0 million, reflecting strong upfront billings.
Braze disclosed $1.033 billion in remaining performance obligations (RPO) as of January 31, 2026, up from $793.1 million a year earlier. Of this, $642.1 million is expected to be recognized within one year and $390.9 million in years 1-5. The company also has operating lease obligations totaling $105.5 million in undiscounted future payments, with $19.3 million due within one year. No material purchase commitments or supply agreements were disclosed in the Notes.
In March 2026, the Board authorized a $100.0 million share repurchase program, including up to $50.0 million via an accelerated share repurchase. No buybacks were executed during the fiscal year. The company paid no dividends. Capital expenditures (property and equipment) totaled $9.6 million, or 1.3% of revenue, down from $13.2 million in the prior year. Additionally, $3.8 million was capitalized for internal-use software. The company has no debt and no debt issuance or repayment activity.
Braze operates as a single reportable segment: cloud-based customer engagement platform subscriptions. The CODM (CEO) reviews financial information on a consolidated basis. Revenue by geography: United States $405.1 million (55%), International $333.1 million (45%). No other individual country exceeded 10% of total revenue. Subscription revenue was $701.8 million (95% of total), and professional services and other revenue was $36.3 million (5%).
Braze faces significant macroeconomic headwinds: inflationary pressure, interest rate hikes, and geopolitical instability have led to extended sales cycles and reduced customer spending. The company reported a net loss of $130.8 million for FY2026, with an accumulated deficit of $718.1 million. Although revenue grew to $738.2 million, the growth rate is expected to decline. The company may require additional capital, and equity or debt financing may not be available on favorable terms. A material weakness in internal control over financial reporting persists, posing risks to financial reporting accuracy.
Competition is intense from well-established players like Adobe, Salesforce, Iterable, and Klaviyo, who have greater resources. Pricing pressure and bundling strategies could erode market share. Braze is heavily reliant on third-party cloud infrastructure (AWS, Rackspace) and mobile operating systems (Apple, Google, Android). Any service disruption or policy change (e.g., anti-tracking updates) could degrade platform performance and customer satisfaction. The company’s single-platform dependence amplifies these risks.
Braze processes large volumes of personal data, subjecting it to stringent privacy laws (GDPR, CCPA, HIPAA). Non-compliance could result in fines up to 4% of global revenue or $7,500 per violation. Data breaches could lead to customer churn, litigation, and reputational harm. Cross-border data transfer mechanisms (e.g., Data Privacy Framework) face ongoing legal challenges, increasing compliance costs. Intellectual property claims, including patent and open-source disputes, could require costly settlements or redesign.
International expansion exposes Braze to currency fluctuations, local labor laws, anti-corruption regulations, and political instability. The company’s hybrid work model may impact culture and security. Acquisitions (e.g., OfferFit) may not yield expected synergies and could dilute shareholder value. The ability to attract and retain key personnel, especially in engineering and sales, is critical for growth.
The provided document excerpt does not contain the actual cash flow statement. It includes the auditor's report and table of contents, but the cash flow data for the years ended January 31, 2026, 2025, and 2024 is not included in the input. Therefore, no analysis can be performed.