Braze (NASDAQ:BRZE) Issues Earnings Results, Beats Expectations By $0.03 EPS

Braze (NASDAQ:BRZE) posted its quarterly earnings data on Tuesday. The company reported $0.19 earnings per share for the quarter, topping analysts’ consensus estimates of $0.16 by $0.03, FiscalAI reports. Braze had a negative net margin of 15.51% and a negative return on equity of 17.52%. The company had revenue of $227.23 million for the quarter, compared to analyst estimates of $220.27 million. During the same period in the prior year, the company posted $0.15 EPS. The firm’s revenue for the quarter was up 26.2% on a year-over-year basis. Braze updated its FY 2027 guidance to 0.640-0.650 EPS and its Q3 2027 guidance to 0.130-0.140 EPS.

Here are the key takeaways from Braze’s conference call:

• Positive Sentiment: Braze reported strong Q2 results, with revenue up 26% year over year to $227 million, large-customer net retention improving to 112%, and record second-quarter free cash flow of $22 million.
• Positive Sentiment: Management raised both third-quarter and full-year revenue guidance, now expecting fiscal 2027 revenue of $910 million to $913 million, while also raising full-year non-GAAP operating income guidance and targeting approximately 400 basis points of margin improvement.
• Positive Sentiment: AI adoption is accelerating: paid adoption of BrazeAI tools reached roughly one-third of large customers, while Operator usage showed strong engagement and is helping customers build campaigns faster, adopt more channels, and expand use of advanced platform features.
• Positive Sentiment: Competitive takeaways, vendor consolidation, and legacy-platform replacements drove strong bookings, and the new three-year AWS collaboration is expected to expand co-selling, AWS Marketplace procurement, and international distribution.
• Negative Sentiment: Third-quarter operating margin is expected to decline to about 7% because of Forge and other customer-event costs, while premium messaging volumes continue to pressure gross margins; management also noted that CRPO growth moderated due partly to seasonality and the lapping of the OfferFit acquisition.

Braze Stock Performance

BRZE traded down $1.65 on Tuesday, hitting $30.31. The company had a trading volume of 6,565,011 shares, compared to its average volume of 2,400,461. The stock has a market capitalization of $3.41 billion, a price-to-earnings ratio of -27.06 and a beta of 0.88. The stock has a fifty day moving average price of $27.57 and a 200-day moving average price of $23.54. Braze has a 12-month low of $15.26 and a 12-month high of $37.33.

Insider Transactions at Braze

In related news, CRO Edward Mcdonnell sold 29,732 shares of the business’s stock in a transaction that occurred on Monday, August 24th. The shares were sold at an average price of $31.38, for a total transaction of $932,990.16. Following the completion of the transaction, the executive owned 409,630 shares in the company, valued at $12,854,189.40. The trade was a 6.77% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Astha Malik sold 33,656 shares of the firm’s stock in a transaction that occurred on Monday, August 10th. The shares were sold at an average price of $27.65, for a total transaction of $930,588.40. Following the completion of the sale, the insider owned 278,138 shares of the company’s stock, valued at approximately $7,690,515.70. This trade represents a 10.79% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 203,568 shares of company stock valued at $6,096,461 in the last 90 days. Insiders own 12.50% of the company’s stock.

Hedge Funds Weigh In On Braze

Several hedge funds have recently modified their holdings of the stock. Envestnet Asset Management Inc. increased its stake in Braze by 7.2% during the 3rd quarter. Envestnet Asset Management Inc. now owns 11,080 shares of the company’s stock valued at $315,000 after purchasing an additional 746 shares in the last quarter. Caitong International Asset Management Co. Ltd lifted its stake in shares of Braze by 3,650.0% during the fourth quarter. Caitong International Asset Management Co. Ltd now owns 825 shares of the company’s stock worth $28,000 after buying an additional 803 shares during the period. MetLife Investment Management LLC grew its holdings in shares of Braze by 1.9% during the fourth quarter. MetLife Investment Management LLC now owns 47,231 shares of the company’s stock valued at $1,620,000 after buying an additional 890 shares during the last quarter. Police & Firemen s Retirement System of New Jersey increased its position in shares of Braze by 5.0% in the 4th quarter. Police & Firemen s Retirement System of New Jersey now owns 23,081 shares of the company’s stock valued at $791,000 after acquiring an additional 1,107 shares during the period. Finally, California State Teachers Retirement System raised its stake in Braze by 1.6% in the 2nd quarter. California State Teachers Retirement System now owns 70,283 shares of the company’s stock worth $1,975,000 after acquiring an additional 1,113 shares during the last quarter. Institutional investors and hedge funds own 90.47% of the company’s stock.

Key Headlines Impacting Braze

Here are the key news stories impacting Braze this week:

• Positive Sentiment: Q2 earnings and revenue beat estimates: Braze reported adjusted EPS of $0.19, above the $0.16 consensus and up from $0.15 a year earlier. Revenue increased 26.2% year over year to $227.23 million, exceeding estimates of $220.27 million. Braze, Inc. Surpasses Q2 Earnings and Revenue Estimates
• Positive Sentiment: Raised outlook is well above consensus: Braze guided fiscal 2027 EPS to $0.64-$0.65, compared with the $0.35 analyst consensus, and revenue to $910-$913 million versus expectations of $898.4 million. Third-quarter guidance also topped estimates, with EPS of $0.13-$0.14 versus $0.09 expected and revenue of $229-$230 million versus $227.7 million. Braze Reports Strong Fiscal Second Quarter 2027 Results
• Positive Sentiment: Improving operating performance: Management highlighted improving operating leverage and record second-quarter free cash flow, indicating progress toward greater profitability while maintaining strong growth.
• Neutral Sentiment: Analyst sentiment remains constructive: Braze had a consensus “Moderate Buy” recommendation, while recent Wall Street estimate changes focused on positioning ahead of the earnings report. Braze Receives Moderate Buy Recommendation
• Negative Sentiment: Profitability remains a concern: Braze still reported a negative net margin and negative return on equity. Investors may therefore be looking for sustained cash-flow improvement and continued progress toward GAAP profitability before bidding the stock higher.

Analysts Set New Price Targets

A number of research analysts have recently commented on the stock. BTIG Research upped their price target on shares of Braze from $30.00 to $35.00 and gave the stock a “buy” rating in a report on Friday, August 14th. UBS Group reissued an “outperform” rating on shares of Braze in a research report on Thursday, May 28th. Barclays raised their target price on shares of Braze from $31.00 to $38.00 and gave the stock an “overweight” rating in a research report on Wednesday, September 2nd. DA Davidson lifted their price target on shares of Braze from $33.00 to $40.00 and gave the company a “buy” rating in a research note on Wednesday, September 2nd. Finally, Stifel Nicolaus set a $30.00 price objective on Braze in a research note on Thursday, May 28th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat.com, the company has an average rating of “Moderate Buy” and an average target price of $36.59.

About Braze

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.