Snapshot
Braze, Inc. reported $205M of revenue in Q4 2026, up 27.9% year over year, with diluted EPS of $-0.29 and an operating margin of -13.8%.
- Revenue
- $205M
- YoY growth
- +27.9%
- Diluted EPS
- $-0.29
- Operating margin
- -13.8%
What management said
- •Please refer to the investor relations section of our website at investors.braze.com for more information and a supplemental presentation related to today's earnings announcement.
- •GAAP included in our earnings release under the investor relations section of our website.
- •In Q4, we generated $205 million of revenue, up 28% year-over-year and 8% from the prior quarter.
- •Organic revenue growth accelerated year-over-year for the third straight quarter, while we continued to drive operating efficiency in our business.
- •Early in fiscal 2027, we passed $800 million in annual recurring revenue, demonstrating continued strong demand for the high ROI delivered by our platform.
- •For the full fiscal year of 2026, we delivered 24% year-over-year revenue growth and $28 million of non-GAAP operating income, with operating margins expanding nearly 400 basis points over the prior year.
- •Our financial strength has also enabled Braze to initiate its first share repurchase program, a milestone that reflects our high conviction in our long-term growth opportunity.
- •Additionally, $1 million-plus customers rose 28% year-over-year, up from 18% year-over-year growth in Q4 of last year.
- •Our go-to-market motion under the leadership of Chief Revenue Officer Ed McDonnell, who joined in like Q2, is operating at a high level, delivering a meaningful improvement in sales productivity.
- •Pipeline generation was also strong in the fourth quarter, indicating robust market demand for our AI-driven solutions, particularly in the enterprise.
- •This execution capability provides brands with confidence to deploy business-critical programs for entire global audiences, confidence that no point solution can match.
- •We reported an outstanding fourth quarter with revenue increasing 28% year-over-year to $205.2 million, driven by a combination of existing customer contract expansions, renewals, and new business.
What went well
- •Braze generated $205 million of revenue in fiscal Q4 2026, up 28% year-over-year and 8% sequentially, with organic revenue growth accelerating year-over-year for the third straight quarter to 24.3%.
- •Trailing 12-month dollar-based net retention inflected positively during the quarter to reach 109%, up from 108% in Q3, signaling the company is through the trough of downsell pressure.
- •Q4 bookings rose over 50% year-over-year, establishing a new high-water mark for average sales price, with 29 deals over $500,000 including seven $1 million-plus deals and an expansion bringing eight-figure customers to four.
- •The company surpassed $1 billion in remaining performance obligations and passed $800 million in annual recurring revenue early in fiscal 2027.
- •For full fiscal year 2026, Braze delivered 24% revenue growth, $28 million of non-GAAP operating income with margins expanding nearly 400 basis points, $42 million of non-GAAP net income (up from $18 million), and $58 million of free cash flow.
- •The board authorized a $100 million share repurchase program, including a planned $50 million accelerated share repurchase, reflecting confidence in the long-term growth opportunity.
What went wrong
- •Non-GAAP gross margin declined to 67.2% from 69.9% a year earlier, driven primarily by higher premium messaging volumes and hosting costs.
- •Non-GAAP net income fell to $11 million ($0.10 per share) from $12 million ($0.12 per share) a year earlier, negatively impacted by a $5 million purchase accounting adjustment related to the OfferFit deferred tax liability.
- •Free cash flow was $14 million, slightly below $15 million in the prior year quarter.
- •Switching costs and limited excess budget continued to weigh on enterprise migration timelines despite improving demand signals.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Operating income margin | FY2027 | — | ~8% (~400 bps expansion) | New |
| Full year revenue | FY2027 | — | Initial guide slightly stronger than past years (specific figures not stated) | New |
| Share count / EPS | FY2027 | — | Includes only the estimated impact of the $50M ASR | New |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Revenue | +28% to $205.2M | Existing customer expansions, renewals, and new business; Decisioning Studio contributed $5.7M, implying 24.3% organic growth |
| Non-GAAP gross margin | 67.2% vs 69.9% | Higher premium messaging volumes and hosting costs, partially offset by improved personnel cost efficiencies |
| Non-GAAP operating income | $15M (7% margin) vs $8M (5%) | Sales and marketing efficiency (34% of revenue vs 37%) and disciplined investment as go-to-market scaled |
| Non-GAAP net income | $11M ($0.10/sh) vs $12M ($0.12/sh) | Negatively impacted by a $5M OfferFit deferred-tax purchase accounting adjustment; excluding it, $16M and $0.15/sh |
| Total customer count | +313 to 2,609 (+14%) | Continued legacy replacement wins and reduced churn; some Q4 logos appear in Q1 FY2027 count |
| $500K+ ARR customers | +35% to 333 | Strong large-deal velocity and upsell momentum |
| $1M+ customers | +28% | Up from 18% YoY growth in Q4 of the prior year, reflecting enterprise strength |
| Total RPO | +30% to just over $1B | Strong Q4 bookings, healthy renewals, a large pool of available renewal dollars, and a small increase in contract duration |
| Current RPO | +27% to $642M | Strong bookings, renewals, and modest duration increase |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Trailing dollar-based net retention | Stabilizing in-quarter around 107% | Inflected positively to 109% on a trailing 12-month basis | improving |
| Bookings / enterprise demand | Improving sales productivity | Bookings up over 50% YoY with record average sales price and enterprise strength | improving |
| BrazeAI product suite | Decisioning Studio and roadmap unveiled at Forge | Agent Console and Operator reached general availability ahead of schedule with immediate credit consumption | improving |
| Gross margin | Pressured by premium messaging | Continued premium messaging and hosting pressure, with new AI products expected to mix in at better margins over time | stable |
| Capital allocation | No buyback in place | First $100M share repurchase authorization initiated | new |
Q&A summary
How do you feel about the underlying growth trajectory and how does AI layer in?
Management said the biggest Q4 difference was the differentiation of the AI roadmap coming out of the Forge conference, which helped win rates and deal velocity as competitor FUD failed to hold water. Combined with strong partner momentum, consumption-based pricing, and global go-to-market, management sees existing scale, performance, and innovation advantages converging.
What makes Braze difficult to replace, per a customer who killed an 18-month, $10M+ in-house replacement project?
The combination of tightly integrated high-performance infrastructure spanning context and intelligence layers, comprehensiveness across data ingestion and complex customer journeys, massive real-time scale, and privacy/security/regulatory compliance. Over a third of customers use Braze for five-plus channels, and customer engagement acts as a multiplier on already-large customer acquisition investments.
What is the journey for DBNR from here and any go-to-market changes from Ed McDonnell?
In-quarter organic DBNR is above the reported level and management is comfortable with the direction of travel, stating they are through the 'belly of the beast.' Ed is advancing initiatives already in motion, being more effective with headcount and enabling the sales team, with no material changes to call out.
What is the gross margin outlook given premium messaging and new AI products?
Premium messaging remains in demand and is the primary margin driver; new products like Agent Console mix in at better-than-company-average margins but off a small base, so it will take time. The focus is on the roughly 8% operating income margin for the year.
When will Agent Console help monetization and how do third-party agents interact with Braze?
Agent Console and Operator reached GA months ahead of schedule, with over two-thirds of customers already using Operator. Agent Console consumes flexible credits recognized ratably over the contract, supporting early renewals and upsells. Braze's composable, ecosystem-neutral architecture and MCP server let customers integrate third-party agents and tools.
Almost a year post-acquisition, what traction and margin progress is OfferFit / Decisioning Studio seeing?
Upsells are happening primarily within the installed base, with strong pipeline and interest. On margin, staffing implementations and onboardings mixes into margins, but the company is expanding more self-service product tiers that will carry higher margins over time.