Braze, Inc. reported fiscal third‑quarter 2026 revenue of $190.8 million, a 25.5% year‑over‑year increase that surpassed the Street estimate of $184.06 million by roughly 3.7%. The revenue lift was driven by robust demand for the company’s BrazeAI suite, which was introduced during the quarter, and by a 29% year‑over‑year rise in customers contributing more than $500,000 in annual recurring revenue. The company’s non‑GAAP earnings per share of $0.06 matched analyst expectations of $0.06 or $0.07, reflecting disciplined cost management and the continued scaling of its high‑margin subscription model.
The company raised its full‑year 2026 revenue outlook to $730.5 million–$731.5 million, up from the prior guidance of $729.5 million–$730.5 million, and lifted non‑GAAP EPS guidance to $0.42–$0.43 per share, a modest increase from the previous $0.41–$0.42 range. Management cited sustained demand for AI‑powered personalization and the integration of the OfferFit acquisition—completed in July 2025—as key drivers of the stronger outlook. The OfferFit platform is expected to contribute approximately 2 percentage points to year‑over‑year revenue growth for the full fiscal year, reinforcing Braze’s AI strategy.
Gross margin for the quarter fell to 69.1% from 70.5% in Q3 FY2025, a 140‑basis‑point decline attributed to ongoing investments in platform infrastructure and AI capabilities. Despite the margin compression, non‑GAAP operating income rose to $5.1 million from a loss of $2.2 million a year earlier, underscoring the company’s improving operating leverage. The margin shift reflects a mix shift toward higher‑margin AI‑enabled contracts and the cost of scaling new product features.
Management emphasized that the company’s AI initiatives—BrazeAI Decisioning Studio, BrazeAI Operator, and BrazeAI Agent Console—are driving higher average contract values and customer retention. CEO Bill Magnuson noted that “the new BrazeAI suite is a force multiplier for marketers, delivering smarter, more adaptive experiences that translate into stronger revenue growth.” The company’s focus on AI is positioned to sustain demand and support the 3.5% operating margin target for fiscal 2026.
Market reaction to the results was positive, with analysts upgrading their outlooks and several firms raising price targets. The revenue beat and guidance lift were cited as primary drivers of the favorable response, highlighting investor confidence in Braze’s AI strategy and its ability to maintain profitability amid macro‑economic headwinds.
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