Executive Summary
Braze reported solid top-line growth in the fiscal first quarter of 2026, delivering $162.1 million in revenue, up approximately 20% year over year. Management highlighted efficiency gains that expanded non-GAAP operating margins by over 900 basis points YoY and achieved a fourth straight quarter of non-GAAP net income profitability, with over $7 million of net income and roughly $23 million of free cash flow in the quarter. The quarter benefited from a diversified booking mix, healthy ARR dynamics, and ongoing expansion outside the U.S., reinforcing Braze’s position as a leading customer engagement platform.
In June 2025 Braze closed the acquisition of OfferFit, a reinforcement-learning–driven AI decisioning company. Management outlined a multi-year integration plan designed to lift deal sizes and broaden AI-driven optimization capabilities across the Braze platform, with near-term upside from cross-sell and better monetization of AI-enabled offerings. The company guided for Q2 revenue of $171-172 million (about 18% YoY at the midpoint) and full-year 2026 revenue of $702-706 million, including approximately $11-12 million from OfferFit. While OfferFit will temper near-term margins, Braze expects to return to a broader operating-margin framework by fiscal 2027.
Key balance-sheet and cash-flow metrics remained healthy, with roughly $540 million of cash, cash equivalents, restricted cash and marketable securities at quarter-end and $24 million of cash provided by operations. The quarterly free cash flow was $23 million, aided by approximately $6 million in vendor payments related to the OfferFit acquisition. Together, these factors support a constructive growth-and-margin trajectory, contingent on successful integration and continued expansion across channels, verticals, and geographies.
Key Performance Indicators
QoQ: -86.57% | YoY:-0.35%
QoQ: -108.15% | YoY:-0.41%
QoQ: -100.00% | YoY:2.86%
Key Insights
Revenue: $162.059 million for Q1 2026, up 19.64% YoY and 1.03% QoQ. Gross profit: $111.202 million, gross margin 68.62% (non-GAAP gross margin 69.3% in the quarter, up from 67.9% YoY). Non-GAAP operating income: $3.0 million (2% of revenue), vs. a non-GAAP operating loss of $10.0 million in the prior-year quarter. Non-GAAP net income: $7.0 million, or $0.07 per share, vs. a loss of $6.0 million in the year-ago quarter. Cash and liquidity: approximately $540 million in cash and equivalents; cash ...
Financial Highlights
Revenue: $162.059 million for Q1 2026, up 19.64% YoY and 1.03% QoQ. Gross profit: $111.202 million, gross margin 68.62% (non-GAAP gross margin 69.3% in the quarter, up from 67.9% YoY). Non-GAAP operating income: $3.0 million (2% of revenue), vs. a non-GAAP operating loss of $10.0 million in the prior-year quarter. Non-GAAP net income: $7.0 million, or $0.07 per share, vs. a loss of $6.0 million in the year-ago quarter. Cash and liquidity: approximately $540 million in cash and equivalents; cash flow from operations: $24.0 million; free cash flow: $23.0 million (including ~$6.0 million of OfferFit-related vendor payments).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
162.06M |
19.64% |
1.03% |
| Gross Profit |
111.20M |
22.32% |
0.10% |
| Operating Income |
-40.22M |
-0.35% |
-86.57% |
| Net Income |
-35.79M |
-0.41% |
-108.15% |
| EPS |
-0.34 |
2.86% |
-100.00% |
Management Commentary
Strategic AI roadmap and OfferFit integration: Braze emphasized accelerating product innovation through AI, reinforcement learning and generative AI, highlighting the OfferFit acquisition as a catalyst to increase deal sizes and expand AI-driven optimization across channels. Quotes: (1) We delivered strong first quarter results, generating $162.1 million of revenue, up nearly 20% year-over-year. (William Magnuson) (2) OfferFit has spent the last 4.5 years building and deploying a leading multi-agent solution that autonomously explores solution spaces across life cycle marketing campaigns. (William Magnuson) (3) In the short term, OfferFit solution will enable us to increase deal sizes through their distinctive reinforcement learning products and services, while also setting us apart from competitors by offering a broad range of AI-driven optimization capabilities at various price tiers and service levels. (William Magnuson) (4) Ed McDonnell will be Braze’s new Chief Revenue Officer in early July, strengthening the leadership team for GTM execution. (Bill Magnuson/Isabelle Winkles) (5) We closed the OfferFit acquisition on June 2, and management notes a near-term impact of ~2 months for Q2 guidance and ~8 months for FY26 guidance. (Isabelle Winkles) (6) Management reiterated that macro noise remains but deal cycles have not materially deteriorated, with global trade concerns not materially affecting deal cycles to date. (William Magnuson) (7) Project Catalyst remains in private beta with early demonstrations of AI-driven optimization and potential 5x uplift in targeted experiments when reinforcement learning is applied higher in the decision stack. (David Hynes) (8) Pricing and packaging changes, including relaxation of data-point limits, were introduced to widen adoption of AI-enabled capabilities and channels. (William Magnuson)
"We delivered strong first quarter results, generating $162.1 million of revenue, up nearly 20% year-over-year."
— William Magnuson
"In the short term, OfferFit solution will enable us to increase deal sizes through their distinctive reinforcement learning products and services, while also setting us apart from competitors by offering a broad range of AI-driven optimization capabilities at various price tiers and service levels."
— William Magnuson
Forward Guidance
Near-term performance: Q2 revenue guidance of $171-172 million implies ~18% YoY growth at the midpoint; non-GAAP operating income guidance of $0.5-1.5 million and non-GAAP net income of $2.5-3.5 million with EPS of $0.02-0.03. Full-year 2026 guidance: revenue of $702-706 million (~19% growth at the midpoint), with OfferFit contributing about $11-12 million to revenue. Non-GAAP operating income targeted at $5.5-9.5 million (midpoint ~1% margin), with net income $17-21 million and EPS $0.15-0.18. These figures assume ~8 months of OfferFit contribution for the full year and reflect management’s expectation that margins normalize to the pre-OfferFit framework by 2027. Key risks to this outlook include continued macro uncertainty, potential churn normalization, and integration execution risk. Monitor: (a) progress on OfferFit integration and cross-sell across Braze’s enterprise base; (b) adoption and monetization of Braze AI features (Canvas, Project Catalyst, RCS); (c) retention metrics (DBNR, NRR) as churn normalization progresses; (d) geographic expansion, particularly APAC data-center expansion and regulatory/data-residency considerations; (e) FX remains a de minimis risk.