"We generated $145.5 million of revenue, up 26% year-over-year, while driving continued efficiency across our business. Non-GAAP gross margin was 70.9%, a rise of 90 basis points compared to the previous year, and we demonstrated strong operating leverage, realizing our first-ever quarter of non-GAAP operating income profitability and non-GAAP net income profitability."
— Bill Magnuson, Co-Founder & CEO
03Detailed Report
BRZE
Company BRZE
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 17, 2026
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Executive Summary
Braze delivered a solid Q2 FY2025 performance, highlighted by 26% year-over-year revenue growth to $145.5 million and a sustained push toward profitability on a non-GAAP basis. The company achieved its first-ever non-GAAP operating income and non-GAAP net income profitability, underpinned by a non-GAAP gross margin of 70.9% and ongoing operating efficiency improvements. Management attributed margin gains to technology-stack optimization and personnel efficiencies, while continuing to reinvest in GTM and product initiatives. The quarter also featured significant top-line expansion driven by an enlarged customer base (2,163 customers, up 205 YoY; 222 large customers, up 28% YoY) and robust ARR growth, supported by durable multi-channel engagement capabilities and an expanding data platform ecosystem.
Strategically, Braze is accelerating its data-first approach through the Braze Data Platform, launched to unify data ingestion, activation, and distribution across environments (including cloud data warehouses) and to enable more sophisticated AI-enabled experiences. Management signaled ongoing channel expansion (including RCS and WhatsApp), a more flexible credit-based pricing model, and a broader product-led growth lens centered on free trials and sandbox experiences to shorten evaluation cycles. While the macro backdrop remains pressurized and gross churn persists, Braze’s trajectory toward revenue growth with improving profitability, expanding ARR, and growing enterprise scale supports a constructive long-term investment thesis. Near-term catalysts include Forge (product roadmap and AI updates) and ongoing enterprise expansions, with a careful eye on cost discipline and cash flow variability as the company scales.
Key Performance Indicators
Revenue
Increasing
145.50M
QoQ: 7.41% | YoY: 26.40%
Gross Profit
Increasing
102.08M
70.16% margin
QoQ: 12.28% | YoY: 28.19%
Operating Income
Increasing
-27.95M
QoQ: 30.26% | YoY: 20.98%
Net Income
Increasing
-23.00M
QoQ: 35.47% | YoY: 27.43%
EPS
Increasing
-0.23
QoQ: 34.29% | YoY: 30.30%
Revenue Trend
Margin Analysis
Financial Highlights
Overview of notable metrics and trends observed in Q2 FY2025:
- Revenue: $145.499 million, up 26% year-over-year; QoQ growth 7.41% in the trailing four quarters context.
- Gross profit: $102.079 million; gross margin 70.16% (non-GAAP gross margin 70.9% reported by management).
- Operating performance (GAAP): Operating loss of $27.95 million; EBIT margin of -19.20%. Non-GAAP operating income: $4.2 million, representing 3% of revenue; QoQ and YoY improvement vs. prior-year quarter where non-GAAP operating loss was $7.6 million (7%).
- Net income and EPS: Net loss of $22.999 million; GAAP EPS -0.23. Non-GAAP net income of $9.1 million, or $0.09 per share.
- Customer and ARR dynamics: 2,163 customers as of July 31, up 205 YoY and 61 QoQ; large ARR customers (≥$500k ARR) at 222, up 28% YoY and contributing ~61% of total ARR.
- Revenue mix and geographic exposure: International revenue declined to 5% of total revenue in Q2 (compared to 43% YoY in the prior year quarter and 44% in Q1 FY2025), signaling a continued geographic expansion plan.
- Remaining performance obligations (RPO): Total RPO $690 million, up 32% YoY and 5% QoQ; Current RPO $438 million, up 24% YoY and 4% QoQ. Revenue visibility remains robust via long-duration deals and renewals.
- Cash flow and liquidity: Net cash provided by operating activities of $11.6 million; free cash flow approximately $7.2 million. Cash and cash equivalents plus marketable securities totaled about $504 million at quarter end; net debt roughly $8.0 million (gross debt $87.9 million).
- Guidance for Q3 and full-year 2025: Q3 revenue guide of $147.5–$148.5 million (≈+19% YoY at midpoint); non-GAAP operating loss of $3.5–$4.5 million; non-GAAP net loss 0 to -$0.01 per share; full-year 2025 revenue guidance of $582.5–$585.5 million (~+24% YoY); non-GAAP net income guidance of $6.5–$7.5 million; non-GAAP EPS of $0.06–$0.07.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
145.50M
26.40%
7.41%
Gross Profit
102.08M
28.19%
12.28%
Operating Income
-27.95M
20.98%
30.26%
Net Income
-23.00M
27.43%
35.47%
EPS
-0.23
30.30%
34.29%
Key Financial Ratios
Gross Profit Margin
Excellent
70.20%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Weak
-0.19%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
-0.16%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
-0.03%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
-0.05%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
2.03
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
Conservative
0.19
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Negative
-48.59x
Negative earnings make P/E ratio not meaningful
Price to Book
High Premium
9.85x
Very high premium suggests asset-light business model or lofty expectations
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