Executive Summary
Braze delivered a robust Q4 2025 performance, underscoring the ongoing strength of the company’s customer engagement platform and the accelerating move by brands to first-party data and AI-driven personalization. Revenue rose 22% year over year to $160.4 million, with non-GAAP operating income of $8.0 million and non-GAAP net income of $12.0 million, marking Braze’s third straight quarter of non-GAAP profitability. Free cash flow totaled $15.0 million, and the company ended the quarter with a solid balance sheet and a large pool of remaining performance obligations. Management highlighted continued expansion through legacy vendor consolidation, cross‑channel capabilities, and a deliberate vertical focus, notably retail and consumer goods, where Braze is enhancing e-commerce features and Shopify integration to shorten time-to-value for large brands.
A pivotal development is Braze’s definitive agreement to acquire OfferFit for $325 million (cash and stock, 42% equity). Management framed OfferFit as a reinforcement-learning AI decisioning engine that complements BrazeAI and Project Catalyst, with expectant benefits including larger deal sizes, expanded optimization capabilities, and accelerated time-to-value for enterprise clients. The acquisition is expected to add approximately 2 percentage points to year-over-year revenue growth in the near term and be modestly dilutive to non-GAAP operating income margins in fiscal year 2026, with a smoother margin trajectory anticipated thereafter. The guidance for Q1 2026 and the full year 2026 excludes OfferFit, with updated guidance to be issued post-close.
Looking forward, Braze sees a long‑term growth runway driven by increased emphasis on first‑party data, AI-enabled personalization, and multi‑channel orchestration across verticals, starting with a concentrated push into retail and consumer goods. The company remains confident in its ability to sustain profitable growth while reinvesting to expand product capabilities, data infrastructure, and geographic reach.
Key Performance Indicators
Key Insights
Revenue: $160.4 million in Q4 2025, +22.0% YoY and +5.0% QoQ.
Gross profit: $111.087 million; gross margin 69.26% (non-GAAP gross profit of $112.0 million and non-GAAP gross margin 69.9%).
Operating performance (GAAP): Operating income -$21.559 million; EBITDA -$18.812 million; net income -$17.192 million; EPS -$0.17.
Non-GAAP metrics: Non-GAAP operating income $8.0 million (5% of revenue); non-GAAP net income $12.0 million; non-GAAP EPS $0.12.
Liquidity and balance sheet: Total cash, cash equiv...
Financial Highlights
Revenue: $160.4 million in Q4 2025, +22.0% YoY and +5.0% QoQ.
Gross profit: $111.087 million; gross margin 69.26% (non-GAAP gross profit of $112.0 million and non-GAAP gross margin 69.9%).
Operating performance (GAAP): Operating income -$21.559 million; EBITDA -$18.812 million; net income -$17.192 million; EPS -$0.17.
Non-GAAP metrics: Non-GAAP operating income $8.0 million (5% of revenue); non-GAAP net income $12.0 million; non-GAAP EPS $0.12.
Liquidity and balance sheet: Total cash, cash equivalents, restricted cash and marketable securities about $513.5 million; cash and cash equivalents $83.6 million; total assets $871.0 million; total liabilities $396.2 million; total stockholders’ equity $474.9 million; net debt approx. -$4.38 million (net cash).
Cash flow: Net cash provided by operating activities $17.0 million; free cash flow $15.0 million; operating cash flow $17.0 million.
RPO and backlog: Remaining performance obligation (RPO) $793.0 million, up 24% YoY; current RPO $505.0 million, up 23% YoY; dollar-weighted contract length just over 2 years.
Customer momentum: Total customers 2,296, up 252 YoY; large customers (>$0.5M ARR) 247, up 22% YoY; large-customer ARR contributes ~62% of total ARR.
Retention and expansion: Dollar-based net retention (DBNR) 111% overall; DBNR for large customers 114%.
Guidance (pre-OfferFit): Q1 2026 revenue guidance of $158–$159 million (~+17% YoY midpoint); Q1 non-GAAP operating income $0–$1 million; Q1 non-GAAP net income $4.5–$5.5 million; Q1 non-GAAP EPS $0.04–$0.05 (104 million weighted-average diluted shares).
Full-year 2026 guidance (pre-OfferFit): Revenue $686–$691 million (~+16% YoY midpoint); non-GAAP operating income $25.5–$29.5 million; non-GAAP net income $34–$38 million; non-GAAP EPS $0.31–$0.35.
Key strategic development: OfferFit acquisition announced (cash and stock, $325 million); expected to close in Q2 2026, with an anticipated 2 percentage points of additional revenue growth and modest dilution to non-GAAP operating income margins for 2026.
Notes: Guidance excludesOfferFit; update guidance after close.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
160.40M |
22.48% |
5.49% |
| Gross Profit |
111.09M |
26.29% |
4.66% |
| Operating Income |
-21.56M |
30.28% |
33.81% |
| Net Income |
-17.19M |
39.20% |
38.40% |
| EPS |
-0.17 |
41.38% |
37.04% |
Key Financial Ratios
operatingProfitMargin
-13.4%
operatingCashFlowPerShare
$0.17
freeCashFlowPerShare
$0.15
priceEarningsRatio
-68.81
Management Commentary
- Strategic AI acceleration and OfferFit: Braze disclosed a definitive agreement to acquire OfferFit for $325 million, aiming to enhance AI-driven optimization capabilities and enterprise deal sizes. Quote: Bill Magnuson described OfferFit as a multi-agent reinforcement learning engine that can deliver uplift across life-cycle marketing campaigns and highlighted its fit with Braze’s AI roadmap and Project Catalyst.
- AI-driven product trajectory and platforms: Management emphasized a spectrum of AI-enabled capabilities from automated experimentation (Canvas and Project Catalyst) to fully customizable models that can generate meaningful ROI at scale. Quote: Bill emphasized the continuum from AB testing to automated, multi-arm experimentation and custom AI models to achieve point-of-difference personalization.
- Execution across verticals and enterprise motion: Braze highlighted diversification across geographies and industries, with a focus on retail and consumer goods as the first vertically targeted R&D effort. They cited Shopify integration enhancements and an expanded e-commerce feature set to accelerate time-to-value for enterprise customers.
- Management commentary on macro and guidance: Isabelle noted a “new normal” of macro disruption, with a focus on revenue growth inflection at the revenue level ahead of DBNR, and that guidance is set to exclude OfferFit with the expectation of updates post-close. Quote: DBNR (111% overall; 114% large) indicating healthy revenue retention despite macro variability.
- Management perspectives on competitive landscape: Bill discussed Braze’s positioning vis-à-vis legacy marketing clouds and the observable shift by partners and clients toward Braze given the stagnation in some incumbents’ roadmaps. Quote: “There’s never been a better time to be a better marketer” and Braze’s commitment to a tight, integrated stack.
OfferFit's most prominent partner, nearly one third of current OfferFit customers use Braze as their primary customer engagement platform.
— William (Bill) Magnuson
Measured across all customers, dollar-based net retention was 111%, while dollar-based net retention for our large customers was 114%.
— Isabelle Winkles
Forward Guidance
- Near-term impact of OfferFit: Acquisition is expected to add roughly 2 percentage points to YoY revenue growth in the near term and be modestly dilutive to non-GAAP operating income margins in fiscal 2026. An updated guidance revision will be provided after close (Q2 fiscal 2026). The organic guidance remains: Q1 2026 revenue of $158–$159 million (+~17% YoY midpoint), non-GAAP OI of $0–$1 million, and non-GAAP net income of $4.5–$5.5 million. Full-year 2026 revenue of $686–$691 million (+~16% YoY midpoint), non-GAAP OI of $25.5–$29.5 million, and non-GAAP net income of $34–$38 million (+/- implied).
- Growth drivers to monitor: (1) Enterprise adoption of first-party data and AI-driven optimization; (2) acceleration from OfferFit integration and cross-sell within Braze’s core platform; (3) Shopify/e-commerce channel enhancements and broader vertical-specific features; (4) potential regulatory and data sovereignty considerations across regions; (5) competitive dynamics as incumbents respond to Braze’s AI-driven trajectory.
- Key metrics to track: DBNR trajectory (expect stabilization and gradual improvement), new customer adds and ARR mix (continued diversification with large customers contributing ~62% of ARR), RPO backlog progression, and free cash flow variability across quarters due to working capital timing. Investors should watch for updated guidance after OfferFit close and any further color on lift from Project Catalyst GA timelines.