Braze reported revenue of $227.2 million for its fiscal second quarter ended 31 July 2026, up 26.2% year on year from $180.1 million. Non-GAAP diluted earnings were $0.19 per share.
Braze raised its full-year revenue outlook to $910 million to $913 million, from $895 million to $899 million. For the third quarter it expects revenue of $229 million to $230 million and non-GAAP diluted earnings of $0.13 to $0.14 per share.
Braze shares fell about 11% in premarket trading on 9 September. Analysts surveyed by FactSet had expected third-quarter adjusted earnings of around $0.16 per share.
Subscription growth is 21%
Subscription revenue rose from $171.8 million to $207.7 million, up 20.9%. Professional services and other revenue rose from $8.3 million to $19.6 million. Around a third of the year-on-year increase came from services.
Services carry lower margins. GAAP gross margin fell to 66.8% from 67.7%. Non-GAAP gross margin fell to 68.6% from 69.3%.
Growth has slowed. Our June coverage reported first-quarter growth of 30%. Goldman Sachs cited four consecutive quarters of acceleration when it initiated coverage in July. Third-quarter guidance implies sequential growth of about 1%.
Retention and customers
Dollar-based net retention was 110% for the trailing twelve months, up from 108%. For customers with annual recurring revenue of $500,000 or more it was 112%, up from 111%. That figure had slipped a point in the first quarter.
Total customers rose 15% to 2,789. Customers spending $500,000 or more rose 28% to 361. Remaining performance obligations were $1.09 billion, with $691 million due within a year.
Free cash flow was $21.7 million against $3.5 million a year earlier. Non-GAAP operating margin was 9.7%, up from 3.4%. Braze bought back $50 million of shares in the first half.
The third-quarter guide
Non-GAAP operating income is guided at $16 million to $17 million, down from $22.0 million delivered in the second quarter, on flat revenue.
Braze does not explain the step down. Its Forge conference runs 28 to 30 September in Las Vegas, inside the third quarter. Conference costs are the likely reason. Braze has not said so.
Pearce Dolan joined as Chief Product Officer on 24 August.
What this means for email
The June argument holds. Budget is following orchestration. Braze added 79 customers in the $500,000-plus tier in a year and those customers are expanding spend faster than the base.
The services line is new. Growth now depends more on paid implementation work, which is the lower-margin part of the business.
Retention of 112% among the largest customers means pricing power. Expect it in renewal quotes.
Figures are from Braze’s earnings release and Form 8-K filed 8 September 2026. Supplemental materials are at investors.braze.com.
