Braze’s first quarter results for 2025 were met with a notably negative market reaction, despite the company delivering higher-than-expected revenue and non-GAAP profits. Management attributed the quarter’s performance to successful expansion among large enterprise customers, continued replacement of legacy marketing systems, and new wins across diverse industries and regions. CEO Bill Magnuson highlighted the momentum from new product launches and the company’s ability to outpace competitors in AI-driven customer engagement, stating, “Our large customer additions were again strong, demonstrating the need for enterprises to deploy AI-based solutions and leverage first-party data to drive sophisticated cross-channel customer engagement.”
Is now the time to buy BRZE? Find out in our full research report (it’s free).
Braze (BRZE) Q1 CY2025 Highlights:
- Revenue: $162.1 million vs analyst estimates of $158.6 million (19.6% year-on-year growth, 2.2% beat)
- Adjusted EPS: $0.07 vs analyst estimates of $0.05 (50.8% beat)
- Adjusted Operating Income: $2.84 million vs analyst estimates of $781,170 (1.8% margin, significant beat)
- The company lifted its revenue guidance for the full year to $704 million at the midpoint from $688.5 million, a 2.3% increase
- Management lowered its full-year Adjusted EPS guidance to $0.16 at the midpoint, a 50% decrease
- Operating Margin: -24.8%, up from -29.6% in the same quarter last year
- Customers: 2,342, up from 2,296 in the previous quarter
- Net Revenue Retention Rate: 109%, down from 111% in the previous quarter
- Annual Recurring Revenue: $619.6 million at quarter end, up 19% year on year
- Billings: $187.1 million at quarter end, up 16.6% year on year
- Market Capitalization: $3.13 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Braze’s Q1 Earnings Call
- Gabriela Borges (Goldman Sachs) asked when positive company-specific trends would outweigh macro headwinds. CFO Isabelle Winkles explained revenue acceleration is the main indicator for improved stability, not current remaining performance obligation.
- DJ Hynes (Canaccord) inquired about Project Catalyst’s early results and ROI versus traditional workflows. CEO Bill Magnuson cited a 5x uplift in a customer’s campaign using reinforcement learning-driven segmentation over manual methods.
- Pinjalim Bora (JPMorgan) questioned friction around pricing for data points. Magnuson detailed the relaxation of data point limits and a move to API-based controls to reduce sales friction and align usage with costs.
- Arjun Bhatia (William Blair) sought clarity on OfferFit pricing and its integration into Braze’s offerings. Magnuson confirmed OfferFit will retain its current premium pricing for now, with potential for a unified model in the future.
- Matthew VanVliet (Cantor Fitzgerald) asked about the timeline for integrating OfferFit’s sales team. Magnuson said full cross-selling is expected by next year, with ramp-up in shared account opportunities underway.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace of OfferFit integration and cross-sell momentum into Braze’s customer base, (2) stabilization in net revenue retention and churn rates as renewal cycles progress, and (3) customer uptake of new AI-driven features and pricing models. Progress in expanding global data center presence and vertical-specific go-to-market efforts will also be important markers of successful execution.
Braze currently trades at $28.20, down from $36.13 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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