Braze Q1 FY27 earnings call BRZE

Braze reported Q1 FY27 revenue of $211M, up 30% YoY and 3% QoQ, its fourth consecutive quarter of organic and total revenue growth acceleration. Growth was driven by existing-customer contract expansions, renewals and new business. Non-GAAP operating income rose to $10.5M (5% of revenue) from $2.8M (2%) a year ago, and non-GAAP net income was $11.4M or $0.10 per share versus $7.3M or $0.07. The company generated record free cash flow of $27M and operating cash flow of $28M, ending the quarter with ~$392M in cash, equivalents, restricted cash and marketable securities.

BrazeAI Operator and Agent Console reached general availability early in Q1 ahead of schedule, with hundreds of customers already using them and a public launch on stage at Braze City x City London at the end of April. Decisioning Studio (built from the OfferFit acquisition) contributed $5.7M of revenue at roughly $200K-$300K per use case. Management framed a full-spectrum AI strategy combining reinforcement learning, GenAI and agentic approaches, and emphasized context engineering/preprocessing to use faster, cheaper models in B2C messaging. Case studies cited included Cleo (unsubscribes down 81%, first-email opt-outs down 97%, app opens up 284%), Luxury Escapes (10% lift in revenue per user) and a large hotel franchisee achieving double-digit CTR gains via Decisioning Studio.

Q1 bookings were robust, driven by competitive takeaways particularly in the enterprise, with higher deal velocity and improved competitive win rates. Management attributed strength to Braze's vertically integrated, organically developed, AI-native architecture built on real-time first-party data. Notable new business wins and expansions included Bondora Group, ClassPass, Denny's, Deuna, Kueski, NRMA, Regal Cinemas, Salomon and Subway, plus a milestone win with a prominent AI lab. The company is also verticalizing its sales teams and doubling down on partner/ecosystem alignment to shorten deal cycles.

After a supply-constrained Q4 that forced Braze to limit Decisioning Studio bookings in certain regions and delay start dates by more than four months in some cases, the company accelerated hiring and ramp of forward-deployed delivery personnel — going from 0 to 1 in EMEA and APAC locations. Start-date delays were roughly halved over the course of Q1, aided by in-person group onboarding. A self-serve roadmap and a Decisioning-Studio-specific version of Operator are under development to reduce reliance on personnel. Management guided Decisioning Studio Q2 revenue to grow 15-20% sequentially.

Subscription revenue was 93% of total, with professional services at 7%; ~85% of professional services is recurring, implying ~99% of total revenue is recurring. A jump in professional services reflected forward-deployed personnel plus packaging changes that separately SKU customer-success (CS) entitlements previously bundled into subscription — a geographic reclassification between line items with no change to revenue recognition. Non-GAAP gross margin was 67.4%, down from 69.3% YoY, driven mainly by higher premium messaging volumes (SMS carrier fees passed directly to customers, WhatsApp) and added Decisioning Studio headcount.

Trailing-12-month dollar-based net retention improved ~100 bps sequentially to 110%, and large-customer DBNR inflected positively, rising ~100 bps to 111%. Total customers reached 2,713 (up 16% YoY, up 371 YoY and up 104 QoQ). Large customers spending at least $500K annually grew 33% YoY to 349 and contributed 65% of total ARR (up from 62% a year ago). The $1M+ customer count rose 27% YoY and 8-figure customers expanded to five. Selling is entirely via flexible 'action credits' (renamed from Flex credits), with customers buying closer to known needs and upscaling mid-contract.

Braze announced at the end of April that CFO Isabelle Winkles is stepping away, with a CFO search actively underway. CEO Bill Magnuson thanked her for six years spanning the IPO, scaling the business to nearly $1 billion in ARR, and driving the path to profitability.