Braze (BRZE 2.56%), a leader in customer engagement software, released its results for Q2 FY2026 on September 4, 2025. The company reported GAAP revenue of $180.1 million, surpassing both its own financial guidance of $171.0–$172.0 million and consensus analyst estimates, with non-GAAP earnings per share also outperformed expectations. Revenue grew to $180.1 million, a 23.8% increase from the prior year, outpacing management’s guidance of $171.0–$172.0 million. Non-GAAP EPS reached $0.15, compared to management’s non-GAAP forecast of $0.02–$0.03. These results marked a notable outperformance. Management raised its full-year outlook for both revenue and non-GAAP earnings following strong subscription growth and new customer wins, though some key retention and margin metrics showed signs of pressure. Overall, the quarter reflected continued top-line momentum alongside emerging operating challenges.

Source: Analyst estimates provided by FactSet. Management expectations based on management’s guidance, as provided in Q1 2026 earnings report.

About Braze and Business Focus

Braze provides a cloud-based software platform designed to help brands manage customer engagement across digital channels like email, push notifications, in-app messaging, and SMS. The company powers tailored marketing experiences for hundreds of brands globally, serving as a critical technology partner for both digital-first and traditional enterprises.

The company has focused recent strategy around broadening its artificial intelligence (AI) and machine learning capabilities, accelerating real-time data processing, and enabling brands to reach customers with cross-channel communications. Success in these areas depends on platform scalability, rapid integration of new AI-driven tools, customer expansion, and maintaining strong retention rates among large enterprise clients.

Quarterly Highlights and Performance Drivers

The quarter saw revenue climb 23.8 % year over year, significantly outpacing management’s outlook and consensus analyst forecasts on a non-GAAP basis. Subscription revenue rose 22.8% year-over-year, reaching $171.8 million, while professional services and other revenue jumped 50.9% year-over-year. New customer signings and upselling existing accounts drove this growth. Total customers reached 2,422, a 12.0% increase year-over-year, and customers with annual recurring revenue above $500,000 expanded 27% year-over-year to 282.

Non-GAAP operating income reached $6.0 million, much higher than management’s non-GAAP guidance of $0.5–$1.5 million, and reflected a margin of 3.4 %. Non-GAAP earnings per share finished five times above the top of management’s outlook at $0.15. These beats came even as non-GAAP gross margin declined to 69.3%. On a GAAP basis, the operating loss widened due to elevated stock-based compensation, totaling $39.5 million.

The company reported non-GAAP free cash flow of $3.5 million, down from the $7.2 million achieved in the prior year and trailing the $23 million result from the prior quarter. Cash, equivalents, and marketable securities stood at $368.3 million as of July 31, 2025, notably lower from earlier in the year due to the $181.2 million paid for OfferFit.

Braze’s dollar-based net retention rate, a key metric indicating additional revenue growth from existing customers, slipped to 108 %, down from 114 % the year prior. Among large enterprise customers with recurring contracts above $500,000, dollar-based net retention was 111%. Dollar-based net retention for all customers declined to 108% from 114% year-over-year, and for customers with annual recurring revenue of $500,000 or more declined to 111% from 117% year-over-year, which management attributed in part to renewal timing. Meanwhile, remaining performance obligations—a measure of contracted business yet to be recognized as revenue—rose to $862.2 million, indicating strong future demand.

Product and Strategic Developments

During the quarter, the company advanced its AI-powered customer engagement platform. Notably, it launched the Model Context Protocol (MCP) Server, a product designed to connect large language models (LLMs) with Braze’s data for more advanced real-time engagement.

OfferFit is part of Braze’s expanding AI product family and aims to enhance targeting and automation for marketing campaigns. Management described these innovations as strengthening Braze’s market position against traditional marketing software competitors.

The customer list added breadth, as new wins included brands like DocMorris, Fogo de Chão, Gopuff, Kleinanzeigen, Laundryheap, Little Caesars, Metcash, Saily, Sweetgreen, and Wix. These additions demonstrate continued global reach and cross-industry appeal. Remaining performance obligations—a forward-looking pipeline metric—continued to grow, supporting projections for sustained demand and business expansion in upcoming periods.

Braze underscored its core focus areas: real-time data processing for customer engagement, cross-channel outreach spanning email, mobile, and web, robust machine learning capabilities for automation and personalization, and technology integration across business systems. The ability to scale was demonstrated by the customer gains and growing enterprise account base.

Outlook and Guidance

Management raised its financial outlook for both the next quarter and the full fiscal year on a non-GAAP basis. For the third quarter, revenue is projected to be $183.5–$184.5 million, with non-GAAP EPS targeted at $0.06–$0.07. Non-GAAP net income is expected between $6.5 million and $7.5 million. For the full fiscal year ending January 31, 2026, management now forecasts revenue of $717.0–$720.0 million, non-GAAP operating income of $24.5–$25.5 million, and non-GAAP earnings per share of $0.41–$0.42—substantial increases over the prior guidance following recent outperformance and the assimilation of OfferFit into core operations.

Looking forward, the cash balance remains robust, but dilution from ongoing stock-based compensation is something to monitor. With new wins and an expanding product suite, Braze remains focused on scaling its global platform.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

Crypto volumes have plunged from a post-Trump election surge of $126 billion to a mere $35 billion. Tech stocks remain sluggish compared to their former highs, even as the dollar hits a decade low. Venture capital feels like it’s collectively holding its breath, with top Silicon Valley firms pivoting their business models. This isn’t a collapse — far from it. It’s a rare, fragile pause. A “wait and see” moment of equilibrium that, like all market pauses, likely won’t last.

Behind the headlines, a far bigger story is unfolding. The United States and China have quietly reopened high-level trade talks aimed at easing the tensions that have defined the past five years of decoupling and protectionism. According to Bloomberg, these negotiations are among the most serious since Trump-era tariffs began reshaping global supply chains. At the same time, China is reportedly loosening capital controls and courting global investors again, which suggests Beijing views the current economic stall as too risky to endure.

If these talks produce breakthroughs — whether tariff rollbacks, a tech export détente or coordinated policy resets — investors can expect a market reaction not seen since early 2021. In short, this stillness may be the calm before the next global bull run. When capital floods back into high-growth sectors, it will do so suddenly and violently.

Founders should see this moment for what it is: a gift. The quiet between cycles is the rarest and most valuable time to build. Attention is cheap. Competition is minimal. Customers are more accessible. And though investors seem quiet, they’re watching closely for the teams that stayed focused while others lost steam.

Related: Today’s Biggest Companies Are Acting Like VCs. Here’s Why Startup Founders Need to Pay Attention.

For startup founders, the single most important mandate now is to increase velocity. This doesn’t mean grinding longer hours or chasing a vague idea of “hustle.” It means removing friction from your product cycle and delivering tangible features or updates to users every week. If your roadmap is quarterly, break it down into weekly shippable blocks. Tools like Linear and Notion help teams stay aligned without heavy process overhead. For UI or user-facing experiments, Figma remains one of the fastest ways to move from idea to prototype without slowing development. Founders must get hands-on with their products and focus on delivering value to power users.

Equally critical is user proximity. It’s easy to skip customer conversations when fundraising is tough and feature velocity slows, but that’s exactly when listening matters most. Even five brief conversations can reshape your roadmap. Ask simple questions: What frustrates power users right now? What features did they stop using, and why? This feedback doesn’t live in dashboards or pitch decks — it lives in the space between what users say and what they wish existed.

Another key use of this pause is building owned distribution. Paid channels are overpriced during market stagnation, and unless you’ve raised a mega-round, you can’t outbid incumbents. Instead, focus on organic reach and audience trust. Use content marketing tools like Substack or Beehiiv to grow an email list that’s immune to algorithm shifts. Invest time in SEO and keyword ranking. Record short product explainers or vision videos with Loom or Descript — not to “go viral,” but to humanize your build process and deepen audience trust through transparency. When markets heat up, people will remember the builders who kept showing up in the quiet— and say, “I’ve got the alpha on a hot project that’s about to pop.”

Macro signals are aligning. Long-term bond yields are starting to wobble, suggesting markets expect increased government stimulus or monetary easing. Chinese capital markets are showing signs of foreign inflows again, especially in ETF activity across Hong Kong and Singapore. Central bank rhetoric is shifting — from “containment” to “cooperation.” Once that shift becomes public and coordinated, markets will snap back, starting with high-risk, high-reward sectors like crypto, AI infrastructure, e-commerce and frontier B2B tooling.

Here’s the truth most won’t say: you won’t have time to prepare when that happens. The winners of the next cycle won’t be those who waited patiently for conditions to improve. They’ll be the founders who treated this silence like a sprint, not an intermission. Then boom! Silicon Valley’s legendary VC, Tim Draper, wrote a social media post saying, “Slack transforms communication, Microsoft responds with Teams. Tesla enters the market, and suddenly every automaker rediscovers innovation. Progress happens in bursts of energy.”

Related: 6 Hidden Costs of Scaling Your Business Too Quickly

Being first to market matters. That means launching scrappy MVPs before they’re perfect. Writing landing pages before the product is done. Building waitlists and generating buzz, even if customer acquisition costs aren’t optimized. This isn’t the time for polish; it’s the time for presence. Investors remember who shipped, who listened and who made noise without needing a bull market to do it for them.

This moment in the cycle doesn’t feel urgent, but it is. The silence is a setup. The only founders who survive the surge will be those building now, shipping weekly, while the world isn’t watching.

Ship faster. Build deeper. Talk to your loyal users. Grow your content channels. Engage.

Because when capital returns, it won’t send a save-the-date.

It will kick the door down. And everything you’ve built in this quiet stretch will either stand or be swept away when the big players come in.