Braze Inc (NASDAQ:BRZE) shares fell about 11% in premarket trading on Wednesday after the customer engagement platform issued third-quarter adjusted earnings guidance below analyst expectations, despite reporting second-quarter results ahead of estimates.
The company reported second-quarter adjusted earnings per share of $0.19, compared with the analyst estimate of $0.15. Revenue increased 26% year over year to $227.2 million from $180.1 million, exceeding the consensus forecast of $220.23 million.
For the third quarter, Braze expects adjusted earnings per share of $0.13 to $0.14, below the analyst consensus of $0.16. The midpoint of the company’s range is $0.135.
Third-quarter revenue guidance exceeds consensus
Braze forecast third-quarter revenue of between $229 million and $230 million. The midpoint of $229.5 million compares with an analyst consensus estimate of $227.8 million.
For fiscal 2027, the company expects adjusted earnings per share of $0.64 to $0.65, compared with the consensus estimate of $0.63.
Full-year revenue is forecast at $910 million to $913 million, above the analyst estimate of $898.7 million.
Raymond James analysts maintained a positive view of the shares following the results, telling investors to “buy the dip, as Braze remains a secular winner.”
“We actually think what investors may miss in this print is the company’s intention to accelerate investments ahead of FY28, which we view as a positive indicator for long-term growth. We ultimately believe that shares offer an attractive risk/reward for investors at just ~2.5x our CY28 revenue estimate (vs. the group at ~4x), especially given the company’s premium growth profile,” they wrote.
Free cash flow rises to $22 million
Braze reported second-quarter cash from operations of $24 million, compared with $7 million in the prior-year period.
Free cash flow increased to $22 million from $3.5 million, while adjusted operating income reached $22 million, compared with $6 million in the second quarter of fiscal 2026.
The company’s customer base increased to 2,789 as of July 31, 2026, from 2,422 a year earlier. The number of customers generating annual recurring revenue of at least $500,000 rose to 361 from 282.
Dollar-based net retention across all customers was 110% for the trailing 12 months, compared with 108% in the prior-year period.
“Our strong second quarter results underscore the essential role Braze plays for brands globally, delivering 26% year-over-year revenue growth alongside improving operating leverage and record second quarter free cash flow,” said Bill Magnuson, co-founder and CEO of Braze.
Braze stock price
