BRZE Q2 Deep Dive: AI Integration and Operational Discipline Drive Outlook Upgrade

September 05, 2025 at 01:30 AM EDT

BRZE Cover Image

Customer engagement platform Braze (NASDAQ: BRZE) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 23.8% year on year to $180.1 million. Guidance for next quarter’s revenue was optimistic at $184 million at the midpoint, 2.1% above analysts’ estimates. Its non-GAAP profit of $0.15 per share was significantly above analysts’ consensus estimates.

Is now the time to buy BRZE? Find out in our full research report (it’s free).

Braze (BRZE) Q2 CY2025 Highlights:

Revenue: $180.1 million vs analyst estimates of $171.6 million (23.8% year-on-year growth, 5% beat)
Adjusted EPS: $0.15 vs analyst estimates of $0.03 (significant beat)
Adjusted Operating Income: $6.04 million vs analyst estimates of $1.17 million (3.4% margin, significant beat)
The company lifted its revenue guidance for the full year to $718.5 million at the midpoint from $704 million, a 2.1% increase
Management raised its full-year Adjusted EPS guidance to $0.42 at the midpoint, a 152% increase
Operating Margin: -21.5%, down from -19.2% in the same quarter last year
Customers: 2,422, up from 2,342 in the previous quarter
Net Revenue Retention Rate: 108%, down from 109% in the previous quarter
Billings: $177.2 million at quarter end, up 38.1% year on year
Market Capitalization: $3.07 billion

StockStory’s Take

Braze’s second quarter results were met with a distinctly positive market reaction, reflecting management’s emphasis on operational discipline and expanding product capabilities. CEO William Magnuson credited the strong performance to improved execution in global sales, enhanced competitive win rates in enterprise segments, and ongoing customer demand for Braze’s AI-powered engagement solutions. The company highlighted solid bookings across key verticals, successful integration of the OfferFit acquisition, and continued growth in large enterprise clients. CFO Isabelle Winkles noted, “Sustained performance in net retention and disciplined resource deployment gave us greater confidence into the back half of the year.”

Looking ahead, Braze’s updated guidance is underpinned by accelerated AI product integration and an expanding enterprise pipeline, especially with the rollout of OfferFit by Braze. Management pointed to heightened interest from large organizations in combining first-party data capabilities with scalable AI-driven personalization. Magnuson described the upcoming Forge conference as a platform to unveil new product innovations and deepen partnerships, stating, “We are eager to unlock the promise of our sophisticated vision for customer engagement with the rapidly advancing power of AI.” The company’s focus remains on balancing reinvestment in technology with a disciplined approach to profitability and margin improvement.

Key Insights from Management’s Remarks

Management attributed Q2’s outperformance to robust enterprise customer wins, advances in AI product offerings, and operational improvements following the OfferFit acquisition.

Enterprise segment momentum: Large customer additions continued, with a 27% year-over-year rise in accounts spending over $500,000 annually. Management attributed this to effective alignment in sales, marketing, and product targeting within retail, e-commerce, and financial services verticals.
OfferFit integration progress: The acquisition of OfferFit, an AI decisioning engine provider, was quickly integrated, leading to new cross-regional wins and accelerating AI-driven product expansion. Magnuson described OfferFit as "a best-of-breed platform for autonomous one-on-one personalization."
AI feature adoption: Rapid uptake of Braze’s AI and machine learning tools was reported across customer segments, particularly in verticals such as retail and media. These tools have lowered barriers to advanced analytics and improved marketer productivity, enhancing Braze’s differentiation.
Sales execution improvements: Management highlighted increased sales productivity and improved pipeline qualification, supported by a more judicious allocation of sales resources across geographies and verticals. This has led to higher win rates against both legacy marketing clouds and point solutions.
Premium messaging and channel innovation: Growth in premium messaging channels, especially outside the U.S., was supported by the introduction of flexible credits and new channel capabilities, such as landing pages and content cards. This multichannel adoption was cited as a key factor in customer retention and account expansion.

Drivers of Future Performance

Braze expects product innovation in AI and continued enterprise adoption to underpin its growth outlook, while disciplined cost management aims to support rising profitability.

AI-led product expansion: Management believes the integration of OfferFit’s reinforcement learning and Braze’s own generative AI capabilities will drive higher customer value, with new offerings and deployment models set to be announced at the Forge conference. The company anticipates high attach rates in its enterprise segment.
Operating leverage focus: CFO Isabelle Winkles cited ongoing efficiency gains from cost-optimized locations and disciplined hiring as key to improving non-GAAP margins, though she noted that internal AI tools are “still early days” in driving material cost savings.
Retention and macro risks: While recent stabilization in net retention rates is encouraging, management acknowledged that macroeconomic caution and lingering switching costs may continue to dampen deal cycles and upsell velocity, especially in less expansionary environments.

Catalysts in Upcoming Quarters

Looking forward, StockStory analysts will be closely monitoring (1) the pace of OfferFit by Braze adoption and its impact on upsell opportunities; (2) customer engagement with new AI-driven features announced at the Forge conference; and (3) further expansion in large enterprise accounts across international markets. The trajectory of net revenue retention rates and ongoing sales productivity improvements will also be key indicators of Braze’s ability to sustain profitable growth.

Braze currently trades at $31.94, up from $27.70 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

Stocks That Trumped Tariffs

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

About Us

Laser Focus World Membership

Magazine Subscription

Newsletter Subscription

The Daily Beam

Product Watch

Bio & Life Sciences Product Watch

Laser Processing Product Watch

Get Published!

Photonics Hot List

Following the Photons: A Photonics Podcast

Social Media

Meet the Laser Focus World Team

Editorial

Sales

Editorial Advisory Board