Braze, Inc. Q4 FY2026 earnings call

Bill highlighted outstanding fourth quarter results validating product leadership, go-to-market approach, and financial strategy. Q4 bookings rose over 50% year-over-year, net customer additions increased, and large deal velocity was impressive with new business wins and existing customer expansions. Competitive takeaways from legacy marketing clouds validated preference for BRAZE's AI-driven omnichannel approach. BRAZE's four foundational strengths include its data platform and customer engagement stack, vertically integrated data and decisioning architecture, composable AI architecture, and being a hybrid of a revenue driving engine and mission-critical operational capability. Isabel discussed revenue growth driven by existing customer contract expansions, renewals, and new business, the contribution of Braze AI Decisioning Studio, growth in the total customer count, the contribution of large customers to ARR, growth in remaining performance obligation, and non-GAAP financial measures such as gross profit, sales and marketing, R&D, G&A expenses, operating income, and net income.

In the fourth quarter, BRAZE generated $205 million in revenue, a 28% year-over-year increase and an 8% quarter-over-quarter rise. Organic revenue growth accelerated for the third consecutive quarter. Trailing 12-month dollar-based net retention reached 109%. For the full fiscal year 2026, revenue grew 24% year-over-year, and non-GAAP operating income was $28 million with operating margins expanding nearly 400 basis points. Braze AI Decisioning Studio contributed $5.7 million in revenue during the fourth quarter. The total customer count increased 14% year-over-year to 2,609 as of January 31. Large customers (spending at least $500,000 annually) grew 35% year-over-year to 333, contributing 64% to total ARR. Revenue outside the U.S. was 45% of total revenue in the fourth quarter. Total remaining performance obligation was just over $1 billion, up 30% year-over-year and 16% quarter-over-quarter. Non-GAAP gross profit in the quarter was $138 million, with a margin of 67.2%. Non-GAAP operating income was $15 million, 7% of revenue. Non-GAAP net income was $11 million, or $0.10 per share.

For the first quarter of fiscal 2027, BRAZE expects revenue to be in the range of $204.5 million to $205.5 million, representing a year-over-year growth rate of approximately 26% at the midpoint. Non-GAAP operating income is expected to be in the range of $10 million to $11 million. Non-GAAP net income is expected to be $11 million to $12 million, and non-GAAP net income per share is in the range of $0.10 to $0.11. For the full fiscal year 2027, total revenue is expected to be in the range of $884 million to $889 million, representing a year-over-year growth rate of approximately 20% at the midpoint. Fiscal year 2027 non-GAAP operating income is expected to be in the range of $69 million to $73 million, and non-GAAP net income is expected to be in the range of $69 million to $73 million, with net income per share expected to be $0.61 to $0.65.

Q: Ryan McWilliams inquired about the underlying growth trajectory of BRAZE and how AI layers in to support growth trends.

A: Bill responded that Q4 was strong, the AI roadmap was differentiated, the partner ecosystem was strong, and global sales leaders were moving fast.

Q: Scott Berg asked about a customer trying to replace BRAZE deployment and what makes it difficult to replace.

A: Bill stated it involves a tightly integrated high performance infrastructure, comprehensiveness, privacy, security, regulatory concerns, and operational demands.

Q: Remo Lencho asked about the journey of DBNR and the impact of Ed's arrival.

A: Bill said the in-quarter organic DBNR was above reported, and Ed was driving initiatives to make the sales team more enabled.

Q: Parker Lane asked about the impact and predictability of gross margins related to premium messaging channel growth and new products.

A: Isabel said premium messaging was in demand, and new products like the agent console had a slightly better margin but started from a small base.

Q: Brett Huff asked about conversations with those selling to on AI and anecdotes.

A: Bill said there was confidence in the roadmap and beta tests, and the agent console was driving real revenue uplift.

Q: Arjun Batia asked about agent console monetization and third party agents.

A: Bill said agent console adoption was growing, consumed flexible credits, and BRAZE was composable and extensible.

Q: Taylor McGinnis asked about proprietary data modes and BRAZE's edge in AI solutions.

A: Bill said there was context engineering with the BRAZE data platform and a full spectrum of AI technologies for decisioning.

Q: Brian Peterson asked about sales hiring and margin drivers.

A: Isabel said sales hiring was underway and an 8% operating margin was expected from sales and marketing efficiencies.

Q: DJ Hines asked about net new ACV growth.

A: Isabel said renewals and upsells were strong in Q4.

Q: Nick Altman asked about professional services revenue.

A: Isabel said professional services mixed in to sell more software.

Q: Matthew Van Vliet asked about AI coding tools and the cost structure.

A: Bill said the R&D team had experience, and operator and agent console were released ahead of schedule.

Q: Brian Schwartz asked about the percentage of AI output from BRAZE-specific data.

A: Bill said decisioning studio models were proprietary, and agent console combined BRAZE context engineering with foundational models.

Q: Siti Benegrahi asked about OfferFit discussion with the install base and margin improvement.

A: Bill said there was momentum with the install base and efforts to improve margins by expanding product tiers and handling implementation expenses.