TLDR
- Braze stock fell 11% on Wednesday after reporting Q2 results that beat Wall Street estimates
- Revenue came in at $227 million, up 19% year-over-year, beating the $220 million consensus
- Adjusted EPS of $0.19 beat the $0.15 estimate
- The selloff was driven by weaker-than-expected growth in remaining performance obligations (RPO)
- Braze raised its full-year revenue growth guidance to approximately 23% year-over-year
Braze stock was trading around $30.31 on Wednesday, falling roughly 11% after the company posted Q2 results that topped Wall Street expectations but failed to impress on a key forward-looking metric.
The company reported adjusted earnings of $0.19 per share on revenue of $227.2 million. Analysts had expected $0.15 per share on $220 million in revenue, per FactSet.
Revenue grew 19% year-over-year, with organic revenue up 24% from the same period last year. That organic figure was down from 27% growth the prior quarter.
Non-GAAP operating margin came in at 9.7%, well above the 8.1% consensus and up from 5.0% in the previous quarter. Margin guidance for fiscal 2027 was also raised.
BRAZE $BRZE Q2’27 EARNINGS HIGHLIGHTS
🔹 Revenue: $227.2M (Est. $220M) 🟢; +26.2% YoY
🔹 Adj. EPS: $0.19 (Est. $0.16) 🟢; +27% YoY
🔹 Non-GAAP Oper Income: $22.0M (Est. $17.6M) 🟢
🔹 FCF: $21.7M (Est. $11.2M) 🟢FY27 Guide:
🔹 Revenue: $910.0-$913.0 (Est. $898M) 🟢
🔹 Non-GAAP… pic.twitter.com/FWFTJdoerv— Wall St Engine (@wallstengine) September 8, 2026
Despite the beat, the stock dropped hard. The culprit was softer growth in remaining performance obligations, a metric that signals how much contracted revenue Braze can expect to collect in future quarters.
AI Monetization Still a Work in Progress
William Blair analyst Arjun Bhatia, who kept his Outperform rating, said the stock reaction was “largely due to lighter RPO quarterly growth while investors wait for the AI monetization catalyst to play out.”
Braze’s AI tools are gaining customer traction, but that hasn’t yet translated into top-line acceleration. That gap between early adoption and actual revenue impact is what’s making investors nervous.
Mizuho also kept its Outperform rating and held its $32 price target. The firm noted strong bookings driven by competitive wins and upsell momentum as positives from the quarter.
Canaccord raised its price target to $37 from a previous level, maintaining a Buy rating. Needham reiterated its Buy rating with a $50 price target, pointing to growth in the low-to-mid 20% range and improving operational metrics.
Citizens kept a Market Outperform rating with a $35 price target.
Guidance Raised, But Near-Term Costs Weigh
Braze raised its fiscal 2027 revenue growth guidance to approximately 23% year-over-year, up from the prior guidance of around 21%.
However, fiscal Q3 operating margin guidance came in below consensus. Management pointed to costs from its Forge conference and new sales capacity investment as the reasons.
The stock has had a volatile year. It dropped more than 50% between January and late February before recovering most of those losses as broader fears around software sector disruption faded.
Mizuho’s InvestingPro analysis flagged the stock as undervalued relative to its Fair Value estimate, with the market cap sitting at approximately $3.41 billion.
The Q3 margin guide miss and RPO softness were enough to overshadow an otherwise solid quarter for Braze.
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