Braze (BRZE) Q2 2025 earnings summary

Executive summary

• Revenue reached $145.5 million in Q2 FY25, up 26.4% year-over-year, with customer count rising to 2,163 and 222 customers over $500K ARR, driven by new business wins and product innovation, including the launch of Braze Data Platform, Braze for Startups, and a 14-day free trial.

• Achieved first-ever non-GAAP operating and net income profitability, reflecting strong execution and demand for the platform.

• Notable new business wins included Asiana Airlines, Bell Media, Papa Johns Pizza, and others, with international revenue now 45% of total.

• Published third annual ESG report and launched ESG website, reinforcing commitment to social impact and transparency.

• Recognized as a Strong Performer in The Forrester Wave for Email Marketing Service Providers, Q3 2024.

Financial highlights

• Q2 revenue was $145.5 million, up 26.4% year-over-year; subscription revenue comprised 96% of total, with non-GAAP gross margin at 70.9% and GAAP gross margin at 70.2%.

• Achieved non-GAAP operating income of $4.2 million (2.9% margin) and non-GAAP net income of $9.1 million ($0.09/share); GAAP net loss was $23 million ($0.23/share).

• Free cash flow was $7.2 million for the quarter, with operating cash flow of $11.6 million; cash, cash equivalents, and marketable securities totaled $504.5 million at quarter end.

• Professional services revenue increased 2.7% year-over-year, and other income rose 42.4% due to higher investment income.

• Non-GAAP sales and marketing expense was 40% of revenue, R&D 15%, and G&A 13%, all showing improved efficiency year-over-year.

Outlook and guidance

• Q3 FY25 revenue expected between $147.5M–$148.5M; non-GAAP operating loss of $3.5M–$4.5M; FY25 revenue guidance is $582.5M–$585.5M with non-GAAP operating loss of $7.5M–$8.5M and non-GAAP net income of $6.5M–$7.5M ($0.06–$0.07 per share).

• Management expects continued investment in sales, marketing, and R&D to drive long-term growth, with near-term operating expenses rising.

• Current liquidity of $504.5 million is expected to cover working capital and capital expenditures for at least the next 12 months.

• Free cash flow is expected to fluctuate with operating expenses and ongoing investments in growth.