Braze, Inc. (BRZE) had a pretty good Tuesday evening. The customer engagement platform delivered third-quarter results that sailed past revenue expectations and promptly raised its full-year outlook, sending shares climbing in extended trading.
Breaking Down the Numbers
Braze reported adjusted earnings of six cents per share for the quarter, matching analyst expectations right on the nose. The real story was revenue, which came in at $190.84 million and beat the Street estimate of $184.08 million by a comfortable margin.
But here's where it gets more interesting. Subscription revenue, the lifeblood of any software-as-a-service company, reached $181.6 million compared to $146.3 million in the same quarter of fiscal 2025. That's substantial growth. Professional services and other revenue added another $9.2 million, up from $5.8 million in the prior-year period.
What the Metrics Tell Us
The company reported remaining performance obligations of $891.4 million at quarter-end, with $572.7 million classified as current (meaning expected within a year). Non-GAAP gross margin came in at 69.1%, down slightly from 70.5% in the third quarter of fiscal 2025.
Customer growth looks healthy. Total customer count grew 14% while large customers expanded by 29%, suggesting Braze is successfully moving upmarket. The trailing 12-month dollar-based net retention rate stabilized at 108%, indicating existing customers are spending more over time.
"This was another standout quarter for Braze, with 25.5% revenue growth and strong profitability, proving the strength of our model," said Bill Magnuson, CEO of Braze.
Looking Ahead
Braze raised its fiscal 2026 guidance across the board. The company now expects adjusted earnings per share between 42 and 43 cents, above the previous analyst estimate of 41 cents. Revenue guidance increased to a range of $730.5 million to $731.5 million, well ahead of the $717.7 million consensus estimate.
Investors clearly liked what they saw. Braze stock climbed 8.12% to $33.14 in Tuesday's extended trading session.
