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$325M. Bam. Just like that, the cohort’s first major acquisition news dropped. You could argue that it’s not an acquisition in the messaging space; you may even argue that Braze isn’t a traditional messaging platform. But the strongest acquisitions aren’t about tradition—they’re about seeing the future, making strategic bets, and spending the right amount at the right moment to manifest that future. Braze seems to have checked every box on that list.
The acquisition wasn’t the only good news. Combined with solid results from Braze’s core business, there was plenty to celebrate in its Q4 2025 report. Some details were intriguing, while others raised justified skepticism.
Disclaimer: This is not stock advice. Everything about the messaging business interests me, including asset pricing. Use your judgment to invest your money.
The Good
Strong Financial Execution
Braze ended the quarter with $160.4M in revenue, up 22% YoY and 5% QoQ. It posted its third straight quarter of non-GAAP profitability ($12M net income) and flipped operating margin from -5.7% to 5.0% YoY. Full-year results included $18M net income, nearly $20M in free cash flow and an 850 basis-point improvement in operating margin. FY26 guidance signals continued expansion, with non-GAAP operating income expected between $25.5M and $29.5M.
Enterprise Growth and Global Diversification
Braze added 85 net-new customers in Q4, bringing the total to 2,296 (up 12% YoY). Midmarket growth remained robust, with customers spending more than $500K (up 22% YoY). Midmarket now likely accounts for about 62% of ARR.
Net retention was 111% overall and 114% among large customers. Revenue outside the US made up 45% of the total. Braze continues to replace legacy marketing clouds and point solutions across fintech, retail, gaming, and telecom.
OfferFit Expands AI Offering
Braze is acquiring OfferFit for $325M, 42% equity, and the rest in cash. The deal adds reinforcement learning tech designed to optimize life-cycle campaigns. Contracts typically start above $250K, and one-third of OfferFit’s customers already use Braze.
OfferFit was already a partner and was preparing for a funding round when Braze stepped in with an acquisition offer. The market didn’t flinch, signaling investors see this as a strategic fit.
The acquisition provides Braze with a credible AI engine for enterprise personalization, creating a wedge into value-based, performance-driven sales. It may also signal Braze’s evolution from a SaaS-first to an AI-first company.
Operating Discipline
Gross margin improved to 69.9%, up 200 basis points YoY. Non-GAAP sales and marketing fell to 37% of revenue (from 42%), while G&A and R&D stayed within target ranges. Growth came with margin. Execution was clean.
The Interesting
AI-Driven GTM Shift
OfferFit could change how Braze sells. Historically, Braze led with platform breadth and speed to value. OfferFit sells AI-driven ROI. Every marketing organization has those small improvements that can create step-function returns. OfferFit claims to find them by using AI and with expert installation.
If Braze integrates that approach into its broader GTM, it unlocks larger deal sizes and deeper enterprise penetration. The bigger question is whether the tech can be repackaged for lower-touch use cases. If yes, this acquisition scales. If not, it remains a high-end add-on.
Vertical Expansion Starts with Retail
Retail and consumer goods now represent about 20% of Braze’s ARR. The company rolled out Shopify integrations with prebuilt templates, abandoned-cart tracking, product catalogs, and WhatsApp shopping flows. None of these additions are game-changing, but they reduce friction and accelerate Braze’s entry into e-commerce. The real benefit is speed, not feature count.
Catalyst and BrazeAI Are Still Evolving
Project Catalyst enters private beta at the end of Q1, with no date yet for general availability. Catalyst, combined with OfferFit, expands Braze’s AI capabilities from lightweight personalization to high-end reinforcement learning. The AI stack is maturing, though monetization is still early.
The Unknown
The Merger of the Acquisition
Post-acquisition execution is a major unknown. At $325M, OfferFit is Braze’s largest acquisition ever—significantly larger than the $54.3M it paid for North Star, its exclusive reseller in the ANZ region, on June 1, 2023. The scale and complexity of integration will test Braze’s operational discipline and execution.
CRO Transition Risk
Longtime CRO Myles Kleeger is stepping down. Field teams now report to CEO Bill Magnuson while the company searches for a replacement. So far, execution hasn’t slipped, but enterprise sales cycles are long, and at Braze’s scale, founder-led sales introduces significant uncertainty.
SMB Remains Fragile
Logo churn improved mostly because the weakest customers have already exited. The company acknowledges more contract right-sizing may occur. SMB might no longer drive growth, but it still matters for sales efficiency and retention. Braze also offered no insights into the effectiveness of its free trial initiative. Continued softness in this segment will weigh on the base.
Finally
Braze delivered a strong Q4. Growth held, margins expanded, and the OfferFit acquisition adds strategic weight to its AI narrative. But 2025 is a proving year. OfferFit still has to scale. Catalyst needs to move beyond beta. Enterprise sales must stay on track through a CRO transition. And SMB churn needs stabilization. These challenges will define the quarters ahead.