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With revenue up 24% YoY to $180M and EPS at five times above consensus, Braze beat on both top and bottom lines. OfferFit is integrating faster than expected. Net retention is down from 2024 levels but is stable. At the same time, large customers and CRPO (see sidebar) are up. All signs that Braze is convincing the cautious buyer to click the Buy button.
The Good
Subscription revenue made up 95% of the total revenue with 282 large customers now spending over $500k annually (up 27% YoY). These customers represent 62% of ARR and are growing. CRPO was up 27% YoY, ending at $862M.
EPS of $0.15 crushed expectations. Cash conversion remained healthy, with $70M in free cash flow over the trailing twelve months. Net retention slipped, 108% overall, 111% for large customers, but trending upward sequentially.
Revenue reserves came in better than expected thanks to stronger customer payment behavior—a subtle but powerful signal of account health. Payments came in faster, overages were above forecast, and the team called it a leading indicator of customer quality.
Sales efficiency also improved. Enterprise cycles are maturing with less forced timing and better sequencing—letting Braze prioritize winning deals instead of firefighting churn.
The Interesting
Acquired in January, Braze has already closed OfferFit deals in all major regions. It is fully into Braze’s pricing, packaging, and go-to-market motion with six-figure enterprise deal cycles.
On the messaging side, Braze’s flexible credits model is working. Premium channel adoption is up, especially outside the US. RCS, WhatsApp, and in-app content cards are seeing wider experimentation as teams test higher-value use cases with less friction.
Internally, Braze continues to ramp investment in AI not just for customers but also for marketers themselves—aiming to turn campaign managers into strategic orchestrators. That shift is already showing up in stronger win rates and differentiation during sales cycles. The most powerful differentiator isn’t raw capability but usability. AI is helping close that last-mile gap.
Sidebar: Bookings vs. CRPO vs. ARR
Braze is the only one among its peers to disclose Current Remaining Performance Obligations (CRPO). That makes it worth unpacking, especially alongside Bookings and Annual Recurring Revenue (ARR).
Bookings are the total value of all signed contracts. They include the full commitment from customers regardless of when that revenue is recognized. Bookings are a sales metric. They tell you what’s been sold, not necessarily what will be earned soon.
CRPO is a subset of bookings. It captures only the portion of revenue from signed contracts that is expected to be recognized in the next twelve months. Think of CRPO as the short-term backlog.
ARR measures the value of recurring revenue normalized over a twelve-month period. It excludes one-time services and variable usage fees. ARR is a run-rate metric. It answers the question how much predictable, recurring revenue is the business generating?
How they relate:
- Bookings include all contracted revenue, whether recurring or not.
- ARR pulls the recurring portion of bookings and annualizes it to show run rate.
- CRPO pulls the next-twelve-month portion of bookings to show near-term visibility.
Used together, they provide a full picture: Bookings show sales momentum, ARR shows recurring scale, and CRPO shows short-term execution visibility.
But be skeptical when:
- CRPO grows while revenue doesn’t.
- Net retention is flat or down, but bookings jump.
- Bookings increase only because of longer contract lengths.
In Braze’s case, all three metrics—ARR, CRPO, and large-customer bookings—are moving together.
The Unknown
Premium messaging ate into gross margin (69.3% vs. 70.9% a year ago). Not surprising, but as the company chases larger deals, I wonder if that’s the beginning of a trend. While Braze expects OfferFit to improve gross margin over time, it hasn’t moved the needle yet.
Operating income and profitability guidance were raised, but internal use of AI hasn’t yet generated meaningful efficiency. Most margin gains are still coming from cost-optimized headcount placement.
Retention is stabilizing but not rebounding. There’s still a ways to go before expansion rates become the story again.
The company also called out cautious expansionary behavior among existing customers, even as the pipeline strengthens.
The 2020–2022 Zero Interest-Rate Policy (ZIRP) era led many companies to sign large, multi-year contracts. That’s contributing to increased switching costs and slowing deal cycles.
Finally
Like a confident transcontinental pilot, Braze is flying well, navigating around storms, staying focused on the destination. Confident in its flight path, the company raised both revenue and profitability targets for the year.