Please refer to the investor relations section of our website at investors.braze.com for more information and a supplemental presentation related to today's earnings announcement. GAAP included in our earnings release under the investor relations section of our website. We delivered our fourth straight quarter of organic and total revenue growth acceleration, generating $211 million of revenue, which is up 30% year-over-year and 3% from the prior quarter. We also continue to realize operating efficiencies, improving non-GAAP operating margin by over 300 basis points year-over-year.

We generated both strong operating cash flow and a record free cash flow amount of $27 million in the quarter. Trailing 12-month dollar-based net retention also continued to improve, rising another 100 basis points to 110%, while inflecting positively with our large customer cohort as well, rising 100 basis points to 111%. As Bill stated, we reported a strong first quarter, with revenue increasing 30% year-over-year to $211 million, driven by a combination of existing customer contract expansions, renewals, and new business. BrazeAI Decisioning Studio contributed $5.7 million of revenue in the quarter, implying an organic year-over-year growth rate of 26.7%, our fourth straight quarter of organic revenue growth acceleration.

As a result, we expect revenue from Decisioning Studio in Q2 to grow 15%-20% sequentially from Q1. Subscription revenue represents the primary component of our total top line, contributing 93% of our first quarter revenue, while the remaining 7% represents professional services revenue. Approximately 85% of the total professional services revenue is recurring revenue that is recognized ratably over the life of a contract, just like our subscription revenue. These recurring professional services include dedicated support from forward-deployed engineers, email deliverability services, and dedicated technical and strategic support and customer success entitlements.

What went well
  • Braze generated $211 million of revenue in fiscal Q1 2027, up 30% year-over-year and 3% sequentially, marking its fourth straight quarter of organic and total revenue growth acceleration.
  • Organic revenue growth reached 26.7% year-over-year, with Decisioning Studio contributing $5.7 million, the fourth straight quarter of organic acceleration.
  • Trailing 12-month dollar-based net retention improved another 100 basis points to 110%, while large-customer net retention also rose 100 basis points to 111%.
  • The company generated a record $27 million of free cash flow and improved non-GAAP operating margin by over 300 basis points year-over-year.
  • Net customer additions increased 104 sequentially (up 16% year-over-year to 2,713), $500,000-plus customers grew 33% year-over-year to 349, and $1 million-plus customers rose 27%, with eight-figure customers expanding to five.
  • Braze raised revenue guidance for Q2 and the full year and reiterated it is on track for the promised 400 basis points of operating margin expansion, while securing a milestone new business win with a prominent AI lab.
What went wrong
  • A supply-constrained Q4 forced Braze to limit Decisioning Studio bookings in certain regions and delayed Decisioning Studio start dates by multiple months due to insufficient forward-deployed delivery personnel.
  • Gross margin remained pressured by premium messaging channels, including rising U.S. SMS carrier fees, though these are passed directly to customers.
  • Decisioning Studio penetration is expected to deepen within the existing installed base rather than immediately increase the logo count, given enterprise sales and deployment timelines.
  • Macro conditions remained broadly similar to recent quarters, with switching costs and customer education still required across the AI and decisioning product set.

Guidance Changes

MetricPeriodCurrent guidance
RevenueQ2 FY2027Raised (specific figures not stated) (Raised)
RevenueFY2027Raised (specific figures not stated) (Raised)
Operating margin expansionFY2027~400 bps (reiterated, on track) (Reiterated)
Decisioning Studio revenueQ2 FY2027Expected to grow 15%-20% sequentially from Q1 (Sequential growth)

Performance Breakdown

MetricYoYNote
Revenue +30% to $211M Existing customer expansions, renewals, and new business; Decisioning Studio contributed $5.7M, implying 26.7% organic growth
Non-GAAP operating margin +300 bps improvement Continued operating efficiencies as the business scaled
Free cash flow Record $27M Strong operating cash flow generation in the quarter
Trailing 12-month DBNR 110%, +100 bps sequentially Continued improvement from upsells, reduced downsell, and broad-based expansion across industries and geographies
Total customer count +371 to 2,713 (+16%) Robust bookings and competitive takeaways, particularly in the enterprise
$500K+ ARR customers +33% to 349 Strong enterprise demand and upsell motion across channels and data integrations
Total RPO +30% to $1.1B Contract renewals, upsells, new contracts, and a continued modest increase in dollar-weighted contract length
Current RPO +28% (accelerating from 27%) to $670M Renewals, upsells, new contracts, and longer contract length

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Organic revenue accelerationThird straight quarter of acceleration in Q4Fourth straight quarter, reaching 26.7%Improving
Dollar-based net retentionInflected to 109% in Q4Improved another 100 bps to 110% (111% for large customers)Improving
Decisioning Studio delivery capacitySupply-constrained, delaying start dates over four months in some regionsAccelerated FDE hiring cut delays roughly in half; expanded into EMEA and APACImproving
BrazeAI adoption (Operator / Agent Console)Reached GA ahead of schedule in Q4Publicly launched at City x City London with strong adoption and self-serve enhancementsImproving
Flexible credits modelDefault for renewals and new businessRenamed Action Credits, the only way Braze sells, supporting mid-contract upsellsImproving
CFO transitionIsabelle Winkles as CFOWinkles announced her departure after six years on this callNew

Q&A Summary

How much of a headwind was the lack of forward-deployed engineers for Decisioning Studio, and how do you feel about hiring now?
Management would not break out the specific Q1 impact but said the Q2 guide of 15%-20% sequential Decisioning Studio growth reflects hiring momentum. Braze went from zero to one on headcount in certain EMEA and APAC locations where it previously lacked capacity, having been strong only in the Americas where the product originated.
Where does customer engagement rank among customers' AI priorities and how ready are they to adopt?
Management framed the roadmap around transforming marketer workflows for productivity and improving performance/personalization. Both are key to transformation agendas because they improve employee productivity and drive the bottom line, though customer education remains paramount, especially in decisioning.
What drove the jump in professional services revenue and is it the new run rate?
Partly forward-deployed personnel, but mostly packaging changes: customer success entitlements previously bundled into subscription are now separately SKU'd, shifting revenue between line items. About 85% of professional services is recurring and recognized ratably, so roughly 99% of total revenue is recurring with no fundamental revenue-recognition change.
Are the new AI modules speeding up or delaying sales cycles?
Bookings results show higher-velocity decision making and strong competitive win rates, with the AI roadmap front and center for buyers. Verticalization of sales teams and partner alignment are helping resolve architectural questions faster and accelerate deal cycles, amid broadly similar macro conditions.
How constrained was Q1 and how much more FDE capacity is needed for Decisioning Studio?
Exiting Q4, start dates were being pushed out over four months in some regions; Braze cut that roughly in half during Q1 through hiring and in-person group onboarding. A self-serve roadmap and a Decisioning Studio version of Operator under development will further accelerate delivery, while the product continues to lead competitors on quality.
How do you think about coexistence of LLM-based agentic decisioning and reinforcement-learning-based decisioning?
Different use cases suit each technology and various hybridizations, central to Braze's full-spectrum AI strategy. The company is investing in MCP, APIs, and the proprietary Braze Operator for the marketer experience while maintaining the control plane via Canvas, Agent Console, decisioning, and Content Optimizer for customer outcomes.

More on Braze, Inc.

Reported 2026-05-27 · figures from the Braze, Inc. Q1 2027 earnings call.

See how Top Bucket AI works for your firm

Request Demo
Top Bucket AI Research

Stay ahead of private markets

Research and market intelligence for private-markets professionals.

✓

You're subscribed.

Thanks for signing up.