Earnings
Home›Earnings›Previews›Braze shares drop after softer Q3 guidance despite str…
Braze shares drop after softer Q3 guidance despite strong Q2 momentum
Braze reported Q2 revenue growth of 26.2% to $227.2 million and said free cash flow rose more than 6 times year over year, even as it guided slightly below consensus for Q3 earnings.
Braze shares fell after the company issued softer-than-expected Q3 guidance, forecasting a penny less in earnings than the consensus, according to MarketBeat Ratings.
The pullback contrasts with strong Q2 performance. Braze reported Q2 revenue growth of 26.2% to $227.2 million, driven by new clients, upsells, and renewals, while subscriptions grew 20.9% and Professional subscriptions more than doubled.
Customer and retention metrics also moved higher. Braze said its net retention rate came in at 110% year over year, up 200 basis points, and customers rose 15% led by a 28% increase in larger clients contributing at least $500,000 in annual recurring revenue.
Despite margin pressures and ongoing GAAP losses, Braze delivered record operating and free cash flow in Q2. MarketBeat Ratings noted free cash flow was up more than 6 times year over year and adjusted earnings per share of 19 cents was up 26% year over year, with adjusted Q2 EPS more than 1,850 basis points above expectations.