Customer engagement platform Braze (NASDAQ: BRZE) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 25.5% year on year to $190.8 million. Guidance for next quarter’s revenue was optimistic at $198 million at the midpoint, 2.7% above analysts’ estimates. Its non-GAAP profit of $0.06 per share was in line with analysts’ consensus estimates.
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Braze (BRZE) Q3 CY2025 Highlights:
- Revenue: $190.8 million vs analyst estimates of $184.2 million (25.5% year-on-year growth, 3.6% beat)
- Adjusted EPS: $0.06 vs analyst estimates of $0.07 (in line)
- Adjusted Operating Income: $5.08 million vs analyst estimates of $4.17 million (2.7% margin, 21.9% beat)
- Revenue Guidance for Q4 CY2025 is $198 million at the midpoint, above analyst estimates of $192.8 million
- Management raised its full-year Adjusted EPS guidance to $0.43 at the midpoint, a 2.4% increase
- Operating Margin: -19.7%, up from -21.4% in the same quarter last year
- Free Cash Flow Margin: 9.3%, up from 2% in the previous quarter
- Customers: 2,528, up from 2,422 in the previous quarter
- Net Revenue Retention Rate: 108%, in line with the previous quarter
- Billings: $200.3 million at quarter end, up 22.4% year on year
- Market Capitalization: $3.34 billion
Company Overview
With its technology powering interactions with 6.2 billion monthly active users across the digital landscape, Braze (NASDAQ: BRZE) provides a platform that helps brands build and maintain direct relationships with their customers through personalized, cross-channel messaging and engagement.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Braze grew its sales at an exceptional 38.4% compounded annual growth rate. Its growth beat the average software company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Braze’s annualized revenue growth of 25.6% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Braze reported robust year-on-year revenue growth of 25.5%, and its $190.8 million of revenue topped Wall Street estimates by 3.6%. Company management is currently guiding for a 23.4% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 17% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is above the sector average and implies the market sees some success for its newer products and services.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Braze’s billings punched in at $200.3 million in Q3, and over the last four quarters, its growth was impressive as it averaged 22.5% year-on-year increases. This performance aligned with its total sales growth, indicating robust customer demand. The high level of cash collected from customers also enhances liquidity and provides a solid foundation for future investments and growth. 
Customer Retention
One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company’s products and services over time.
Braze’s net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 109% in Q3. This means Braze would’ve grown its revenue by 9% even if it didn’t win any new customers over the last 12 months.
Despite falling over the last year, Braze still has a decent net retention rate, showing us that its customers not only tend to stick around but also get increasing value from its software over time.
Key Takeaways from Braze’s Q3 Results
We enjoyed seeing Braze beat analysts’ billings expectations this quarter. We were also glad its EPS guidance for next quarter exceeded Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 7.4% to $32.96 immediately after reporting.
Indeed, Braze had a rock-solid quarterly earnings result, but is this stock a good investment here? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
