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Investing.com -- Braze Inc (NASDAQ:BRZE) shares surged in after-hours trading Thursday, jumping 10.6%, after the customer engagement software company posted fiscal second-quarter results that beat Wall Street expectations and issued upbeat guidance. The company’s strong performance was driven by double-digit year-over-year revenue growth and a sharp improvement in non-GAAP profitability metrics.
For the quarter ended July 31, Braze reported adjusted earnings of $0.15 per diluted share, trouncing the analyst consensus of $0.03. Revenue rose nearly 24% year-over-year to $180.1 million, topping forecasts for $171.6 million as strong customer demand continued to propel top-line growth.
Subscription revenue accounted for $171.8 million of quarterly sales, with professional services and other revenue contributing $8.3 million. Remaining performance obligations reached $862.2 million, up significantly from a year ago, while dollar-based net retention among customers with over $500,000 in annual recurring revenue stood at 111%, down from 117%.
“We reported a strong second quarter, delivering 24% year-over-year revenue growth while driving continued efficiency in our business, expanding our non-GAAP operating income and net income profitability, and generating strong free cash flow,” said Bill Magnuson, Braze’s cofounder and CEO. He added, “Braze is focused on AI solutions that will empower brands to transform the customer engagement experience for marketers and end users alike, driving high ROI for our customers and Braze.”
Braze, which positions itself as a leader in customer engagement platforms leveraging artificial intelligence, has seen steady expansion in its enterprise customer base. Total customers rose to 2,422 from 2,163 a year earlier, including a 27% increase in those generating over $500,000 in annual recurring revenue to 282.
Looking ahead, the company guided fiscal 2026 non-GAAP EPS to between $0.41 and $0.42, handily exceeding estimates of $0.17, and projected revenue of $717 million to $720 million, well above the $704 million consensus. Non-GAAP net income for the full fiscal year is expected to range from $45.5 million to $46.5 million.
The upbeat results and guidance suggest mounting optimism among investors, even as gross margins narrowed slightly and free cash flow moderated. With expanding demand for customer experience solutions and increasing investments in generative AI, investors appear confident in Braze’s long-term growth trajectory.