Why Braze Stock Popped Today

Shares of Braze (NASDAQ: BRZE), a customer engagement platform company, spiked Friday morning after the company's fiscal 2025 fourth-quarter results blew past analysts' consensus estimates. Management also issued strong fiscal 2026 guidance that added to investor optimism.

As a result, Braze stock popped by as much as 19.6% in early trading and was up by 6% as of 11:44 a.m. ET.

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Expanding on all fronts

Braze reported revenue of $160.4 million in the quarter, an increase of nearly 23% from the year-ago quarter, and ahead of Wall Street's consensus estimate of $155.7 million. Management said sales growth was fueled by new customers, upsells, and renewals.

As impressive as Braze's top-line beat was, it was the company's bottom line that truly caught investors' attention. Braze reported non-GAAP earnings per share of $0.12, up from a loss of $0.04 in the year-ago quarter and far ahead of analysts' consensus estimate of $0.05 per share.

Braze has now delivered three consecutive quarters of non-GAAP net income profitability, and ended its fiscal year with a non-GAAP gross profit margin of 69.9%.

The company also had a substantial increase in its customer count. Braze ended its fiscal 2025 with 2,296 customers, up 22% from a year earlier. The number of large customers contributing annual recurring revenue of $500,000 or more rose from 202 last year to 247.

"Fiscal 2025 was a milestone year for Braze that reinforced our position as the leading Customer Engagement platform through robust customer growth and continued advancements in our product, including meaningful new investments in AI and machine learning," CEO Bill Magnuson said in the earnings release.

Another highlight came from Braze's free cash flow, which rose from a loss of $3.5 million in the year-ago quarter to $15.2 million.

More growth ahead

Braze's management is confident the good times will keep coming in fiscal 2026. It's guiding for sales to be in the range of $686 million to $691 million for the year, which would be a 16% increase at the midpoint.

Investors who were looking for signs that the customer engagement platform company is on the right track got what they wanted from the fourth-quarter results. And based on management's optimistic guidance for the current year, investors may have more to look forward to.

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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool recommends Braze. The Motley Fool has a disclosure policy.