Will Braze's (BRZE) Widening Losses Challenge Its Path to Long-Term Margin Expansion?

• Braze, Inc. recently reported its second-quarter earnings for the fiscal year ended July 31, 2025, revealing sales of US$180.11 million, up from US$145.5 million a year earlier, and updated its guidance to expect revenue of US$717.0 million to US$720.0 million for the full fiscal year ending January 31, 2026.
• Although revenue increased year-over-year, Braze's net loss and basic loss per share also widened, underscoring ongoing investments and operating challenges even amid heightened demand.
• Next, we'll assess how Braze's upgraded revenue outlook and expanding sales profile may reshape analyst views on its long-term margin potential.

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Braze Investment Narrative Recap

To consider Braze as an investment, you need to believe that its AI-driven customer engagement platform can translate strong revenue growth into lasting profitability. The latest quarterly results show improving sales momentum and an upgraded revenue forecast, but expanding losses remain the key short-term risk while demand and integration efforts continue. This news does not fundamentally change the largest catalyst, whether AI-powered offerings like OfferFit can unlock larger deals and move the company toward positive margins amid ongoing operational pressures.

Among recent updates, Braze’s raised full-year revenue guidance following Q2 results stands out as most relevant here. The upgraded outlook suggests continued confidence in topline growth, likely tied to both organic expansion and new AI-focused products, even as the bottom line reflects ongoing upfront investments tied to those innovations.

Yet, with heightened optimism on sales, investors should also be aware of unresolved concerns around net losses, especially if rising costs tied to technology integration or international operations begin to weigh on margins...

Read the full narrative on Braze (it's free!)

Braze's narrative projects $1.0 billion revenue and $133.0 million earnings by 2028. This requires 17.9% yearly revenue growth and a $236.9 million increase in earnings from -$103.9 million.

Uncover how Braze's forecasts yield a $43.72 fair value, a 39% upside to its current price.

Exploring Other Perspectives

Four individual estimates from the Simply Wall St Community put fair value between US$23.50 and an outlier high of US$33,504.83. While views differ substantially, ongoing net losses and widening margins weigh heavily on expectations for future performance so be sure to review several perspectives.

Explore 4 other fair value estimates on Braze - why the stock might be worth 25% less than the current price!

Build Your Own Braze Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Braze research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Braze research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Braze's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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