Braze Stock Falls Over 11% as Weak Profit Outlook Overshadows Earnings Beat

Shares of Braze Inc. (BRZE) tumbled more than 11% in pre-market trading after the customer engagement platform issued a disappointing profit forecast for the upcoming quarter, overshadowing an otherwise strong second-quarter earnings report.

Guidance Undercuts Strong Q2 Results

For its fiscal second quarter of 2027, Braze reported adjusted earnings per share (EPS) of $0.19, comfortably beating the analyst consensus estimate of $0.15. Revenue also surpassed expectations, growing 26% year-over-year to $227.2 million, against a consensus of $220.23 million.

However, the company's forward guidance became the focal point for investors. Braze projected third-quarter adjusted EPS in the range of $0.13 to $0.14, a figure whose midpoint is significantly below the Wall Street consensus of $0.16. This outlook suggests potential near-term pressure on the company's profit margins.

Decelerating Growth Metrics Add to Concerns

Beyond the soft profit guidance, investors also keyed in on several signs of slowing momentum. The report highlighted a deceleration in key business metrics, creating a more cautious narrative around the company's trajectory.

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• Revenue Growth: The 26.2% year-over-year revenue growth in Q2 marked a slowdown from the 30.2% rate reported in Q1.
• Cash Flow: The company's free cash flow margin contracted compared to the previous quarter.
• Customer Growth: The pace of new customer acquisition also appeared to be slowing.

Market Reaction and Context

The sharp sell-off occurred amid a broader risk-off tone in the market, with major U.S. indices trading modestly lower, providing no support for the stock. The weak guidance and slowing growth metrics prompted a re-evaluation among investors, who are increasingly scrutinizing the balance between growth and profitability across the software sector.

Despite the negative reaction, some analysts remained positive. Canaccord, for instance, maintained a Buy rating and raised its price target on Braze to $37, citing the company's record free cash flow and strong billings growth in the second quarter.