Braze (BRZE +4%) saw a notable rise after posting impressive Q4 (Jan) earnings and sales, along with promising guidance. Braze, a customer engagement and marketing platform, competes with Sprinklr (CXM, Financial), Salesforce (CRM, Financial), and HubSpot (HUBS, Financial) in the customer experience management software sector.

Despite challenges like a tough macroeconomic environment and tariff policy uncertainties affecting customer spending and IT budgets, Braze delivered a solid quarterly performance. The company also announced a $325 million acquisition of OfferFit, an AI-powered firm aiding marketers in making optimal customer decisions.

• Braze concluded FY25 with adjusted EPS of $0.12, surpassing its $0.05-0.06 forecast, marking its largest earnings beat since its IPO in late 2021. The company improved non-GAAP operating margins to a positive 5.0% from a negative 5.7% a year ago.
• Revenue grew by 22.4% year-over-year to $160.4 million. Although growth is slowing, the decline rate is decelerating. The market expected growth to dip below 20% based on Braze's revenue forecast of $155-156 million.
• Q4 gains were supported by a legacy vendor replacement cycle, with Braze securing new business across fintech, retail, and energy sectors in the U.S., EMEA, and APAC regions. Total customers increased by 12% year-over-year to 2,296, while large customers ($500K+ in annualized recurring revenue) rose by 22% to 247. Management remains confident in these trends providing long-term growth opportunities.
• The acquisition of OfferFit is seen as beneficial for Braze, with its AI capabilities enhancing cross-sell and upsell opportunities and increasing repeat purchase frequency. OfferFit's clientele includes notable names like Wyndham and Brinks.
• Braze's FY26 guidance is positive, with expected adjusted EPS of $0.31-0.35 and a forecasted revenue of $686-691 million, indicating a 16% growth at the midpoint. The company aims to achieve positive quarterly non-GAAP operating income, despite challenging demand conditions.

Following Sprinklr's surprise beat-and-raise in Q4 (Jan), Braze was under pressure to meet expectations and succeeded, demonstrating its technological advantage. However, FY26 revenue growth guidance highlights ongoing economic challenges that may limit further stock appreciation in the near term.