New Portfolio Addition: Revisiting a Category Leader in Customer Engagement (BRZE)

Made a new addition to the portfolio on Friday, a company I have been following for a few years and have owned in the past but sold in '24 in the mid 50s due to valuation concerns making the r/r unattractive. The company is BRZE, a customer engagement platform that enables brands to orchestrate and personalize messaging across multiple channels (mobile push notifications, in-app messages, email, SMS, web, etc.) in real time.

Braze was founded 2011 under the name Appboy by Bill Magnuson, Jon Hyman, and Mark Ghermezian. The idea sprang from a chance meeting at a 2011 hackathon (TechCrunch Disrupt NYC) where Magnuson and Hyman crossed paths with Ghermezian. The original vision centered on the booming mobile app economy and they set out to build a platform to help app developers better engage and understand their users through push notifications and in-app messaging. In 2016, the company launched a visual campaign orchestration tool called "Canvas" to design customer journeys. By 2017 they expanded beyond mobile into email and other channels and rebranded the company Braze to reflect broader customer engagement mission. Leading up to its IPO in late 2021 the raised over $175M in funding from investors including Battery Ventures, ICONIQ, and others. They went public at a ~6B valuation raising ~520M in cash, providing liquidity and capital for further growth.

Product & Tech

Nearly all customers integrate the Braze SDK into their mobile apps and websites, which continuously feeds first-party data (user behaviors, attributes) into Braze's system. Their architecture is built on a streaming data architecture that ingests a firehose of user interaction events and updates a unified user profile in real time. Their deep embedment into the customers tech stack is a key strength and allows them to process customer data live as it happens instead of traditional overnight batches. Data from various sources (the SDK, REST APIs, partner feeds) converges into Braze's vertically integrated platform, where it is immediately available for segmentation and messaging. As Braze documentation explains, the system pre-computes certain values on write and stores profiles in a lightweight document format, enabling millisecond level query and trigger response times. This real time streaming first design was a key innovation versus legacy marketing clouds, allowing them to respond to user actions (like a purchase or app login) with a contextual message almost immediately, which is critical for timely customer engagement. Once data is in Braze, marketers use a web-based dashboard to build segments and design cross channel journeys. Braze's Canvas journey builder (now evolved into Canvas Flow) provides a drag and drop interface to orchestrate messages and define decision splits based on user behavior. Braze supports personalization through a templating language (Liquid) and its Connected Content feature, which can pull in external data via API in real time to customize messages with, say, promotions or latest news. This means each user's message can be dynamically tailored at send time using any data the brand has access to.

Basically Braze offers a full multichannel hub. Messaging channels via push notifications (iOS, Android, web), in-app messages, email, SMS, Content Cards (embedded content feeds in app or website), and more. It is essentially channel agnostic, the same campaign can fan out across channels based on user preference or live results. Newer channels like WhatsApp have been added via integrations. Braze also provides real time segmentation on user attributes and events, with the ability to do behavioral targeting (for example users who did X but not Y in the last week). Marketers get live campaign stats and can run A or B tests or multivariate experiments natively. The platform also offers Braze Currents, a data streaming export feature that pipes events and engagement data into external systems or data lakes for analysis. Also, uncommonly for a marketing tool, Braze includes feature flags that let teams toggle app features on or off for segments of users. This blurs into product experimentation, for example releasing a new app feature to 5 percent of users and messaging them about it via Braze, then rolling out based on feedback. It underscores Braze's strategy to sit at the intersection of product and marketing teams for customer experience management. AI is obviously being integrated as well and they introduced its Sage AI suite, which includes machine learning models for things like send time optimization and content recommendation. Notably, Braze just announced an agreement to acquire OfferFit, an AI decisioning engine that uses reinforcement learning to auto optimize cross channel campaigns. This suggests Braze sees automated next best action recommendations as a key future capability and a competitive differentiator as AI permeates marketing software.

Moat

BRZE moat lies in the architecture as the real time streaming infrastructure and unified data model are hard to replicate advantages. Competing platforms that evolved from email or were assembled through acquisitions often rely on relational databases and batch jobs, which makes it difficult to match Braze's speed and true cross channel statefulness. Braze's ability to instantly act on event triggers across billions of user interactions is a result of years of engineering optimization. A new entrant would face a steep challenge to build a comparably scalable, low latency system without significant time and investment. Moreover, once Braze is integrated as the central messaging pipeline for a customer with SDK hooks in the app and data feeds flowing, the switching costs become high. As analysts have noted, the SDK integration heightens Braze's importance within a customer's tech stack and increases its stickiness. Customers build not just campaigns but internal workflows around Braze, replacing it could risk disruption to their user experience and would require re integrating data pipes and re learning a new system.

They have demonstrated impressive scalability, regularly touting the trillions of messages it processed in 2024 and manages 7.2 billion monthly active users on behalf of clients. The company has 99.9 percent plus uptime and has invested heavily in cloud infrastructure. They are an AWS partner and also support deployments via the AWS Marketplace now. Looking ahead, Braze's product expansion appears to be heading toward more unified platform capabilities. They have largely solved cross channel orchestration, future opportunities include deeper attribution to prove ROI of campaigns, expanding built in data capabilities perhaps moving further into Customer Data Platform territory to unify profiles across systems, and low code tools to bring non technical users on board. With the OfferFit acquisition and Sage AI, Braze is also positioning to offer more intelligent automation so marketers can let the system decide optimal messaging rather than manually building every journey. This could increase the platform's value and pricing power if it demonstrably improves campaign performance.

As of January 2025, Braze has 2,296 customers globally, up from 2,044 a year prior which are digital first companies such as streaming platforms, enterprise incumbents in retail, QSR, finance, media, and travel. The customer base is diverse, from food delivery, software, fintech, and e-commerce, illustrating adoption across industries and use cases. The customer base skews toward mid size and enterprise organizations rather than very small businesses. Within its ~2.3k customers, the number of big ticket clients is growing. Braze had 247 customers with ARR of at least $500k as of January 2025, which is 11 percent of total customers and a 22 percent increase from 202 a year earlier. These large customers contribute the majority of revenue. In FY2024, the company noted that 58 percent of ARR came from customers with at least $500k ARR and they drive expansion through higher usage. It has fewer truly small businesses, as the product's complexity and price point tend to require a certain sophistication to implement the platform. To address this, Braze has been investing in more product led growth motions including free trials, sandbox environments, and listing on the AWS Marketplace to more efficiently onboard smaller customers without a heavy sales touch. Overall, Braze's geographic mix is roughly 56 percent U.S. and 44 percent international by revenue with strong presence in EMEA and growing business in APAC especially after opening offices in Japan, Singapore, Australia, and now plans in Dubai and Seoul.

GTM

Braze employs a hybrid sales strategy. Its primary motion is a direct sales force targeting enterprise and mid-market accounts. The company has regional sales teams and uses a typical SaaS land and expand approach, win a division or use case, then grow the account. Expansion within customers is a big contributor to growth. It has built alliances with systems integrators and agency partners, and technology partnerships through the Alloys program that refer business. For instance, Braze’s integrations with Segment, Shopify, Snowflake, and others not only make the product stickier but can also act as lead funnels. A customer using Snowflake for data warehousing might adopt Braze to activate that data in marketing. The listing on AWS Marketplace in late 2023 allows AWS customers to purchase Braze through their cloud commitment, which can accelerate procurement for some clients. The sales cycle for Braze, especially for enterprise deals, typically involves pilot projects or proof of concept trials, given the mission critical nature of switching messaging platforms. Braze does utilize multi year contracts with some customers, as reflected in its remaining performance obligations which include contractual commitments beyond one year. At January 2025, RPO was $793M, of which about $288M was beyond 12 months, with many enterprise clients signing 1 to 3 year agreements, often paid annually.

In terms of magnitude, Braze’s contracts can range widely. Smaller deals might be around $50k per year, whereas large enterprise deals can run into the hundreds of thousands or even $1M or more per year. Third party analyses suggest typical Braze contracts cluster in the $60k to $200k per year range for mid-sized clients. Pricing is not seat based, and is not about number of marketing users on the platform, which is good for encouraging broad team usage. Instead it’s usage driven, making Braze somewhat of a transactional SaaS model, similar to Twilio in that revenue grows if the customer’s own user engagement grows. This has helped Braze capitalize on clients that scale up, as their user base or messaging frequency increases, Braze’s bill increases accordingly, leading to high net retention historically. The downside is in economic downturns, customers may actively try to optimize or cut down usage to save costs, which can pressure Braze’s expansion rates.

NRR has been strong, though it has come off highs recently. Over the trailing 12 months ending January 31, ‘25, Braze’s NDBR for all customers was 111%, and for large customers with over $500k ARR it was 114%. This means the average customer grew their spend by about 11% over the year net of churn. A year prior, these figures were 117% and 120%, respectively, and in the peak growth years, Braze’s NRR was even higher, around 126% in ‘23 and reportedly around 130% in earlier years. The downward trend indicates expansion has moderated, likely due to macroeconomic factors causing clients to rein in marketing spend and right size their Braze contracts. Gross retention remains high, Braze has low logo churn among enterprise customers, but expansion revenue from more volume or cross sell of new channels and features has slowed compared to the boom of prior years. Still, an NRR above 110% is healthy and above average for SaaS peers, showing that Braze’s existing customers generally grow their investment year to year. Braze’s gross customer retention isn’t disclosed, but given the NRR and that expansions exceed contractions, we can infer logo retention is likely in the 90% plus range annually, with most churn coming from the smaller clients.

Braze has been displacing legacy platforms in some accounts. For example, winning deals where companies migrate off Salesforce Marketing Cloud or Oracle Responsys seeking better real time capabilities. Braze and Iterable have also occasionally swapped accounts. Industry chatter on forums indicates these two are often the final contenders in evaluations. Iterable won Uber as a client a few years back, and Braze had to compete for that deal, whereas Braze won Burger King globally, displacing a competitor. On the loss side, there haven’t been public disclosures of major customer losses, however, if Braze’s net retention is dipping, it might imply some clients optimized usage or in a few cases left. It’s possible that some smaller tech startups that were Braze customers went out of business or scaled down, which would impact Braze’s usage revenue. So far, Braze has maintained a strong renewal record with large enterprises.

Overall, customer feedback on Braze is quite positive. In Gartner Peer Insights and G2 Crowd reviews, Braze is consistently rated highly. Customers praise Braze’s reliability at scale and flexibility. It can handle complex segmentation and is developer friendly for custom integrations. The main criticisms that appear are about the learning curve, it’s a powerful tool but requires technical know how to unlock full potential, and the cost at high volumes. For marketers without a dedicated tech team, Braze can feel overwhelming, which is why it tends to serve companies that can invest in using it properly. The company’s support is well regarded, rated 8.5 out of 10 by G2 users, though some competitors score even higher on support quality.

Competition

Braze operates in the customer engagement and multichannel marketing hub category, which is a pretty crowded space. The competition comes from all angles, including legacy marketing cloud giants, newer private companies, and adjacent point solutions. Iterable is probably Braze’s closest direct competitor. It’s a privately held cross-channel platform founded in 2013 that offers a very similar product set including mobile push, email, in-app messaging, and more, all built on modern infrastructure. In evaluations, Braze and Iterable are often the final two being considered by tech-savvy B2C brands moving off legacy systems. Braze usually stands out with its stronger mobile SDKs and real time data capabilities, while Iterable gets credit for being a bit easier to use and offering top-tier customer support. They both move fast and often leapfrog each other with new feature releases. Iterable also competes aggressively on price and flexibility.

Salesforce Marketing Cloud is still the 800 pound gorilla in the room for enterprise marketing. SFMC was born from ExactTarget and other acquisitions and has deep integrations across Salesforce’s CRM stack. A lot of big companies use SFMC simply because they already use Salesforce. But the tech is older, batch-oriented, and often criticized for being clunky and slow, which is the exact pain point Braze targets. Braze positions itself as the agile, mobile-first alternative that can deliver value faster. Salesforce still has a leg up when it comes to broad suite integration and top-down enterprise sales reach, and they’ll bundle products or discount heavily to keep clients. So the decision often comes down to best of breed versus single vendor suite. Adobe is another heavyweight. Adobe Campaign and Journey Optimizer sit within the Adobe Experience Cloud. Adobe Campaign is older, more email-centric, and less optimized for mobile. Journey Optimizer is a newer, cloud-native option launched around 2021 that’s trying to be more real time. Adobe leans into its strengths in analytics and content management. Braze plays better in the execution layer where speed, trigger-based messaging, and orchestration matter most. Big enterprises that already use Adobe might test Journey Optimizer, but Braze has gotten recognition from analysts as a leader in cross-channel orchestration. Then there’s the legacy pack. Oracle Responsys, SAP Emarsys, IBM Watson Campaign, and others still come up in RFPs, but not as often. Responsys was a leader in the early 2000s but is now being replaced by platforms like Braze and Iterable in many accounts, especially in retail and finance. SAP’s Emarsys is still relevant in some commerce-focused deals, especially in Europe. IBM exited this space entirely when it sold Watson Marketing. These legacy systems make up a huge install base that Braze is targeting, and a lot of them are still on old tech.

Another angle of competition comes from companies that take a build-it-yourself approach. Twilio, for instance, offers Segment for data unification, along with communication APIs for email, SMS, and push. In theory, a dev-heavy company could stitch together Segment, messaging APIs, and some internal logic to build their own version of Braze. Twilio even launched Twilio Engage in 2022 to offer a packaged journey tool on top of Segment, aimed squarely at Braze and Iterable. But in 2024, Twilio stopped selling Engage to new customers, essentially admitting that building a true marketing platform isn’t their focus. That move validated how hard it is to compete with a purpose-built solution like Braze. Other DIY-oriented tools include Customer.io, which is popular with developers and cheaper than Braze but much less scalable. It works fine for startups, but as complexity and volume grow, many of those users upgrade to Braze. So the build versus buy question still shows up in some sales cycles, but Braze’s strength is that it comes out of the box with orchestration, UI, and optimization already solved. In emerging markets, particularly mobile-heavy regions like Asia-Pacific, Braze competes with players like CleverTap and MoEngage. CleverTap acquired Leanplum and touts strong AI features, claiming superiority over Braze in areas like unified data and automation. These platforms win some cost-sensitive or regional deals but typically aren’t chosen by multinationals or enterprises looking for scale and global support. Airship, formerly Urban Airship, is another name in the mix, historically strong in push notifications and mobile wallet passes. It doesn’t have the orchestration depth that Braze offers. Insider, a private company from EMEA, focuses heavily on AI personalization and has won high customer satisfaction scores in G2 reports. It’s more visible in Europe and Asia than in the US, and while its platform is broad, it hasn’t displaced Braze in enterprise cross-channel orchestration.

Overall, Braze is still considered a leader. Its edge comes from real time capabilities and scalability, strong SDKs, in-app messaging, feature flags, and integrations with CRMs, analytics tools, and data warehouses. It’s a technically robust system that still manages to be marketer friendly. That said, Braze can’t rest. As competitors modernize, especially giants like Salesforce and Adobe, the gap could narrow. Braze’s moat is strongest in its streaming architecture, which is not easy for legacy players to replicate due to their tech debt. Braze is also layering in more AI, like the Sage suite and the OfferFit acquisition, to further separate itself from the pack.

The risk is that multichannel messaging and journey building are becoming table stakes. Everyone offers email, push, and some kind of personalization. Braze has to keep winning on execution, intelligence, and ease of use. The other wildcard is commoditization. If cross-channel engagement becomes just another module in a broader CRM or CX suite, the standalone platforms could get squeezed. So far, Braze has kept ahead by staying nimble and focused. There are still some limitations to the platform. Braze isn’t a full marketing cloud. It doesn’t handle ad retargeting, web personalization widgets, or deep attribution out of the box. Some customers will prefer a broader platform like Salesforce or Insider that claims to do everything. Braze is also premium priced. For companies that are price sensitive or want a simpler product, cheaper alternatives might win. And while Braze is powerful, it historically required some developer support to implement and operate, which could be a hurdle for teams that want a pure no-code experience.

Financials

In FY’25, which ended January 31, revenue came in at $593M, up 26% year over year. Strong on an absolute basis, but a slowdown from the hypergrowth of prior years. Nearly all of Braze’s revenue, about 95% to 96%, is subscription-based and recurring. The rest, around 4% to 5%, comes from professional services and one-time onboarding fees. Subscription revenue includes platform fees and usage overages. The services piece is mostly implementation support or technical help to get customers integrated, not a big needle mover and often outsourced to partners. High subscription mix is a big positive. It makes revenue more predictable and helps with margin consistency.

Gross margins sit around 70% and have been slowly climbing as Braze gains cloud scale and optimizes delivery costs. That includes negotiating better email delivery rates or improving how data is processed across infrastructure. While 70% is a bit lower than pure-play software companies that run in the 75% to 80% range, that’s expected since Braze’s cost of goods includes messaging costs like SMS and email via SendGrid, plus the real-time data architecture load. Still, 70% is healthy and gives Braze plenty of headroom to expand operating margins over time. On that front, the company is making progress. Braze essentially broke even on a non-GAAP operating basis in FY2025. That’s a big improvement from a $40M loss in FY’24 and $70M in FY’23. The adjustments from GAAP to non-GAAP are mostly stock-based comp, which was $114M in FY2025.

Sales and marketing is the biggest line item. They’ve been spending hard to win new business and grow accounts. That includes the sales team, marketing programs, and partner commissions. But as brand awareness increases and more growth comes from expansion rather than new logos, efficiency is improving. The S&M spend as a % of revenue has been trending lower, which is exactly what you want to see as a path to leverage. R&D is next in line, with solid ongoing investment in AI features, new messaging channels, and broader platform capabilities. It’s growing, but not spiking as a % of revenue, which shows discipline. Braze is FCF positive now and generated around $20M in FY’25. That said, it’s low quality FCF, largely driven by stock-based comp. Something to watch. For FY’26, Braze guided to $686M to $691M in revenue, which is 16% growth. That’s a sharp deceleration from FY’25 and likely reflects a pretty conservative guide. Management is signaling that macro headwinds are still real, with tighter marketing budgets and slower sales cycles. But if conditions improve or AI features drive incremental demand, there could be upside.

Big picture, Braze is no longer a cash-burning startup. It’s transitioned into a scaled public SaaS company growing in the high teens to low 20s, approaching profitability. Gross margin is inching up, operating losses are almost gone, and FCF is now in the green. The big question from here is whether this slowdown is just temporary or structural. If Braze can reaccelerate with AI, product expansion, or new markets, sentiment could shift quickly. But if mid-teens growth becomes the norm, then valuation will rest more on long-term margin expansion. They appear on track to hit a typical SaaS steady-state model of 20%+ operating margins. With around 70% gross margins and improving sales efficiency, that path looks realistic. The long-term setup still works, but the near-term is all about how quickly growth stabilizes and reaccelerates.

Management

Co-founder Bill Magnuson is the CEO. He’s got a technical background and was actually Braze’s first CTO before stepping into the CEO role in 2016. Under his leadership, the company has stayed product-driven. Jon Hyman, also a co-founder, still runs technology and infrastructure as CTO. Exec comp is mostly equity-based, which keeps management aligned with long-term stock performance. According to the latest proxy, Magnuson’s total comp in FY’24 was about $12M. Of that, only $490K was base salary and $481K was annual bonus. The rest came in the form of RSUs that vest over four years. Same setup for the other execs. Most had base salaries between $300K and $425K, with bonuses ranging from 50% to 100% of base. Multi-million dollar stock grants made up the majority of their pay.

Braze doesn’t use performance-based equity, which is what I’d prefer. Instead, all equity is time-based RSUs. Not ideal, but at least insiders have real skin in the game. One negative worth pointing out is they have a dual-class share structure. Class B shares, held by insiders, carry 10 votes each versus 1 vote for Class A shares held by the public. That gives insiders and early investors outsized control of the company’s direction. As of mid 2024, Battery Ventures, through Neeraj Agrawal, held about 33% voting power. Founders and early VCs control the majority of the voting rights, so the governance is locked down tight. The company’s bonus targets are tied to ARR growth and operating leverage. So even though the equity comp isn’t performance-based, the cash comp is still tied to meaningful operating KPIs. Overall, incentives look reasonably well aligned. Management owns meaningful equity, and their comp structure encourages them to grow both top line and margin. Stock-based comp is worth keeping an eye on. It’s chunky, and while that’s expected at this stage, investors will want to see Braze grow into it. If revenue growth stays ahead of dilution, it’ll likely be tolerated as the price of retaining top talent in a competitive software market.

Risks and Opportunities

Braze is a discretionary SaaS product focused on marketing, so it’s naturally exposed to macro cycles. In downturns or when budgets tighten, marketing spend is often one of the first things to get cut. We’re already seeing growth moderate as customers become more cautious. If we head into a recession or another slowdown, new deals could take longer to close and expansion could slow. While Braze is mission critical for engagement, a company under pressure might decide to cut messaging frequency or shift to a cheaper solution. The risk is somewhat offset by Braze’s importance in customer retention, but it’s still cyclical. Around 44% of revenue comes from international markets, so FX volatility is another factor. A strong dollar has already been a modest headwind in recent quarters.

The competitive environment is always a risk. Braze could face price pressure from large players like Salesforce or Adobe who can bundle offerings at a discount to block Braze from landing new accounts. On the other end, cheaper upstarts could undercut Braze for price-sensitive mid-market customers. If Braze’s differentiation starts to blur, maybe because a competitor like Salesforce upgrades its Marketing Cloud significantly, Braze might need to spend more on S&M or lower pricing, which would hit margins. So far, they’ve defended their position on quality, but that could change if someone like Iterable decides to aggressively cut prices. The shutdown of Twilio Engage was a plus, one less head-to-head competitor, but Segment is still out there nudging some customers toward build-your-own approaches. Over time, there’s a risk that customer engagement tools become commodity features, either bundled into larger platforms or offered by cloud providers. AWS, Azure, and GCP could start layering in engagement tools directly on top of their cloud stacks. Amazon already has Pinpoint and Google has Firebase messaging. Those tools are basic now, but if they improve, Braze could be pressured from the low end.

Braze depends on mobile platforms like iOS and Android for push notifications and in-app engagement. If Apple or Google introduce changes that limit those channels or offer competing features, it could cut into Braze’s value prop. For instance, Apple already hides email open data with Mail Privacy Protection. If they ever restricted push notifications or launched their own re-engagement tools, that’s a real threat. Similarly, if consumer sentiment turns against push and email, or spam rules tighten, usage volume could be affected. Braze is channel agnostic and already supports emerging formats like WhatsApp, but they’ll need to continue adapting to new communication habits and platforms quickly to stay relevant. Internally, Braze has to execute well across sales, global expansion, and integrating acquisitions like OfferFit. If the $325M OfferFit deal doesn’t deliver the AI upside they’re expecting, that would be a miss. Rapid growth can stretch the team, and customer success and support need to scale along with usage. A drop in support quality could threaten Braze’s strong retention. As the company grows, there’s also the cultural challenge with keeping the product focus sharp and avoiding bloat. The founders are still at the helm, which helps, but continuing to scale R&D efficiently will take discipline.

In terms of opportunities, Braze has a large base of customers who aren’t fully penetrated. Many sign up using only one or two messaging channels and later expand. For example, a mobile-first client might later add email or web push. On top of that, there are paid add-ons like Currents, Predict, and now OfferFit’s AI decisioning. These premium modules boost ARR per customer. With net retention above 110%, there’s evidence that upsell and cross-sell continue to work, especially in large accounts. Finance, healthcare, and telecom are all under-penetrated. These industries are modernizing fast, and Braze can win there if it builds for their needs, like HIPAA compliance. Also, B2B is a new frontier. Some product-led SaaS companies could use Braze for onboarding and engagement. There’s overlap with tools like Intercom or Pendo, and if Braze wants to chase this space, it could open up a whole new TAM. There’s still a ton of whitespace in Asia and LatAm. Localizing features and going direct in regions like ANZ shows commitment. Partnerships with platforms like LINE or WhatsApp help unlock regional traction. OfferFit could be a game changer if Braze can integrate reinforcement learning into journey orchestration. That’s a serious leap from rules-based automation. If Braze becomes the go-to for self-optimizing engagement, it can justify higher pricing and win evaluations. There’s also more room to add AI in message generation, response prediction, and analytics. Also, There’s a clear tailwind building around loyalty-driven marketing, especially in QSR, fast casual, and broader retail. Most large restaurant chains now push their best offers exclusively through their apps or loyalty emails, moving away from generic coupons or ad-based promotions. As pricing has climbed aggressively, chains can’t risk slashing menu prices instead, they’re leaning into personalized discounts, reactivation campaigns, and rewards programs to drive traffic without cannibalizing revenue. This is a massive opportunity for platforms like Braze. Personalized messaging and targeted offer delivery are exactly what Braze is built for. Similar patterns are playing out in softlines and hardlines retail, where customer acquisition costs are high and re-engagement is critical. The broader shift toward owned channels and closed-loop offers should directly benefit Braze as brands double down on CRM-driven growth.

Valuation

Braze trades around $30 per share, putting its market cap at roughly $3.1B. With around $500M in cash and no debt, enterprise value is about $2.7B to $2.8B. On FY2025 revenue of $593M, that’s an EV/Revenue multiple of ~4.5x to 4.7x. On a forward basis, using FY2026 guidance of $689M revenue (midpoint), the forward EV/Revenue is around 4.0x. These multiples are way down from IPO days when Braze traded above 20x revenue. That compression is typical for the broader 2022–2023 SaaS correction and reflects both macro sentiment and Braze’s growth slowing into the high teens. Marketing tech peers are rare. Klaviyo, which IPO’d in 2023, was growing ~30% and traded at ~8x before coming down. HubSpot is at ~7x forward revenue with similar growth and stronger margins. Twilio, growing low single digits, trades at ~2x. Amplitude is closer at ~15% growth and ~4x sales. Salesforce and Adobe aren’t good comps on valuation due to their size and breadth, though Salesforce trades at ~5x with <15% growth and Adobe closer to ~10x because of much higher margins. So Braze at 4x to 5x forward sales is being priced like a mid-growth SaaS platform approaching profitability. You could argue it deserves more given net retention over 110% and leadership in a valuable category, but deceleration and recession fears is weighing it down. On a PEG-style basis using EV/Revenue divided by growth, Braze comes in at ~0.26 (4.2x EV/Revenue divided by 16% growth). Many quality SaaS names trade around 0.5 on this metric. That gap could suggest the market is skeptical of growth durability or sees elevated risk. Maybe it’s competition, TAM saturation, or just macro.

Current valuation implies future margin expansion. The Street likely expects non-GAAP operating margins to hit 10% in a couple years and 20%+ long-term. If Braze gets to $950M revenue by CY2027 and 15% op margin, that’s $140M in op income. A $3.2B market cap today would be ~20x that number not unreasonable for a high retention platform with a long runway. The market seems to be assuming revenue growth between 15% and 20% over the next couple of years, NRR stays around110%, but not back to 120%+, and operating leverage continues to drive margins higher. Braze cites a $29B TAM and at ~$600M revenue, they’re only 2% penetrated. So the price doesn’t reflect TAM doubts. More likely, the market just isn’t sure how fast Braze can get there. Investors may believe Braze grows steadily but doesn’t dominate the market and reaches maybe a few billion in revenue long-term, but not $10B. The $325M OfferFit acquisition hasn’t really moved the stock. That suggests investors view it as a long-term tech upgrade, not near-term revenue. If OfferFit boosts NRR or drives new logo wins, it could be upside to the base case.

Right now, sentiment is balanced. Braze is viewed as high quality but priced like a mid-growth SaaS company. There is upside if growth re-accelerates to 20%+, margin expansion comes faster than expected, OfferFit integration boosts adoption or expands use cases, valuation re-rates to 6x to 8x sales if growth returns, which would be a 30% to 70% move up in the stock. Braze’s current valuation seems to assume execution without surprises. No massive beat, no major stumble. If Braze just meets expectations, the stock probably grinds higher slowly. But if it beats, especially on the margin side, then it’s underpriced. Also worth flagging, Braze is an attractive takeout target. The tech is differentiated, the customer base is sticky, and the integrations are deep. At 4x sales, there’s room for strategic buyers to pay a premium and still make the math work. That puts a potential floor on the downside.

Variant Perception

To form a variant view, we have to ask where the market might be misunderstanding or underappreciating Braze. The consensus today sees a category leader that is decelerating into mid-growth mode — maybe 15% to 20% revenue growth per year, gradual margin expansion, and a steady evolution into a profitable but not explosive software company. The valuation reflects that, with a 4x to 5x forward EV/Revenue multiple and little premium for optionality. But what if that’s too conservative?

Consensus seems anchored to a ~$30B TAM and assumes Braze captures a reasonable piece. But if customer engagement platforms become as essential as CRMs or ERPs, then the real TAM is much larger. Braze has only ~2,300 customers today, but there are tens of thousands of digital-first brands globally that could benefit from its stack. As more verticals digitize especially in finance, healthcare, telecom, and international markets, Braze could tap into demand that’s not reflected in current forecasts. If adoption broadens beyond tech-forward consumer companies into the enterprise mainstream, growth could easily return to the 25% to 30% range. Consensus may be too linear in assuming a permanent slowdown. Braze keeps adding monetizable modules like Sage AI, OfferFit, and new channels. If customers adopt more of the stack, the net dollar retention could jump, pushing organic growth above what’s modeled. If wallet share per customer increases meaningfully, total revenue growth would re-accelerate without needing a huge influx of new logos. The platform is sticky, and churn has been minimal, consensus might not fully price in how powerful Braze's expansion engine still is. Street models typically assume Braze reaches 5% to 10% operating margin over the next few years. But the company already hit non-GAAP breakeven a year ahead of schedule. Gross margins are ~70%, and sales efficiency is improving. If Braze pulls back on hiring or finds leverage in G&A, it could get to 20% margins by CY2027. That would make it a Rule of 40 business well ahead of expectations. Earnings leverage from the existing base is substantial, and if Braze wants to show profitability sooner, it has the mechanics to do it. Current forecasts may be too anchored to the slow, steady ramp.

Competition is fierce but Braze seems to be best of breed. There’s always noise about Iterable, Salesforce, and others, but in practice, Braze seems to be pulling away. Twilio is stepping back from the space. Salesforce still relies on older tech and struggles with real-time execution. And anecdotal signs like marketers calling Braze the default landing spot for SFMC refugees suggest share gains are happening. If Braze becomes the default real-time engagement layer the way Snowflake became the default cloud data warehouse, this could turn into a winner-take-most scenario. The Street may be underpricing the power of that moat and the flywheel it creates. Some investors worry about usage pricing and that customers will cap spend to control costs. But if Braze drives conversion and ROI, brands will keep spending. The incentive is aligned. In fact, Braze could see pricing tailwinds through mix shift to premium features or volume-based price increases. If AI features like OfferFit drive better outcomes, Braze could justify charging more per engagement, not less. Consensus likely assumes flat pricing, but there may be room for uplift not reflected in forward models. The buyout premium isn’t fully reflected partially due to share class structure. As a high-quality, differentiated platform with sticky customers, Braze would be a logical target for a strategic buyer. Think Salesforce, Adobe, or even Amazon or Microsoft if they want to own the engagement layer. At 4x sales with positive cash flow, it would be an accretive deal. There’s no active chatter, but the optionality is real. That tail risk to the upside may not be fully reflected in the valuation.

Consensus says Braze is a solid software name with mid-teens growth and moderate profitability. The variant view is Braze could still be in the early innings of a much bigger growth story. If TAM is larger, net retention rebounds, margins expand faster, and worries about competitive intensity fades, Braze could deliver 20%+ growth and 20% margins within a few years. That would put it back into the top tier of SaaS names and warrant a higher multiple of 6x to 8x sales versus the current 4x. That creates meaningful upside if Braze beats expectations. Add in the potential for strategic M&A, and the risk/reward looks skewed positively. In short, the market may be pricing in a good company. But Braze might be on track to prove it’s a great one.

While Braze is clearly a cyclical business tied to marketing budgets and broader macro conditions, I think any slowdown or recession will be more of a proving ground than a threat. Growth may get dinged in the near term, but Braze is well-positioned to come out stronger on the other side. Some competitors might not fare as well, and that creates an opening for Braze to grab share and consolidate its leadership over the long run.