Braze Analysts Hail Its cRPO Momentum While Keeping Their Guard Over Macro Challenges

Braze, Inc BRZE reported Q2 revenue growth of 54.5% year-on-year to $86.1 million, beating the consensus of $81.1 million. Adjusted EPS loss of $(0.16) beat the consensus loss of $(0.20).
Needham analyst Scott Berg reiterated a Buy and $70 price target on Braze.
Braze reported a substantial upside to 2Q financial results driven by sales metrics that were better than expected in a softening macro.
While some may point to a sharp deceleration in billings growth as a change in the demand environment, cRPO grew 51.9% versus 55.8% in 1Q, which he viewed as a purer sales metric that eliminates noise around invoicing terms.
However, macro pressure is impacting 2H guidance (especially 4Q revenues), which he viewed as prudent given the macro backdrop.
Piper Sandler analyst Brent Bracelin maintained Braze with an Overweight and raised the price target from $42 to $47.
Elongating sales cycles and a shift in customer payment terms pressured calculated billings growth to moderate as deferred revenue declined Q/Q.
However, robust customer renewals contributed to healthy bookings growth, with cRPO increasing Q/Q and Y/Y.
Given macro headwinds, the 2H growth outlook implies growth could moderate versus 1H.
He bumped his top-line estimates by $4 million this year on 46% growth without rolling forward the upside into next year, pending better visibility into budget priorities.
Raymond James analyst Brian Peterson reiterated Braze with an Outperform and raised the price target from $40 to $50 following 2Q results that showed a deceleration in most key metrics but still illustrate Braze's above-market growth rates.
Bears will likely point to the 9% billings miss and slowing growth in net adds in NRR, although bulls still have pretty robust growth in metrics like cRPO.
Management's reference to extended sales cycles is consistent with other prominent front-end software vendors, albeit marketing infrastructure will be far more resilient than discretionary ad spend.
He was also encouraged that management raised its long-term gross margin profile.
While shares will likely be under pressure post-print, he believes the company's product positioning and competitive differentiation should allow for secular share gains.
Price Action: BRZE shares traded lower by 15.42% at $36.86 on the last check Tuesday.

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