Braze (NASDAQ: BRZE) shares fell sharply on Tuesday after the customer engagement software company posted its latest quarterly earnings results.
Investors moved aggressively to sell the stock despite the company beating analyst expectations on both revenue and adjusted profit.
Revenue for Braze’s second quarter of fiscal 2027 reached just over $227 million, representing a 26% year-over-year improvement from the same period last year.
The company attributed the growth primarily to an influx of new customers, combined with upsells and renewals from its existing clientele base.
Subscription revenue, which made up the bulk of total sales, came in at nearly $208 million, marking a 21% increase year over year.
Adjusted net income also climbed 26% to more than $21 million, translating to $0.19 per share for the quarter.
Both headline figures cleared analyst consensus estimates, which had called for roughly $220 million in revenue and $0.15 per share in adjusted earnings.
The post-earnings sell-off appeared driven more by forward guidance concerns than by any dissatisfaction with the company’s trailing performance results.
For the current third quarter, Braze guided for revenue of $229 million to $230 million, slightly above the analyst consensus of just under $228 million.
However, its adjusted earnings guidance range of $0.13 to $0.14 per share fell short of the analyst consensus expectation of $0.16 per share.
The full-year revenue guidance was raised to a range of $910 million to $913 million, topping the consensus estimate of $899 million.
Full-year adjusted earnings per share guidance was set at $0.64 to $0.65, also edging above the consensus figure of $0.63 per share.
The reaction underscores a broader trend in which software stocks face punishment for falling short of blowout quarters or overwhelmingly strong guidance projections.
Investors who are less sensitive to short-term guidance gaps may view Tuesday’s sell-off as an opportunity to buy a focused niche operator at a lower price.
Braze operates in the competitive customer engagement software space, where its platform helps businesses communicate with users across a wide range of digital channels.
