Braze falls on underwhelming Q1 revenue, analysts optimistic on OfferFit acquisition

Braze (NASDAQ:BRZE) was down during early trading Friday, following its first quarter fiscal 2026 results, but analysts remain optimistic as revenue growth is likely to accelerate in the quarters ahead.

Although Braze, a customer engagement platform, beat revenue and earnings per share estimates in the first quarter, new subscription revenue was less than the market anticipated.

"While sales commentary was positive, the $1mm 1Q Q/Q subscription revenue increase was underwhelming and the lowest since the IPO, but the 2Q step up is in line with historical trends suggesting 1Q was more backend loaded," said Needham analysts, led by Scott Berg, in a Friday investor note. "Overall, we came away optimistic regarding platform technology enhancements that can come from the OfferFit acquisition, which could be accretive to growth in FY27."

During the first quarter, Braze announced it was acquiring OfferFit, an artificial intelligence decisioning company, for $325M. AI decisioning agents can autonomously experiment, learn, and deliver personalized experiences. 

"Focused on the decisioning layer, OfferFit replaces the manual work of A/B testing with reinforcement learning agents that autonomously experiment and learn optimal actions," said OfferFit CEO George Khachatryan, back in March when the acquisition was announced.

The acquisition is expected to close during the second quarter of fiscal 2026.

"While still early days, Braze sounded optimistic regarding the technological capabilities OfferFit will bring to the platform, specifically its distinctive reinforcement learning products and services, which the company believes will allow them to drive overall ACV growth and further strengthen Braze's competitive position, along with benefitting Project Catalyst," Berg said.

Needham reiterated its Buy rating and $50 price target following the results.

Meanwhile, Wells Fargo retained its Overweight rating and $40 price target, noting that Braze modestly increased it guidance.

"BRZE provided updated FY26 guidance of $702-$706M (~18%-19% y/y) and OM of 0.7-1.2% vs prior st ests of $689.1M (~17% y/y) and 4.0%," said Wells Fargo analysts, led by Michael Berg, in an investor note. "Notably this includes ~$11-$12M from OfferFit, implying the co raised top line guide by the amount of the beat, in-line w/bogeys, while the reduction in OM is ~80% from OfferFit and ~20% from BRZE investments to drive integration efforts."

Braze competitors include Salesforce (CRM), Adobe (ADBE) and Klaviyo (KVYO). All three stocks inched up between 1% to 2% during early Friday trading.