10:48 AM EDT, 06/06/2025 (MT Newswires) -- Braze (BRZE) fiscal Q1 beat expectations, but Oppenheimer said in a Friday note that the magnitude and quality of the beat was limited, pointing to decelerating growth and weak net revenue retention.

The firm highlighted that while revenue and profit came in ahead of consensus, helped by strong cost control and a record $22.9 million in free cash flow, subscription revenue rose just 19% and net revenue retention fell below 110%, signaling ongoing deceleration. Sequential subscription growth was under 1%, a notable slowdown versus the trailing average.

Current remaining performance obligations rose in the mid-twenties percentage range, which Oppenheimer sees as a sign of healthy bookings, but analysts warned that the integration of OfferFit brings timing and execution risk for financial synergies.

Still, Oppenheimer said management is handling a difficult market well, and sees valuation as reasonable for a company expected to grow subscription revenue in the mid-to-high teens.

Fiscal Q2 and full-year revenue guidance met or slightly exceeded expectations, but the profit outlook was reduced due to OfferFit-related expenses. Full-year adjusted EPS guidance was lowered to $0.15 to $0.18, well below the $0.34 consensus.

Oppenheimer maintained an outperform rating and lowered its price target to $44 from $51, citing peer group multiple compression.

Shares of Braze were down more than 16% in recent Friday trading.

Price: 30.27, Change: -5.83, Percent Change: -16.15