1. Setup Recap
Original call (for Tuesday, Dec. 9 after the close): small up move, ~+1.5% base case, 55% direction confidence, with guidance expected to be roughly inline and the quarter framed as “solid but not a blowout.” The pre-earnings write-up leaned on a simple 4-step checklist (market setup → business fundamentals → options/sentiment → final call) rather than publishing numeric factor weights.
2. What Actually Happened
Braze printed a mixed-but-constructive tape:
- EPS: $0.06, in-line with the $0.06 estimate.
- Revenue: $190.8M, above the $184.22M consensus.
- FY26 guide: revenue $730.5M–$731.5M vs $718M consensus (and EPS guide also essentially in-line to slightly better).
Net: “in-line EPS + revenue beat + better revenue outlook” is the kind of combo that tends to get rewarded in software.
3. Price Action & Scoreboard
Prior close (Tue, Dec. 9): $30.90 Open (Wed, Dec. 10): $33.05 Close (Wed, Dec. 10): $32.92
- Gap return: +6.96% (up)
- Session return (close-to-close): +6.54% (up)
Scorecard vs prediction
- Gap direction: Correct (up)
- Full-session direction: Correct (up)
- Reversal: No (gap-and-hold; only modest fade from the open)
4. Options, Flows & Example Structures
Given the move was a clean gap higher and finished strong, directional upside structures (call spreads, call flies centered slightly above spot) likely did well, and short-vol structures would have struggled unless they were paired with upside protection.
One nuance: the open was the best print of the day, so selling upside into strength would have looked smart for traders trying to monetize the immediate post-earnings pop.
5. Hindsight on Reasoning & Weights
- What mattered most: the revenue beat + FY revenue guide above consensus. In this tape, guidance wasn’t “inline”—it was a positive surprise on the top line.
- Where the pre-writeup was right: it didn’t call for a huge downside trap; the setup was constructive enough that the path of least resistance was higher.
- Where it underweighted risk/reward: it treated guidance as a “likely inline” variable. For this quarter, guidance was the catalyst, and the market paid up for it.
If you’re doing a framework tweak: for high-multiple software, the guide often dominates the quarter, even when EPS is merely in-line.
6. Lessons & Playbook Updates
- Ticker-specific: BRZE can trade more on forward revenue than on the EPS print. When revenue + guide line up, it can gap-and-go cleanly.
- Process tweak: explicitly model “guide skew” as its own driver (even if you keep it qualitative):
- If you see room for an upside guide, don’t cap the base-case move at “small up.”
- Trade design: when you expect “modest up,” consider structures that still benefit if you get a fatter upside gap (e.g., wider call spreads or call ratio spreads with defined risk).