Summary
Box delivered FY2025 first-quarter revenue of $264.7 million, up 5% from the prior-year quarter, or 8% growth in constant currency. Gross profit was $206.4 million, up 8.5%, and gross margin reached 78.0%, up 2.5 percentage points. Non-GAAP gross margin was 80.2%. Operating income was $18.0 million, up 116.0%, and operating margin was 6.8%, up 3.5 percentage points. Non-GAAP operating income was $70.4 million, or 26.6% of revenue. Net income was $17.2 million, up 106.3%, and diluted EPS was $0.08, up 300.0%. Non-GAAP diluted EPS was $0.39. Management noted that GAAP EPS included a negative impact of $0.04 year over year from unfavorable foreign exchange rates, and revenue growth faced a 260 basis point FX headwind.
Cash generation remained a bright spot. Operating cash flow was $131.2 million, up 5.0%, while non-GAAP free cash flow was $123.2 million, up 14%. Capital expenditures were $1.28 million, down 56.8%. Deferred revenue was $513.6 million, up 1.2%. Remaining performance obligations were $1.20 billion, flat versus the prior-year quarter. Billings were $190.5 million, down 1% year over year, or up 5% in constant currency. Net retention rate slipped to 101% from 106%, which the company tied to heightened budget scrutiny, pressure on seat expansion, and increased partial customer churn. The Suites attach rate in deals over $100,000 rose to 85% from 69%.
Operationally, Box pushed deeper into AI and content management. The company announced the public beta of Box Hubs, introduced Box AI for Hubs in public beta, and made Box AI for Documents and Box AI for Notes generally available. It also announced a collaboration between NVIDIA NIM and Box AI, launched Box for Oracle NetSuite v3, and hosted the Box Content Cloud Summit. Customer wins and expansions included Alcon Vision, Alnylam Pharmaceuticals, Axiom Space, Clyde & Co, ABN AMRO Bank N.V., EverBank, Idaho National Laboratory, the U.S. Army Civilian Human Resources Agency, JTB Corp., Seiko Group Corporation, and Skydance Media. Box was recognized by Great Place to Work and Fortune as one of the 100 Best Companies to Work For, earning the #18 spot for 2024, and appointed Steve Murphy, CEO of Epicor Software, to its board.
Guidance points to slower reported growth because of currency. For Q2 FY25, Box expects revenue of $268 million to $270 million, up 3% year over year at the high end, or 6% growth in constant currency. Q2 FY25 GAAP operating margin is guided to approximately 6.0%, non-GAAP operating margin to approximately 27%, GAAP diluted EPS to $0.06 to $0.07, and non-GAAP diluted EPS to $0.40 to $0.41. For full fiscal year 2025, revenue is expected to be $1.075 billion to $1.08 billion, up 4% year over year at the high end, or 7% growth in constant currency. The company said constant-currency revenue guidance is a $3 million increase from previous guidance. Full-year GAAP operating margin is guided to approximately 6.5%, non-GAAP operating margin to approximately 27%, GAAP diluted EPS to $0.20 to $0.24, and non-GAAP diluted EPS to $1.54 to $1.58. Box now expects FX to be a 250 basis point headwind to full-year revenue growth, 80 basis points higher than before, and a 160 basis point headwind to operating margin, nearly 50 basis points higher than before. The company also flagged deferred tax expense in the U.K. as a non-cash drag on GAAP and non-GAAP EPS.
Risks remain familiar but real. Management pointed to macroeconomic conditions, inflation, higher interest rates, the stronger dollar against foreign currencies, especially the Japanese Yen, and the Hamas-Israel and Russia-Ukraine conflicts. The company also cited customer scrutiny on larger deals, lower seat expansion rates, increased churn, delayed sales cycles, and reduced budgets. Competitive pricing pressure, industry consolidation, security vulnerabilities, renewal risk, and the ability to deliver platform enhancements, partnerships, and acquisitions are additional risks. The net retention rate of 101% and a 1% decline in billings show that expansion is not automatic in this environment. Box still expects net retention to remain above 100%, and it plans to keep investing while targeting operating margin expansion.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $264.7M | $262.9M | +0.7% | $251.9M | +5.1% |
| Gross profit | $206.4M | $200.2M | +3.1% | $190.2M | +8.5% |
| Gross margin | 78.0% | 76.1% | +1.8 pp | 75.5% | +2.5 pp |
| Research & development | $62.7M | $61.9M | +1.2% | $62.5M | +0.2% |
| Sales & marketing | $92.7M | $85.9M | +7.9% | $86.2M | +7.5% |
| General & administrative | $33.1M | $31.2M | +6.0% | $33.2M | -0.4% |
| Total operating expenses | $188.4M | $179.0M | +5.3% | $181.9M | +3.6% |
| Operating income (loss) | $18.0M | $21.2M | -14.9% | $8.3M | +116.0% |
| Operating margin | 6.8% | 8.1% | -1.3 pp | 3.3% | +3.5 pp |
| Net income (loss) | $17.2M | $99.2M | -82.6% | $8.3M | +106.3% |
| Net margin | 6.5% | 37.8% | -31.2 pp | 3.3% | +3.2 pp |
| Diluted EPS | $0.08 | $0.57 | -$0.49 | $0.02 | +$0.06 |
| Net retention rate | 101.0% | 101.0% | ±0.0 pp | 106.0% | -5.0 pp |
Risks
MD&A says challenging macroeconomic conditions led to additional customer scrutiny on larger deals, lower seat expansion rates, increased customer churn and delayed sales cycles, and customers reducing budgets. Risk factors also state adverse economic conditions have in the past and may in the future reduce sales, lengthen sales cycles, reduce renewal rates and increase price competition.
Net retention rate was approximately 101% as of April 30, 2024, down from 106% as of April 30, 2023. The decline was primarily due to heightened budget scrutiny pressuring seat expansion within existing customers and increased partial customer churn.
MD&A says foreign currency exchange rate trends negatively impacted the revenue growth rate by 260 basis points and billings by 550 basis points for the three months ended April 30, 2024; billings were $190.5 million, a decrease of 1%. Risk factors note the Japanese Yen, British pound and Euro declines negatively affected results in the year ended January 31, 2024 and the three months ended April 30, 2024.
Risk factors state disruptive technologies such as generative AI may fundamentally alter the market for Box services in unpredictable ways, including reduced customer demand and increased costs. Box also faces AI-specific risks from integrating Box AI, including brand or reputational harm, regulatory scrutiny, and reliance on third-party AI services that may become unavailable.
As sales efforts increasingly focus on cloud content management use cases and enterprise and highly-regulated customers, sales cycles may become longer and more expensive. MD&A also cites delayed sales cycles and greater scrutiny on larger deals in the three months ended April 30, 2024.
The cloud content management market is intensely competitive, with primary competitors including Microsoft SharePoint and OpenText, and Microsoft OneDrive, Google Drive and Dropbox in enterprise file sync and share. Competitors may bundle products at lower prices or for free, creating pricing pressure and potentially harming Box operating results.
Box issued $345.0 million aggregate principal amount of 0.00% convertible senior notes due January 15, 2026 and has elected to settle principal in cash. If holders convert or require repurchase upon a fundamental change, Box may need significant cash, and failure to pay could default under its credit facility.
Series A Convertible Preferred Stock has cumulative 3.0% dividends and redemption rights, including following the seventh anniversary or a change of control, and KKR has the right to designate a board member and consent rights. These obligations could impact liquidity and limit additional financing.
Privacy and data protection laws, including GDPR, CCPA/CPRA and new state laws effective between 2024 and 2026, impose compliance costs and may reduce demand. Data localization requirements in regions such as the EEA could limit Box ability to provide services or subject it to significant fines.
Box outsources a substantial majority of its cloud hosting to Google Cloud Platform. Capacity constraints, service interruptions or contract issues with GCP or other providers could impair delivery, increase expenses and reduce margins.
SaaS KPIs
All quarters →Billings
Net Retention Rate
Non-GAAP Operating Margin
Remaining Performance Obligations (RPO)
Non-GAAP Free Cash Flow
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from BOX INC's SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.