Summary
Box reported first quarter fiscal 2026 revenue of $276.27 million, up 4.4% from $264.66 million in the prior-year quarter. Gross profit rose 4.5% to $215.60 million from $206.41 million. Gross margin was flat at 78.0%. The top line grew, but operating leverage went the other way. Operating income dropped 64.8% to $6.34 million from $18.01 million. Operating margin fell to 2.3% from 6.8%. Net income declined 52.4% to $8.19 million from $17.22 million. Diluted EPS was $0.02, down from $0.08. The profit decline came alongside a workforce reorganization that produced charges in the quarter. Box expects additional charges in the second quarter of fiscal 2026.
On a non-GAAP basis, Box earned operating income of $69.8 million, or 25.3% of revenue, compared with $70.4 million, or 26.6% of revenue. Non-GAAP diluted EPS was $0.30, compared with $0.39. Non-GAAP gross profit was $222.3 million, or 80.5% of revenue, up from $212.2 million, or 80.2% of revenue. Those adjustments strip out stock-based compensation, intangible amortization, litigation and reorganization costs, and related tax effects. The gap between GAAP and non-GAAP results remains wide, largely because stock-based compensation and the reorganization charges hit GAAP profit.
Billings, a metric Box uses to track sales activity, were $242.3 million, up 27% from the prior-year quarter, or up 17% on a constant currency basis. Remaining performance obligations were $1.50 billion, up 25% from $1.20 billion. Deferred revenue was $574.10 million, up 11.8% from $513.60 million. The company's net retention rate was 102%, compared with 101% a year earlier. That metric remains above 100%, but Box said heightened budget scrutiny is putting pressure on seat expansion and causing partial customer churn. Revenue growth was also held back by foreign exchange, which reduced the growth rate by 90 basis points.
Cash generation remained solid but lower. Net cash provided by operating activities was $127.06 million, down 3.2% from $131.20 million. Capital expenditures were $0.35 million, down 72.6% from $1.28 million. Non-GAAP free cash flow was $118.3 million, down 4% from the prior-year quarter. During the quarter, Box repurchased 1.6 million shares for approximately $50 million. As of April 30, 2025, about $152 million remained under the current share repurchase plan.
Guidance points to faster growth. For the second quarter of fiscal 2026, Box expects revenue of $290 million to $291 million, up 8% year-over-year, or 6% on a constant currency basis at the high end. The company guided non-GAAP operating margin to approximately 28% and non-GAAP EPS to $0.30 to $0.31. For the full fiscal year 2026, Box expects revenue of $1.165 billion to $1.170 billion, up 7% year-over-year. Full-year non-GAAP operating margin is guided to approximately 28%, and non-GAAP EPS is expected to be $1.22 to $1.26. The guidance includes expected negative impacts from non-cash deferred tax expenses.
The main risks remain familiar. About one third of Box revenue is generated outside the U.S., and roughly 65% of that international revenue is in Japanese Yen. Foreign exchange moves can swing reported results. Management also cited macroeconomic pressure, tariffs, inflation, higher interest rates, slower growth, and reductions in U.S. federal spending as potential headwinds. Customers are scrutinizing larger deals, and Box continues to face churn and delayed sales cycles. Competition, security vulnerabilities, and the execution of product and partnership initiatives are additional risks. Box is leaning on AI product launches and partnerships to drive expansion, but the near-term profit picture shows the cost of those investments and restructuring.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $276.3M | $279.5M | -1.2% | $264.7M | +4.4% |
| Gross profit | $215.6M | $220.7M | -2.3% | $206.4M | +4.5% |
| Gross margin | 78.0% | 79.0% | -0.9 pp | 78.0% | +0.1 pp |
| Research & development | $72.3M | $68.9M | +5.0% | $62.7M | +15.4% |
| Sales & marketing | $99.1M | $96.8M | +2.3% | $92.7M | +6.9% |
| General & administrative | $37.9M | $37.1M | +2.1% | $33.1M | +14.5% |
| Total operating expenses | $209.3M | $202.8M | +3.2% | $188.4M | +11.1% |
| Operating income (loss) | $6.3M | $17.9M | -64.7% | $18.0M | -64.8% |
| Operating margin | 2.3% | 6.4% | -4.1 pp | 6.8% | -4.5 pp |
| Net income (loss) | $8.2M | $194.0M | -95.8% | $17.2M | -52.4% |
| Net margin | 3.0% | 69.4% | -66.4 pp | 6.5% | -3.5 pp |
| Diluted EPS | $0.02 | $1.13 | -$1.11 | $0.08 | -$0.06 |
| Net retention rate | 102.0% | 102.0% | ±0.0 pp | 101.0% | +1.0 pp |
Risks
MD&A says challenging macroeconomic conditions led to additional customer scrutiny on larger deals, lower seat expansion rates, customer churn, delayed sales cycles, and reduced customer budgets. It also cites inflation, higher interest rates, tariffs, a stronger dollar versus the Japanese Yen, and reductions in U.S. federal spending.
Risk factors emphasize that sales efforts are increasingly focused on cloud content management and enterprise and highly-regulated customers, which can lengthen sales cycles, increase costs, and create greater pricing pressure and customization challenges. MD&A notes continued scrutiny on larger deals and delayed sales cycles.
Box faces intense competition from Microsoft (SharePoint, OneDrive), OpenText (Documentum), Google (Drive), and Dropbox, with competitors offering lower-priced or free bundled products. The filing says generative AI may fundamentally alter the market and increase pricing pressure.
The filing highlights that generative AI and machine learning may disrupt demand for Box offerings, increase costs, and present adoption risk, while Box integrates AI into products such as Box AI. Third-party AI services could become unavailable or more expensive.
The filing says cyberattacks, ransomware, phishing, and nation-state activity are increasing, and Box's growing use in regulated industries raises its target profile. AI technologies may create additional cybersecurity risks and increase risk of breaches.
As of April 30, 2025, Box had $460.0 million of 2029 Convertible Notes and $205.0 million of 2026 Convertible Notes outstanding, with the 2026 notes maturing January 15, 2026. The filing says Box must settle principal in cash upon conversion, and reclassification of the notes as current could materially reduce reported working capital.
FY2026 Q1 revenue rose 4.4% and gross profit rose 4.5% vs the prior-year quarter, but operating income fell 64.8%, net income fell 52.4%, and operating margin declined 4.5 percentage points. The filing attributes expense growth partly to headcount increases and workforce reorganization costs.
New and evolving AI rules, including the EU AI Act adopted in May 2024, a January 2025 U.S. Executive Order, and California and Colorado AI bills, create legal, compliance, and cost uncertainty. The filing also notes DORA fines for noncompliant cloud service providers.
Net retention rate was 102% as of April 30, 2025 and 101% as of April 30, 2024. The filing says it remains pressured by heightened budget scrutiny, seat expansion pressure, and increased partial customer churn.
The Japanese Yen's decline negatively affected results for the year ended January 31, 2025 and the three months ended April 30, 2025. In FY2026 Q1, FX negatively impacted revenue growth by 90 basis points, while RPO growth benefited by 390 basis points and billings growth by 1,000 basis points.
Box sells to government entities, and the filing cites risks from reductions in U.S. federal spending, an extended federal government shutdown, a prolonged continuing resolution, or a breach of the federal debt ceiling that could delay federal spending on Box solutions.
Box is subject to evolving privacy and data protection laws, including GDPR, CCPA, CPRA, and cross-border transfer frameworks, with potential fines and compliance costs. The filing notes Data Privacy Framework legal challenges and local data localization requirements.
Box outsources a substantial majority of cloud hosting to Google Cloud Platform, and service interruptions or capacity constraints at GCP or other third-party providers could impair delivery. The filing also notes risks from overestimating or underestimating cloud server capacity.
The Series A Convertible Preferred Stock carries cumulative 3.0% dividends and redemption rights, including a right to require repurchase after the seventh anniversary of issuance, which could affect liquidity. KKR also has a board designation right and consent rights over certain actions.
MD&A states Box incurred approximately $7.1 million in workforce reorganization charges in FY2026 Q1 and expects additional charges in Q2 FY2026. Operating income decreased 64.8% and net income decreased 52.4% in FY2026 Q1 vs the prior-year quarter.
SaaS KPIs
All quarters →Billings
Net Retention Rate
Non-GAAP Operating Margin
Remaining Performance Obligations (RPO)
Non-GAAP Free Cash Flow
Long-term RPO
Short-term RPO
Summary, forecast, risks and KPIs are extracted from BOX INC's SEC filings for Q1 FY2026 (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.