Summary
Box closed FY2025 Q2 with revenue of $270.0 million, up 3.3% from the prior-year quarter, or 6% growth on a constant currency basis. GAAP gross profit rose 10.3% to $214.5 million. Gross margin reached 79.4%, up 5.1 percentage points. Operating income climbed 105.4% to $20.3 million, and operating margin was 7.5%, up 3.7 percentage points. Net income increased 89.9% to $20.5 million. GAAP diluted EPS was $0.10, up 150% from the prior-year quarter. Operating cash flow rose 11.1% to $36.3 million. The company also reported record non-GAAP operating margin of 28.4% and record non-GAAP diluted EPS of $0.44.
Sales activity showed more momentum than revenue. Billings for the quarter were $256.4 million, up 10% from the prior-year quarter. Remaining performance obligations were $1.30 billion, up 18.2% from the prior-year quarter. Deferred revenue was $502.1 million, up 4.8%. Management pointed to seat growth in existing customers, strong attach rates for multi-product Suites, and growth in Japan. Net retention rate slipped to 102% from 103% a year earlier, reflecting budget scrutiny and partial customer churn. The company repurchased 3.9 million shares for about $102 million in the quarter. On August 25, 2024, the board authorized an additional $100 million for the repurchase plan.
Box continued to push its Intelligent Content Management platform. It announced the acquisition of Alphamoon's AI-powered intelligent document processing technology and team. It made unlimited Box AI queries available for Hubs, Documents, and Notes on Enterprise Plus plans. It expanded its Slack partnership so joint customers can use unlimited Box AI queries in Slack. Box also unveiled Box AI features including GPT-4o integration, image and spreadsheet support, and a metadata API. Customer wins spanned financial services, hospitality, life sciences, industrial goods, media, public sector, retail, and transportation. The company named Samantha Wessels as President of Box EMEA and Tricia Gellman as Chief Marketing Officer.
Guidance for the next quarter, FY2025 Q3, calls for revenue growth of 5% year over year, or 6% on a constant currency basis. Full-year FY2025 guidance calls for revenue growth of 5% year over year, or 7% on a constant currency basis. Management expects non-GAAP operating margin of about 28% for Q3 and about 27.5% for the full year. Non-GAAP diluted EPS guidance is $0.41 to $0.42 for Q3 and $1.64 to $1.66 for the full year. The outlook includes FX headwinds, with the U.S. dollar versus the Japanese Yen reducing full-year revenue growth by 170 basis points, 80 basis points less than previous expectations. Deferred tax expense in the United Kingdom also weighs on GAAP and non-GAAP EPS guidance.
Risks remain. Management cited inflation, higher interest rates, slower growth, the stronger dollar, and the Hamas-Israel and Russia-Ukraine conflicts as pressures on customer behavior. Larger deals are getting more scrutiny, seat expansion is lower, and churn has increased. Sales cycles have been delayed, and some customers are reducing budgets. The company also faces a highly competitive market, pricing pressure, industry consolidation, new competitors, and the risk that customers do not renew or adopt new products. Security vulnerabilities, acquisition integration, and reliance on third-party partnerships are additional concerns. Non-GAAP free cash flow was $32.7 million, up 59% from the prior-year quarter.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $270.0M | $264.7M | +2.0% | $261.4M | +3.3% |
| Gross profit | $214.5M | $206.4M | +3.9% | $194.4M | +10.3% |
| Gross margin | 79.4% | 78.0% | +1.5 pp | 74.4% | +5.1 pp |
| Research & development | $65.4M | $62.7M | +4.4% | $63.3M | +3.4% |
| Sales & marketing | $95.2M | $92.7M | +2.8% | $88.6M | +7.5% |
| General & administrative | $33.6M | $33.1M | +1.6% | $32.6M | +2.9% |
| Total operating expenses | $194.2M | $188.4M | +3.1% | $184.5M | +5.3% |
| Operating income (loss) | $20.3M | $18.0M | +12.6% | $9.9M | +105.4% |
| Operating margin | 7.5% | 6.8% | +0.7 pp | 3.8% | +3.7 pp |
| Net income (loss) | $20.5M | $17.2M | +19.0% | $10.8M | +89.9% |
| Net margin | 7.6% | 6.5% | +1.1 pp | 4.1% | +3.5 pp |
| Diluted EPS | $0.10 | $0.08 | +$0.02 | $0.04 | +$0.06 |
| Net retention rate | 102.0% | 101.0% | +1.0 pp | 103.0% | -1.0 pp |
Risks
MD&A states that during the quarter ended July 31, 2024, Box continued to see additional customer scrutiny on larger deals and lower seat expansion rates due to the challenging macroeconomic environment, resulting in increased customer churn and delayed sales cycles. Risk Factors also warn that adverse economic conditions have in the past and may in the future reduce sales, lengthen sales cycles, and increase price competition.
Net retention rate was approximately 102% as of July 31, 2024, down from 103% as of July 31, 2023. MD&A attributes the decline to heightened budget scrutiny pressuring seat expansion within existing customers and increased partial customer churn, and Risk Factors note that any decline in renewals or failure to expand use would harm future operating results.
Risk Factors state that the market is intensely competitive and that disruptive technologies such as generative AI may fundamentally alter the market for Box's services in unpredictable ways, including reduced customer demand and increased costs. Box faces larger competitors including Microsoft SharePoint and OneDrive, Google Drive, and OpenText Documentum, some of which bundle products at lower prices or for free.
Risk Factors state that the Japanese Yen has experienced a decline in value relative to the U.S. dollar, which negatively affected results of operations during the year ended January 31, 2024 and the six months ended July 31, 2024. MD&A reports that foreign currency exchange rates negatively impacted revenue growth by 310 basis points in the quarter and 290 basis points year to date, and offset RPO growth by 230 basis points.
Risk Factors state that as sales efforts are increasingly focused on cloud content management use cases and targeted at enterprise and highly-regulated customers, sales cycles may become longer and more expensive, with greater pricing pressure and implementation and customization challenges. MD&A notes larger deals required more scrutiny across verticals and geographies.
Risk Factors highlight new and evolving AI regulation, including the EU AI Act adopted March 13, 2024, U.S. Executive Order 14110 issued October 30, 2023, and the Colorado AI Act effective February 2026. Box also warns that developing, testing, and deploying third-party AI systems may increase computing costs and impact margins, and that third-party AI service outages or unfavorable terms could disrupt its business.
Risk Factors state that Box issued $345.0 million aggregate principal amount of 0.00% convertible senior notes due January 15, 2026, and has made an irrevocable election to settle principal in cash upon conversion. If holders convert or require repurchase upon a fundamental change, Box may not have enough available cash or be able to obtain financing, and reclassification of the notes to current could materially reduce reported working capital.
Risk Factors state that Box has incorporated AI technologies into product offerings and may continue to do so, which may create additional cybersecurity risks or increase risks of security breaches and incidents. The filing also notes heightened risk from nation-state and affiliated actors due to geopolitical conflicts and from remote work arrangements.
Risk Factors describe evolving privacy and data protection laws, including GDPR penalties of up to the greater of 20 million Euros or 4% of global revenue, the CCPA and CPRA, and numerous state laws becoming effective between 2024 and 2026. Some jurisdictions are considering data localization requirements that could prevent Box from providing services in those regions or subject it to significant fines.
Risk Factors state that Series A Convertible Preferred Stock has liquidation preference, cumulative 3.0% dividends, and redemption rights after the seventh anniversary, and that KKR has the right to designate a board member and consent rights over certain actions. These obligations could impact liquidity and reduce cash available for working capital, capital expenditures, and growth.
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 Q2 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 1, 2026.