Summary
Box reported third-quarter fiscal 2025 revenue of $275.9 million, up 5.5% year over year. Gross profit rose 14.6% to $220.4 million, lifting gross margin to 79.9%, up 6.3 percentage points. Operating income was $23.4 million, up 105.7%, and operating margin was 8.5%, up 4.1 percentage points. Net income was $12.9 million, up 21.0%, and diluted earnings per share was $0.05, up 25.0%. Management described the results as delivering record GAAP gross and operating margins. Through nine months, revenue reached $810.6 million, up 4.6%. Gross profit was $641.3 million, up 11.1%. Operating income was $61.7 million, up 108.5%. Net income was $50.6 million, up 69.9%. Diluted earnings per share for the nine months was $0.23, up 130.0%. Gross margin for the nine months was 79.1%, up 4.7 percentage points, and operating margin was 7.6%, up 3.8 percentage points.
Cash flow and non-GAAP results showed a similar split between profit and cash. Operating cash flow for the quarter was $62.6 million, down 12.8% year over year. Capital expenditures were $0.27 million, down 89.0%. Through nine months, operating cash flow was $230.1 million, flat, and capital expenditures were $1.94 million, down 56.4%. Non-GAAP free cash flow, a different measure, was $57.4 million, down 2% from a year earlier. Deferred revenue stood at $491.30 million, up 4.1%. Non-GAAP gross profit was $226.1 million, or 81.9% of revenue. Non-GAAP operating income was $80.2 million, a 29.1% operating margin. Non-GAAP diluted net income per share was $0.45. Billings were $264.7 million, up 4%. The net retention rate was 102%.
Product activity centered on the Intelligent Content Management platform. Box introduced the Enterprise Advanced Suites plan, which bundles Box Forms, Doc Gen, Box AI Studio, Box Apps beta, Box Archive, Content Recovery, and expanded developer tools. Box Hubs reached general availability, and Box AI became available for Hubs, Documents, and Notes. The company received an In Process designation for FedRAMP High. It expanded its partnership with Amazon Web Services so customers can access foundation models in Box AI through Amazon Bedrock, starting with Anthropic's Claude and Amazon Titan. A new AI partnership with Slalom aims to help customers use advanced AI and machine learning. Box hosted BoxWorks 2024 and was recognized as a Leader in the IDC MarketScape for Worldwide Intelligent Content Services 2024. The company also announced the fourth-annual Box Impact Fund, which awards a total of $150K to six nonprofits, with each receiving a $25K grant. The Suites attach rate was 83% in deals over $100,000, up from 79%. Revenue growth was driven by seat growth in existing customers, strong attach rates for multi-product Suites, and strong growth in Japan. Recent wins or expansions included Blue Origin, Citadel Enterprise Americas, Moelis Company, Gibson Dunn, Morgan Lewis, Biogen, Catalent Pharma Solutions, Food Drug Administration, Naval Air Systems Command, Veeco Instruments, Vulcan Materials, Lionsgate, San Antonio Spurs, and Serviceplan.
On the capital front, Box raised $460 million through convertible notes due September 15, 2029. The notes carry a 1.50% interest rate. During the quarter, Box repurchased 1.0 million shares at a weighted average price of $29.78 for $29.9 million. As of October 31, 2024, $94.6 million remained authorized for additional repurchases. Management guided fourth-quarter fiscal 2025 revenue growth to approximately 6% year over year, or 7% on a constant currency basis. For the fourth quarter, non-GAAP operating margin is expected to be approximately 27.5%, non-GAAP diluted net income per share is expected to be approximately $0.41, and weighted-average diluted shares outstanding are expected to be approximately 151 million. For the full fiscal year 2025, management guided revenue growth to approximately 5% year over year, or 7% on a constant currency basis. Full-year non-GAAP operating margin is expected to be approximately 28%, non-GAAP diluted net income per share is expected to be approximately $1.70, and weighted-average diluted shares outstanding are expected to be approximately 149 million.
The company expects foreign exchange to be a 190 basis point headwind to full-year revenue growth, 20 basis points higher than previous expectations. About one third of revenue is generated outside the U.S., and about 65% of that is in Japanese Yen. Management cited ongoing customer scrutiny on larger deals, lower seat expansion rates, increased churn, and delayed sales cycles. The challenging macroeconomic environment, inflation, higher interest rates, the stronger dollar versus foreign currencies, the Russia-Ukraine conflict, and the conflict in the Middle East are all listed as pressures. Other risks include competition and pricing pressure, industry consolidation, new competitors, security vulnerabilities or breaches, the ability to realize benefits from partnerships, and the integration of acquisitions.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $275.9M | $270.0M | +2.2% | $261.5M | +5.5% |
| Gross profit | $220.4M | $214.5M | +2.7% | $192.3M | +14.6% |
| Gross margin | 79.9% | 79.4% | +0.4 pp | 73.5% | +6.3 pp |
| Research & development | $67.9M | $65.4M | +3.7% | $61.0M | +11.2% |
| Sales & marketing | $95.4M | $95.2M | +0.2% | $87.9M | +8.5% |
| General & administrative | $33.7M | $33.6M | +0.3% | $32.0M | +5.3% |
| Total operating expenses | $196.9M | $194.2M | +1.4% | $180.9M | +8.9% |
| Operating income (loss) | $23.4M | $20.3M | +15.4% | $11.4M | +105.7% |
| Operating margin | 8.5% | 7.5% | +1.0 pp | 4.3% | +4.1 pp |
| Net income (loss) | $12.9M | $20.5M | -37.1% | $10.7M | +21.0% |
| Net margin | 4.7% | 7.6% | -2.9 pp | 4.1% | +0.6 pp |
| Diluted EPS | $0.05 | $0.10 | -$0.05 | $0.04 | +$0.01 |
| Net retention rate | 102.0% | 102.0% | ±0.0 pp | 102.0% | ±0.0 pp |
Risks
MD&A says challenging macroeconomic conditions contributed to additional customer scrutiny on larger deals, lower seat expansion, increased churn and delayed sales cycles. Foreign exchange, especially the weaker Japanese Yen, negatively impacted revenue growth by 100 basis points in the quarter and 220 basis points in the nine-month period.
The filing re-emphasizes that sales efforts increasingly target enterprise and highly regulated customers, which can lengthen sales cycles and raise costs. Net retention rate was approximately 102% as of October 31, 2024 and 2023, with MD&A attributing pressure to heightened budget scrutiny on seat expansion and increased partial customer churn.
Risk factors warn that disruptive technologies such as generative AI may fundamentally alter the market for Box services, including reduced customer demand and increased costs. Box AI, Box Hubs and the Box AI API are highlighted in MD&A, but third-party AI computing costs could impact margins and adoption remains uncertain.
Privacy and AI regulations are expanding, including the EU AI Act adopted in March 2024, EO 14110, California and Colorado AI bills, GDPR fines of up to the greater of 20 million Euros or 4% of global revenue, and NIS2 and DORA compliance deadlines. These requirements can increase costs, delay product development and reduce demand for Box services.
Box states it has become more of a target as its customer base grows in regulated industries such as healthcare, government, life sciences and financial services. The filing also says incorporating AI technologies may create additional cybersecurity risks or increase risks of security breaches and incidents.
As of October 31, 2024, Box had $460.0 million of 2029 Convertible Notes and $205.0 million of 2026 Convertible Notes outstanding. Principal must be settled in cash upon conversion, and reclassification of the notes as current could materially reduce reported working capital.
Series A Convertible Preferred Stock accrues cumulative dividends at 3.0% per annum and has redemption rights beginning after the seventh anniversary of issuance plus change-of-control make-whole obligations. KKR also has a board designation right, which may create divergent interests from Class A common stockholders.
Sales to government entities face upfront time and expense, certification changes, public sector budgetary cycles, and potential extended federal government shutdowns or debt-ceiling breaches that could delay or reduce spending on Box solutions.
SaaS KPIs
All quarters →Billings
Net Retention Rate
Non-GAAP Operating Margin
Remaining Performance Obligations (RPO)
Non-GAAP Free Cash Flow
Summary, forecast, risks and KPIs are extracted from BOX INC's SEC filings for Q3 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.