Summary
Box closed fiscal 2026 with a stronger fourth quarter on revenue and operating profit, but net income fell sharply. Revenue came in at $305.9 million, up 9.4% from the prior-year quarter. Gross profit rose 11.0% to $245.0 million, and gross margin expanded to 80.1%, up 1.1 percentage points. GAAP operating income climbed 74.0% to $31.2 million, lifting operating margin to 10.2%, up 3.8 percentage points. Net income was $81.7 million, down 57.9%. The press release noted that the prior-year quarter included a net tax benefit from a valuation allowance release. On a non-GAAP basis, operating income was $93.7 million, or 30.6% of revenue, and non-GAAP diluted EPS was $0.49.
Operational metrics point to steady expansion. Remaining performance obligations were $1.71 billion, up 14.0% from the prior-year quarter. Billings were $419.8 million, up 5%. Net retention rate reached 104%, compared with 102% as of January 31, 2025 and 101% as of January 31, 2024. Management said Enterprise Advanced customers already account for 10% of revenue. The product pipeline stayed busy. Box announced general availability for Box Extract and Box Shield Pro, added support for Anthropic's Claude Opus 4.5 and 4.6, Sonnet 4.6, Google's Gemini 3 Flash and 3.1 Pro, and OpenAI's GPT-5.2 in Box AI Studio, and launched integrations with Atlassian, Figma, ServiceNow, and Workday. Customer wins included Robinhood Markets, Zurich Insurance Group, Mayo Clinic, Novo Nordisk, Sega Europe, Sony Music Entertainment, Ace Hardware, and Chanel.
Cash generation remained solid. Fourth-quarter operating cash flow was $110.4 million, up 8.0%, while capital expenditures were $1.9 million, up 206.1%. Non-GAAP free cash flow was $97.5 million, up 7%. For the full year, operating cash flow was $356.5 million, up 7.3%, and non-GAAP free cash flow was $312.9 million, up 3%. Capital expenditures for the full year were $6.1 million, up 136.1%. Deferred revenue ended the quarter at $656.7 million, up 7.9% from the prior-year quarter. Box repurchased 4.4 million shares for approximately $126 million in the fourth quarter, leaving about $59 million of buyback capacity. Full-year revenue was $1.18 billion, up 8.0%. Full-year net income was $115.4 million, down 52.8%, and full-year GAAP diluted EPS was $0.58, down 57.4%.
Guidance for the next quarter and the full fiscal year points to continued top-line growth. For Q1 FY27, Box expects revenue of approximately $304 million, up 10% year over year, or 9% on a constant currency basis, including an expected positive FX tailwind of about 90 basis points. Non-GAAP operating margin is guided to about 27.5%. Non-GAAP diluted EPS is guided to approximately $0.36. For full-year FY27, revenue is expected to be approximately $1.275 billion, up 8% year over year, or 9% on a constant currency basis, including an expected FX headwind of about 60 basis points. Non-GAAP operating margin is guided to about 28%, and non-GAAP diluted EPS is guided to approximately $1.55. Weighted-average diluted shares are expected to be approximately 141 million for both periods. Management noted that FY27 guidance reflects a lower expected tax rate.
The main risks are familiar and mostly external. The company called out macroeconomic pressure from inflation, higher interest rates, tariffs, slower growth, a stronger dollar versus foreign currencies, especially the Japanese Yen, government shutdowns, and reductions in U.S. federal spending. The ongoing Russia-Ukraine conflict and conflicts in the Middle East also remain overhangs. Box faces a highly competitive market with pricing pressure, industry consolidation, and new competitors. Customer renewal and expansion are not guaranteed, and the company noted heightened budget scrutiny that pressures seat expansion and increases partial churn. Execution risks include timely product enhancements and integrations, security vulnerabilities or breaches, reliance on third-party partnerships, and integration of acquisitions.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2026 | Q3 FY2026 | QoQ | Q4 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $305.9M | $301.1M | +1.6% | $279.5M | +9.4% |
| Gross profit | $245.0M | $239.5M | +2.3% | $220.7M | +11.0% |
| Gross margin | 80.1% | 79.5% | +0.5 pp | 79.0% | +1.1 pp |
| Research & development | $76.6M | $73.9M | +3.6% | $68.9M | +11.2% |
| Sales & marketing | $99.6M | $103.1M | -3.3% | $96.8M | +2.9% |
| General & administrative | $37.6M | $37.5M | +0.3% | $37.1M | +1.3% |
| Total operating expenses | $213.8M | $214.5M | -0.3% | $202.8M | +5.4% |
| Operating income (loss) | $31.2M | $25.1M | +24.5% | $17.9M | +74.0% |
| Operating margin | 10.2% | 8.3% | +1.9 pp | 6.4% | +3.8 pp |
| Net income (loss) | $81.7M | $12.1M | +577.0% | $194.0M | -57.9% |
| Net margin | 26.7% | 4.0% | +22.7 pp | 69.4% | -42.7 pp |
| Diluted EPS | $0.46 | $0.05 | +$0.41 | $1.13 | -$0.67 |
| Net retention rate | 104.0% | 104.0% | ±0.0 pp | 102.0% | +2.0 pp |
Risks
Generative AI may fundamentally alter the market, reduce customer demand or let competitors incorporate AI capabilities faster; Box's strategy relies on new AI offerings such as Box AI, Box Extract, Box Automate and Box Shield Pro. The filing also warns third-party AI costs could pressure margins and that EU and U.S. state AI rules add compliance risk.
MD&A says inflation, higher interest rates, tariffs, a stronger dollar versus the Japanese Yen, government shutdowns, reduced U.S. federal spending and geopolitical conflicts may continue to cause customer churn and delayed sales cycles. It also says customers scrutinize deals more closely and budget pressure is constraining seat expansion and increasing partial churn.
Net retention rate was approximately 104% as of January 31, 2026 and 102% as of January 31, 2025, and the filing says it may decline if customers do not renew, renew on less favorable terms, purchase fewer seats or fail to adopt higher-tiered Suites including Enterprise Advanced. MD&A attributes pressure to budget scrutiny, weaker seat expansion and increased partial churn.
The cloud content management market is intensely competitive, with Microsoft, Google, OpenText and Dropbox as primary competitors; some competitors bundle products at lower prices or for free, pressuring Box's pricing and margins. Box must keep investing in product and go-to-market capabilities to compete.
Box stores large amounts of sensitive customer data and increasingly serves heavily regulated industries such as healthcare, government, life sciences and financial services, making it a more attractive target. The filing notes increased attack sophistication, nation-state threats, remote-work exposure, and that incorporating AI may create additional cybersecurity risks.
Sales efforts are increasingly focused on cloud content management for enterprise and highly regulated customers, which can lengthen sales cycles, increase costs and create greater pricing, implementation and customization challenges. MD&A notes customers scrutinizing deals more closely due to the economic environment.
As of January 31, 2026, Box had $460.0 million principal of 2029 Convertible Notes due September 15, 2029. Principal must be settled in cash upon conversion, holders can require repurchase upon a fundamental change, and conditions could force reclassification to current, materially reducing reported working capital. Interest expense rose 76% to $10.7 million for FY2026.
Series A Convertible Preferred Stock accrues cumulative 3.0% dividends compounding quarterly, has redemption rights after seven years and change-of-control make-whole payments. These obligations could reduce cash available for working capital, capital expenditures and growth, and limit additional financing.
Box faces evolving privacy, data protection and cybersecurity laws, including GDPR, EU Data Act, NIS2, DORA, CCPA/CPRA and many U.S. state statutes. DORA can impose fines up to 5 million euros on third-party cloud providers, and in-region storage or data transfer requirements could increase costs or limit service offerings.
Box is exposed to currency fluctuations, particularly the Japanese Yen and to a lesser extent the British Pound, Euro and Polish Zloty. MD&A says FX favorably impacted FY2026 revenue growth by approximately 80 basis points, RPO growth by approximately 70 basis points and billings growth by approximately 170 basis points, so a reversal could pressure reported results.
Government sales are subject to public sector budget cycles and funding authorizations. The filing cites government shutdowns, reductions in U.S. federal spending, prolonged continuing resolutions and potential U.S. sovereign default as factors that may delay or limit federal purchases of Box solutions.
Box depends on key employees and skilled personnel, including its direct sales force. MD&A reports a 5% headcount increase in R&D and sales and marketing and $10.6 million in workforce reorganization expenses for FY2026, highlighting execution risk if hiring, retention or productivity falters.
SaaS KPIs
All quarters →Billings
Net Retention Rate
Non-GAAP Operating Margin
Non-GAAP Free Cash Flow
Non-GAAP Gross Margin
Paying Organizations
Remaining Performance Obligations
Long-term RPO
Short-term RPO
Summary, forecast, risks and KPIs are extracted from BOX INC's SEC filings for Q4 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.