Core Viewpoint - The article provides an update on Box, Inc. (NYSE: BOX) following a previous recommendation for a buy rating, emphasizing the company's potential for growth acceleration and the importance of a fundamentals-based approach to value investing [1]. Group 1: Investment Philosophy - The investment philosophy focuses on seeking companies that demonstrate long-term durability and steady growth, rather than merely low multiple stocks [1]. - There is a belief that while valuation is important, in certain situations, the potential for growth can outweigh immediate price concerns [1]. Group 2: Company Characteristics - The ideal companies for investment are characterized by a robust balance sheet and lack of cyclicality, which contributes to their long-term growth prospects [1].

Core Insights - The Asia-Pacific Food Gifting Market is culturally significant, with food symbolizing goodwill in various celebrations and daily interactions [1][4] - The market is projected to grow at a CAGR of over 6.10% from 2024 to 2029, driven by demand for premium, personalized, and health-conscious food gifts [3][6] - E-commerce is a key enabler for market expansion, allowing consumers to easily send food gifts [2][5] Market Overview - The market is characterized by a diverse range of products, including traditional sweets, chocolates, and gourmet hampers [2][3] - Major players focus on luxury and convenience, while local companies thrive by addressing specific cultural preferences [4][6] - Offline retail remains important, providing a tactile shopping experience that is valued in cultures with rich gifting traditions [6] Trends and Drivers - Key trends include the rising popularity of vegan, gluten-free, and sugar-free options, reflecting a shift towards healthier lifestyle choices [3] - Collaborations with celebrity chefs and influencers are enhancing product appeal through exclusive offerings [5] - Cultural events like Lunar New Year and Diwali significantly drive gifting practices in the region [4] Regional Insights - China is highlighted as a leading market due to its cultural practices, economic growth, and a robust e-commerce sector [6] - The report provides a comprehensive analysis of market size, regional dynamics, and distribution channels, offering strategic insights for stakeholders [6]

Financial Performance - For the three months ended April 30, 2025, revenue was $276.3 million, a year-over-year growth of 4%[113] - Billings for the three months ended April 30, 2025, were $242.3 million, an increase of 27% from $190.5 million for the same period in 2024[123] - Revenue for the three months ended April 30, 2025 was $276,272,000, a $11,614,000 or 4% increase from $264,658,000 in 2024, driven by seat growth and strong attach rates[145][147] - Gross profit for the three months ended April 30, 2025, was $215.6 million, with a gross margin of 78.0%[113] - Operating income for the three months ended April 30, 2025, was $6.3 million, with an operating margin of 2.3%[113] - Non-GAAP free cash flow for the three months ended April 30, 2025, was $118.3 million, a decrease of 4% from $123.2 million for the same period in 2024[127] Remaining Performance Obligations - Remaining performance obligations (RPO) as of April 30, 2025, were $1.469 billion, representing a 21% increase from $1.212 billion as of April 30, 2024[119] - The increase in RPO was primarily driven by expansion within existing customers and the addition of new customers, with a 390 basis point impact from favorable foreign currency exchange rates[120] Customer Retention - The net retention rate is a key metric indicating the long-term value of subscription agreements, reflecting the company's ability to retain and grow revenue from existing customers[129] - The net retention rate was 102% and 101% as of April 30, 2025 and 2024, respectively, indicating strong customer retention despite budget scrutiny[130] - The company expects to maintain a net retention rate above 100% in the foreseeable future as it continues to penetrate customer accounts[130] Expenses - Cost of revenue increased by $2,421,000 or 4% to $60,673,000, with gross margin remaining at 78%[148] - Research and development expenses rose by $9,628,000 or 15% to $72,301,000, representing 26% of revenue, driven by increased headcount and related costs[150][151] - Sales and marketing expenses increased by $6,426,000 or 7% to $99,099,000, accounting for 36% of revenue, influenced by workforce reorganization and employee-related costs[152][153] - General and administrative expenses grew by $4,808,000 or 15% to $37,861,000, representing 14% of revenue, primarily due to increased stock-based compensation and headcount[154][155] Cash Flow and Investments - As of April 30, 2025, cash and cash equivalents totaled $792.1 million, with operating cash flow generated of $127.1 million during the three months[161] - Net cash provided by operating activities decreased by $4.1 million to $127.1 million, attributed to a $9.0 million decrease in net income[162] - Net cash used in investing activities decreased by $12.8 million to $(10.4) million, primarily due to a $14.2 million decrease in purchases of short-term investments[164] - Net cash used in financing activities increased by $26.1 million to $(61.8) million, mainly due to a $17.5 million increase in stock repurchases[165] Debt and Financing - The company issued $460.0 million of 1.50% convertible senior notes due September 15, 2029, with a conversion price of approximately $43.46 per share[166] - A share repurchase plan was authorized, with $150 million allocated for repurchases; 1.6 million shares were repurchased at an average price of $31.28 per share for a total of $49.6 million[171] - The company had no debt outstanding on the June 2023 Facility as of April 30, 2025[169] Foreign Currency Exposure - Approximately one-third of the company's revenue is represented by customer contracts denominated in foreign currencies, including the Japanese Yen, Euro, and British Pound[186] - For the three months ended April 30, 2025, total revenue was unfavorably impacted by approximately 90 basis points due to foreign currency fluctuations compared to the prior period[187] - The company recognized $2.8 million in foreign currency exchange gains for the three months ended April 30, 2025, net of losses from foreign currency derivative contracts[189] - The company has entered into foreign currency derivative contracts to hedge unrealized gains and losses from remeasurement of monetary assets and liabilities denominated in foreign currencies[189] - The company has increasing exposure to fluctuations in foreign currency exchange rates as foreign operations grow, particularly in Japan[186] - The company has entered into foreign currency derivative contracts designated as cash flow hedges to mitigate the impact of foreign exchange rate fluctuations on future cash flows and earnings[189] Interest Income and Expense - Interest income for the three months ended April 30, 2025 was $6,698,000, an increase of $1,009,000 or 18% from $5,689,000 in 2024, attributed to higher cash and short-term investment balances[156][157] - Interest expense increased by $1.9 million, or 235%, to $(2.7) million for the three months ended April 30, 2025, primarily due to a $2.1 million increase related to the 2029 Convertible Notes[158] Tax Provision - Provision for income taxes rose by $0.3 million, or 7%, to $4.95 million, mainly due to increases in foreign income taxes from profitability and U.S. income taxes from the release of the U.S. valuation allowance[160]

Group 1 - Box's shares surged by as much as 19.7% following the release of strong Q1 fiscal-year 2026 results, with a peak increase of about 18% by 3:10 p.m. ET [1] - The company's Q1 2026 sales increased by 4% year over year to $276.3 million, while adjusted earnings per diluted share fell from $0.39 to $0.30, impacted by foreign currency exchange rates [3] - Analysts had expected earnings of approximately $0.26 per share on revenue around $275.1 million, indicating that Box's performance exceeded some market expectations [3] Group 2 - Looking ahead, Box's management anticipates Q2 revenue of approximately $290 million and adjusted earnings per share of around $0.30, compared to $270 million and $0.44 per share in the same period last year [4] - The company is recognizing $248 million of deferred tax credits, which has affected its bottom line, reducing Q1 adjusted earnings by $0.12 per share [5] - Box recently launched a new AI platform aimed at helping enterprise clients manage data for their AI agents, contributing to a positive outlook and stock performance [6]

Core Insights - Jack in the Box Inc. has been trading at a low valuation, prompting an investigation into the reasons behind this trend [1] Company Analysis - The company is perceived as a long-term investment opportunity, with a typical investment horizon of 5-10 years [1] - The investment strategy focuses on a balanced portfolio that includes growth, value, and dividend-paying stocks, with a particular emphasis on value stocks [1] Market Position - The current market sentiment towards Jack in the Box Inc. suggests potential undervaluation, which may present investment opportunities for value-focused investors [1]

Core Viewpoint - Box reported a decline in non-GAAP earnings for Q1 fiscal 2026, but total revenues exceeded expectations, driven by strong demand for its Suite offerings and new product introductions [1][2][3]. Financial Performance - Non-GAAP earnings for Q1 fiscal 2026 were 30 cents per share, a 23.1% decline year over year, but exceeded the Zacks Consensus Estimate by 20% [1] - Total revenues reached $276.3 million, surpassing the consensus mark by 0.67%, with a year-over-year increase of 4.4% on a reported basis and 5% on a constant-currency basis [1] - Billings for the quarter were $242.3 million, reflecting a 27% year-over-year increase (17% growth on a constant-currency basis) [3] - The company’s net retention rate improved to 102%, up 100 basis points year over year [4] Product and Service Developments - The revenue growth was primarily driven by the strong momentum of Box Suites, which bundle multiple products and services [2] - Box introduced a new Box AI Agent for Microsoft 365 Copilot, enhancing customer capabilities to interact with Box content [4] Operating Metrics - Non-GAAP gross margin for Q1 fiscal 2026 was 80.5%, an increase of 30 basis points year over year [6] - Operating expenses rose to $209.3 million, an 11.1% increase year over year, leading to an operating margin of 25.3%, which contracted by 130 basis points [6] Balance Sheet and Cash Flow - As of April 30, 2025, cash and cash equivalents were $689.7 million, up from $624.6 million at the end of January 2025 [7] - The company generated $127.1 million in cash from operations, an increase from $102.2 million in the previous quarter [8] - Non-GAAP free cash flow for the quarter was $118.3 million, with $50 million spent on share repurchases [9] Guidance - For Q2 fiscal 2026, Box expects revenues between $290 million and $291 million, indicating an 8% rise year over year [10] - For fiscal 2026, the revenue guidance is set between $1.16 billion and $1.17 billion, suggesting a 7% year-over-year increase [11]

Core Insights - Box Inc and Okta Inc reported earnings that exceeded estimates for the first quarter, but their market reactions diverged significantly due to differing guidance and outlooks [1] Box Inc (NYSE:BOX) - Box Inc's stock surged by 17.3%, trading at $36.88, and reached a record high of $37, marking its largest single-day percentage gain since March 2020 [2] - The company raised its profit and revenue guidance for 2026, which contributed to the positive market reaction [1] - Box's shares have increased by 15.4% year-to-date in 2025 [2] - The options market is highly active for Box, with trading volume at 40 times the intraday average, and the most active contract being the June 40 call [4] Okta Inc (NASDAQ:OKTA) - Okta Inc's stock fell by 13.6% to $108.43, indicating its worst performance since August, following eight price-target cuts, including a reduction by Barclays from $135 to $120 [3] - Despite the decline, Okta's shares are still up 38.1% for the year, having previously reached a three-year high of $127.57 on May 16 [3] - The options market for Okta is also seeing increased activity, with trading volume at 16 times the usual level, and the most active contract being the June 117 call [4]

Market Overview - The stock market is currently experiencing high volatility, with major indices fluctuating based on various tariff-related news [1] - There is significant dispersion between individual assets, indicating that stock pickers may find opportunities in this environment [1] Analyst Background - Gary Alexander has extensive experience in covering technology companies on Wall Street and has worked in Silicon Valley [1] - He has been an outside adviser to several seed-round startups, providing insights into current industry trends [1] - Alexander has been a contributor to Seeking Alpha since 2017 and has been featured in various web publications [1]

Financial Performance - Revenue for Q1 FY26 reached $276 million[7], driven by Suites momentum[6] - Total Remaining Performance Obligations (RPO) increased by 21% year-over-year to $1469 million[9, 10] - Long-term RPO increased by 32% year-over-year[10] - Billings increased by 27% year-over-year to $242 million[13] - Non-GAAP gross margin was 80.5%, up 30 bps year-over-year[15] - Non-GAAP operating margin was 25.3%, down 130 bps year-over-year[20] Cash Flow and Share Repurchase - The company repurchased approximately 1.6 million shares for approximately $50 million in Q1[26] - As of April 30, 2025, the company had approximately $152 million remaining for share repurchases[26] - Cash, cash equivalents, restricted cash, and short-term investments totaled $792 million[23] Guidance and Customer Metrics - Q2 FY26 revenue is projected to be $290 to $291 million, representing a year-over-year growth of 8%[30] - FY26 revenue is projected to be $1.165 to $1.170 billion, representing a year-over-year growth of 7%[30] - Net retention rate remained stable at 102%[37, 38] - 61% of total revenue came from Suites[41] - The number of customers paying more than $100k annually grew by 8% year-over-year to 1,940[43, 44]

Core Viewpoint - The self-regulation of the loot box industry in the UK has failed, leading to widespread noncompliance and lack of enforcement, particularly affecting consumer protection for children [2][4][5] Group 1: Industry Self-Regulation - The previous Conservative UK government encouraged the gaming industry, represented by Ukie, to self-regulate instead of imposing legislation [1] - A study published in Royal Society Open Science indicates that compliance with self-regulation is very poor, with only 23.5% of the top 100 iPhone games disclosing the presence of loot boxes in their marketing [2] - Only 8.6% of these games consistently disclosed the probabilities of obtaining different rewards, highlighting a significant lack of transparency [2] Group 2: Enforcement Issues - Noncompliant games were reported to Ukie and the UK government over six months ago, yet no enforcement actions have been taken, allowing these games to remain available for download [3] - Ukie had previously promised that noncompliant games would face "severe fines" and "delisting" from app stores, but these promises have not been fulfilled [3] Group 3: Consumer Protection - The current state of noncompliance and lack of enforcement fails to protect consumers, especially children, as initially promised by the industry [4] - Companies are not only breaching self-regulation but also advertising regulations and consumer laws, indicating a need for more proactive enforcement by other regulators [4]