Box(BOX) - 2026 Q2 - Quarterly Results

Executive Summary & Business Highlights Box reported strong Q2 FY26 financial results, driven by its Intelligent Content Management platform and strategic AI initiatives, securing new client wins and expanding its ecosystem Q2 FY26 Performance Overview Box reported strong preliminary Q2 FY26 financial results, with revenue at $294 million (+9% YoY) and RPO growing 16% to $1.5 billion, achieving GAAP operating margin of 7.0% and non-GAAP of 28.6% Q2 FY26 Key Financial Highlights | Metric | Value | YoY Change | | :-------------------------------- | :---------------- | :--------- | | Revenue | $294 Million | +9% (+7% CC) | | Remaining Performance Obligations | $1.5 Billion | +16% (+16% CC) | | GAAP Operating Margin | 7.0% | -0.5 pp | | Non-GAAP Operating Margin | 28.6% | +0.2 pp | | GAAP Net Income Per Share | $0.05 | -0.05 | | Non-GAAP Net Income Per Share | $0.33 | -0.11 | Strategic Commentary & AI Focus Box's CEO emphasized the Intelligent Content Management platform and AI agents for unstructured data, while the CFO noted strong Box AI demand supporting strategic investments - Box is doubling down on its Intelligent Content Management platform to leverage AI agents for unstructured data, with strong momentum seen in Enterprise Advanced[2] - Strong demand for Box AI is driving operating results above guidance, enabling strategic investments in product innovation and go-to-market initiatives[2] Recent Business Highlights Box secured new client wins, expanded its AI framework with new agent and protocol launches, and strengthened its ecosystem through strategic partnerships and government collaborations - Secured wins or expansions with leading organizations across Hospitality, Legal, Media and Entertainment, Public Sector, Retail, and Technology industries[5] - Delivered new updates to Box's AI framework, including the general availability of the Enhanced Extract Agent and beta launch of the remote Model Context Protocol (MCP) Server, alongside updates to Box AI Units, Box AI Studio, and AI Admin Console[10] - Announced general availability of Box Hubs with new features for organization, governance, and API, and delivered the Box connector for OpenAI's ChatGPT[10] - Formed strategic partnerships with Anthropic (Financial Analysis Solution), Snowflake (Openflow), AWS (Bedrock AgentCore Runtime), and Salesforce (MCP Partner Network) to enhance AI capabilities and content integration[10] - Collaborated with the U.S. General Services Administration (GSA) for OneGov, providing federal agencies access to Box's AI functionality, and hosted the Box Federal Summit and regional BoxWorks events[10] Fiscal Second Quarter Financial Results Box reported strong Q2 FY26 financial results, including increased revenue, gross profit, and operating cash flow, while managing balance sheet changes and net income fluctuations Key Financial Highlights (Q2 FY26) Box reported a 9% increase in revenue to $294.0 million for Q2 FY26, with strong RPO growth of 16% to $1.5 billion, achieving record GAAP gross profit and increased net cash from operating activities Q2 FY26 Key Financial Metrics (YoY Change) | Metric | Q2 FY26 Value | YoY Change | | :-------------------------------- | :---------------- | :--------- | | Revenue | $294.0 million | +9% (+7% CC) | | Remaining Performance Obligations | $1.5 billion | +16% (+16% CC) | | Short-term RPO | $812 million | +12% | | Long-term RPO | $664 million | +21% | | Billings | $264.9 million | +3% (+6% CC) | | GAAP Gross Profit | $232.5 million (79.1%) | +$18.0 million (+1.7 pp) | | Non-GAAP Gross Profit | $239.2 million (81.4%) | +$19.0 million (-0.2 pp) | | GAAP Operating Income | $20.6 million (7.0%) | +$0.3 million (-0.5 pp) | | Non-GAAP Operating Income | $84.0 million (28.6%) | +$7.3 million (+0.2 pp) | | GAAP Diluted EPS | $0.05 | -$0.05 | | Non-GAAP Diluted EPS | $0.33 | -$0.11 | | Net Cash from Operating Activities | $46.0 million | +27% | | Non-GAAP Free Cash Flow | $35.7 million | +9% | Condensed Consolidated Balance Sheets As of July 31, 2025, Box's total assets decreased to $1.62 billion from $1.67 billion, with total liabilities also decreasing to $1.40 billion from $1.47 billion, while stockholders' deficit improved slightly Condensed Consolidated Balance Sheets (in thousands) | Metric | July 31, 2025 | January 31, 2025 | | :------------------------------------------ | :-------------- | :--------------- | | ASSETS | | | | Cash and cash equivalents | $657,826 | $624,575 | | Total current assets | $1,042,740 | $1,097,779 | | Total assets | $1,624,581 | $1,667,520 | | LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | | | | Total current liabilities | $853,159 | $922,076 | | Total liabilities | $1,398,658 | $1,470,244 | | Total stockholders' deficit | $(269,355) | $(296,962) | | Total liabilities, convertible preferred stock and stockholders' deficit | $1,624,581 | $1,667,520 | Condensed Consolidated Statements of Operations For Q2 FY26, Box's revenue increased to $294.0 million, and gross profit rose to $232.5 million, but net income attributable to common stockholders decreased to $8.1 million due to higher taxes and preferred stockholder earnings Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $293,999 | $270,039 | $570,271 | $534,697 | | Gross profit | $232,477 | $214,526 | $448,076 | $420,932 | | Income from operations | $20,578 | $20,280 | $26,916 | $38,287 | | Net income | $13,445 | $20,496 | $21,639 | $37,718 | | Net income attributable to common stockholders | $8,097 | $14,341 | $11,611 | $25,855 | | Diluted EPS | $0.05 | $0.10 | $0.08 | $0.18 | | Total stock-based compensation expense | $60,758 | $55,111 | $115,652 | $106,273 | Condensed Consolidated Statements of Cash Flows Box's net cash from operating activities increased to $46.0 million for Q2 FY26, while investing activities shifted to a net outflow, and financing activities saw reduced cash usage due to lower stock repurchases Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $45,964 | $36,298 | $173,023 | $167,502 | | Net cash (used in) provided by investing activities | $(8,510) | $38,818 | $(18,901) | $15,648 | | Net cash used in financing activities | $(65,276) | $(121,407) | $(127,052) | $(157,102) | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(31,726) | $(42,669) | $33,443 | $23,459 | | Cash, cash equivalents, and restricted cash, end of period | $659,553 | $407,716 | $659,553 | $407,716 | Financial Outlook Box provided financial guidance for Q3 and full year FY26, projecting continued revenue growth and stable operating margins, with EPS figures significantly impacted by non-cash deferred tax expenses Q3 FY26 Guidance For Q3 FY26, Box anticipates revenue between $298 million and $299 million (+8% YoY), with GAAP operating margin around 8% and non-GAAP at 28%, while EPS is impacted by deferred tax expenses Q3 FY26 Financial Guidance | Metric | Range | | :------------------------------------------ | :-------------------- | | Revenue | $298 million to $299 million | | YoY Growth (reported) | +8% | | YoY Growth (constant currency) | +7% | | GAAP Operating Margin | ~8% | | Non-GAAP Operating Margin | ~28% | | GAAP Net Income Per Share | $0.05 to $0.06 | | Non-GAAP Diluted Net Income Per Share | $0.31 to $0.32 | | Weighted-average diluted shares outstanding | ~150 million | - Q3 FY26 GAAP EPS guidance includes a negative impact of $0.05 from non-cash deferred tax expenses, partially offset by a positive impact of $0.01 from favorable exchange rates[11] - Q3 FY26 Non-GAAP EPS guidance includes a negative impact of $0.14 from non-cash deferred tax expenses, partially offset by a positive impact of $0.01 from favorable exchange rates[11] Full Year FY26 Guidance For full year FY26, Box projects revenue between $1.170 billion and $1.175 billion (+8% YoY), with GAAP operating margin around 7% and non-GAAP at 28%, with EPS significantly affected by non-cash deferred tax expenses Full Year FY26 Financial Guidance | Metric | Range | | :------------------------------------------ | :-------------------- | | Revenue | $1.170 billion to $1.175 billion | | YoY Growth | +8% | | GAAP Operating Margin | ~7% | | Non-GAAP Operating Margin | ~28% | | GAAP Net Income Per Share | $0.18 to $0.20 | | Non-GAAP Diluted Net Income Per Share | $1.26 to $1.28 | | Weighted-average diluted shares outstanding | ~150 million | - Full year FY26 GAAP EPS guidance includes a negative impact of $0.19 from non-cash deferred tax expenses, partially offset by a positive impact of $0.04 from favorable exchange rates[19] - Full year FY26 Non-GAAP EPS guidance includes a negative impact of $0.58 from non-cash deferred tax expenses, partially offset by a positive impact of $0.04 from favorable exchange rates[19] Non-GAAP Financial Measures & Reconciliations Box provides non-GAAP financial measures to offer additional insights into core business performance, with detailed reconciliations for Q2 FY26 and guidance for Q3 and full year FY26 About Non-GAAP Financial Measures Box provides non-GAAP financial measures to supplement GAAP results, offering insights into core business performance by excluding certain expenses, used for internal decision-making and investor analysis, despite potential comparability limitations - Non-GAAP measures (e.g., gross profit, operating income, net income, billings, RPO, free cash flow) are provided to supplement GAAP results, offering meaningful supplemental information by excluding expenses not indicative of recurring core business operations[23][24] - These measures are used for financial and operational decision-making, evaluating period-to-period comparisons, and assessing performance against historical data and competitors[24] - Limitations include non-uniform definitions across companies, potential for limited comparability, and the fact that they are not substitutes for GAAP measures[25] Reconciliation of GAAP to Non-GAAP Data (Q2 FY26) Box provided detailed reconciliations from GAAP to non-GAAP figures for gross profit, operating income, net income, and free cash flow for Q2 FY26, with key adjustments including stock-based compensation and acquired intangible asset amortization Reconciliation of GAAP to Non-GAAP Gross Profit (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | GAAP gross profit | $232,477 | $214,526 | | Stock-based compensation | $5,666 | $4,731 | | Acquired intangible assets amortization | $993 | $981 | | Workforce reorganization | $45 | — | | Non-GAAP gross profit | $239,181 | $220,238 | | GAAP gross margin | 79.1% | 79.4% | | Non-GAAP gross margin | 81.4% | 81.6% | Reconciliation of GAAP to Non-GAAP Operating Income (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | GAAP operating income | $20,578 | $20,280 | | Stock-based compensation | $60,758 | $55,111 | | Acquired intangible assets amortization | $993 | $981 | | Acquisition-related expenses | $270 | $293 | | Expenses related to litigation | $334 | $25 | | Workforce reorganization | $1,052 | — | | Non-GAAP operating income | $83,985 | $76,690 | | GAAP operating margin | 7.0% | 7.5% | | Non-GAAP operating margin | 28.6% | 28.4% | Reconciliation of GAAP to Non-GAAP Net Income Attributable to Common Stockholders (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | GAAP net income attributable to common stockholders | $8,097 | $14,341 | | Stock-based compensation | $60,758 | $55,111 | | Acquired intangible assets amortization | $993 | $981 | | Amortization of debt issuance costs | $888 | $477 | | Workforce reorganization | $1,052 | — | | Income tax effects of non-GAAP adjustments | $(17,231) | — | | Undistributed earnings attributable to preferred stockholders | $(5,339) | $(6,486) | | Non-GAAP net income attributable to common stockholders | $49,822 | $64,742 | | GAAP diluted EPS | $0.05 | $0.10 | | Non-GAAP diluted EPS | $0.33 | $0.44 | | Non-GAAP free cash flow | $35,720 | $32,735 | Reconciliation of GAAP Revenue to Billings (Q2 FY26) Box's billings for Q2 FY26 were $264.9 million, an increase from the prior year, calculated by adjusting GAAP revenue for changes in deferred revenue and contract assets to reflect sales activity Reconciliation of GAAP Revenue to Billings (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP revenue | $293,999 | $270,039 | $570,271 | $534,697 | | Deferred revenue, end of period | $547,263 | $502,104 | $547,263 | $502,104 | | Less: deferred revenue, beginning of period | $(574,119) | $(513,572) | $(608,600) | $(586,871) | | Contract assets, beginning of period | $3,662 | $3,345 | $4,160 | $2,452 | | Less: contract assets, end of period | $(5,931) | $(5,481) | $(5,931) | $(5,481) | | Billings | $264,874 | $256,435 | $507,163 | $446,901 | Reconciliation of GAAP to Non-GAAP Guidance (Q3 & FY26) Box provided reconciliations for GAAP to non-GAAP net income per share and operating margin guidance for Q3 and full year FY26, primarily adjusting for stock-based compensation and income tax effects Reconciliation of GAAP to Non-GAAP Net Income Per Share Guidance | Metric | Three Months Ended October 31, 2025 | Fiscal Year Ended January 31, 2026 | | :------------------------------------------ | :---------------------------------- | :--------------------------------- | | GAAP net income per share attributable to common stockholders, diluted | $0.05 - $0.06 | $0.18 - $0.20 | | Stock-based compensation | $0.38 | $1.53 | | Acquired intangible asset amortization | $0.01 | $0.03 | | Income tax effects of non-GAAP adjustments | $(0.11) | $(0.44) | | Undistributed earnings attributable to preferred stockholders | $(0.03) | $(0.14) | | Non-GAAP net income per share attributable to common stockholders, diluted | $0.31 - $0.32 | $1.26 - $1.28 | | Weighted-average shares, diluted | 150,000 | 150,500 | Reconciliation of GAAP to Non-GAAP Operating Margin Guidance | Metric | Three Months Ended October 31, 2025 | Fiscal Year Ended January 31, 2026 | | :-------------------------------- | :---------------------------------- | :--------------------------------- | | GAAP operating margin | 8.0% | 7.0% | | Stock-based compensation | 19.5% | 19.5% | | Acquired intangible assets amortization | 0.5% | 0.5% | | Other (workforce reorganization and litigation) | — | 1.0% | | Non-GAAP operating margin | 28.0% | 28.0% | Corporate Information This section provides details on Box's webcast and conference call, forward-looking statements, company overview, and contact information for investor and media inquiries Webcast and Conference Call Box's management team hosted a conference call on August 26, 2025, to discuss financial results and outlook, with a live audio webcast and replay available on its Investor Relations website - A conference call was hosted on August 26, 2025, at 2:00 p.m. (PT) / 5:00 p.m. (ET) to discuss financial results, business highlights, and future outlook[14] - A live audio webcast and replay were accessible via Box's Investor Relations website (www.boxinvestorrelations.com)[14](index=14&type=chunk)[15] Forward-Looking Statements This press release contains forward-looking statements subject to various risks and uncertainties, including those related to growth, AI impact, and market conditions, with actual results potentially differing materially - The press release includes forward-looking statements regarding Box's growth, profitability, market opportunity, AI impact, product introductions, strategic partnerships, and financial targets for Q3 and full fiscal year 2026[18] - Actual results could differ materially due to factors such as adverse economic conditions, delays or reductions in IT spending, intense market competition, development of the intelligent content management market, customer retention, and security vulnerabilities[20][21] - Box does not assume any obligation to update these forward-looking statements[22] About Box Box, Inc. (NYSE:BOX) is a leader in Intelligent Content Management, providing a platform for collaboration, content lifecycle management, security, and AI-driven workflow transformation for global organizations - Box is a leader in Intelligent Content Management, offering a platform for collaboration, content lifecycle management, secure content, and enterprise AI-driven workflow transformation[33] - Founded in 2005, Box serves leading global organizations like AstraZeneca, JLL, Morgan Stanley, and Nationwide[33] - Headquartered in Redwood City, CA, with offices across the United States, Europe, and Asia[33] Contacts Contact information for Box's investor relations and media inquiries is provided for direct communication - Investor inquiries can be directed to Cynthia Hiponia and Elaine Gaudioso at ir@box.com[35] - Media inquiries can be directed to Sheridan Hoover at press@box.com[35]