Box(US:BOX)2025-08-27 20:05Financial Performance - For the three months ended July 31, 2025, revenue was $294.0 million, representing a year-over-year growth of 9%[112] - Gross profit for the three months ended July 31, 2025, was $232.5 million, with a gross margin of 79.1%[112] - Operating income for the three months ended July 31, 2025, was $20.6 million, with an operating margin of 7.0%[112] - The company reported a net income of $13.445 million for the three months ended July 31, 2025, down from $20.496 million in 2024[145] - For the three months ended July 31, 2025, revenue increased by $23.96 million, or 9%, to $293.999 million compared to $270.039 million for the same period in 2024[147] - Non-GAAP free cash flow for the three months ended July 31, 2025, was $35.7 million, a 9% increase from $32.7 million for the same period in 2024[126] - Non-GAAP free cash flow for the six months ended July 31, 2025, was $154.057 million, slightly down from $155.979 million in 2024[127] Revenue and Customer Metrics - Remaining performance obligations (RPO) as of July 31, 2025, were $1.476 billion, a 16% increase from $1.272 billion as of July 31, 2024[118] - The increase in RPO was driven by expansion within existing customers and the addition of new customers[118] - The net retention rate was 103% as of July 31, 2025, compared to 102% in 2024, indicating strong customer retention despite some churn[129] - The increase in revenue was primarily driven by seat growth in existing customers and strong attach rates of multi-product Suites offerings[147] Expenses and Costs - Operating expenses for the three months ended July 31, 2025, totaled $211.899 million, up from $194.246 million in 2024, driven by increases in research and development and sales and marketing expenses[145] - Cost of revenue for the three months ended July 31, 2025, was $61.522 million, an increase of $6.009 million, or 11%, compared to $55.513 million in 2024[148] - Cost of revenue increased by $8.4 million, or 7%, for the six months ended July 31, 2025, primarily due to a $7.3 million rise in public cloud infrastructure costs[149] - Research and development expenses rose by $15.9 million, or 12%, for the six months ended July 31, 2025, driven by a $10.0 million increase in employee-related costs and a 14% increase in headcount[152] - Sales and marketing expenses increased by $13.4 million, or 7%, for the six months ended July 31, 2025, primarily due to a $5.2 million rise in employee-related costs driven by a 6% increase in headcount[155] - General and administrative expenses increased by $9.2 million, or 14%, for the six months ended July 31, 2025, mainly due to a $4.9 million rise in stock-based compensation expense[159] Cash Flow and Investments - Net cash provided by operating activities was $173.0 million for the six months ended July 31, 2025, an increase of $5.5 million compared to the previous year[169] - Net cash provided by operating activities increased by $5.5 million for the six months ended July 31, 2025, compared to the prior period, primarily due to a $13.2 million increase in adjustments to reconcile net income to net cash provided by operating activities[170] - Net cash used in investing activities increased by $34.6 million for the six months ended July 31, 2025, mainly due to a $27.3 million increase in maturities and sales of short-term investments[173] - Net cash used in financing activities decreased by $30.1 million for the six months ended July 31, 2025, primarily due to a $49.1 million decrease in repurchases of common stock[174] Foreign Currency Impact - Approximately one-third of the company's revenue is derived from contracts denominated in foreign currencies, impacting total assets and revenues due to exchange rate fluctuations[195] - For the six months ended July 31, 2025, revenue growth was positively impacted by approximately 70 basis points due to foreign currency fluctuations[196] - The company recognized $2.0 million in foreign currency exchange gains for the six months ended July 31, 2025, net of losses from foreign currency derivative contracts[198] Product Development and Authorizations - The company launched several new products, including Box AI Extract Agents and Box Doc Gen API, enhancing its content management capabilities[110] - The company achieved Federal Risk and Authorization Management Program (FedRAMP) High Authorization, allowing U.S. government agencies to leverage its platform for sensitive data[109] Debt and Interest - Interest income for the six months ended July 31, 2025, was $13.413 million, compared to $11.076 million in 2024[145] - Interest income increased by $2.3 million, or 21%, for the six months ended July 31, 2025, primarily due to higher cash and short-term investment balances[161] - Interest expense rose by $3.8 million, or 236%, for the six months ended July 31, 2025, mainly related to the Convertible Notes[163] - The company issued $460.0 million in 1.50% convertible senior notes due September 15, 2029, with a conversion price of approximately $43.46 per share[175] Workforce and Organizational Changes - The company conducted a workforce reorganization, resulting in charges of approximately $8.2 million for the six months ended July 31, 2025[114] - The company’s investments in product and customer success are expected to support continued growth in net retention rates above 100%[130]