Why Is Box (BOX) Down 5.9% Since Last Earnings Report?

Core Viewpoint - Box's recent earnings report shows strong performance with non-GAAP earnings per share and revenues surpassing estimates, indicating potential for growth despite recent stock underperformance [2][10]. Financial Performance - Box reported Q1 fiscal 2025 non-GAAP earnings per share of 39 cents, beating estimates by 8.3% and increasing 21.9% year over year [2]. - Total revenues reached $264.66 million, exceeding consensus by 1.15% and reflecting a 5% year-over-year increase (8% growth on a constant-currency basis) [2]. - Billings for the quarter were $190.5 million, down 1% year over year (5% growth on a constant-currency basis) [3]. - Deferred revenues stood at $514 million, up 1% year over year (5% growth on a constant-currency basis) [3]. - The non-GAAP gross margin improved to 80.2%, expanding 230 basis points from the prior year [4]. Operational Metrics - Box achieved an 85% attach rate for its Suites, significantly up from 69% in the previous year [3]. - The net retention rate was 101%, down 500 basis points year over year due to macroeconomic challenges [3]. - Operating expenses increased by 3.6% year over year, but as a percentage of revenues, they contracted to 71.2% [4]. Balance Sheet and Cash Flow - As of April 30, 2024, cash and cash equivalents were $449.5 million, up from $383.7 million at the end of January 2024 [5]. - Box generated $131.2 million in cash from operations, an increase from $89.3 million in the previous quarter [6]. Guidance - For Q2 fiscal 2025, Box expects revenues between $268 million and $270 million, indicating a 3% rise at the high end from the prior year [7]. - The company revised its fiscal 2025 revenue guidance downward to $1.075-$1.08 billion, still reflecting a 4% increase from the previous year [7]. - Non-GAAP earnings per share guidance for fiscal 2025 was raised to $1.54-$1.58, accounting for an expected foreign exchange headwind [7]. Market Position and Outlook - Box has a strong Growth Score of A, but a B on the Momentum Score, indicating mixed performance across investment strategies [9]. - Estimates for Box have trended upward, suggesting positive sentiment among analysts [10]. - Box holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [10].