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BOX INC (BOX)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY25 revenue was $279.5M (+6% YoY; +8% cc), non-GAAP operating margin 27.3%, and non-GAAP EPS $0.42; GAAP diluted EPS was $1.12, driven by a $1.04 net tax benefit from releasing a valuation allowance. Non-GAAP EPS was $0.01 above guidance; GAAP EPS was a major upside surprise due to the tax item .
  • Billings of $398.6M (+5% YoY) and RPO of $1.466B (+12% YoY) underscored demand and longer contract durations; billings exceeded internal expectations, aided by ~$5M of early renewals even as FX was a headwind versus prior expectations; long-term RPO grew 21% YoY .
  • FY26 guide: revenue $1.155–$1.160B (+6% YoY), non-GAAP operating margin ~28%, non-GAAP EPS $1.13–$1.17 (includes ~$0.56 deferred tax headwind); Q1 FY26 revenue $274–$275M (4–5% YoY; ~120bp leap-year headwind), non-GAAP EPS $0.25–$0.26; FX expected to be a modest negative in Q1 .
  • Strategic traction: Enterprise Advanced launched late in Q4 with dozens of deals; Suites attach rate hit 87% in large deals and Suites comprised 60% of revenue; pricing uplift on Enterprise Advanced deals is running 20–40% vs Enterprise Plus .
  • Capital return and perception catalysts: Board added $150M to buybacks; Box recognized as a Leader across Gartner, IDC and Forrester for Intelligent Content Management, reinforcing product narrative momentum .

What Went Well and What Went Wrong

  • What Went Well

    • Enterprise Advanced momentum with multi-product automation/AI value proposition; “we closed several dozen Enterprise Advanced deals in Q4” and are seeing adoption for metadata extraction, Box Apps, Forms/Doc Gen, and AI Studio .
    • Billings and RPO strength; billings exceeded expectations due to solid bookings and early renewals, and RPO grew 12% with longer durations; gross margin reached a top-tier 81% non-GAAP in Q4 .
    • Recognition as an industry Leader (Forrester Wave, Gartner MQ, IDC MarketScape), supporting the Intelligent Content Management strategy and AI-led roadmap .

  • What Went Wrong

    • FX headwinds pressured reported results relative to prior expectations; billings had a 150bp FX headwind vs an 80bp expectation and non-GAAP EPS was impacted by ~$0.03 of FX in Q4 .
    • Non-GAAP operating margin of 27.3% was slightly below the prior 27.5% guidance for Q4; GAAP operating margin was 6.4% vs 7.5% guided (mix and FX), though gross margin improved YoY .
    • FY26 non-GAAP EPS guide steps down (to $1.13–$1.17) versus FY25 ($1.71) due to the introduction of non-cash deferred tax expense (~$0.56 FY headwind), which may necessitate sell-side EPS estimate resets .

Financial Results

MetricQ2 FY25Q3 FY25Q4 FY25
Revenue ($M)$270.0 $275.9 $279.5
GAAP Gross Margin %79.4% 79.9% 79.0%
Non-GAAP Gross Margin %81.6% 81.9% 81.0%
GAAP Operating Margin %7.5% 8.5% 6.4%
Non-GAAP Operating Margin %28.4% 29.1% 27.3%
GAAP Diluted EPS ($)$0.10 $0.05 $1.12
Non-GAAP Diluted EPS ($)$0.44 $0.45 $0.42
Cash from Operations ($M)$36.3 $62.6 $102.2
Free Cash Flow – non-GAAP ($M)$32.7 $57.4 $91.3
Billings ($M)$256.4 $264.7 $398.6
Remaining Performance Obligations ($B)$1.272 $1.282 $1.466

Segment breakdown: Box does not disclose segment revenue; results are reported on a consolidated basis .

KPIs

KPIQ2 FY25Q3 FY25Q4 FY25
Suites Attach Rate in Large Deals (%)——87%
Suites as % of Revenue——60%
Customers ≥$100K ARR——~1,920
Net Retention Rate (%)——102%
Annualized Full Churn (%)——3%
Cash, Cash Eq., Restricted + ST Investments ($M, end of period)——~$724

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ActualChange
Revenue ($M)Q4 FY25~$279 $279.5 Met/beat
Non-GAAP Op Margin (%)Q4 FY25~27.5% 27.3% Maintained/slightly below
Non-GAAP Diluted EPS ($)Q4 FY25~$0.41 $0.42 Beat
GAAP Diluted EPS ($)Q4 FY25~$0.07 $1.12 (includes ~$1.04 net tax benefit) Beat/major surprise
GAAP Op Margin (%)Q4 FY25~7.5% 6.4% Lower
Revenue ($M)Q1 FY26N/A$274–$275 New
Non-GAAP Op Margin (%)Q1 FY26N/A~25% New
Non-GAAP Diluted EPS ($)Q1 FY26N/A$0.25–$0.26 New
Revenue ($B)FY26N/A$1.155–$1.160 New
Non-GAAP Op Margin (%)FY26N/A~28% New
Non-GAAP Diluted EPS ($)FY26N/A$1.13–$1.17 (incl. ~$0.56 deferred tax headwind) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY25 and Q3 FY25)Current Period (Q4 FY25)Trend
AI/technology initiativesAlphamoon IDP acquisition; Box AI unlimited queries; GPT‑4o integration; Slack partnership Enterprise Advanced launched; Box AI Units consumption model; new models (GPT‑4.5, Claude 3.7) and 20‑point extraction improvement in internal eval Accelerating product velocity
Suites/product adoptionBox Hubs GA; Enterprise Advanced announced at BoxWorks Suites 60% of revenue; attach rate 87% in large deals; dozens of Enterprise Advanced deals closed Rising mix and breadth
Go‑to‑market & partnersExpanded AWS/Slack partnerships Emphasis on SIs/partners; indirect vs direct economics broadly comparable; scaling enablement More partner‑led motion
Macro/FXFX headwinds in FY25 guidance FX impacted Q4 EPS (~$0.03) and margin; Q1 ops margin headwind (~40bp) and leap-year effect (~80bp) Persistent headwind
R&D/workforce location—~470 FTEs in Poland; continued scaling for engineering and G&A Expanding lower‑cost footprint
Regulatory/public sectorFedRAMP High “In Process” recognized in prior period Achieved FedRAMP High (post‑quarter); public sector ~mid‑single-digit of US revenue; federal low single‑digit; cautious stance Strengthening compliance posture
Contract duration/RPO—Longer durations increased long-term RPO; early renewals (~$5M) aided billings Lengthening terms

Management Commentary

  • “We delivered strong Q4 operating results, reflecting stabilization of IT budgets and continued growth in customer demand for Box AI… operating margins of 27.3% and EPS of $0.42, $0.01 above our guidance.” — Aaron Levie, CEO .
  • “Q4 billings exceeded our expectations… due to solid bookings and a high volume of early renewals… we ended Q4 with RPO of $1.5B, a 12% year‑over‑year increase.” — Dylan Smith, CFO .
  • “Beginning in FY ’26, we are establishing a long‑term non‑GAAP tax rate of 27%… we expect FY ’26 non‑GAAP EPS to be $1.13 to $1.17, including a ~$0.52 headwind from incremental noncash deferred tax expenses.” — Dylan Smith, CFO .
  • “We are clearly entering one of the biggest shifts in business that we’ve ever seen, driven by AI… Enterprise Advanced combines the full power of our ICM platform in a single offering.” — Aaron Levie, CEO .
  • “Fiscal 2025 was a pivotal year for Box… record free cash flow, while investing in our foundation to accelerate top‑line growth in the coming years.” — Dylan Smith, CFO .

Q&A Highlights

  • Enterprise Advanced momentum and pricing: several dozen Q4 deals; pricing uplift of 20–40% vs Enterprise Plus on like‑for‑like ACVs; early stage but strong demand for AI metadata extraction and no‑code apps .
  • Partner strategy economics: indirect customers broadly as profitable as direct due to pricing and marketplace benefits; expanding SI enablement and industry focus .
  • Billings outperformance drivers: early renewals ~$5M and FX optics; expect Q1 billings growth low‑to‑mid teens, with FX tailwind, then Q2 headwind given last year’s volatility .
  • NRR composition: improvement driven primarily by price per seat; muted seat growth near term; churn best‑in‑class at ~3% .
  • Macro & public sector: dynamic macro backdrop monitored closely; US public sector mid‑single‑digit % of US revenue; federal low single‑digit; FedRAMP High status supports opportunity but guidance remains prudent .
  • AI Units model: credits abstracted across applied AI use cases (e.g., per page extraction, agentic workflow time, model class), enabling flexible consumption pricing .

Estimates Context

  • Wall Street consensus estimates from S&P Global were unavailable due to an API limit at the time of retrieval. As a proxy, we compared actuals to company guidance: revenue of $279.5M met/slightly exceeded ~$$279M guided, and non‑GAAP EPS of $0.42 beat ~$0.41 guided; GAAP EPS $1.12 was far above ~$0.07 guided due to the $1.04 net tax benefit from releasing a valuation allowance .
  • Given FY26’s introduction of non‑cash deferred tax expense, sell‑side EPS estimates likely need to reflect Box’s long‑term 27% non‑GAAP tax rate and the ~$0.56 full‑year deferred tax headwind embedded in guidance .

Key Takeaways for Investors

  • Enterprise Advanced is showing early traction with a significant pricing uplift (20–40% vs E+), supporting revenue quality and NRR improvement over time .
  • Billings/RPO strength, longer durations, and early renewals suggest durable demand and multi‑year commitments; monitor Q1/Q2 billings cadence given FX and renewal timing optics .
  • Margin profile remains strong (81% non‑GAAP GM, ~27% non‑GAAP OM in Q4); FY26 OM guide of ~28% balances methodical GTM/partner investments with efficiency .
  • GAAP/non‑GAAP EPS visibility changes with deferred tax expense; near‑term EPS will step down despite healthy operating performance—focus on cash flow ($91.3M Q4; $304.6M FY25) and FCF conversion .
  • FX remains a recurring swing factor (notably Yen exposure); expect near‑term FX headwind in Q1 and leap‑year effect to complicate YoY compares .
  • Capital allocation is supportive: $150M buyback expansion and ~$724M liquidity provide flexibility amid investment cycle in AI and workflow automation .
  • Narrative catalysts: continued AI model upgrades, IDP (Alphamoon) integration, partner ecosystem build-out, and recognized category leadership (Gartner/IDC/Forrester) should support medium‑term growth acceleration potential .