Box (BOX) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue grew 3% year-over-year (6% in constant currency) to $270 million, driven by strong Suites adoption and AI-enabled content management demand.

• Record non-GAAP gross margin of 81.6% and non-GAAP operating margin of 28.4%, with GAAP gross margin at 79.4% and GAAP operating margin at 7.5%.

• Billings rose 10% year-over-year to $256.4 million, and RPO increased 12% to $1.272 billion, supporting revenue visibility.

• Enterprise Plus and Suites adoption surged, with 87% of large deals and 57–58% of revenue from Suites.

• Announced acquisition of Alphamoon's AI-powered document processing technology and expanded partnerships, including with Slack.

Financial highlights

• Q2 revenue: $270M, up 3% year-over-year (6% in constant currency); gross margin: 81.6% non-GAAP, 79.4% GAAP.

• Operating margin: 28.4% non-GAAP (record), 7.5% GAAP; EPS: $0.44 non-GAAP, $0.10 GAAP.

• Free cash flow: $32.7M–$33M, up 59% year-over-year; cash from operations: $36M, up 11%.

• Net retention rate: 102%, churn rate: 3%; customers with $100K+ ACV up 9% to 1,850.

• Share repurchases totaled $139.1M YTD, with 3.9–5.3M shares repurchased and $100M additional buyback authorized.

Outlook and guidance

• Q3 FY25 revenue guidance: $274M–$276M, up 5% year-over-year (6% in constant currency); non-GAAP EPS: $0.41–$0.42.

• FY25 revenue guidance: $1.086B–$1.09B, up 5% year-over-year (7% in constant currency); non-GAAP EPS: $1.64–$1.66.

• FY25 non-GAAP operating margin: ~27.5%; GAAP operating margin: ~7.0%.

• FX expected to remain a headwind, but less than previously anticipated.

• Net retention rate expected to remain above 100%.