Box (BOX) Q3 2025 earnings summary

Executive summary

• Q3 FY25 revenue grew 5% year-over-year to $275.9M–$276M, driven by strong Suites adoption, large customer growth, and high attach rates, despite FX headwinds.

• Record non-GAAP gross margin of 81.9% and operating margin of 29.1%, with GAAP gross margin at 79.9% and GAAP operating margin at 8.5%.

• Remaining performance obligations (RPO) reached $1.282B–$1.3B, up 13% year-over-year, with 60% expected to be recognized in the next 12 months.

• Launched major product innovations, including Box AI Studio, Box Apps beta, and Enterprise Advanced Suite, with expanded partnerships with AWS, Anthropic, OpenAI, Google, and Slalom.

• Share repurchases totaled $30M in Q3, with $95M remaining under the current plan; $460M raised via convertible debt, and $140M of 2026 notes repurchased.

Financial highlights

• Q3 revenue: $275.9M–$276M, up 5% year-over-year and at the high end of guidance.

• Q3 gross margin: 81.9% non-GAAP (up 560 bps YoY), 79.9% GAAP; Q3 operating margin: 29.1% non-GAAP (up 440 bps YoY), 8.5% GAAP.

• Q3 EPS: $0.45 non-GAAP, $0.05 GAAP; free cash flow: $57M–$57.4M; cash from operations: $62.6M–$63M; cash and equivalents: $699M.

• Q3 billings: $264.7M–$265M, up 4% year-over-year; deferred revenue also up 4%.

• Large customers (>$100k ACV) grew 8% year-over-year to 1,900; Suites attach rate in large deals reached 83%, now 59% of revenue.

Outlook and guidance

• Q4 FY25 revenue expected at ~$279M, up 6% year-over-year (7% in constant currency); Q4 non-GAAP operating margin expected at 27.5%, non-GAAP EPS at $0.41.

• FY25 revenue expected at ~$1.09B, up 5% year-over-year (7% in constant currency); non-GAAP operating margin raised to 28%, non-GAAP EPS expected at $1.70.

• FX headwinds and deferred tax expenses expected to impact revenue, billings, and margins.

• Weighted average diluted shares for FY25 expected at 149M.

• Management expects cost of revenue and operating expenses to increase in absolute dollars but decrease as a percentage of revenue over time.