Box: Fiscal 2Q25 Financial Results

• Revenue of $270 Million up 3% Y/Y, up 6% in Constant Currency
• GAAP Operating Margin of 7.5% and Record Non-GAAP Operating Margin of 28.4%
• GAAP Net Income Per Share of $0.10 and Record Non-GAAP Net Income Per Share of $0.44
• New $100 Million Expansion of Stock Repurchase Program

Box, Inc. announced preliminary financial results for the second quarter of fiscal year 2025, which ended July 31, 2024.

“As we enter the era of Intelligent Content Management, Box is delivering a singular platform that can power the lifecycle of content with intelligence built right in,” said Aaron Levie, co-founder and CEO”. “With Box AI and strategic technology acquisitions like Alphamoon, the Box Intelligent Content Cloud can now support more use-cases across the enterprise than traditional ECM, dramatically expanding our market opportunity.”

“We delivered a strong second quarter, with accelerated billings growth as well as record gross margin, operating margin, and EPS,” said Dylan Smith, co-founder and CFO. “These strong results demonstrate both our proven business model and the success of the investments we’re making to build the leading Intelligent Content Management platform.”

2FQ25 Highlights

• Revenue was $270.0 million, a 3% increase from revenue for 2FQ24 of $261.4 million, or 6% growth on a constant currency basis.
• Remaining performance obligations (RPO) as of July 31, 2024 were $1.272 billion, a 12% increase from RPO as of July 31, 2023 of $1.138 billion, or 14% growth on a constant currency basis.
• Billings were $256.4 million, a 10% increase from billings for 2FQ24 of $232.5 million, or 9% growth on a constant currency basis.
• GAAP gross profit was a record $214.5 million, or 79.4% of revenue. This compares to a GAAP gross profit of $194.4 million, or 74.4% of revenue, in 2FQ24.
• Non-GAAP gross profit 2025 was a record $220.2 million, or 81.6% of revenue. This compares to a non-GAAP gross profit of $201.1 million, or 76.9% of revenue, in 2FQ24.
• GAAP operating income was $20.3 million, or 7.5% of revenue. This compares to a GAAP operating income of $9.9 million, or 3.8% of revenue, in 2FQ24.
• Non-GAAP operating income was a record $76.7 million, or 28.4% of revenue. This compares to a non-GAAP operating income of $64.7 million, or 24.8% of revenue, in 2FQ24.
• GAAP diluted net income per share attributable to common stockholders was $0.10 on 146.5 million weighted-average shares outstanding. This compares to GAAP diluted net income per share attributable to common stockholders of $0.04 in 2FQ24 on 150.0 million weighted-average shares outstanding.
• GAAP diluted net income per share attributable to common stockholders includes a negative impact of $0.05 Y/Y from unfavorable foreign exchange rates.
• Non-GAAP diluted net income per share attributable to common stockholders was a record $0.44. This compares to non-GAAP diluted net income per share attributable to common stockholders of $0.36 in 2FQ24. Non-GAAP diluted net income per share attributable to common stockholders includes a negative impact of $0.05 Y/Y from unfavorable foreign exchange rates.
• Net cash provided by operating activities was $36.3 million, an 11% increase from net cash provided by operating activities of $32.7 million in 2FQ24.
• Non-GAAP free cash flow was $32.7 million, a 59% increase from non-GAAP free cash flow of $20.6 million in 2FQ24.

In 2FQ25, approximately 3.9 million shares were repurchased for approximately $102 million. As of July 31, 2024, approximately $25 million of buyback capacity was remaining under the current share repurchase plan. The company remains committed to opportunistically returning capital to its shareholders through an ongoing stock repurchase program, and on August 25, 2024, the board of directors authorized an expansion of its stock repurchase program by $100 million.

3FQ25 Guidance

• Revenue is expected to be in the range of $274 million to $276 million, up 5% Y/Y, or 6% growth on a constant currency basis.
• GAAP operating margin is expected to be approximately 7.5%, and non-GAAP operating margin is expected to be approximately 28%.
• GAAP net income per share attributable to common stockholders is expected to be in the range of $0.07 to $0.08. GAAP EPS guidance includes an expected negative impact of $0.02 from unfavorable exchange rates and $0.01 from the recognition of deferred tax expenses in international countries.
• Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of $0.41 to $0.42. Non-GAAP EPS guidance includes an expected negative impact of $0.02 from unfavorable exchange rates and $0.01 from the recognition of deferred tax expenses in international countries.
• Weighted-average diluted shares outstanding are expected to be approximately 148 million.

FY25 Guidance

• Revenue is expected to be in the range of $1.086 billion to $1.09 billion, up 5% Y/Y, or 7% growth on a constant currency basis. Due to the weakening of the U.S. dollar vs. the Yen since last provided guidance, the company now expects FX to be a 170 basis point headwind to FY25 revenue growth, 80 basis points lower than our previous expectations. On a constant currency basis, new guidance represents a $2 million increase from previous guidance.
• GAAP operating margin is expected to be approximately 7.0%, and non-GAAP operating margin is expected to be approximately 27.5%. For FY25 GAAP and non-GAAP operating margin, the firm now expects FX to be a headwind of 130 basis points, 30 basis points lower than previous expectations.
• GAAP net income per share attributable to common stockholders is expected to be in the range of $0.31 to $0.33. FY25 GAAP EPS guidance includes an expected negative impact of $0.12 from unfavorable exchange rates and $0.05 from the recognition of deferred tax expenses in international countries.
• Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of $1.64 to $1.66. FY25 non-GAAP EPS guidance includes an expected negative impact of $0.12 from unfavorable exchange rates and $0.05 from the recognition of deferred tax expenses in international countries.
• Weighted-average diluted shares outstanding are expected to be approximately 148 million.