Box, Inc. — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance

• Reported revenue of $321.1 million, an increase of 9% year-over-year, or 11% on a constant currency basis.
• Billings reached $309.5 million, up 17% year-over-year, or 16% on a constant currency basis.
• Remaining Performance Obligations (RPO) totaled $1.7 billion, up 15% year-over-year, or 17% on a constant currency basis; short-term RPO was $904.7 million (up 11%) and long-term RPO was $787.0 million (up 18%).
• GAAP operating income was $32.6 million (10.2% of revenue), compared to $20.6 million (7.0% of revenue) in the prior year.
• Non-GAAP operating income was $94.5 million (29.4% of revenue), compared to $84.0 million (28.6% of revenue) in the prior year.
• GAAP diluted earnings per share (EPS) were $0.09, compared to $0.05 in the prior year.
• Non-GAAP diluted EPS were $0.40, compared to $0.33 in the prior year.
• Net cash provided by operating activities was $70.8 million, up 54% year-over-year.
• Non-GAAP free cash flow was $59.7 million, up 67% year-over-year.
• GAAP gross profit was $254.0 million (79.1% of revenue); Non-GAAP gross profit was $260.7 million (81.2% of revenue).
• Net retention rate improved to 106%.

Guidance and Future Outlook

• Q3 Fiscal 2027 revenue is expected to be approximately $329 million, up 9% year-over-year (11% constant currency), including a 170 basis point FX headwind.
• Q3 Fiscal 2027 GAAP operating margin is expected to be approximately 10.0% and non-GAAP operating margin approximately 28.0%.
• Q3 Fiscal 2027 GAAP diluted EPS is expected to be approximately $0.12 and non-GAAP diluted EPS approximately $0.39.
• Full Year Fiscal 2027 revenue is expected to be approximately $1.290 billion, up 10% year-over-year (11% constant currency), including a 100 basis point FX headwind.
• Full Year Fiscal 2027 GAAP operating margin is expected to be approximately 9.5% and non-GAAP operating margin approximately 28.0%.
• Full Year Fiscal 2027 GAAP diluted EPS is expected to be approximately $0.38 and non-GAAP diluted EPS approximately $1.54.
• Full Year Fiscal 2027 weighted-average diluted shares outstanding are expected to be approximately 141 million.

Business Segments and Product Lines

• Enterprise Advanced revenue in constant currency accelerated for a fifth consecutive quarter.
• Secured wins or expansions with customers including Toyota Motor Corporation, Hasbro, The North Face, Piper Sandler Companies, Citizens Business Bank, McDermott Will & Schulte, Wilson Sonsini, Argenx, Novartis, California Department of Justice, Federal Communications Commission, Red Hat, and Siemens.
• Announced new security capabilities for AI agents, including agent guardrails, third-party agent activity oversight, prompt injection detection, and agent classification-based access policies.
• Expanded Box Zones with new locations in Switzerland, Israel, and Singapore, and enhanced compute capabilities in France and Canada.
• Released Admin AI Insights to optimize customer AI usage.
• Announced support for major AI models including Anthropic's Opus 5, Claude Sonnet 5, Google's Gemini 3.7 Flash, OpenAI's GPT-5.6, and Meta's Muse Spark 1.1.
• Announced new Model Context Protocol (MCP) integrations with Anthropic, Databricks, Figma, Harvey, IBM, Notion, Slack, and SpaceXAI.
• Joined the Open Secure AI Alliance alongside NVIDIA.

Market and Competitive Landscape

• Approximately 35% of revenue is generated outside the U.S., with approximately 70% of that international revenue in Japanese Yen.
• Management positions Box as a model-neutral platform of choice for enterprises deploying AI agents requiring secure, well-governed unstructured data.

Risks and Challenges

• Foreign currency exchange rates are expected to create headwinds of approximately 170 basis points for Q3 revenue and 100 basis points for full-year revenue.
• Forward-looking statements involve risks including adverse economic conditions, IT spending reductions, competitive pricing pressures, market consolidation, and the development of the intelligent content management market.
• Risks include customer non-renewal, failure to adopt new products, security vulnerabilities, and the ability to realize benefits from third-party partnerships.

Management Commentary and Tone

• CEO Aaron Levie described results as "exceptional" with strong momentum accelerated by Enterprise Advanced adoption, highlighting Box's position as the platform of choice for AI agents.
• CFO Dylan Smith noted strong execution with revenue, billings, and operating margins exceeding expectations, citing the 106% net retention rate and sustained acceleration in Enterprise Advanced revenue.
• Management expressed confidence in delivering durable, long-term growth as enterprises seek to securely power AI with content context.

Other Key Points

• Repurchased 2.6 million shares for approximately $66 million in the second quarter.
• Approximately $378 million of buyback capacity remained under the share repurchase plan as of July 31, 2026.
• Box remains committed to opportunistically returning capital to shareholders through its ongoing stock repurchase program.
• Management will host a conference call on August 25, 2026, at 2:00 p.m. PT to discuss results.