Executive Summary
Box Inc. delivered a solid QQ2 2025 performance anchored by continued demand for Box AI within the Enterprise Plus multi-product suite. Revenue of $270.0 million rose 3% year over year (3% YoY) and was up 6% in constant currency (CC), with a record gross margin of 81.6% and a record operating margin of 28.4% after a 360 basis point expansion vs. a year ago. Non-GAAP earnings per share (EPS) for the quarter were highlighted at $0.41–$0.42 per share for the full year guidance, while GAAP diluted EPS stood at $0.10 for the quarter. Management underscored that AI-driven upgrades and larger Enterprise Plus deals are accelerating the upgrade cycle, supported by a robust RPO of $1.3 billion, up 12% YoY and 14% CC. Box also highlighted strong net retention (102%) and a high suite contribution (57% of revenue from suites; 87% of deals over $100k included suites), signaling durable pricing power and stickiness.
Looking ahead, Box raised its full-year guidance for FY25: revenue of $1.086–$1.09 billion (about 5% YoY, 7% CC) with gross margin around 81% and non-GAAP operating margin near 27.5%. Non-GAAP EPS is guided to $1.64–$1.66 (mid-to-high single-digit growth implied), aided by a durable margin expansion trajectory as data-center asset sales near completion (a ~60 bps tailwind in Q2 and Q3), and ongoing Box AI-driven leverage. FX is expected to remain a headwind but is expected to moderate later in the year. The company also signaled ongoing capital returns and a strategic emphasis on expanding Enterprise Plus adoption through Box AI, Box Sign, and broader integrations. Investors should monitor Box AI consumption dynamics (including the shift to unlimited end-user queries for Enterprise Plus), RPO progression, international mix (Japan especially), and the pace of Suite-based upsells as near-term catalysts for revenue acceleration beyond Q4.”
Key Performance Indicators
QoQ: 12.62% | YoY:105.37%
QoQ: -17.08% | YoY:33.02%
Key Insights
Revenue: $270.039 million in QQ2 2025, +3% YoY, +6% CC
Gross profit: $214.526 million, gross margin 81.6% (record)
Operating income: $20.280 million, operating margin 7.51% (record high)
Net income: $20.496 million, net margin 7.59%
EPS (GAAP): $0.0995 basic; $0.0979 diluted
EPS (Non-GAAP): guidance for FY25 $1.64–$1.66 annualized; Q3 guidance $0.41–$0.42
RPO: $1.3 billion, up 12% YoY, 14% CC
Billings: $256.0 million, +10% YoY, +9% CC
Free cash flow (LTM): $29.8 million in QQ2; CFO: $36.0 mi...
Financial Highlights
Revenue: $270.039 million in QQ2 2025, +3% YoY, +6% CC
Gross profit: $214.526 million, gross margin 81.6% (record)
Operating income: $20.280 million, operating margin 7.51% (record high)
Net income: $20.496 million, net margin 7.59%
EPS (GAAP): $0.0995 basic; $0.0979 diluted
EPS (Non-GAAP): guidance for FY25 $1.64–$1.66 annualized; Q3 guidance $0.41–$0.42
RPO: $1.3 billion, up 12% YoY, 14% CC
Billings: $256.0 million, +10% YoY, +9% CC
Free cash flow (LTM): $29.8 million in QQ2; CFO: $36.0 million; FCF yield supported by gross margin expansion
Cash and equivalents: $406.62 million (cash at period end); total cash + short-term investments: $482.23 million
Debt: total debt $479.66 million; net debt $(73.04) million
Customer and product metrics: >1,800 customers paying ≥$100k; suites revenue 58% of total; suites attach rate in large deals 87%
RPO recognition: ~60% of RPO expected to be recognized in next 12 months
International revenue: ~1/3 of revenue outside the U.S.; ~60% of international revenue from Japan
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
270.04M |
3.29% |
2.03% |
| Gross Profit |
214.53M |
10.34% |
3.93% |
| Operating Income |
20.28M |
105.37% |
12.62% |
| Net Income |
20.50M |
89.94% |
19.01% |
| EPS |
0.10 |
33.02% |
-17.08% |
Key Financial Ratios
operatingProfitMargin
7.51%
operatingCashFlowPerShare
$0.25
freeCashFlowPerShare
$0.21
dividendPayoutRatio
18.3%
Management Commentary
Key themes from management remarks and questions during the QQ2 2025 earnings call:
- AI strategy and Enterprise Plus activation: Aaron Levie emphasized that AI is a foundational driver of upgrade cycles, with Box including Box AI in Enterprise Plus to drive higher-tier migrations. Quote: unlimited end-user Box AI queries for Enterprise Plus were introduced to remove usage caps and accelerate adoption. Context: This lowers friction for customers to deploy AI broadly across the organization. (Quote attributed to Aaron Levie)
- Box AI product cadence and ecosystem: Management highlighted ongoing feature expansions (GPT-4o access for Box AI, support for new file types, Box AI for Metadata API) and integrations with ecosystem players (Salesforce, Microsoft Teams, Slack, IBM, ServiceNow). Context: Cross-enterprise integration is designed to deepen stickiness and expand addressable use cases (e.g., metadata extraction, contract workflows).
- Margin and efficiency discipline: Executives highlighted record gross margin (81.6%) and operating margin (28.4%), aided by data-center asset sales tailwinds and favorable mix. They cautioned FX headwinds (~180 bps on margin in the quarter) and expected continued but moderating FX impact in Q3 and FY25. Context: Margin expansion supports profitability even as growth remains mid-single digits.
- RPO and billings momentum: Q2 billings grew 10% YoY (CC +9%), and RPO grew 12% YoY (14% CC). Context: Demonstrates robust demand, longer contract durations, and continued bookings strength, especially in Japan and the public sector.
- Go-to-market and partnerships: Emphasis on expanding Enterprise Plus adoption and partner channels, including system integrators, and leveraging BoxWorks to showcase product roadmap and AI enhancements. Context: Box is seeking to institutionalize its Intelligent Content Management platform as the standard for AI-enabled content management.
We delivered a strong second quarter with operating results at the high end or above our guidance. This includes revenue growth of 3% year-over-year or 6% in constant currency, and record gross margin of 81.6%.
— Aaron Levie
Enterprise Plus customers now have unlimited end-user queries for Box AI in notes, documents and hubs, making it even easier for customers to roll out Box AI across their enterprise.
— Aaron Levie
Forward Guidance
Near-term outlook underscored by continued AI-driven upgrades and Enterprise Plus expansion. Key takeaways from the call:
- Q3 guidance: Revenue $274–$276 million, +5% YoY, with a mid-single-digit billings growth rate. FX headwind ~130 bps; cost of sales benefits from data-center asset sales should yield roughly flat gross margin QoQ. Q3 non-GAAP operating margin ~28%, reflecting about 110 bps FX headwinds; non-GAAP EPS of $0.41–$0.42 (high end of the range). Weighted-average diluted shares ≈148 million.
- FY25 guidance: Revenue $1.086–$1.090 billion, +5% YoY (7% CC); gross margin ~81%; non-GAAP operating margin ~27.5%; non-GAAP EPS $1.64–$1.66. FX headwinds for the year are now expected to be ~170 bps (vs prior ~250 bps). Data center asset sales have been largely completed by year-end, with a total tailwind of ~60 bps in Q2 and Q3, after which the margin impact should dissipate.
- Growth drivers and risks: The growth algorithm remains reliant on net retention improvements and continued adoption of AI capabilities across Enterprise Plus. Long-term upside hinges on AI-driven upgrades, higher-tier plan adoption, and international expansion (notably Japan). Risks include FX volatility, SMB cyclical softness, and competition as AI pricing and availability evolve.
- What investors should monitor: (1) AI utilization and upgrade cadence into Enterprise Plus; (2) RPO trajectory and 12-month recognition cadence; (3) pace of Suite monetization and cross-sell of governance/security tools; (4) data-center asset sale completions and any residual margin impact; (5) international growth, particularly Japan, and regulatory/compliance progress (FedRAMP High timeline).