BOX - Earnings call transcript Q2 2025

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Operator

Ladies and gentlemen, good afternoon, and thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Box, Inc.

Second Quarter Fiscal 2025 Earnings Conference Call. [Operator Instructions] And I would now like to turn the conference over to Cynthia Hiponia, Vice President of Investor Relations.

begin. may You

Cynthia Hiponia

welcome Conference and Relations. Second Fiscal Quarter Good I'm to Cynthia Earnings Call. Investor Hiponia, XXXX afternoon Box's Vice President,

On Box have CEO; the we Box call and Co-Founder Aaron and and Co-Founder Levie, Smith, CFO. Dylan today,

take boxinvestorrelations.com. Following questions. is be for Today's will Investor our your replay our and we on webcast Relations call remarks, available prepared will being website at

only. will be audio webcast Our

the website. X slides However, at today's available We'll our also now from of post are @boxincir. supplemental call handle download on platform the highlights the for

to and our allocation from the sale capital equipment, environment our on growth challenges address benefits for leverage, and rates common year ability On including adoption and obligations, of results and of our and for statements, opportunity, our data this and expectations stock. call, enterprise other the including future our and net of our our operating and currency our we'll performance our pricing impact timing macro XXXX operating and performance our future be to XXXX foreign our fiscal making of our achieve targets; third proceeds planned profitability, forward-looking of our quarter ability and offerings financial including revenue, impact deliver potential regarding rates and revenue and fiscal cost market of tax customers, savings financial operating repurchase future margins, periods, exchange our and business investments, strategies, and operating market from products, center guidance new operating the partnerships. size and the regarding retention our deferred strategies; The gross billings expectations full model expenses models remaining margins the our the product margins,

factors and that Exchange to XX-Q statements documents Securities the filed Please recent the differ These earnings uncertainties report known to with statements on our and judgment information factors to or events earnings and on may cause made we refer most risk our differ release from today may call. currently quarterly us, results Commission, file and and including materially. actual for actual results risks based this Form on materially on our reflect best may press

These being XX, August date. to to any XXXX, of or forward-looking we up should or made be as revise statements are today, seek obligation and them they change update to disclaim

In discuss non-GAAP from addition, financial These we during as to, considered be addition GAAP substitute isolation or a today's will measures financial results. non-GAAP in measures. in for call, should not our

reconciliations additional a the indicated, otherwise non-GAAP on comparable of in find GAAP including disclosures can which our our website. press on financial page earnings basis. non-GAAP IR results these supplemental measures regarding with measures, all are the found in You be and can related slides, to Unless references release

that, With Aaron. the let turn to call over me

Aaron Levie

Cynthia, and growth and for in at Thank or us with thanks, end revenue quarter X% X% you, today. includes of delivered above record operating results constant XX.X%. joining the margin guidance. This We everyone, our or gross second currency a year-over-year of strong high

continued of while year-over-year XX% growth growth margin points RPO XXX operating XX.X%, ago, on from of and drove focus Our up XX% growth a billings of investments in discipline reflected year our accelerated QX operational year-over-year. basis our are in

continued the collaboration, management, show results secure automation out platform workflow Our powerful content success for building the intelligence. most of AI-enabled and

enterprise help and boost to to use replacing of automating store Plus an their to what both a Box is QX Box that U.S.-based content also all productivity demand to They their its experiences in access serve Box Enterprise They for and Customer all in Box repositories more to create their include security vendor conversations to working is leverage and other Hubs wins wins Box and from They will data deal. new purchased grow, And as company-wide leverage searchable the X-figure staff. These enable convenience for driving client and employees firm customer to consumer to and platform center clear collaboration a attorneys Enterprise deliver in customer lean to AI this in saw layer. to employees customers. leverage easily enabling expanded AI upgrades AI Plus by Box we Box every Box examples work. of Box a large Plus gain order A almost in how in logo as QX, enterprise their that law AI. use of Sign, for new become In AI plan posture. to continue use with box chose their existing attorney their more e-signature to security out has improve to and content. productivity Japan reinforce upgraded their figure AI. improved illustrate customers my by at Enterprise

of how is most content. being unstructured about talk with enterprise's data an of You've enterprise XX% unstructured that data heard me

management Historically, in where enterprise are of truly the repositories of leverage automation and and end-to-end content Box, a intelligent content workflow technologies, of intelligence. our secure of enterprises numerous technologies, extending their to products, to Instead legacy in content Fox value able AI. enterprises from is we investment in. enterprise intelligence singular attempting disparate into built value applications built with in a life content not modern years And on that e-signature our on platform for way At we with are power top among can on transforming cycle workflow delivering bolt enterprise investing tools how now security building and scattered get is content management. ECM content not fundamentally have due working these in the right of companies and systems the leadership with been AI to collaboration, many this fragmented across solutions

And management that every can in and with fortune the critically, core, be AI, leverage user instead cloud. productivity. systems a we app, increase equation ways, of their intelligent of and AI by well enable content at to enterprise-grade cases security used the legacy beyond content the rigid systems and With change offering being in Box, the experiences, insights only ECM building gain and and extends enterprises relatively entirely dramatically having Box to can fully ECM integrating use from traditional in modern compliance cost

at their workflows expansion In or can enterprise than expand of traditional ECM sensitive how Combined management, be Box invoice over scale our with of intelligent customers We client run. digital they the proprietary open language how combines they most with can powerful intelligently digital and manage AI including represents are a recently everything our seeing Because asset dramatic document a address similar important management, Alphamoon's govern capabilities technology IDP externally acquisition creation we models workflows and customers others leading processing, is onboarding and Once with we Once our able more records will they business ultimately, Box, contracts more into this to support collaboration their Box Box image their documents or ECM processing with more. single content from internal to much and when AI-powered management to and disrupted marketing the a strategic to team Alphamoon. protect more sizes. so contract sizes. unprecedented processing the across of and ECM the automate and now to from vastly and move as processes sales new more platform, and for metadata legacy the customers IDP Cruise customers technology Metadata to long cost CRM financial all will use the announced technology cases, integrated automation large all solution. opportunity for the Box's how platform of documents multi-tenant, us their content-centric natively lower challenges more This intelligent technology to within technology acquisition, our replace to content structure to platform, choose and significantly customers turn their from automate able Box, the power Box disrupted enterprises of like document flexible, applied long-standing from and further at be Salesforce ServiceNow and market transform use AI scale. with secure solution easily With will Alphamoon's on expand ITSM. clients year, more revolutionize earlier empower cases capabilities. assets intelligent of to a critical or and

unveiled box which ability announced QX, AI. hubs, access AI the for roll user to In critical now be leveraging to of our enterprise-grade usage easier documents we across now And our having images new AI Box a of have success as intelligent notes, Customers in their worry In as value file well management spreadsheets and on as to content to end include AI. Box is GPT-XX to June, enable also to new in caps. such customers Plus about for making can with for innovation in features even unlimited queries Box and types, focus support enterprise. Box leading customers products it Box Enterprise AI, Hubs drive for without that edge out including customers in set Box to we on

available be features included these Plus plans. this in will Enterprise expect later We and year will be

key API using integrate functionality Salesforce. in to key file save for custom available Plus with AI Box unstructured new Enterprise information in information be the metadata, to from plans. our beta processes Developers documents such to able Box When content to based automatically AI on combined will able automate Box' with extract metadata workflow for customers as fields from on customers box tools, scale. also API applications at metadata for is are AI applications automation external and extract

to continue security advancements also compliance. roll We and across out

admins high use Zero quarters in on sandbox last meet to track expand in validation enhancements to cases we the Trust compliance federal are we've and our X.X months, the government. several FedRAMP for Over GxP management, the and launched coming

differentiator flexible platform is interoperable and Box. our a major for Finally,

IBM We Microsoft ServiceNow applications. Technologies, are deeper our with integrations Salesforce, custom-built Teams, customers and CoPilot, Microsoft supporting

brings access ask content. from to in Joint Slack, critical partnership Slack last with their directly month, box insights announced questions timely enterprise and uncover unlimited AI can box an and Just users customers of we queries secure AI Slack to allowing that expanded files. Box

go Now turning to market. to

over As $XXX,XXX, comprising our with Japan. saw offering of all across Box XX% Plus and our earlier, of access see up Enterprise rates With XX% year to in I we multiproduct geographies, comprised deals Enterprise suites suite adoption large in continue Plus, from solid QX, a over In AI. those attach including rates XX% mentioned suite unlimited record strong of attach to ago. we verticals deals deals,

XX% year have suites compared a opportunity of our with Now large ago, plus coming XX% we a adoption. enterprise still to to revenue from drive

costs X-figure come new key a with production looks for legacy policies upsell order as and companies one collaborate purchased in world, X-figure experiences agreement management associated the solution, Plus and Enterprise up on-prem and construction integrate utilize The content replace upgrades that expansions their to on industry, ecosystem. solution, has hubs event metadata to securely to their team. deal on with Hubs support efforts partners, to to ECM system time X-year design costs. permitting wins AI their expect Plus and engaging creates as clients, a ECM contract customer the they include their streamline intelligent Enterprise with with Box SharePoint, purchased Box of marketing Box AI contract workflow antiquated in organization Box Box QX Box hardware, save a maintenance, with clients. organization they to including Plus a and upgraded tools plans engagements license leverage to system for and modern with with vendors the A the to enhance client-centric their with an for and speed Our like collaboration to as Enterprise with organization teams reduce with and storage, largest U.K.-based across also their an create to enterprise and their on-prem regulates replacing company create to the focus

critical across the ECM advanced system -- integrators, more a workflows SI including replacement we industries partners. power in help many key QX, wins saw with with of large we number focus in strong customers systems. with of these of partnership the As legacy

partners catalyzed ECM penetration more by our legacy Now engine expansion, prospects and our planned efforts critical and to to expand go-to-market our can and AI. like Box integrators into And looking with system access to plus key workflows embedded forward, will that go-to-market continue expand we get into accounts systems. gaining Box enterprise drive customer have retire

customers partnerships streamed system well major conference be globally. incredibly At thousands BoxWorks, live major investors major we're the new ecosystems. flagship San are We BoxWorks, also updates. to unveil as November to will landscape also a excited product hosting XX conjunction to year, on host product IR AI Francisco, with these our we to which this of customer BoxWorks briefing highlight virtual tens for of In expect in integrator and year across discuss enhancements as this

announce large Samantha in has as with team. Now in EMEA. system us of Box last pleased including Wessels been who and have of and to software high-performing SaaS decades our of the the enterprise via leaders few companies, appointment This teams includes integrators to some President months, leadership Samantha fantastic Elastic experience Snyk and joined has led software at successful we

will giants brings innovation delivering and leaders decades intelligent Salesforce experience as Another the Officer. new for us collaboration, Marketing workflow leader, has driving high-growth drive platform, and evolution Adobe. technology joined including industry Tricia and over X Tricia leading companies, help These AI-powered as our Gellman, our and growth management security leading to content Chief automation, like of intelligence. in startups

pleased we're content career and of QX. the operational Steve our the Overall, of Finally, the CEO are incredibly excellence pleased market. track an software management performance Murphy strong is a we in execution with to had Steve industry also in and Board to Epicor extensive in has welcome and record our Directors. Software expertise of

will Our of to the momentum second this RPO half year growth beyond. continue and acceleration in in drive

let hand that, with off And me to it Dylan.

Dylan Smith

everyone, us and for afternoon, today. Good you Aaron. Thanks, thank joining

disciplined demonstrate pleased both as margin, delivering from business These QX success priorities, are content model with EPS. very results making allocation signs margin growth as key strategy. the with proven platform. gross record our of capital intelligent generate our We management to financial and early investments our strong operating leverage in continuing our we're accelerated well execute billings record Consistent we're and and operating our on

million and least We of at revenue $XXX year-over-year customers guidance, high up us at have X% end our total constant paying annually. QX, in In we more X,XXX of delivered X% currency. now the than $XXX,XXX

FX advanced ago. suite Our from XX% from more a was in of of up significantly seeing revenue, QX deals in and rate customers last for tailwind account in up year. XX%, to now our Box Japan versus strong $X increasing also public our Suites Consistent QX We're year low by high a a large the this XX growth. attach over watermark AI $X XX% outperformance Roughly currency, were demand by sector combination new $X.X QX roughly prior up capabilities recognize This mid-single-digit for expectations our in was in XX% billings last expect represents increase year-over-year with expectations. million X% from and year-over-year has $XXX a from of acceleration currency RPO, million constant constant our bookings RPO suites RPO roughly next half billion, XX% quarter's of outperformance QX a roughly driven QX for growth driven of of and of longer million been XX% year-over-year as performance average business. which driver X%, momentum. quarters, from particularly and and the as XX% bookings, XX% our or contract early up We or well strong strong our of billings of our with remaining in durations. constant currency. key renewals to ended above benefited prior we obligations, months. a

driven and seat quarter's of QX was Our rate for XXX%, up retention by XXX% last rate net trends. per price net from retention improving

an remain product roughly Our stickiness our churn stable FY of a rate prior We now at retention anticipate best-in-class at our rate annualized expectations customers. XXX%. with with net to 'XX full improvement continues least X%, from of exiting XXX%, demonstrating

record roughly data In came XX%. were sell tailwind margin XX we exceeding and to XXX no approximately in assets we're our XX.X%, points able up of a basis points. at of QX that using QX, expectation year-over-year longer a center gross margin generating basis gross

the year-over-year was realize to by more as to QX center than XX% we remaining expect $XXX once operating QX QX, of the income of business. of delivered $XX again our growth gross up leverage benefit points. commitment up We basis demonstrating across revenue in our million sale In rate generate we XX% million, profit similar our XXX data a assets. complete exceeding year-over-year

of margin roughly XXX of points FX year-over-year, XX.X% operating was an XXX record up headwind basis basis points. QX's absorbing despite

Our to expansion, gross in with coupled rigorous approach additional model. margin our continues expense leverage to management, generate operating

a As FX a result of a we EPS $X.XX. QX, $X.XX of of record delivered This the also up approximately above negative result, from well high and $X.XX includes of end result guidance $X.XX. in year-over-year impact our

We turn year. XX% and of from up of $XX now our cash free to XX% cash I'll QX flow balance generated QX, year-over-year. flow million, last operations generated In from of up flow sheet. $XX cash million, we

turn X.X now quarter capital cash ended cash, with $XXX approximately restricted strategy. In we short-term allocation for QX, our million. cash repurchased to approximately We shares investments. in million $XXX equivalents, the Let's and million

As stock of remaining approximately capacity capital stock repurchase buyback July had $XXX under our recently share repurchase repurchase opportunistically shareholders program ongoing $XX our returning XX, our had to through committed additional remain current XXXX, Board to our We plan. a million an plan. we million authorized of

that, me now turn let to and year our With QX guidance. full

international following FX, roughly assuming approximately rates. the a Japan. the is revenue As has U.S. Since generated guidance weakened of dollar current of reminder, last our the provided of includes we U.S. coming yen expected X/X guidance, with revenue XX% the exchange and from the impact our versus outside of

represent the Additionally, in and noncash of GAAP $X.XX we tax $X.XX EPS expect non-GAAP for full impact year. deferred to the that an expenses previously to we discussed roughly and QX

the would half I to years the seasonality from expected of for expenses differ note few that is reasons. second our Finally, X past

mentioned data QX from benefit cost center sales. resulting the recognize to expect that we equipment I lower of QX, in in earlier, First, sales

more than sales held BoxWorks in little be year, QX representing and expenses. marketing million QX, will in $X person in a this Second,

For the of quarter fiscal third XXXX.

QX to growth. an the early of QX. We XXX expected headwind points. points be expected be FX growth in expect million the basis in of $X $XXX range basis We year-over-year This approximately $XXX mid-single-digit that to XXX million rate billed from headwind includes from of FX representing as This X% tailwind an renewals QX were includes to as well revenue the approximately roughly of range. from in billings our expected an million, anticipate

flat improvement complete year-over-year sequentially, points. we assets margin QX, been in our sale basis will our center data QX, remaining will more data be in As forward. sales impact center asset gross going the have than margin we a expect QX XXX representing longer Beginning completed roughly of to no of our gross and

expect QX basis a an XXX operating a and non-GAAP expected XXX This improvement negative point be in which our XXX We points margin FX. constant currency. impact point approximately approximately to improvement to due basis of year-over-year XX%, includes represents basis

of to noncash QX the FX approximately from $X.XX shares our EPS year-over-year be expect expected We are this This diluted end the expected high XX% an of range $XXX $X.XX approximately increase and deferred average to non-GAAP Weighted of range. expenses. headwind $X.XX, tax to a in be at million. $X.XX includes from

previous expectations versus rate from roughly $XX.X guidance our attributable X/X of expect points. versus January a FX increase basis a fiscal to underlying versus For low roughly X% our expect growth points We in XXXX, business. at an basis midpoint XXX impact basis strength growth now XX mid-single-digit billings ending billion, this million points. We in in our of expectations our previous and constant year-over-year growth be FX in the of This anticipate expectations improvement roughly an on points $X.XX with currency. and to to of 'XX $X.XXX revenue range, We billings of increase basis XXX be the growth year's to this XX, approximately our billion now of the FY we XXX attributable approximately expect headwind a approximately represents single-digit year full our representing to of X/X range the X% to now previous growth FX rate. have prior negative

an basis of improvement raising increase We a This are expectations margin XX%. roughly basis XXX points. FY roughly year-over-year our points of from XX%, 'XX XXX gross represents to

of to We representing 'XX raising roughly XXX and non-GAAP our expect margin basis are expectations impact year-over-year. approximately operating to point on approximately versus XX% XX.X%, now negative a FY from XXX our We operating have basis also XXX basis up previous points expectations of improvement points. margin a FX

in expectations 'XX across $X.XX, leverage business. and XX% We the EPS are to we've non-GAAP the driven expectations. $X.XX expect $X.XX, our of the from previously generate as $XXX FX of been tax approximately outperformance range year. raising FY than are that versus well be previous expectations. previous includes lower million which be for This lower in We deferred $X.XX a year, expected to high able impact average to at now full end of the expenses prior our diluted an $X.XX the I expected EPS is than range noted the this increase to million, $X.XX headwind $X as our the representing by shares now Weighted

with the is intelligent of native capabilities. AI and platform cycle content As a of security management, era full we single Box enterprise-grade content powering in enter the life

already As are Enterprise with of success an we capabilities, in AI its in Aaron strategy and increasing our and rate. net the of retention acceleration enhanced improvement RPO Box an catalyzing Plus mentioned, growth our adoption this seeing

innovation our and making investments to financial targeted expanding to product Additionally, continue also shareholders. allows our and margins our go-to-market to fuel strategy returning us disciplined capital while initiatives

Aaron I and happy Operator? to questions. your will With take that, be

Operator

question [Operator from line first Instructions] And your the Enders. comes of Steve

Steven Enders

bit hear of Macron just what there bookings in you maybe start, Great. going sales an the the to a guess, execution environment? give feel I out there Okay. great better on on is bit if the And outperformance kind I guess maybe clarity deal on you're on side. improvement there versus of little like seeing I little guess, I mean, a good to side. more, to the

Aaron Levie

Yes.

happy execution The results with strong quarter. team the in So across delivered segments. definitely, really the we're very

seeing. relative see when QX pressure the kind segments. incremental, still some to, in Box we think I let's say, relatively demand we the a and look we've of AI couple and of Overall, But by plan. was at of a like quarter not feels areas been QX trends performance, for and I Plus it Enterprise stable incremental general but regional driven think areas compared degree pressure like in it our

management upsells just which teams to continues see new unabated, continuing on great are really idea logos the drive areas on and on content think though happy into broad very cetera. ePlus But intelligent where basis, macro . So of is some performance relatively the still much both there plan, see an platform. I and to momentum SMB, of we pressure focused doubling that down are we're this having et the in even with and customers a some like degree of kind areas

Steven Enders

in prepared some guess, that we about when firm I cases impact? Okay. maybe is I AI I kind of hear. I AI just guess, down monetization No, of guess revenue of think the maybe then a to, I as secondarily, the maybe leveraging called their And pretty I guess, out side contribution And called that's wins on terms the choosing platform there of versus out to equation. there? great drove what kind law remarks, beginning out there. the for some slow you use then is the way have Box other in AI side you solid think and to I what mean, the guess,

Aaron Levie

Yes.

that same fact a key cheaper made think strategy we becoming the was space more tokens AI, saw and I improving. underlying cost-effective we ago where about powerfulness a trends and year in AI time. really for to models models on AI decision the are pricing of At as and and the AI time, the cheaper the cost were So over due performance and those the it of the

technology really cheaper it at decision customers make the make have letting and better and the get kinds of time, you want you of all price accruing the of where And do sure of so to anytime value. kind to to that getting kind that trajectories same a package those you're have you is on how your

in upgrade plan, the drive expectation multiple you -- any cycle include our as We AI out and call is made And do Plus moving know. holding Plus. maybe so that we with for Enterprise Box that had the getting to on And Enterprise would to that And of to were variety customers is to that of be chances additional an goal component of kind of for moved into customers a upgrade still provided very plan upgrade out the But features. they AI the other just some for big catalyst has that to them reason, to ePlus cycle. haven't get turning a plan. that what yet

of is really, So in really, This full so Box mentioned -- firm, hubs law the in portfolio Box deal any in mentioned in future. that this remarks. the particular case of use capabilities, you I Sign potential the the cases again, the of included

upgrades had gets by in And that another of QX in just Box renewals type a Board for of their capability Directors. right to an were company, strategy that access kind either kind so the customers for catalyzed foundational We done. if wanting of further over of able of for about to or AI any AI just ePlus to to becomes core that customer the edge CIO getting leadership number deal you AI kind they leader for of the need all be team employees think have step you their back of IT and a or now,

And extremely component is the Box my Box platform. on so to a as fact say, platform that we're content management included is okay, easy the making of it based intelligent core

And so happen. made for easier to easier and we've just that it

Dylan Smith

on this And build And to that. just is Dylan. Yes.

from forward, going impact well. we to see record attributable then still will XX as with AI Plus another the upgrade impact really we revenue biggest, monetizing our at so penetration, AI of most suites to AI have be highs plan both yet set even you in offerings of where is currently And suites current year-on-year. suites overall metrics attach to of points sets expect see tier terms the cycle well our offerings highest and In the those with in those larger Enterprise direct of driving discretely rate that can i.e., our deals capabilities, we once up as our about and capabilities the newer as

so And plans. attributable customers expect into directly we the higher will and be connected impact but to queries, move be majority electing tier AI the to very coming from of clearly that to

Operator

your from And the Pinjalim comes question next line Bora. of

Pinjalim Bora

point? question. price any One a I per that would hear what the But trends at It you're are seat. little Obviously, growth improving? you of you seems seed to talking see stabilizing? growth bit better. love seeing Do this around about of signals kind like Is

Dylan Smith

Yes.

our in stronger really which electing we tier more more was plan, So and talking driven in to to Plus move to large overall saw by just uptick pricing, were that your attributable highest where around AI. retention about we customers part to Enterprise what was our point, to due net rate

seat the environment dynamic relatively there. On we seeing are a stable front,

we on have expansion seeing pressure overall been seed So rates. continued

And we was we most that improve recent while feel rates reported. will and a do that over those just that not confident improvement factor that net the to retention so time, XXX% in

Pinjalim Bora

avenues basis? you'd could behind some to the power gross of Maybe consumption friction how manage lower then that Yes. Understood. to run And unlimited I in those talk in a the were users the about mainly there before, one by the providing to monetize maybe just sounds plan. AI that be for Is driven trying saying lowering -- margins. the you, like it. queries, cost Aaron. you queries adoption. the on question reasoning Plus is reasoning Maybe the behind And of think think Just kind still

Aaron Levie

Yes. Great.

X factors then unlimited, in more share why monetization. for one future of terms factor gave So and I'll we

worried were finding broadly kind factor AI. of seamless was wanted we customers with the what deploying And over So their limits. and was of we they encourage Box most of include kind of frictionless first decided of sort the adoption the Enterprise suggested because to opposite Plus. running we not boxes why were Box as And into internal that were to demand about their some query AI

time, deployments. just magnitude more So each the to of in the months. able seen friction kind some the the or think be that we've this the that XX At drop by in underlying we without order limited don't in dependent less same same seeing would I costs time, secondary of models other, we really past these from factor. didn't like the AI and were probably on to do XX At are we customer of

that very a we're seeing models than in just lower quarters on couple space. leading in the regular priced the at So GPT-XX this basis fact breakthroughs of rate the Mini were a is is whatever past

a the So . can the benefit themselves the improving at well toes. And in models on is all we for of customers that just and with. precipitously. fairly are something their are model that's keeping providers is costs us, that our model Competition The rapid space alive rate. then dropping

monetization is use more, other volume large let's the The use. say, excessive component or of

end-user So what we our use for became cases was announced Box AI uncapped.

if of platform. on document you're the ask set and that's So included in a documents, a unlimited now or a a you question user of an basis

volume with of want APIs, on do large extract our thousands you a a large amount and -- that's of through basis. something to power so If content read of process, onboarding data metadata a per documents, amount from

any Box. that. increase with of baked AI API of the Alphamoon and monetize That our things to cases we AI aspect the using will about the only over mentioned Box monetization and continue capabilities, in when technology use kind platform will you being think I time of metadata the So like high-volume

You'll more want will competitive make delivering that performance of are use price extraction very, that. very metadata separately. see that We even we and cases, we high-volume monetize to in still kind sure

the margins the we dilutes as fundamental so but underlying want to the get sure make as possible, -- of that we much market company. So it extent can share not to that

Operator

Your of the next from Brian Peterson. question line comes

Brian Peterson

Congrats on the strong quarter.

the or guys anything so far seeing could in curious the be you're share and that to hear quarter through linearity you on how I'd August. environment demand evolved what So

Aaron Levie

Yes.

a we pretty in think healthy linearity saw I quarter. the So

kind And for speak the of another. the right seeing way what expectations, year been rest embedded to of nothing one QX So our our or for year guidance have now guidance full thus and far. of into obviously, we're

Brian Peterson

some Just case And price strength know, Great. in AI really is bit. that's correlate maybe or of following to And I any And Is higher plan a reasonable strength? there? products anything or public use curious is what's you that resonating? prevalent that just back that Aaron, there up. that out driving called sector. it the point the

Aaron Levie

Yes.

together When that probably you overall the about think taken is message think government I momentum. a producing agency. traditional all

think state vast, whatever document systems of mission-critical be running legacy federal space the is and may highly and in, their our and of operating that and management environments these technology. storage work lots think decentralized capacity state legacy instantly but is often brands I very government, and where are local they're on for agency they're

security constituents many baked time management platform reasons, be for modern power able cloud. able do the so of now ecosystems. at intelligence representing to to content compliance they're to and and their move and first in enterprise where And citizens with cases our scale in experiences is to because and really the

been that resonating. now and public sector So addition at level efforts, up state federal in local the We've again, our message well. to as really building is

success environment. we toward seen internally. And and continue and And so management agencies federal see nice SLED Box large as think, I some to on we've a across intelligent deliver their to in departments then equally really look balanced the side, both way federal content modern

And part the so not this AI generating this kind in revenue high the customers the that case more are compelling. process more of open in federal it. a much platform the through is data. additional future. there's of government, possible And for use upside sensitive very yet will we our going from only it's piece, FedRAMP much for is cases that up modernization the very, is is we're of set I think so that story whole so then But of the another But yet,

high applications. in right in our process federal for FedRAMP So now, marketplace the we're

FedRAMP see momentum the right there. compliance great website. . process can on the on that to certification You

Operator

Ader. of question next from the Jason your line And comes

Jason Ader

to I think that is And to algorithm just couple your the to just of -- boost years, a the from Do on ask, next get that we of is the you are question, part a operating growth? what growth what wanted points few of growth? about way potential to perspective double-digit taking to your line as if you back maybe margin thoughts think drive top out wondering top line? as

Dylan Smith

Yes.

our years between pretty up the level, going kind seat where bit to the net of show at environment the currently moves range few retention So to I a normal from think and to about high and up a see range. the would be think We single-digit more in pushing of a growth points majority normalized moving double-digit rates high into growth that say and coming as we that the we currency constant kind are our getting balanced is through stage as coming up of a contribution as that to would returns in pricing. expect at macro do

driven more over we Over we quarters, improvements, it's as -- the or past to healthier from and the as you also initiatives that of macroeconomic think lot up us mix toward a several mentioned. mix both been more a see to improvements, the the newer sell enable would pricing to But that expect about weighted will ratable but opens much use cases customers. impact time, a sorry, that,

bit part markets growth net We've we're the new to that the the emerging would growth where we about a majority seeing and of at talked the customer markets as think some logo I contribution little that's net same versus we are in So and other improvement. kind contribute the the of there past EMEA think But internationally. of and to currently well. business new the the expect more some where equation opportunity time,

any given any the investments invest. as to are profitability exactly a land balance, And can of growth certainly as where certainly relates to making, see paying function really going a year is We'll And be like we we in that the we of we're today, lot of of balance. it into off. continue kind those are big and of then the other exactly versus those to areas. buckets So kind drill

I think But because that change be out the rate that the of may that a juice we through we initiatives bottom proven have that able past. expand the that are a well we how to confident kind we've and success of equation in our continue lot of of that we signs will line growth more have we rule underway very as growth profitability. see, of of of And the just you'll those regardless improve revenue between shift squeeze to mix so we're lot to talked

Jason Ader

follow-up, the you've quick one acquisitions? EPS that this from either or any then done impact these just on And revenue on Is year. X there M&A

Dylan Smith

Yes.

So on I impact the side. no would revenue say

a are the Box of into we brought in kind the or And of the XX that's scale about embedded of with over that those from guidance then -- sense acquisition So not we set. bringing in we're incorporated bringing we Alphamoon, the all any but and join for to get team that to engineers Alphamoon in example, provided. well expectations just

Operator

from question the And next Taylor comes McGinnis. your of line

Taylor McGinnis

And some accelerating guide, So first know in prepared one I outlook. the at growth look slight just the the in it were is implies revenue an acceleration remarks, XQ. a comments I about there

So of emerging AI. with Box the the in tailwind from demand bookings momentum, we areas some the stabilization like environment saw more and

year any how exit into behind indicator on and leading a you as provide should that? Just about think the can next we color that the drivers rate comfort in

Dylan Smith

Yes.

what this specifically, would headwind stronger QX say of are signals that the the actually initiatives bit year, to were of question a an and in how are rates time line note expecting that I'd that because we little those acceleration that moved early some but of expect see to see have a lot year. FX to recently are I they expect half also QX, less growth back we just to we throughout over of move do and that. your and seeing drive in how see success intended to -- So it's the top while of intended that of

kind through business, the the we you constant of a versus So of half. the actually, provided terms there's again, a we're in specific constant But that. currency growth terms of the color we difference much a for And expect half sense into into growth currency a to the we're for that and for get provide in of certainly underlying what lot a not back seeing outlook at, QX of we'll more the bit once expectations next year in deeper year year. to the growth too kind look first of full

Taylor McGinnis

adds if the just look XXX,XXX is [ quarter. this at pretty one than that we second the looked greater my then customers And strong Perfect. ] for net past

you guys to? think expectations whether that, AI. that Box forward, have you of your better what you I that there? And that going what attribute when about any the we just So have that guess, about as drivers main been would end execution, like metric on think

Aaron Levie

Yes.

particular not metric we're on QX's on But guiding happy those really front. deals. to overall, were a So in on we performance increase that

component governing to ] you'll capabilities becomes trend contributor our to more we'll again, of favor continue higher-tier our and AI Governance advanced deals. just Box addition we access the go upgrade advancing another general is, better content to it right the in data to additional or security kind cycle some that's Box be scale the upgrade really Sign plus, really your the the of to for main plus this able for beyond Shield or into But be through drive think another add the Box trend enterprise doing functionality, and plans in enterprise future, as plan. Enterprise see tips gaining Plus [ that XXX,XXX-plus customers a now, in I Box of

Operator

the Rishi line of Jaluria. from And your final question comes

Rishi Jaluria

we seen wanted by on the about off versus margins from on full is contemplated quarter thinking that guiding extra Can the we've data prior you remind follow-up. that the year? margin just to benefits of gave? last center that Then was you've full And much have a start just specific in sales. I quarter? what guide the year that to this seen you're us, that kind Maybe how I already of is quantification quick Or

Dylan Smith

Yes.

about in margin represent to QX. both point and and gross this sales a operating for year, So QX basis XX those both tailwind

our was think basis that points entering as so. kind to XX the or about expectations it full of for year. you And So the roughly relative incremental year,

our because to So execute that. of that ability was upside against

not we prior our into today, So into -- provided was that of baked incorporated but all is guidance that guidance. the our

Rishi Jaluria

on And Got it. to That's ask helpful. a question really I then wanted Japan.

-- like can you changes you uptick driving macro of past. bit Anything made? the did a It in are through was things or it what an in see. slowdown Japan. Maybe great walk you environment? talked there any in to us Is that? you Because sounds you're seeing So bookings have else? improvement it Maybe is sounds walk like which kind is an a the us through of getting better, little

Aaron Levie

be -- we strong. to it performance, continues Japan Yes.

federal As kinds mentioned a market of financial and out past, that part Japan. given we've like in in so of the remain upside across penetrating, kind they the still steady of called services, the remaining we're Japanese industries significant pharmaceuticals, business, early that things we've of our kind and the pretty government in spaces

So and major lots early still AI Japan, adopters of upside they been believe Box we across adopters have of functionality. of our

extremely cases. that automation in interested this a is their market is to bringing AI content and So use really more

they've think kinds the I to still of of industries lot we in. a been Obviously, continued So that relatively work room upside stable on just the have see macro in front. we we're

Operator

closing now I like back turn concludes would session. question-and-answer that our to to the remarks. for over Hiponia Cynthia And conference

Cynthia Hiponia

joining forward Great. look today, call. to you and Thank for again our we on everyone, you, next updating us

Operator

today's And and concludes participation. that ladies and for we you call, gentlemen, thank your

disconnect. now may You

Box (BOX) 27 Aug 242025 Q2 Earnings call transcript