Yahoo Finance

• Revenue: $276 million, up 4% year over year, 5% in constant currency.

• Operating Margin: 25.3%.

• EPS: $0.30, $0.04 above guidance.

• Gross Margin: 80.5%, up 30 basis points year over year.

• RPO (Remaining Performance Obligations): $1.5 billion, up 21% year over year.

• Billings: $242 million, up 27% year over year.

• Net Retention Rate: 102%.

• Free Cash Flow: $118 million.

• Cash and Equivalents: $792 million.

• Share Repurchase: 1.6 million shares for approximately $50 million.

• Warning! GuruFocus has detected 3 Warning Signs with APEUF.

Release Date: May 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Box Inc (NYSE:BOX) reported a 4% year-over-year revenue growth in Q1, with a 5% increase in constant currency.

• The company achieved a 21% year-over-year growth in remaining performance obligations (RPO), indicating strong future revenue potential.

• Operating margins were reported at 25.3%, with earnings per share (EPS) of $0.30, exceeding guidance by $0.04.

• Box Inc (NYSE:BOX) saw strong adoption of its Enterprise Advanced product, driven by AI-driven workflows and content management.

• The company announced significant AI partnerships and integrations, including with Microsoft 365 CoPilot, IBM watsonx Orchestrate, and ChatGPT, enhancing its AI capabilities and market presence.

Negative Points

• Despite strong Q1 results, Box Inc (NYSE:BOX) expressed caution due to macroeconomic uncertainties, which could impact IT spending and future growth.

• The company experienced a 1% decrease in constant currency billings guidance for the full fiscal year, reflecting a more conservative outlook.

• Box Inc (NYSE:BOX) noted that seat growth is minor and pricing improvements are the primary driver of revenue growth, indicating potential challenges in expanding user base.

• Early renewals contributed significantly to Q1 results, which may not be sustainable in future quarters, affecting revenue consistency.

• The federal vertical remains dynamic, with potential caution in spending, although the recent FedRAMP High certification could mitigate some challenges.

Q & A Highlights

Q: Can you discuss the demand picture and any prudence baked into the guidance? A: Aaron Levie, CEO: Customer conversations are robust, with strong momentum in Q1 and into Q2. The AI-first strategy is resonating, focusing on automating workflows and bringing intelligence to content. We are being prudent with the macroeconomic environment, balancing these factors in our guidance.

Q: Can you explain the strong billings and RPO growth versus the revenue growth guidance? A: Dylan Smith, CFO: The timing of early renewals impacted Q1 billings, with about $7 million in early renewals contributing to a 400 basis point impact. Approximately $6 million of this will affect Q2, making the Q1 to Q2 impact more pronounced. Overall, the first half shows more strength due to these dynamics and macroeconomic conservatism.