Box shares climb on AI-driven beat-and-raise Q2

Published 26/08/2025, 21:22
Updated 27/08/2025, 10:46
© Reuters.

Investing.com -- Box Inc (NYSE:BOX) shares climbed Tuesday after the company reported fiscal second-quarter results that exceeded market expectations and lifted its annual revenue forecast, reinforcing investor confidence in its AI-led content platform strategy.

Shares rose nearly 3% in premarket trading Wednesday as the company posted adjusted earnings per share of $0.33 on revenue of $294 million, both topping Wall Street forecasts.

Revenue rose 9% from a year earlier, or 7% on a constant currency basis, beating analysts’ expectations of $290.78 million. CFO Dylan Smith credited demand for the company’s AI solutions, saying, “We delivered a strong second quarter with operating results above our guidance and double-digit short-term RPO growth.”

Box’s remaining performance obligations (RPO) reached $1.5 billion, up 16% year-over-year, including a 12% increase in short-term RPO to $812 million. Long-term RPO rose 21% to $664 million, highlighting the company’s stronger-than-expected sales pipeline and enterprise adoption.

The company reported record non-GAAP gross profit of $239.2 million, or 81.4% of revenue, and non-GAAP operating income of $84 million, improving slightly from the previous year. Operating efficiency remained stable, evidenced by a non-GAAP operating margin of 28.6%, up from 28.4%.

"Another solid quarter of top-line outperformance was aided by strong bookings momentum from Advanced adoption," Morgan Stanley analysts commented. 

Separately, Bank of America analysts said "another quarter of strong execution and Enterprise Advanced (EA) adoption is supportive of a positive re- rate as it further validates the EA bull case." The bank reiterated its Buy and the $40 price target. 

CEO Aaron Levie emphasized Box’s positioning at the intersection of content and AI, noting that its platform is increasingly core to digital transformation. “In the second quarter, we continued to see strong momentum with Enterprise Advanced, which delivers intelligent workflow automation, advanced AI, powerful AI agents and secure content management in one plan,” he said.

Box issued third-quarter guidance broadly in line with expectations, forecasting revenue between $298 million and $299 million, and adjusted EPS between $0.31 and $0.32. The outlook reflects an anticipated 8% revenue growth year-over-year and acknowledges foreign exchange headwinds affecting earnings per share.

The company lifted its full-year (FY26) revenue guidance by 0.4% to $1.17 billion and $1.175 billion, compared to the consensus estimate of $1.168 billion. 

The non-GAAP EPS guide was reiterated to be between $1.26 and $1.28, with flat foreign exchange impact assumed. Box highlighted strong international performance, particularly in Japan, where 65% of its overseas revenue is generated.

The operating margin guidance stayed flat at 28%.

"While FY26 margins remain unchanged and limit positive estimate revisions, investors likely give Box credit for a conservative FY26 revenue guidance," Morgan Stanley analysts wrote.

Alongside financials, Box highlighted several product enhancements and partnerships, including AI integrations with OpenAI’s GPT-5, support for AWS Bedrock AgentCore, and expanded collaboration with Salesforce. These moves, executives said, align with Box’s strategy to embed more intelligent features into its platform and drive long-term enterprise adoption.

(Luke Juricic contributed to this report.)

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