Box delivered a positive second quarter, with results surpassing Wall Street’s expectations. Management highlighted that growing customer adoption of the Enterprise Advanced and Enterprise Plus plans, both featuring robust AI capabilities, drove the quarter’s performance. CEO Aaron Levie noted, “We had strong momentum in Q2 in customer adoption of Enterprise Advanced, which brings together our most powerful intelligent workflow capabilities in one plan.” The quarter was also shaped by increased upgrades and new customer wins, as organizations sought to automate workflows and harness unstructured data with Box’s AI tools.
Is now the time to buy BOX? Find out in our full research report (it’s free).
Box (BOX) Q2 CY2025 Highlights:
- Revenue: $294 million vs analyst estimates of $290.8 million (8.9% year-on-year growth, 1.1% beat)
- Adjusted EPS: $0.33 vs analyst estimates of $0.31 (6.4% beat)
- Adjusted Operating Income: $83.99 million vs analyst estimates of $81.22 million (28.6% margin, 3.4% beat)
- The company slightly lifted its revenue guidance for the full year to $1.17 billion at the midpoint from $1.17 billion
- Management raised its full-year Adjusted EPS guidance to $1.27 at the midpoint, a 2.4% increase
- Operating Margin: 7%, in line with the same quarter last year
- Billings: $264.9 million at quarter end, up 3.3% year on year
- Market Capitalization: $4.73 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Box’s Q2 Earnings Call
- Steve Enders (Citi) asked about the drivers behind billings outperformance. CFO Dylan Smith attributed it to a combination of strong bookings, early renewals, and momentum in Box Consulting, all influenced by demand for AI capabilities and Enterprise Advanced.
- Lucky Schreiner (DA Davidson) inquired about factors behind net seat growth. Smith explained this was due to Enterprise Advanced and Enterprise Plus unlocking new use cases and engaging more departments across customers, leading to broader adoption.
- Taylor McGinnis (UBS) questioned the sustainability of first-half momentum and the implied guidance for the second half. Smith emphasized prudent forecasting due to ongoing market variability but noted confidence in long-term growth tied to premium suite adoption.
- Matt Balik (Bank of America) asked how use cases for Enterprise Advanced are evolving and the role of the MCP server. CEO Aaron Levie described expanding customer demand for workflow automation and highlighted MCP server as a tool for seamless integration with various AI systems.
- Chris Candero (Morgan Stanley) referenced concerns about failed AI initiatives in enterprises and asked how Box is achieving success. Levie pointed to Box’s prebuilt, integrated platform as reducing complexity and risk for customers, enabling targeted, high-ROI AI adoption.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace of Enterprise Advanced and AI suite adoption across existing and new customers, (2) the rollout and customer feedback on new workflow automation and collaboration features, and (3) the effectiveness of Box’s enhanced security and compliance offerings, especially in regulated industries. Execution on AI integrations and expansion into the public sector will remain important markers of progress.
Box currently trades at $32.75, up from $31.19 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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