Cloud content management platform Box (NYSE:BOX) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 8.9% year on year to $294 million. The company expects next quarter’s revenue to be around $298.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.33 per share was 6.4% above analysts’ consensus estimates.
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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: $4.70 billion
StockStory’s Take
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.
Looking ahead, Box’s guidance reflects its confidence in continued demand for its AI-powered platform, particularly in automating business processes and managing unstructured data. Management pointed to further enhancements in workflow automation, upcoming AI-driven features for collaboration tools, and a strengthened focus on security as core elements shaping its outlook. CFO Dylan Smith emphasized that investments in the intelligent content management platform and ongoing go-to-market initiatives are expected to sustain the company’s growth trajectory, stating, “We will continue to invest in our intelligent content platform, key go-to-market initiatives, and our balanced financial model positions Box to capitalize on the AI-driven ahead in enterprise content.”
Key Insights from Management’s Remarks
Management attributed the quarter’s growth to accelerating adoption of AI-driven plans, larger deal sizes, and success in expanding use cases through automation and workflow enhancements.
- Enterprise Advanced adoption: The rapid uptake of Enterprise Advanced was a central driver, with the number of deals nearly doubling compared to the previous quarter. Management highlighted that this plan’s AI-powered metadata extraction and workflow automation features resonated with customers across industries such as law, hospitality, and industrial automation.
- AI capabilities expand use cases: Box’s enhanced AI offerings, including metadata extraction and custom agent creation, enabled customers to automate processes like contract management, document review, and knowledge search, leading to broader and deeper deployments. CEO Aaron Levie noted that these capabilities allowed Box to address more complex, high-value workflows that were previously managed manually.
- Larger and upgraded deals: The company saw existing customers upgrading from other plans and new customers purchasing higher-tier offerings directly, resulting in higher average deal sizes. CFO Dylan Smith explained that upgrades to Enterprise Advanced often resulted in a “rough doubling” of revenue per user versus non-suite plans, with some deals expanding into new departments or user groups.
- AI partnerships and integrations: Box expanded its ecosystem by supporting leading AI models such as OpenAI’s GPT-5, Anthropic’s Claude 4.1, and xAI’s Grok 4, while integrating with platforms like ChatGPT, Snowflake, AWS Bedrock, and Salesforce. These integrations strengthened Box’s position as a flexible, interoperable content platform.
- Go-to-market leadership transition: The company announced the retirement of Chief Revenue Officer Mark Whalen and welcomed Jeff Newsom, formerly of Google Cloud, as the new CRO. Management framed this as a move to reinforce Box’s enterprise sales capabilities and accelerate adoption of its AI-powered platform.
Drivers of Future Performance
Box expects continued revenue growth and stable margins, driven by ongoing AI innovation, expanded workflow automation, and deeper enterprise engagement.
- AI-driven workflow automation: Management sees the next phase of growth coming from new workflow and no-code app capabilities, enabling organizations to automate complex business processes—such as contract management and digital asset handling—powered by AI agents. These upgrades are anticipated to make Box a more integral part of enterprise operations.
- Broader customer adoption: The company aims to further penetrate existing accounts and attract new ones by enhancing core collaboration tools with AI features and making Box AI capabilities available via API integrations. Management believes that expanding use cases and department-level adoption will contribute to higher seat growth and net retention.
- Security and compliance focus: As enterprises increasingly rely on AI agents to handle sensitive unstructured data, Box is investing in advanced security, governance, and compliance features. Management contends that robust data protection will be a key differentiator in winning and retaining large enterprise customers, particularly in regulated industries and the public sector.
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 $32.47, 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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