Box Inc. reported quarterly revenue of $321.1 million for its second fiscal quarter, an increase of 9% year-over-year or 11% in constant currency terms, exceeding Wall Street's forecast of $319.33 million. Adjusted earnings per share matched consensus at $0.40, while billings rose 17% to $310 million.
Gross margin remained stable at 81.2%, operating income reached $95 million, and operating margin expanded by 90 basis points to 29.4%. Free cash flow surged 67% to $60 million, with cash and investments totaling $446 million at quarter-end. Remaining performance obligations grew 15% year-over-year to $1.7 billion.
The company raised its full-year revenue guidance by $10 million to approximately $1.29 billion, implying 10% growth or 11% in constant currency. Full-year adjusted EPS is projected at $1.54, with gross and operating margins expected to land at 80.5% and 28%, respectively. For the current quarter, Box forecasts revenue of about $329 million and adjusted EPS of $0.39.
Revenue from suites customers accounted for 69% of total sales, up from 63% a year earlier, while the number of customers paying at least $100,000 annually increased 10% year-over-year. Net retention rate improved to 106%, exceeding expectations of 105% and rising from 103% in the prior-year period.
Executives highlighted strong demand for Box AI and Enterprise Advanced as key drivers of growth. CEO Aaron Levie noted the company's role in enterprise AI adoption, stating that "the world's most advanced super intelligence is only as useful as the underlying enterprise knowledge." CFO Dylan Smith cited "record Q2 bookings" and increasing AI adoption as factors behind the raised outlook.
Shares ended the regular session down 1.4% at $33.00, within a 52-week range of $21.34 to $33.88. The stock edged up 0.08% in after-hours trading to $33.03.
