Yahoo Finance Box, Inc. (NYSE:BOX) 2025 Q1 Earnings Call Summary
Box, Inc. missed its earnings expectations for Q1 2025, reporting an EPS of $0.07739 compared to the anticipated $0.36. The earnings conference call, hosted by Cynthia Hiponia, Vice President of Investor Relations, featured remarks from Co-Founder and CEO Aaron Levie, and Co-Founder and CFO Dylan Smith.
Aaron Levie, Co-Founder and CEO of Box, Inc. (NYSE:BOX), expressed satisfaction with the company's Q1 2025 performance, highlighting that the operating results exceeded their guidance. Box, Inc. achieved a 5% year-over-year revenue growth (8% on a constant currency basis), which resulted in operating margins of 27%, up 400 basis points from last year.
Despite foreign exchange challenges, Box, Inc. saw strong execution and ongoing momentum in AI-driven initiatives. Levie emphasized that Box, Inc. is at the forefront of AI transformation, with increasing demand for Box AI, particularly from Enterprise Plus customers. He cited examples of companies upgrading to access advanced AI capabilities for tasks like client analysis and content management.
Levie discussed Box, Inc.'s strategy that is focused on four innovation areas: workflow and collaboration, security and compliance, open platform integration, and advanced AI. New features like AI-enabled Box Hubs and metadata extraction aim to automate workflows and enhance content management. The integration of Crooze's no-code application and metadata features is expected to further support these efforts. Security remains a priority with the expansion of Box Shield and new compliance solutions. Box, Inc. is also enhancing its platform to integrate with major tools like Salesforce, Slack, Microsoft Teams, Microsoft Copilot, IBM’s Technologies and AI technologies from partners like Nvidia and Microsoft Azure.
A close-up of a laptop with a screen revealing the 25 languages supported by the company's cloud content management platform.
The company's go-to-market strategy includes expanding demand channels, hosting global AI events, and partnering with system integrators to drive larger deals. Levie highlighted key customer wins across various industries, illustrating Box, Inc.'s pivotal role in leveraging AI to unlock the value of unstructured data. He concluded by celebrating Box, Inc.'s recognition by Fortune magazine as one of the best companies to work for in 2024, attributing their success to the dedication of their employees and the company's mission to transform how the world works together.
Dylan Smith, CFO of Box, Inc. (NYSE:BOX), highlighted the company's strong performance in Q1 2025, with revenue of $265 million. He also pointed out key achievements which included a high attach rate for suites in large deals, strong demand for Box AI, and a 3% year-over-year increase in remaining performance obligations (RPO) to $1.2 billion. He explained that gross margin improved to 80.2%, the first time surpassing 80%, driven by efficiencies from using public cloud infrastructure.
Box, Inc.’s operating income rose 23% year-over-year to $70 million, with operating margin increasing to 26.6%. Free cash flow generation was $123 million, and the company repurchased $37 million worth of shares. Looking ahead, Box, Inc. anticipates Q2 revenue of $268 to $270 million, 3% year-over-year growth (6% on a constant currency basis), and a full fiscal year revenue of $1.075 to $1.08 billion. The company expects continued growth driven by AI-enabled business processes and disciplined financial strategies.
You can read the entire transcript and Q&A section here.
If you are looking for an AI stock that is more promising than BOX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Disclosure: None.
