BOX (NYSE:BOX) reported second-quarter fiscal 2027 results that exceeded its guidance, citing record bookings, accelerating adoption of its Enterprise Advanced offering and increased demand for AI-driven content workflows.
Revenue for the quarter totaled $321 million, up 9% year over year, or 11% in constant currency. The company posted non-GAAP operating income of $95 million and an operating margin of 29.4%, above its 28.5% guidance. Non-GAAP earnings per share were $0.40, compared with guidance of $0.39.
Bookings, Retention and Cash Flow Strengthen
Second-quarter billings rose 17% year over year to $310 million, exceeding management’s expectation for low-double-digit growth. Remaining performance obligations increased 15% from a year earlier to $1.7 billion, or 17% in constant currency. Box said it expects to recognize roughly 55% of RPO over the next 12 months.
Net retention rose to 106%, compared with 103% in the prior-year period and above the company’s 105% target. CFO Dylan Smith attributed the improvement to seat expansion and strong retention within the Enterprise Advanced customer base. Annualized full churn remained 3%.
- Customers paying at least $100,000 annually increased 10% year over year.
- Suite customers accounted for 69% of revenue, up from 63% a year earlier.
- Free cash flow was $60 million, up 67% year over year.
- Cash flow from operations was $71 million, up 54% year over year.
Box ended the quarter with $446 million in cash equivalents, restricted cash and short-term investments. During the period, it repurchased 2.6 million shares for approximately $66 million and had about $378 million remaining under its current repurchase authorization as of July 31.
AI Platform Drives Enterprise Advanced Adoption
Management emphasized that customer demand is increasingly centered on connecting AI agents to enterprise content in a secure, governed environment. Levie said customers are seeking a model-neutral platform that can allow them to use different AI models and agents without moving content and workflows among separate systems.
Box cited several Enterprise Advanced customer wins, including a multinational investment bank that upgraded from Enterprise Plus and expanded to a wall-to-wall agreement as it transitions legacy file servers to Box. The company also highlighted a federal agency that upgraded to Enterprise Advanced and expanded seats fourfold to replace legacy contract lifecycle management and collaboration platforms.
Box introduced security features aimed at AI agents, including agent guardrails, third-party agent activity oversight, prompt injection detection and classification-based access policies. The company said these controls are intended to extend its security framework to Box agents and external tools including Claude, ChatGPT and Gemini.
The company also announced Model Context Protocol, or MCP, integrations with Anthropic’s Claude for Legal, Databricks, Harvey, IBM watsonx Orchestrate Agent Catalog, Notion custom agents, Slackbot and xAI’s Grok. Box said its Databricks integration enables users to combine unstructured content stored in Box with structured CRM and ERP data without duplicating files or moving them outside Box’s governance boundary.
Legacy Migrations and Consumption Opportunity
Levie said enterprises are increasingly evaluating migrations from legacy enterprise content management systems and on-premises repositories, because those environments can limit AI agents’ ability to securely access contracts, research files, claims documents and other unstructured data.
He said Box recorded several second-quarter deals involving agentic workflows alongside data or legacy ECM migrations. The company expects to introduce product features during the second half of fiscal 2027 and into the following year intended to facilitate such migrations.
Management also pointed to growing consumption of Box AI units. Levie said that longer-running agents and workflows that process large document volumes are more token-intensive, which he said increases the value of Box’s model-neutral approach. The company aims to route workloads to models that meet customer accuracy and cost requirements, including open-weight models where appropriate.
Smith said adoption of heavier AI workloads and agentic processes, along with capacity constraints among public-cloud providers, are affecting gross-margin dynamics. The company expects to pursue infrastructure-efficiency projects as those capacity constraints ease.
Guidance Raised for Fiscal 2027 Revenue
For the third quarter, Box forecast revenue of approximately $329 million, representing 9% year-over-year growth, or 11% growth in constant currency. The company expects third-quarter billings growth to be roughly in line with revenue growth, gross margin of about 80.5%, operating margin of approximately 28% and non-GAAP EPS of about $0.39.
For the fiscal year ending Jan. 31, 2027, Box raised its revenue outlook by $10 million to approximately $1.29 billion, representing 10% growth, or 11% growth in constant currency. The company expects full-year billings growth to be roughly in line with revenue growth, gross margin of approximately 80.5%, operating margin of approximately 28% and non-GAAP EPS of about $1.54.
Smith said the updated forecast reflects demand for Box AI, broader Enterprise Advanced adoption, improving net retention and continued momentum across the business. The company expects second-half expenses to be more weighted toward the fourth quarter because BoxWorks will occur in the fourth quarter and due to the recent extension of its Redwood City headquarters lease.
About BOX (NYSE:BOX)
Box, Inc is a leading provider of cloud content management and file sharing solutions designed to support enterprises in securely managing, accessing and collaborating on digital content from anywhere. The company offers a unified platform that enables organizations to store, share and automate workflows across various departments, enhancing productivity and ensuring governance over sensitive information. Box’s services are tailored to meet the needs of industries such as healthcare, financial services, government and media, where compliance and data security are paramount.
The core offerings of Box include its Content Cloud platform, which provides content collaboration, workflow automation, data classification and secure file sharing.
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