Q2 FY2027
Filed Aug 25, 2026Revenue of $321.1 million, up 9%, or 11% on a constant currency basis; GAAP operating margin of 10.2% and non-GAAP operating margin of 29.4%.
Box reported 9% revenue growth, 17% billings growth, 15% RPO growth, expanding GAAP and non-GAAP operating margins, and operating cash flow and non-GAAP free cash flow growth of 54% and 67%, respectively. The company also guided to 9% year-over-year revenue growth in Q3 and 10% for FY27, while identifying FX headwinds.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $321.1 million | – | up 9%, or 11% on a constant currency basis |
| Billingsother | $309.5 million | – | up 17%, or 16% on a constant currency basis |
| Remaining performance obligationsother | $1.7 billion | – | up 15%, or 17% on a constant currency basis |
| Short-term remaining performance obligationsother | $904.7 million | – | up 11%, or 14% on a constant currency basis |
| Long-term remaining performance obligationsother | $787.0 million | – | up 18%, or 22% on a constant currency basis |
| GAAP gross profitGAAP | $254.0 million, or 79.1% of revenue | – | – |
| Non-GAAP gross profitnon-GAAP | $260.7 million, or 81.2% of revenue | – | – |
| Research and development expenseGAAP | $78.403 million | – | – |
| Sales and marketing expenseGAAP | $106.719 million | – | – |
| General and administrative expenseGAAP | $36.208 million | – | – |
| Total operating expensesGAAP | $221.330 million | – | – |
| GAAP operating incomeGAAP | $32.6 million, or 10.2% of revenue | – | – |
| Non-GAAP operating incomenon-GAAP | $94.5 million, or 29.4% of revenue | – | – |
| Net incomeGAAP | $19.221 million | – | – |
| Net income attributable to common stockholdersGAAP | $13.134 million | – | – |
| GAAP diluted earnings per share attributable to common stockholdersGAAP | $0.09 | – | – |
| Non-GAAP net income attributable to common stockholdersnon-GAAP | $55.650 million | – | – |
| Non-GAAP diluted net income per share attributable to common stockholdersnon-GAAP | $0.40 | – | – |
| Weighted-average diluted shares outstandingGAAP | 139.719 million | – | – |
| Stock-based compensation expenseGAAP | $61.363 million | – | – |
| Net cash provided by operating activitiesGAAP | $70.8 million | – | up 54% |
| Non-GAAP free cash flownon-GAAP | $59.7 million | – | up 67% |
Q3 FY27 and Full Year FY27 outlook
- RevenueQ3 FY27: approximately $329 million, up 9% year-over-year, or 11% on a constant currency basis. Full Year FY27: approximately $1.290 billion, up 10% year-over-year, or 11% on a constant currency basis.
- NoteQ3 FY27 GAAP operating margin is expected to be approximately 10.0% and non-GAAP operating margin is expected to be approximately 28.0%.
- NoteQ3 FY27 GAAP net income per share attributable to common stockholders is expected to be approximately $0.12 and non-GAAP diluted net income per share attributable to common stockholders is expected to be approximately $0.39.
- NoteQ3 FY27 weighted-average diluted shares outstanding are expected to be approximately 142 million.
- NoteFull Year FY27 GAAP operating margin is expected to be approximately 9.5% and non-GAAP operating margin is expected to be approximately 28.0%.
- NoteFull Year FY27 GAAP net income per share attributable to common stockholders is expected to be approximately $0.38 and non-GAAP diluted net income per share attributable to common stockholders is expected to be approximately $1.54.
- NoteFull Year FY27 weighted-average diluted shares outstanding are expected to be approximately 141 million.
- NoteQ3 FY27 revenue guidance includes an expected headwind of approximately 170 basis points due to FX; operating-margin guidance includes an expected headwind of approximately 80 basis points due to FX; GAAP and non-GAAP EPS each include an expected headwind of approximately $0.02 due to FX.
- NoteFull Year FY27 revenue guidance includes an expected headwind of approximately 100 basis points due to FX; operating-margin guidance includes an expected headwind of approximately 80 basis points due to FX.
- NoteFull Year FY27 GAAP and non-GAAP EPS guidance each include an expected headwind of $0.09 due to FX, which is $0.01 higher than prior expectations, and an expected headwind of $0.02 due to an increase in expected weighted-average diluted shares outstanding.
Capital returns
- Box repurchased 2.6 million shares for approximately $66 million in the second quarter of fiscal year 2027.
- Repurchases of common stock were $69.255 million for the three months ended July 31, 2026, compared with $39.924 million for the prior-year quarter.
- Approximately $378 million of buyback capacity remained under the current share repurchase plan as of July 31, 2026.
- Payments of dividends to preferred stockholders were $3.750 million for the three months ended July 31, 2026.
What drove it
- Management cited rapid adoption of Enterprise Advanced as a source of momentum.
- Net retention rate improved to 106%.
- Revenue in constant currency accelerated for a fifth quarter in a row, according to the CFO.
- The company reported wins or expansions across automotive, consumer packaged goods, financial services, legal, life sciences, public sector, and technology organizations.
- Product activity included AI-agent security capabilities, new Box Zones, Admin AI Insights, AI-model support, and MCP integrations.
Concerns
- Approximately 35% of Box revenue is generated outside the United States, of which approximately 70% is in Japanese Yen.
- Q3 FY27 guidance includes an expected FX headwind of approximately 170 basis points to revenue and approximately 80 basis points to operating margin.
- Full Year FY27 GAAP and non-GAAP EPS guidance each include an expected $0.09 FX headwind, which is $0.01 higher than prior expectations.
- Non-GAAP gross margin was 81.2% of revenue, compared with 81.4% of revenue in the prior-year quarter.
- The release states that reported results are preliminary estimates that could differ from amounts ultimately reported in the Form 10-Q.
What to watch
- Q3 FY27 revenue of approximately $329 million and the expected 9% year-over-year growth rate.
- Delivery of approximately 10.0% GAAP operating margin and approximately 28.0% non-GAAP operating margin in Q3 FY27.
- Progress in net retention rate following the reported improvement to 106%.
- Enterprise Advanced adoption and the reported acceleration in constant-currency revenue.
- The effect of FX headwinds on reported revenue, operating margin, and EPS.
- RPO and billings trends, including short-term RPO of $904.7 million and long-term RPO of $787.0 million.
Balance sheet and cash flow
- Cash and cash equivalents were $342.870 million as of July 31, 2026, compared with $375.130 million as of January 31, 2026.
- Short-term investments were $101.266 million as of July 31, 2026, compared with $102.932 million as of January 31, 2026.
- Debt, net, non-current was $452.212 million as of July 31, 2026, compared with $451.011 million as of January 31, 2026.
- Deferred revenue was $589.540 million as of July 31, 2026, compared with $647.893 million as of January 31, 2026.
- Net cash used in investing activities was $14.029 million, compared with $8.510 million in the prior-year quarter.
- Net cash used in financing activities was $90.586 million, compared with $65.276 million in the prior-year quarter.
- Cash, cash equivalents, and restricted cash were $344.290 million at July 31, 2026, compared with $659.553 million at July 31, 2025.
Analysis
Box reported record Q2 FY27 revenue of $321.1 million, up 9%, or 11% on a constant currency basis. Sales activity outpaced recognized revenue, with billings of $309.5 million up 17%, or 16% on a constant currency basis. RPO reached $1.7 billion, up 15%, while short-term RPO grew 11% and long-term RPO grew 18%. Management identified Enterprise Advanced adoption as a key growth driver, and reported that net retention rate improved to 106%.
Profitability expanded materially on both reported bases. GAAP operating income was $32.6 million, or 10.2% of revenue, compared with $20.6 million, or 7.0% of revenue, in the prior-year quarter. Non-GAAP operating income was $94.5 million, or 29.4% of revenue, compared with $84.0 million, or 28.6% of revenue. GAAP gross margin held at 79.1%, while non-GAAP gross margin was 81.2%, compared with 81.4% a year earlier. Stock-based compensation was $61.363 million, compared with $60.758 million in the prior-year quarter.
Cash generation also strengthened. Net cash provided by operating activities was $70.8 million, up 54%, and non-GAAP free cash flow was $59.7 million, up 67%. The company repurchased 2.6 million shares for approximately $66 million during the quarter and had approximately $378 million of remaining authorization. Cash and cash equivalents were $342.870 million as of July 31, 2026, with $101.266 million of short-term investments and $452.212 million of net non-current debt.
The Q3 FY27 outlook calls for approximately $329 million of revenue, up 9% year-over-year, or 11% on a constant currency basis, plus approximately 10.0% GAAP operating margin and approximately 28.0% non-GAAP operating margin. Full Year FY27 guidance is approximately $1.290 billion of revenue, up 10% year-over-year, or 11% on a constant currency basis, with approximately 9.5% GAAP operating margin and approximately 28.0% non-GAAP operating margin. FX is a central reported constraint: Q3 revenue guidance includes an expected approximately 170-basis-point headwind, and Full Year FY27 GAAP and non-GAAP EPS guidance each include an expected $0.09 headwind from FX.
The filing does not provide standalone prior-quarter operating results for a sequential comparison. It does provide January 31, 2026 balance-sheet comparisons, including cash and cash equivalents of $375.130 million, deferred revenue of $647.893 million, and net non-current debt of $451.011 million at that date. The main operating measures to monitor are Enterprise Advanced adoption, net retention, billings, RPO conversion, margin delivery against the Q3 outlook, and the continuing impact of foreign currency exchange rates.
Management, verbatim
Box delivered exceptional second quarter results, continuing our strong momentum accelerated by the rapid adoption of Enterprise Advanced.
Aaron Levie, co-founder and CEO of Box
Q2 results demonstrate strong execution, with revenue, billings, and operating margin all exceeding our expectations.
Dylan Smith, co-founder and CFO of Box
Not in the filing
stated, not guessed- Prior-quarter standalone revenue, billings, RPO, gross profit, operating income, net income, EPS, operating cash flow, and free cash flow comparisons were not provided.
- Revenue by reportable segment was not provided.
- Segment-level revenue, growth rates, and segment drivers were not provided.
- Q3 FY27 and Full Year FY27 gross-margin guidance was not provided.
- Q3 FY27 and Full Year FY27 operating-expense guidance was not provided.
- Q3 FY27 and Full Year FY27 tax-rate guidance was not provided.
- Previous-quarter outlook was not provided, so no comparison of actual results with prior guidance is available.
- A common-stock dividend was not reported.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.