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Box Q2 Earnings Beat Estimates: Can Positive Guidance Lift Shares?
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Box, Inc. (BOX - Free Report) reported second-quarter fiscal 2025 non-GAAP earnings per share of 44 cents, which beat the Zacks Consensus Estimate by 10%. The figure jumped 22.3% year over year.
Total revenues of $270.04 million surpassed the consensus mark by 0.3%. The top line increased 3% year over year (6% growth on a constant-currency basis).
Solid momentum in the Content Cloud platform and the growing adoption of Enterprise Plus due to strength in Box AI drove top-line growth.
The BOX stock has returned 27.7% year to date, outperforming the industry’s rally of 13.6%.
Box provided better-than-expected guidance for revenues and earnings for the third quarter and fiscal 2025. The upward revision in the fiscal 2025 guidance is another positive.
Following the release of second-quarter fiscal 2025 results, Box’s shares have gained 10.8%.
Against this backdrop, we expect the company’s positive guidance to keep the momentum running.
Billings were $256.4 million for the reported quarter, increasing 10% year over year (9% growth on a constant-currency basis).
Deferred revenues were $502 million in the fiscal second quarter, increasing 5% from the prior-year quarter (7% growth on a constant-currency basis).
BOX saw an 87% attach rate for its Suites, significantly up from 78% in the year-ago quarter. The company generated 57% of its revenues from Enterprise Plus Suites in the reported quarter.
Box’s net retention rate was 102% at the end of the fiscal second quarter, down 100 bps year over year due to macroeconomic challenges.
The remaining performance obligations as of Apr 30, 2024, were $1.272 billion, up 12% on a year-over-year basis (14% growth on a constant-currency basis).
BOX’s Operating Results
The non-GAAP gross margin was 81.6%, expanding 470 bps from the prior-year quarter.
Box’s operating expenses of $194.2 million increased 5.2% year over year. As a percentage of revenues, the figure expanded 130 bps from the year-ago quarter to 71.9%.
On a non-GAAP basis, the company recorded an operating margin of 28.4%, which expanded 360 bps from the prior-year quarter.
BOX’s Balance Sheet & Cash Flow
As of Jul 31, 2024, cash and cash equivalents were $406.6 million, down from $449.5 million as of Apr 30, 2024.
BOX’s short-term investments amounted to $75.6 million, down from $116.6 million in the previous fiscal quarter.
Accounts receivables amounted to $177.5 million at the end of the fiscal second quarter, which increased from $143.05 million at the end of the prior quarter.
Non-current debt was pegged at $371.8 million at the reported quarter’s end compared with $371.3 million at the previous quarter’s end.
Box generated $36.3 million in cash from operations in the fiscal second quarter, down from $131.2 million in the previous quarter.
The company generated a free cash flow of $32.7 million in the reported quarter.
BOX offers Strong Guidance
For third-quarter fiscal 2025, Box expects revenues between $274 million and $276 million, suggesting a 5% rise from the prior year’s reported figure. The constant-currency growth rate is pegged at 6%. The Zacks Consensus Estimate for the same is pinned at $271.09 million.
On a non-GAAP basis, BOX projects earnings per share of 41-42 cents. The guidance includes an expected foreign exchange headwind of 2 cents. The Zacks Consensus Estimate for the same is pegged at 39 cents.
Box expects the fiscal third-quarter billings growth rate to be in the mid-single-digit range.
The non-GAAP operating margin for the fiscal third quarter is expected to be 28%.
For fiscal 2025, the company revised its revenue guidance upward from $1.075-$1.08 billion to $1.086-$1.09 billion, indicating an increase of 5% from the prior year’s actual. The constant-currency growth rate is pegged at 7%. This guidance includes 170 bps of foreign exchange headwind, which is 80 bps lower than the previous expectation. The Zacks Consensus Estimate for the same is pinned at $1.08 billion.
BOX raised its guidance for non-GAAP earnings per share from $1.54-$1.58 to $1.64-$1.66. The guidance includes an expected foreign exchange headwind of 12 cents. The Zacks Consensus Estimate for the same is pegged at $1.57 per share.
Box expects the fiscal 2025 billings growth rate to be in the mid-single-digit range.
The non-GAAP operating margin for the fiscal year is expected to be 27.5%.
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Box Q2 Earnings Beat Estimates: Can Positive Guidance Lift Shares?
Box, Inc. (BOX - Free Report) reported second-quarter fiscal 2025 non-GAAP earnings per share of 44 cents, which beat the Zacks Consensus Estimate by 10%. The figure jumped 22.3% year over year.
Total revenues of $270.04 million surpassed the consensus mark by 0.3%. The top line increased 3% year over year (6% growth on a constant-currency basis).
Solid momentum in the Content Cloud platform and the growing adoption of Enterprise Plus due to strength in Box AI drove top-line growth.
The BOX stock has returned 27.7% year to date, outperforming the industry’s rally of 13.6%.
Box provided better-than-expected guidance for revenues and earnings for the third quarter and fiscal 2025. The upward revision in the fiscal 2025 guidance is another positive.
Following the release of second-quarter fiscal 2025 results, Box’s shares have gained 10.8%.
Against this backdrop, we expect the company’s positive guidance to keep the momentum running.
Box, Inc. Price, Consensus and EPS Surprise
Box, Inc. price-consensus-eps-surprise-chart | Box, Inc. Quote
BOX’s Q2 Metrics in Detail
Billings were $256.4 million for the reported quarter, increasing 10% year over year (9% growth on a constant-currency basis).
Deferred revenues were $502 million in the fiscal second quarter, increasing 5% from the prior-year quarter (7% growth on a constant-currency basis).
BOX saw an 87% attach rate for its Suites, significantly up from 78% in the year-ago quarter. The company generated 57% of its revenues from Enterprise Plus Suites in the reported quarter.
Box’s net retention rate was 102% at the end of the fiscal second quarter, down 100 bps year over year due to macroeconomic challenges.
The remaining performance obligations as of Apr 30, 2024, were $1.272 billion, up 12% on a year-over-year basis (14% growth on a constant-currency basis).
BOX’s Operating Results
The non-GAAP gross margin was 81.6%, expanding 470 bps from the prior-year quarter.
Box’s operating expenses of $194.2 million increased 5.2% year over year. As a percentage of revenues, the figure expanded 130 bps from the year-ago quarter to 71.9%.
On a non-GAAP basis, the company recorded an operating margin of 28.4%, which expanded 360 bps from the prior-year quarter.
BOX’s Balance Sheet & Cash Flow
As of Jul 31, 2024, cash and cash equivalents were $406.6 million, down from $449.5 million as of Apr 30, 2024.
BOX’s short-term investments amounted to $75.6 million, down from $116.6 million in the previous fiscal quarter.
Accounts receivables amounted to $177.5 million at the end of the fiscal second quarter, which increased from $143.05 million at the end of the prior quarter.
Non-current debt was pegged at $371.8 million at the reported quarter’s end compared with $371.3 million at the previous quarter’s end.
Box generated $36.3 million in cash from operations in the fiscal second quarter, down from $131.2 million in the previous quarter.
The company generated a free cash flow of $32.7 million in the reported quarter.
BOX offers Strong Guidance
For third-quarter fiscal 2025, Box expects revenues between $274 million and $276 million, suggesting a 5% rise from the prior year’s reported figure. The constant-currency growth rate is pegged at 6%. The Zacks Consensus Estimate for the same is pinned at $271.09 million.
On a non-GAAP basis, BOX projects earnings per share of 41-42 cents. The guidance includes an expected foreign exchange headwind of 2 cents. The Zacks Consensus Estimate for the same is pegged at 39 cents.
Box expects the fiscal third-quarter billings growth rate to be in the mid-single-digit range.
The non-GAAP operating margin for the fiscal third quarter is expected to be 28%.
For fiscal 2025, the company revised its revenue guidance upward from $1.075-$1.08 billion to $1.086-$1.09 billion, indicating an increase of 5% from the prior year’s actual. The constant-currency growth rate is pegged at 7%. This guidance includes 170 bps of foreign exchange headwind, which is 80 bps lower than the previous expectation. The Zacks Consensus Estimate for the same is pinned at $1.08 billion.
BOX raised its guidance for non-GAAP earnings per share from $1.54-$1.58 to $1.64-$1.66. The guidance includes an expected foreign exchange headwind of 12 cents. The Zacks Consensus Estimate for the same is pegged at $1.57 per share.
Box expects the fiscal 2025 billings growth rate to be in the mid-single-digit range.
The non-GAAP operating margin for the fiscal year is expected to be 27.5%.
Zacks Rank & Stocks to Consider
Currently, Box carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Arista Networks (ANET - Free Report) , Badger Meter (BMI - Free Report) and Audioeye (AEYE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have rallied 46.8% in the year-to-date period. The long-term earnings growth rate for ANET is anticipated to be 17.2%.
Badger Meter’s shares have gained 32.5% in the year-to-date period. The long-term earnings growth rate for BMI is projected at 17.91%.
Shares of Audioeye have surged 342.6% in the year-to-date period. The long-term earnings growth rate for AEYE is expected to be 25%.