Box BOX reported fourth-quarter fiscal 2025 non-GAAP earnings of 42 cents per share (including 3 cents of unfavorable forex impacts), unchanged year over year. The figure exceeded the Zacks Consensus Estimate by 2.44%.

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Total revenues of $279.5 million surpassed the consensus mark by 0.19%. The top line increased 6% year over year on a reported basis and 8% on a constant-currency (cc) basis.

This year-over-year revenue increase was primarily driven by the strong momentum of BOX Suites offerings, which bundle multiple products and services into comprehensive solutions for customers.

Following the release of the fourth-quarter fiscal 2025 results, Box shares declined 6.78% in the pre-market trading.

BOX’s Q4 Metrics in Detail

Billings were $398.6 million in the reported quarter, increasing 5% year over year (7% growth on a cc basis). Billings suffered a 150-basis-point (bps) headwind from unfavorable forex, worse than an anticipated 80 bps negative impact.

BOX saw an 87% attach rate for its Suites, up from 81% in the year-ago quarter. The company generated 60% of its revenues from Suites customers in the reported quarter.

Box’s net retention rate was 102% at the end of the fiscal fourth quarter, up 100 bps year over year.

The company’s remaining performance obligations (RPO) totaled $1.466 billion, reflecting a 12% year-over-year increase (14% on a cc basis). This includes $815 million in short-term RPO and $651 million in long-term RPO.

In the reported quarter, Box introduced the Enterprise Advanced Suites plan, seamlessly integrating Box Apps, Box AI Studio and Box Doc Gen into a unified offering. The plan has already seen strong market adoption. Additionally, Box enhanced its Enterprise Advanced Suite with new features, including Box AI extract agents, multi-document querying, Box Forms and Box Doc Gen, expanding its capabilities.

BOX’s Q4 Operating Details

The non-GAAP gross margin for fourth-quarter fiscal 2025 was 81%, expanding 260 bps year over year.

Box’s operating expenses of $202.8 million increased 13.3% year over year. As a percentage of revenues, the figure expanded 450 bps from the year-ago quarter to 72.6%.

On a non-GAAP basis, the company recorded an operating margin of 27.3%, which expanded 70 bps year over year.

BOX’s Balance Sheet & Cash Flow

As of Jan. 31, 2025, cash and cash equivalents were $624.6 million, up from $608.8 million as of Oct. 31, 2024.

BOX’s short-term investments amounted to $98.2 million, an increase from $89.2 million in the previous quarter.

Non-current debt was pegged at $448.6 million at the reported quarter’s end compared with $651.7 million at the previous quarter’s end.

Box generated $102.2 million in cash from operations in the fiscal fourth quarter, up from $62.6 million in the previous quarter.

The company generated a non-GAAP free cash flow of $91.3 million in the reported quarter.

BOX repurchased 1.3 million shares for $43 million in fourth-quarter fiscal 2025. As of Jan. 31, 2025, approximately $52 million of buyback capacity was remaining under Box’s current share repurchase plan. 

On March 3, 2025, the company’s board authorized an expansion of its stock repurchase program by an additional $150 million.

BOX Initiates Q1 & FY26 Guidance

For the first quarter of fiscal 2026, Box expects revenues between $274 million and $275 million, suggesting a 4% rise from the prior-year reported figure. The cc growth rate is pegged at 5%. The Zacks Consensus Estimate for the same is pinned at $279.26 million, indicating year-over-year growth of 5.51%.

On a non-GAAP basis, BOX expects earnings of 25-26 cents per share. The guidance factors in a negative impact of 15 cents from unfavorable forex rates and a year-over-year negative impact of 2 cents due to the leap year in fiscal 2025.

The non-GAAP operating margin for the fiscal first quarter is expected to be 25%.

For fiscal 2026, BOX expects revenues between $1.15 billion and $1.16 billion, indicating a year-over-year increase of 6%. The Zacks Consensus Estimate for the same is pegged at $1.15 billion, suggesting year-over-year growth of 5.72%.

Non-GAAP earnings are expected between $1.13 and $1.17 per share. This includes an expected negative impact of 56 cents from the recognition of non-cash deferred tax expenses. The Zacks Consensus Estimate for the same is pegged at $1.82 per share, implying year-over-year growth of 13.33%.

The non-GAAP operating margin for the fiscal year is expected to be 28%.

Zacks Rank & Stocks to Consider

Currently, Box carries a Zacks Rank #4 (Sell).

Guidewire Software GWRE, RF Industries RFIL and Ballard Power Systems BLDP are some better-ranked stocks in the broader sector. Guidewire Software sports a Zacks Rank #1 (Strong Buy), and RF Industries and Ballard Power Systems carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Guidewire Software shares have risen 15.7% year to date. GWRE is set to report second-quarter fiscal 2025 results on March 6.

RF Industries shares have returned 3.6% year to date. RFIL is set to report first-quarter fiscal 2025 results on March 17.

Ballard Power Systems shares have declined 25.9% year to date. BLDP is set to report fourth-quarter 2024 results on March 13.

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