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BOX's Q3 Earnings Meet Estimates, Revenues Rise Y/Y, Shares Fall

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Key Takeaways

  • Box's Q3 revenues rose 9.1% while earnings fell 31% year over year.
  • Billings climbed 11.8% with Suite customers driving 64% of revenues and RPO rising to $1.5 billion.
  • Box expects Q4 revenues of about $304M and FY26 revenues of $1.175B alongside stable operating margins.

Box (BOX - Free Report) reported third-quarter fiscal 2026 non-GAAP earnings of 31 cents per share, which declined 31% year over year. The figure was in line with the Zacks Consensus Estimate.

Total revenues of $301 million surpassed the consensus mark by 0.89%. The top line increased 9.1% year over year on a reported basis and 8% on a constant-currency (cc) basis.

Box shares were down 6.52% at the time of writing this article. In the trailing 12 months, BOX shares dropped 5% against the Zacks Computer and Technology sector’s return of 25%.

BOX’s Q3 Metrics in Detail

Billings were $296 million in the reported quarter, increasing 11.8% year over year on a reported and cc basis. The company generated 64% of its revenues from Suite’s customers in the third quarter of fiscal 2026. 

Box’s net retention rate was 104% at the end of the fiscal third quarter, up 200 bps year over year.
 

Box, Inc. Price, Consensus and EPS Surprise

Box, Inc. Price, Consensus and EPS Surprise

Box, Inc. price-consensus-eps-surprise-chart | Box, Inc. Quote

 

The company’s remaining performance obligations (RPO) totaled $1.5 billion, up 18% year over year on a reported basis and 19% on a cc basis. This includes $837 million in short-term RPO (up 14% year over year) and $680 million in long-term RPO (up 25% year over year).

BOX’s Q3 Operating Details

Third-quarter fiscal 2026 non-GAAP gross margin was 81.7%, which contracted 20 basis points (bps) year over year. Sequentially, gross margin expanded 30 bps.

As a percentage of revenues, non-GAAP sales and marketing and non-GAAP general and administrative expenses were flat sequentially, whereas non-GAAP research and development expenses were up 100 bps sequentially.

On a non-GAAP basis, the company recorded an operating margin of 28.6%, which contracted 50 bps year over year. Sequentially, the operating margin was flat.

BOX’s Balance Sheet & Cash Flow Details

As of Oct. 31, 2025, cash and cash equivalents were $730 million, down from $758 million as of July 31, 2025.

Box generated $73.1 million in cash from operations in the fiscal third quarter, up from $45.9 million in the previous quarter. The company generated a non-GAAP free cash flow of $61.4 million in the reported quarter.

In the third quarter of 2025, Box repurchased approximately 2.4 million shares for $77 million. The company had roughly $35 million under its current buyback capacity. BOX expanded its share repurchase program by $150 million.

BOX Offers Q4 & FY26 Guidance

For the fourth quarter of fiscal 2026, Box expects revenues of roughly $304 million, suggesting  9% year-over-year increase and 8% on a cc basis. This includes an expected positive impact of approximately 100 bps due to favorable forex.

The non-GAAP operating margin for the fiscal fourth quarter is expected to be 30%. On a non-GAAP basis, BOX expects earnings of 33 cents per share. 

For fiscal 2026, BOX expects revenues to be approximately $1.175 billion, indicating year-over-year increase of 8% on a reported basis and 7% on a cc basis. This includes an expected positive impact of approximately 70 bps due to favorable forex.

The non-GAAP operating margin for fiscal 2026 is expected to be approximately 28%. Non-GAAP earnings are expected to be approximately $1.28 per share. 

For fiscal 2026, the billings growth is expected to be in the 9-10% range. This includes a tailwind of approximately 130 basis points from favorable forex.

Zacks Rank & Stocks to Consider

Currently, Box carries a Zacks Rank #3 (Hold).

Advanced Energy Industries (AEIS - Free Report) , Digital Turbine (APPS - Free Report) and Amphenol (APH - Free Report) are some top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. 

Advanced Energy Industries, Digital Turbine and Amphenol each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for Advanced Energy Industries, Digital Turbine and Amphenol are currently pegged at 33.4%, 42.4% and 38.7%, respectively.

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