Box, Inc. Q2 FY2026 earnings call

• Box delivered strong Q2 results with revenue above guidance, driven by customer adoption of Enterprise Advanced and Enterprise Plus powered by AI solutions.
• Announced updates to Box AI capabilities, including general availability of the enhanced extract agent and beta launch of the MCP server.
• Focus on driving adoption of Enterprise Advanced, with nearly doubling the number of deals closed over the prior quarter.
• Introduced Jeff Newsom as the new chief revenue officer.
• Operating as an AI-first company, equipping employees with AI skills and using AI agents across the business.
• Upcoming BoxWorks event in San Francisco with significant product launches planned.

Box Inc. reported Q2 fiscal 2026 revenue of $294 million, which was above the high end of guidance, up 9% year over year and 7% in constant currency. Suite customers now account for 63% of revenue, up from 58% a year ago. Remaining performance obligations (RPO) were $1.5 billion, a 16% year-over-year increase. Billings were $265 million, up 3% year over year and 6% in constant currency. The net retention rate was 103%, an improvement from 102% in Q1 and the year-ago period. Q2 gross margin was 81.4%, and Q2 operating income was $84 million with an operating margin of 28.6%.

• Q3 revenue is expected to be in the range of $298 million to $299 million, representing approximately 8% year-over-year growth, including an 80 basis point FX tailwind.
• Q3 billings growth is anticipated to be approximately 10%, including a 200 basis point FX tailwind.
• FY 2026 revenue is raised to $1.17 billion to $1.175 billion, a $5 million increase, with 8% year-over-year growth or 7% in constant currency.
• FY 2026 non-GAAP operating margin is expected to be approximately 28%, and non-GAAP EPS is in the range of $1.26 to $1.28.

• Forward-looking statements may differ materially from actual results.
• Risks related to macro environment impact on business and operating results.
• Uncertainties in market adoption of new products, pricing models, and partnerships.
• Impact of foreign currency exchange rates and deferred tax expenses.

Q: Steve Enders on enterprise advance momentum and billings upside A: Dylan Smith states billings outperformance is driven by strong bookings, Box Consulting professional services, and early renewals, influenced by AI capabilities in Enterprise Advanced and Enterprise Plus Q: Lucky Schreiner on net seat growth and upgrade to Enterprise Advanced A: Dylan Smith says net seat growth is driven by use cases and AI capabilities in Enterprise Advanced and Enterprise Plus; Aaron Levie mentions straight upgrades to Enterprise Advanced are common with a 20-40% price per seat uplift Q: Taylor McGinnis on Q2 outperformance and NRR A: Dylan Smith notes Q2 outperformance factors have similar impact, and NRR improvement is driven by seat growth and pricing; Aaron Levie talks about NRR continuing to improve as they move toward double-digit growth Q: Matt Balik on metadata extraction use cases and MCP server A: Aaron Levie discusses metadata extraction as the first step in workflow automation, with next steps being full workflow automation using AI agents; Aaron Levie explains MCP server is an abstraction layer allowing AI systems to tap into Box data for seamless access Q: Chris Candero on Gen AI pilots failing and federal sector opportunities A: Aaron Levie talks about Box AI platform derisking AI project failures with its integrated capabilities; on federal sector, Box is positioned well with FedRAMP high support and focus on IT modernization Q: Brian Peterson on M&A appetite A: Aaron Levie states Box is thoughtful about product roadmap and M&A, focusing on organic development but remaining open to M&A in areas needing doubling down