Box, Inc. Q3 FY2026 earnings call

• Box is building an AI platform as a secure, neutral AI content platform for enterprise content, integrating with major models like OpenAI, Google, etc. • Enterprise Advanced continues to drive upgrades and new logo wins, with examples including a financial services org, law firm, and renewable energy company using it. • New AI features like Box Extract (data extraction), Box Automate (workflow automation), and Box Shield Pro (security) were announced. • Go-to-market efforts focus on driving adoption of Enterprise Advanced, with partner-led growth and vertical focus. • Box is using AI-first approach internally, with purpose-built AI agents in go-to-market, HR, IT, etc., and leveraging Cursor for product development.

In Q3, Box, Inc. delivered revenue of $301 million, a 9% year-over-year growth. Suites customers account for 64% of revenue. Remaining performance obligations (RPO) were $1.5 billion, growing 18% year over year. Billings were $296 million, up 12% year over year. Net retention rate was 104%. Gross margin was 81.7%, and operating margin was 28.6%.

• Q4 2026 revenue expected to be ~$304 million (9% year-over-year growth). • Q4 billings growth in low single-digit range. • Q4 gross margin expected to be ~82%, non-GAAP operating margin ~30%, non-GAAP EPS $0.33. • Full-year fiscal 2026 revenue expected to be ~$1.175 billion (8% year-over-year growth). • Full-year billings growth in 9-10% range. • Full-year gross margin ~81%, non-GAAP operating margin ~28%, non-GAAP EPS ~$1.28.

Q: Kind of a high-level question on growth levers since March Analyst Day.

A: Aaron said all growth levers are tracking well, with adoption of Enterprise Advanced and AI capabilities exceeding expectations, new customer acquisition tracking well, and platform expansion tracking nicely.

Q: On sales and marketing efficiency, hiring intentions.

A: Aaron said they are investing incrementally more in sales capacity, vertical efforts, and partner ecosystem, seeing good results on productivity and qualitative impact.

Q: On FedRAMP High and federal vertical.

A: Aaron said FedRAMP High is important for government deals, seeing good momentum in sales conversations and pipeline, with some deal timing shifts due to shutdown but confident in Q4 momentum.

Q: On broader core content management opportunity and competitive perspective.

A: Aaron said AI is a catalyst for content management market growth, with TAM increase and more legacy takeouts and migrations as AI enables new use cases.

Q: On seat growth and NRR.

A: Aaron said both price per seat and seat expansion are drivers, with seat dynamics being a big opportunity for net retention rate improvement.

Q: On FY '27 growth and acceleration.

A: Aaron said focused on returning to double-digit top-line growth, with underlying momentum in business being a good indicator, more details to come on Q4 call.

Q: On AI adoption inflection point and Box platform capabilities.

A: Aaron said Box is in sweet spot of AI, seeing use cases like data extraction from contracts, invoices, etc., with Box Extract in Q4 further accelerating adoption, and new use cases in healthcare and medical billing emerging.

Q: On go-to-market investment priorities.

A: Dylan said focus on partner SI ecosystem, verticalization of Salesforce, and scaling high ROI marketing programs, with plans to continue investments for operating margin expansion.