Box(BOX -0.46%) reported second quarter fiscal 2026 results on August 26, 2025, exceeding prior guidance with revenue of $294 million (up 9% year over year) (non-GAAP), operating margin of 28.6%, and earnings per share (EPS) of $0.33. Notably, remaining performance obligations (RPO) grew 16% year-over-year to $1.5 billion, supported by accelerating enterprise adoption of Box AI and Enterprise Advanced, as well as significant product expansion and an updated fiscal 2026 guidance. The analysis below details Box’s AI-driven platform strategy, growing monetization from tiered offerings, and how Suite adoption and higher price per seat drove improvements in net retention rate and revenue, each with significant consequences for long-term investors. For reference, fiscal 2026 for Box ends January 31, 2026.
Box AI platform powers multi-year, enterprise adoption surge
Box’s AI-centric roadmap, featuring interoperable integration with leading large language models and agentic automation for unstructured data, underpinned a year-over-year expansion in short-term RPO (up 12% year over year) (non-GAAP) and nearly doubled sequential Enterprise Advanced deal volume. Management highlighted broad-based adoption across regulated industries via high-value AI workflow solutions such as metadata extraction, automated compliance, and custom agent creation.
"We have announced support for OpenAI's GPT-5, Anthropix's Claude 4.1, and xAI's Grok 4 in the BoxAI Studio. Often on the day of the launch of this new model. In addition to supporting these new models on our platform, we've integrated with the broader product and partner ecosystems, OpenAI has integrated Box directly into ChatGPT for content access, Box partnered with Anthropics Financial Analysis Solution, We served as a launch partner for Snowflake's OpenFlow capability. Collaborated with AWS Bedrock agent core runtime, and partnered with Salesforce as a part of their MCP partner network."
-- Aaron Levie, CEO
Box’s fast-cycle AI integrations and cross-platform partnerships build a competitive advantage as enterprise customers seek secure, extensible content management in the fragmented generative AI ecosystem.
Premium pricing and suite upgrades expand Box margin profile
Expanded customer migration to Enterprise Plus and Enterprise Advanced drove suite-based revenue contribution to 63% of total revenue (from 58% a year ago) (non-GAAP), and yielded seat-based pricing increases of 20%-40% on upgrades from Enterprise Plus to Enterprise Advanced, further elevating net retention rate (NRR) to 103% (non-GAAP). New customer wins and departmental expansion overcame persistent macro uncertainty as seat expansion rebounded.
"So when you have a straight upgrade to Enterprise Advanced, you know, we tend to see relative to just using the core service non-suites, call that rough doubling, sometimes a little more, a little less based on relative to what they'd be paying versus that 20 to 40% uplift when going from Enterprise Plus to Enterprise Advanced. And we have been pretty pleased with the momentum there, especially given how early we are in the overall rollout of Enterprise Advanced."
-- Dylan Smith, CFO
Box’s tiered monetization strategy rapidly improves per-customer economics and underpins management’s confidence in sustained margin leverage and durable revenue growth.
Box leverages AI capabilities directly into customer workflow automation
Box’s direct embedding of AI agents in customer content workflows supports adoption in use cases like intelligent contract lifecycle management, clinical study automation, and enterprise-wide knowledge retrieval, addressing the enterprise market’s challenge of managing unstructured data, which accounts for about 90% of corporate information. The MCP Server general availability enables external AI systems to securely access Box content, streamlining enterprise-wide AI orchestration.
"so MCP server is basically this really compelling abstraction layer that makes it easy for the AI agents or AI systems on those external products to tap into the data that's within Box or the agents that are within Box. And so what we just launched it, GA'd in August. But the core idea is that you can be inside of Claude, and you could say, please summarize my meeting note from that one meeting or a contract that I was working on. And, again, instead of you having to upload your data to Claude, it will just tap into the BoxMC server, find the information you're looking for, and then right in line where you were doing your work, you can access your data."
-- Aaron Levie, CEO
This infrastructure position reinforces Box as the control plane for secure enterprise content in the AI era, facilitating future expansion into workflow and agent marketplaces.
Looking Ahead
Management raised full-year fiscal 2026 revenue guidance (non-GAAP) by $5 million to $1.17 billion to $1.175 billion, representing approximately 8% year-over-year growth, or 7% in constant currency, and guided fiscal 2026 non-GAAP operating margin to 28%, with non-GAAP EPS of $1.26 to $1.28. Third quarter guidance calls for revenue of $298 million to $299 million (up approximately 8% year over year), third quarter billings growth of approximately 10%, gross margin of 81%, and a non-GAAP operating margin of 28%, with continued net retention rate improvement, expected to exit fiscal 2026 at 103% (non-GAAP). Specific margin headwinds in the third quarter include BoxWorks-related expenses (about $3 million) and the absence of prior-year one-time hardware revenues. All margin references are on a non-GAAP basis.
