← Back

Box: Box's Q3 FY2026 Earnings: Strong Growth Driven by AI Adoption

Box, Inc.'s third-quarter fiscal 2026 revenue was $301 million, a 9% year-over-year growth, with operating margins of 28.6%. The company's gross margin was 81.7%, and operating income was $86 million. EPS was $0.31, in line with estimates. Billings grew 12% year over year to $296 million, and remaining performance obligations (RPO) grew 18% year over year to $1.5 billion. The company has more than 2,000 customers paying at least $100,000 annually, up 7% year over year. Box generated free cash flow of $61 million and ended the quarter with $731 million in cash and short-term investments.

BOX

USD 31.81

-1.15%

A-Score: 5.1/10

Publication date: December 2, 2025

Full Report

Author: Analystock.ai

📋 Highlights
  • Revenue & Growth: Q3 revenue reached $301 million (9% YoY growth), with operating margins at 28.6%.
  • Net Retention & Billings: Net retention rate of 104% driven by pricing and seat expansion; billings grew 12% to $296 million.
  • RPO & Cash Position: Remaining performance obligations hit $1.5 billion (18% YoY), and cash reserves totaled $731 million.
  • Customer Base Expansion: Over 2,000 customers pay $100K+ annually (7% YoY increase).
  • AI-Driven Growth: Enterprise Advanced and AI tools like Box Extract are accelerating adoption, with Q4 launch expected to boost automation use cases.

AI-Powered Growth

The company is seeing strong demand for its enterprise-grade AI capabilities, driving momentum in Enterprise Plus and Enterprise Advanced. CEO Aaron Levie noted that all growth levers outlined at the March Analyst Day are tracking well, with adoption of Enterprise Advanced and AI capabilities exceeding expectations. The company is seeing an acceleration in top-line metrics, driven by demand for Box AI and adoption of Enterprise Advanced. Levie believes that enterprises are nearing an inflection point in overcoming barriers to AI adoption, with customers looking to extract data from unstructured content and automate workflows.

Seat Growth and Pricing

In terms of seat growth, Levie noted that the company is seeing strength in both pricing and seat expansion, with Enterprise Advanced driving an improvement in net seat growth. He expects continued strength in seat dynamics, driven by AI-enabled workflows expanding seats. The company's net retention rate was 104%, driven by price per seat increases and seat expansion.

Valuation and Outlook

Box's P/E Ratio is 20.43, and its P/S Ratio is 4.05, indicating a premium valuation. However, the company's strong growth prospects, driven by AI adoption, may justify this premium. Analysts estimate next year's revenue growth at 7.8%. For Q4, the company expects revenue of approximately $304 million and operating income of $87 million. For the full year, Box expects revenue of $1.15 billion and operating margins of 28%. The company's focus on driving the adoption of its AI-powered solutions, particularly Enterprise Advanced, is expected to drive growth and increase its addressable market.

Investment Priorities

The company is focusing on growing its Salesforce, with an emphasis on verticalization and industry-specific expertise. The partner SI ecosystem and high ROI marketing programs are also key areas of investment. The company plans to continue investing in go-to-market initiatives, with a goal of moderate operating margin expansion, and remains committed to its long-term target model.

Box's A-Score