Box Q2 FY27 slides: revenue up 9%, billings accelerate 17%

Box Inc. released its second quarter fiscal 2027 earnings on August 25, 2026, revealing a 9% year-over-year revenue increase and a 17% surge in billings. Wall Street expectations were narrowly surpassed, underscoring the company's progress in operational performance. The stock saw a slight dip of 1.4% during regular trading and rose 0.08% to $33.03 in after-hours trading, hovering near its recent 52-week peak of $33.88.

The presentation highlighted a revenue of $321 million for the quarter, a 9% YoY growth, or 11% in constant currency terms. Billings performance was especially robust, with $310 million generated, a 17% YoY rise (16% in constant currency). This momentum in billings, surpassing revenue growth, signals heightened demand, offering insight into future revenue recognition.

Short-term and long-term remaining performance obligations (RPO) totaled $1.7 billion at quarter-end, with long-term RPO surging 18% (22% in constant currency). This reflects enduring contract durations, enhancing revenue predictability. Customer economics improved across various metrics, with the net retention rate climbing to 106%, up three points from 103% a year ago.

This uptick is attributed to seat expansion and increased spending via seat additions and product upgrades. Suite adoption accelerated, with 69% of revenue now originating from customers utilizing Box's bundled offerings, up six points from 63% a year prior.

The company bolstered operational leverage, with non-GAAP operating margin at 29.4%, up 90 basis points YoY, despite a 100 basis point foreign exchange headwind. Non-GAAP gross margin stood at 81.2%, down 20 basis points from the prior year, driven by FX headwinds and Box AI usage patterns, though margins remained robust above 80%.

Cash flow improved notably, with $60 million in free cash flow, a 67% year-over-year increase, and operating cash flow at $71 million, a 54% rise YoY. The company's capital allocation efforts saw approximately $66.4 million spent on share repurchases, with $378 million remaining in approved buyback capacity as of July 31, 2026.