Cloud content storage and management platform Box (NYSE: BOX) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 4.4% year on year to $276.3 million. Guidance for next quarter’s revenue was optimistic at $290.5 million at the midpoint, 2.6% above analysts’ estimates. Its non-GAAP profit of $0.30 per share was 17.2% above analysts’ consensus estimates.
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Box (BOX) Q1 CY2025 Highlights:
- Revenue: $276.3 million vs analyst estimates of $274.7 million (4.4% year-on-year growth, 0.6% beat)
- Adjusted EPS: $0.30 vs analyst estimates of $0.26 (17.2% beat)
- The company slightly lifted its revenue guidance for the full year to $1.17 billion at the midpoint from $1.16 billion
- Management raised its full-year Adjusted EPS guidance to $1.24 at the midpoint, a 7.8% increase
- Operating Margin: 2.3%, down from 6.8% in the same quarter last year
- Free Cash Flow Margin: 42.8%, up from 32.7% in the previous quarter
- Billings: $242.3 million at quarter end, up 27.2% year on year
- Market Capitalization: $4.50 billion
Company Overview
Founded in 2005 by Aaron Levie and Dylan Smith, Box (NYSE: BOX) provides organizations with software to securely store, share and collaborate around work documents in the cloud.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Box’s 6.6% annualized revenue growth over the last three years was weak. This fell short of our benchmark for the software sector and is a rough starting point for our analysis.
This quarter, Box reported modest year-on-year revenue growth of 4.4% but beat Wall Street’s estimates by 0.6%. Company management is currently guiding for a 7.6% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 5.7% over the next 12 months, similar to its three-year rate. This projection is underwhelming and suggests its newer products and services will not accelerate its top-line performance yet.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Box’s billings punched in at $242.3 million in Q1, and over the last four quarters, its growth slightly outpaced the sector as it averaged 11.7% year-on-year increases. This alternate topline metric grew faster than total sales, meaning the company collects cash upfront and then recognizes the revenue over the length of its contracts - a boost for its liquidity and future revenue prospects. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
Box is very efficient at acquiring new customers, and its CAC payback period checked in at 28 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give Box more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.
Key Takeaways from Box’s Q1 Results
We were impressed by how significantly Box blew past analysts’ billings expectations this quarter. We were also glad its EPS guidance for next quarter trumped Wall Street’s estimates.Zooming out, we think this quarter featured some important positives. The stock traded up 10.9% to $34.90 immediately after reporting.
Indeed, Box had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.
