Q1 2025 Box Inc Earnings Call Transcript
Key Points
- Box Inc (BOX) delivered first quarter operating results above guidance, with revenue growth of 5% year over year and 8% on a constant currency basis.
- Operating margins improved to 27%, up 400 basis points from the previous year.
- Strong demand for Box AI and advanced capabilities, leading to increased customer upgrades to Enterprise Plus.
- Gross margin reached 80.2%, up 230 basis points year over year, marking the first time the company reported 80% gross margins.
- Free cash flow generation was exceptionally strong at $123 million, up 14% year over year.
- Box Inc (BOX) continues to experience headwinds in foreign exchange (FX), impacting updated guidance.
- Q1 billings of $190 million were down 1% year over year, although up 5% in constant currency.
- Net retention rate remained flat at 101%, indicating no improvement from the previous quarter.
- The company expects FX to have a negative impact on operating margin of roughly 160 basis points for the full fiscal year.
- Stock-based compensation (SBC) is nearing 20% of revenue and growing faster than revenue, raising concerns about compensation strategy.
Hello. Thank you for standing by, and welcome to the Box Inc First Quarter Fiscal 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. (Operator Instructions) I would now like to turn the conference over to Cynthia Hiponia, Vice President, Investor Relations. You may begin.
Good afternoon, and welcome to Box's First Quarter Fiscal 2025 earnings conference call. I'm Cynthia Hiponia, Vice President, Investor Relations. On the call today, we have Aaron Levie, Box's Co-Founder and CEO; and Dylan Smith, Box's Co-Founder and CFO. Following our prepared remarks, we will take your questions.
Today's call is being webcast and will also be available for replay on our Investor Relations website. Our webcast will be audio only. However, supplemental slides are now available for download from our website. Will also post the highlight of today's call on the X platform at the handle@BoxIncIR.
On this call, we'll be making forward-looking statements, including our second
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