Summary
Box: Revenue Growth Is Accelerating As Expected
Box, Inc. remains a buy as revenue growth accelerates, underpinned by strong billings, RPO, and AI-driven product adoption. Q3 revenue grew 9% y/y to $301.1M, with suites at 64% of revenue, robust margins, and $61M in free cash flow. Net retention rate improved to 104%, driven by organic seat growth and higher-value Enterprise Advanced tier adoption.
Box: Cheap FCF Multiples Amid AI-Driven Backlog Growth
Box remains a value-oriented, underappreciated enterprise software stock despite AI-driven market narratives. BOX trades at attractive valuation multiples—3.5x EV/FY27 revenue and 12.5x EV/FY27 FCF—while generating robust free cash flow. Management raised FY26 guidance, projecting $1.175 billion in revenue and $1.28 pro forma EPS, with double-digit billings and RPO growth.
Box Q3: Limited Alpha Ahead
Box is rated Hold with a $36 price target, implying a modest 13.2% upside versus current levels. Q3 results highlight stable cash generation, 9% revenue growth, and durable gross margins near 80%, but EPS softness persists due to tax normalization and R&D investment. Management is executing a strategic shift toward AI-driven content infrastructure, with new partnerships and a subscription-first model supporting long-term value creation.
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Box Inc. Profile
| Transportation Infrastructure Industry | Industrials Sector | Aaron Levie CEO | NYSE Exchange | 10316T104 CUSIP |
| US Country | 2,810 Employees | - Last Dividend | - Last Split | 23 Jan 2015 IPO Date |
Overview
Box, Inc. is a prominent provider of cloud content management solutions, catering to a diverse range of organizations by facilitating the management and sharing of content from any location and through any device. The company's foundation dates back to 2005, initially known as Box.net, Inc., until its rebranding to Box, Inc. in November 2011. With its headquarters based in Redwood City, California, Box, Inc. has established itself on a global scale, supporting approximately 100,000 paying organizations and offering its solutions in 25 different languages. Its clientele spans across vital industries such as financial services, health care, government, and legal services, operating both in the United States and overseas.
Products and Services
Cloud Content Management Platform: At the core of Box, Inc.'s offerings is its advanced cloud content management platform. This Software-as-a-Service (SaaS) solution enables seamless external collaboration and sharing, providing secure workspaces and portals. It supports a wide variety of content workflows and e-signature processes, significantly boosting employee productivity and accelerating key business operations.
Application Suite: Box extends its services through a comprehensive suite of applications designed for web, mobile, and desktop use. These applications enhance the user's ability to manage content efficiently on the cloud, ensuring accessibility and functional flexibility across different devices and platforms.
Development Platform: Understanding the need for customization, Box offers a robust platform that empowers developers to create tailor-made applications. This capability allows organizations to integrate Box's cloud content management services into their digital ecosystems seamlessly, further extending the utility and reach of Box's technology.
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