Box FY25 Q3 Earnings: CEO Levie Highlights Box Apps’ Expansion
Box had positive Q3 results, with revenue and profits showing continued growth. However, despite CEO Aaron Levie’s enthusiasm for the new AI-powered products, Wall St wasn’t as impressed, causing the stock to drop by more than 5% in early trading. Levie believes that Box Apps, a no-code workflow builder introduced at the recent Boxworks event, will be a gamechanger. This new tool, acquired through the purchase of ISV partner Crooze, fills a gap in Box’s offerings, making it more competitive with other cloud vendors. Levie explains that it allows customers to quickly build custom applications within Box, streamlining business processes across all departments dealing with content.
In addition to Box Apps, Box announced other exciting features like an AI agent builder and archive and content recovery capabilities. Levie hinted at more innovations to come, saying that BoxWorks was just the beginning of the company’s transformation into a leading content platform. These new tools are expected to open up thousands of new use cases, expanding Box’s potential significantly.
Q3 revenue grew by 5% compared to the previous year, reaching $275.9 million, with Remaining Performance Obligations (RPO) up by 13%, showing longer contract durations. Operating margin hit a record high, driven by expenses like BoxWorks being shifted to the following quarter. The company raised its full-year revenue guidance to $1.090 billion, despite FX headwinds affecting revenue from certain regions. The addition of $205 million from a convertible debt offering in September strengthened the balance sheet.
Levie credited the growth in Q3 to increased customer demand for Box AI, especially in utilizing AI to extract information from documents. This capability helps users quickly summarize information, gain insights from AI models, and search across large amounts of data. With the new features set to roll out in 2025, Levie believes more customers will be drawn to move their content to Box from legacy ECM systems, as Box’s AI capabilities enable the extraction of metadata from documents, allowing for more efficient workflows and automation.
Overall, Box’s Q3 results show positive growth and strong potential for the company’s continued success, with exciting new products on the horizon.
