Cloud content management platform Box (NYSE: BOX) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 8.9% year on year to $294 million. The company expects next quarter’s revenue to be around $298.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.33 per share was 6.4% above analysts’ consensus estimates.

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Company Overview

Known as the "Content Cloud" for managing the 90% of business data that exists as unstructured files and documents, Box (NYSE: BOX) provides a cloud-based platform that enables organizations to securely manage, share, and collaborate on their content from anywhere on any device.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, Box grew its sales at a weak 6.1% compounded annual growth rate. This was below our standard for the software sector and is a rough starting point for our analysis.

This quarter, Box reported year-on-year revenue growth of 8.9%, and its $294 million of revenue exceeded Wall Street’s estimates by 1.1%. Company management is currently guiding for a 8.2% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 7.4% over the next 12 months, similar to its three-year rate. While this projection indicates its newer products and services will fuel better top-line performance, it is still below the sector average.

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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 came in at $264.9 million in Q2, and over the last four quarters, its growth slightly lagged the sector as it averaged 10% year-on-year increases. However, 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 extremely efficient at acquiring new customers, and its CAC payback period checked in at 17 months this quarter. The company’s rapid recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments.

Key Takeaways from Box’s Q2 Results

It was encouraging to see Box beat analysts’ billings expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter slightly missed. Zooming out, we think this was a decent quarter. The stock traded up 3.7% to $32.35 immediately after reporting.

So should you invest in Box right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.