Box posts solid Q2 revenue growth ahead of annual shareholder meeting

The cloud content management company reported double-digit Q2 sales growth driven by large and multi-product deals. The results come ahead of the company's annual shareholder meeting, where it will face off against activist investors from hedge fund Starboard Value LP.
Written by Stephanie Condon, Senior Writer

Box on Wednesday published its official second-quarter financial results, beating market expectations. 

The cloud content management company published preliminary results two weeks earlier, amid its ongoing dispute with activist investors at hedge fund Starboard Value LP. 

Non-GAAP net income per share came to 21 cents on revenue of $214.5 million, up 12% year-over-year. 

Analysts were expecting earnings of 18 cents per share on revenue of $212.45 million. 

"As companies implement strategies to support a remote workforce and digital processes in this hybrid world, more customers are turning to Box to secure content management and collaboration in the cloud," CEO Aaron Levie, co-founder and CEO of Box. "This momentum is reflected in our strong Q2 results and outlook for the full year. The strength of our platform strategy is resonating, as evidenced by a record attach rate of Suites in large deals."


Box's net retention rate came to 106%, up from 103% in Q1.

The remaining Performance Obligations came to $922.4 million, up 27% year-over-year. Billings for the second quarter were $213.1 million, a 13% increase year-over-year. For the third consecutive quarter, billings growth was greater than revenue growth.

Free cash flow in the second quarter was positive $29.8 million. This compares to a free cash flow of positive $13.3 million in the second quarter of FY21.

Deferred revenue as of July 31 was $422 million, a 16% increase from the second quarter of the fiscal year 2021.

For the third quarter, Box expects revenue to be in the range of $218 million to $219 million. For the full fiscal year 2022, revenue is expected to be in the range of $856 million to $860 million. 

Box's Q2 results come ahead of the company's annual shareholder meeting on Sept. 9, when board members will vote for the company's directors. Earlier this year, Starboard nominated four directors to Box's 10-person board, arguing that Box hasn't aggressively capitalized on the enterprise trends driven by the COVID-19 pandemic

Earlier in the week, Box announced that Institutional Shareholder Services (ISS), a leading independent proxy advisory firm, recommended that Box stockholders vote for the company's directors (former VeriSign CFO Dana Evan, McAfee CEO Peter Leav and Box CEO Aaron Levie) rather than the Starboard nominees.

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