Box 2026 Q3 Earnings Revenue Beats Guidance, Net Income Drops 6.4%

Box Inc. (BOX) reported fiscal 2026 Q3 earnings on Dec 3, 2025, with revenue rising 9.1% to $301.11 million and net income declining 6.4% to $12.06 million. The results exceeded revenue guidance, and management raised FY2026 guidance, citing strong demand for AI-driven solutions.

Revenue

Box’s total revenue surged 9.1% year-over-year to $301.11 million, surpassing the $298.4 million forecast. This growth was driven by a 104% net retention rate, fueled by pricing increases and seat expansion. The company’s AI-powered content management platform, including the Box AI platform, contributed significantly to this performance.

Earnings/Net Income

Earnings per share (EPS) remained stable at $0.05, matching the prior year’s figure. However, net income fell to $12.06 million, a 6.4% decline from $12.89 million in Q3 2025. Adjusted earnings came in at $0.31 per share, in line with expectations but below the $0.32 forecast. The stable EPS masked underlying operational challenges, as the company’s net income contraction highlighted margin pressures.

Price Action

Box’s stock surged 10.13% on the day of the earnings release, with a 7.27% gain in the following week. However, the post-earnings trading strategy of buying shares on release day and holding for 30 days underperformed, delivering a -15.33% total return over three years. This underperformance contrasted sharply with the benchmark’s 73.44% return, underscoring the stock’s volatility and risk-averse positioning.

Post-Earnings Price Action Review

The strategy of buying Box shares on the earnings release date and selling after 30 days over the past three years yielded a dismal CAGR of -5.88%, with a total return of -15.33%. This significantly underperformed the benchmark’s 73.44% return. The strategy’s maximum drawdown of 0.00% and Sharpe ratio of -0.33 indicated a risk-averse approach with minimal losses during volatile periods. However, the moderate volatility of 17.78% revealed that the strategy failed to capitalize on broader market gains, resulting in suboptimal long-term profitability.

CEO Commentary

CEO Aaron Levie emphasized the 9% YoY revenue growth and 28.6% operating margins, driven by a 104% net retention rate. Strategic investments in AI-powered products, including the Box AI platform, and partnerships with AWS and TCS were highlighted as growth drivers. Levie noted AI’s transformative role in converting unstructured data into actionable insights, with use cases expanding in financial services, legal, and energy sectors. Internally, AI agents are enhancing productivity across sales, HR, and engineering, with Levie declaring, “AI is the biggest shift in work… we are seeing customers discover new use cases.”

Guidance

Box projected Q4 2026 revenue of $304 million (9% YoY growth) and FY2026 revenue of $1.175 billion (8% YoY). Non-GAAP EPS is expected at $1.28, with billings growth of 9–10% YoY and RPO growth of 18% YoY.

Additional News

1. AWS Partnership Expansion: Box announced a multi-year AI collaboration with AWS, enhancing integrations to streamline enterprise content management and expand market reach.

2. Raymond James Price Target Cut: Raymond James reduced Box’s price target to $38 from $42, maintaining an Outperform rating amid strong billings growth and AI tailwinds.

3. Q3 Profit Decline: Despite revenue outperforming estimates, Box’s Q3 profit fell to $12.1 million, missing Wall Street’s $12.9 million expectations, due to below-the-line variances.