Episode Details

Box Inc (BOX) Q2 FY2027 — Shares closed the reaction session at $33.39, +1.2%, then ran to $34.98 by Friday - a 12-month closing high, and +63.7% off the April low of $21.37. Box raised full-year revenue guidance to $1.290bn and CUT full-year non-GAAP EPS guidance to $1.54 - below the $1.55 it started the year with. The entire cut is the share count, guided from 139m in May back up to 141m in August. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$32.66 vs ~$34.98 today. KEY METRICS: - Revenue $321.1m, +9.2% YoY (+11% constant currency) - a record, vs a $319.3m consensus - Non-GAAP EPS $0.40 vs a $0.3981 bar - a 0.5% beat, and Box's own May guide was $0.39 - Non-GAAP operating margin 29.4% (record) vs GAAP 10.2% - the 19.3pt gap is stock compensation - Non-GAAP EPS grew 20.8% while non-GAAP operating income grew 12.5% - 43.8% of the growth was the share count - Diluted shares 151.1m → 139.7m; 3.87m of that 11.38m fall was the LOW share price, not the buyback - Antidilutive restricted units went from 479k to 5.17m as the price fell - a reservoir a rally refills - H1 buyback: 7.386m shares at $24.47, 3.676m issued to staff, 3.710m retired net, $206.6m of cash = $55.69 per net share - FY27 guidance walk: revenue $1.275bn → $1.280bn → $1.290bn; non-GAAP EPS $1.55 → $1.56 → $1.54 - Q3 FY27 guide: revenue ~$329m, non-GAAP EPS ~$0.39, diluted shares ~142m (ABOVE the 139.7m just reported) - RPO $1.69bn +15%; long-term RPO $787.0m +18% (+22% cc); billings $309.5m +17%; net retention 106% from 103% - KKR's $500m convertible preferred pays 3% compounding and converts at $27.00 into 18.52m shares - in no diluted count Box publishes - Interest income fell 58% to $2.8m as cash went $691m → $344m funding the buyback What to watch: A Q3 diluted share count BELOW the 142m Box guided, or stock compensation under 16% of revenue, would break our objection. A FY27 EPS guide under $1.50, or a Q4 share guide above 143m, confirms it. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.