© Build A Rocket Boy
One weakness of Valve's Steam Deck gaming handheld and SteamOS is that, by default, they will only run Windows games from Steam that are supported by the platform's Proton compatibility layer (plus the subset of games that run natively on Linux). It's possible to install alternative game stores, and Proton's compatibility is generally impressive, but SteamOS still isn't a true drop-in replacement for Windows.
Microsoft and Asus' co-developed ROG Xbox Ally is trying to offer PC gamers a more comprehensive compatibility solution that also preserves a SteamOS-like handheld UI by putting a new Xbox-branded user interface on top of traditional Windows. And while this interface will roll out to the ROG Xbox Ally first, Microsoft told The Verge that the interface would come to other Ally handhelds next and that something "similar" would be "rolling out to other Windows handhelds starting next year."
Bringing a Steam Deck-style handheld-optimized user interface to Windows is something Microsoft has been experimenting with internally since at least 2022, when employees at an internal hackathon identified most of Windows' handheld deficiencies in a slide deck about a proposed "Windows Handheld Mode."
© Microsoft/Twitter user _h0x0d_
Seagate has announced a new 4TB version of its storage expansion card for the Xbox Series X and S consoles. It’s the first time the company has introduced a new capacity since launching 2TB and 512GB versions of the expansion card in late 2021.
The 4TB card is available starting today through Seagate’s online store and Best Buy for $499.99, but is discounted to $429.99 as part of a limited-time launch promotion. For comparison, the Xbox Series S starts at $379.99, while the Xbox Series X starts at $599.99.
But, the added storage may be required by folks with large libraries of games. Depending on the options and expansions you install, games like Call of Duty: Black Ops 6 and Microsoft Flight Simulator can easily gobble up hundreds of gigs of storage each. You can increase the Xbox’s storage capacity using an external drive connected over USB, but to play games directly from an SSD, without having to move files around, requires the storage expansion cards.
You may want to wait for a price drop, though. The 2TB version of the card was originally priced at $399.99, but is now listed on Seagate’s online store for $249.99, with a current promotion bringing it down to $219.99.
For nearly three years, Seagate was the only company offering expandable storage cards for the Xbox Series X and S, but in mid-2023 Western Digital introduced its own. Its current pricing and capacities are comparable to Seagate’s offerings. Western Digital hasn’t yet introduced a 4TB option.
Although the added competition did help bring the price of Seagate’s expansion cards down, they’re still more expensive than storage expansions for the PlayStation 5, which allows you to use any SSD as long as it meets certain performance requirements. Not only does Western Digital already sell a PS5-compatible 4TB SSD for $339.99, it also offers an 8TB option, although that will set you back a steep $699.99.
Capping off a very busy week in the world of gaming is Microsoft with its annual Xbox Games Showcase, providing “a look at brand-new games and updates from across our first-party studios and our incredible partners across the globe.” It was followed by a segment focused entirely on the sci-fi RPG The Outer Worlds 2.
The big reveal was portable gaming news, as Microsoft announced the Xbox app, Game Bar, and Windows OS updates that will arrive on two new ROG Xbox Ally handhelds. They’ll have a full-screen Xbox experience that’s supposed to make Windows more friendly to handhelds, and help them compete with the Steam Deck and other SteamOS-powered devices.
News for specific game titles included Gears of War: E-Day, Persona 4 Revival, and a surprise drop of Final Fantasy XVI on Xbox.
Read on below to find out about everything announced during the Xbox Games Showcase 2025.
You can play the latest entry in the Final Fantasy series, Final Fantasy XVI, on Xbox right now. Shadow dropped during today’s Xbox Games Showcase, players will be able to experience FFXVI’s slick-ass kaiju monster battles, incredible voice acting, and ho-hum story (because, hey, you can’t expect Square Enix to be perfect at everything). In addition to the base game, players will also get access to FFXVI’s two story DLCs The Rising Tide and Echoes of the Fallen which adds more story and a new Eikon (the game’s version of summons) Leviathan.
But that’s not all as the partnership between Xbox and Square Enix continues apace. Last year, Xbox brought the critically acclaimed MMORPG Final Fantasy XIV to the system. Later it was rumored, due to Square Enix’s stated desire to expand their games beyond the PlayStation ecosystem, that it would bring the Final Fantasy VII remake project to Xbox as well. That rumor has been proven true. The absurdly titled Final Fantasy VII Remake Intergrade, which is the first entry in the FF7 reimagination project combined with the Yuffie-centric DLC, is coming to Xbox this winter.
Psychonauts developer Double Fine just announced a new game — and you’ll be able to play it soon. Keeper, a game where you play as a walking lighthouse with a seabird as a buddy, is launching on October 17th, 2025 on Xbox and PC.
Here’s a description from an Xbox Wire post about what you can expect from the game:
It has stood alone for countless years, but now the Lighthouse finds companionship in a curious and spirited seabird, who encounters the Lighthouse while seeking refuge from a creeping malevolent presence spreading throughout the isle. The Lighthouse discovers that its bright beam of light is able to affect the flora and fauna, and even seems to ward off the withering tendrils spreading throughout the world around it.
Meanwhile the bird proves to be a useful and dextrous ally, able to interact with strange and ancient mechanisms. Together, these two unlikely friends set off together on an epic adventure, an odyssey of mystifying metamorphosis, and a journey that will take them into realms beyond understanding.
The art in the trailer is absolutely gorgeous, and it looks like the world will be a beautiful one to explore. The game will be a “story told without words” and is a “strange, otherworldly tale,” according to the post. I’m looking forward to it.
Microsoft first revealed Gears of War: E-Day during its Xbox Games Showcase last year, and at today’s showcase it’s now putting a 2026 release window on the latest entry in the sci-fi shooter series. Developed by The Coalition, E-Day will release in a year that marks 20 years since the original Gears of War game debuted on the Xbox 360, and 25 years of Xbox.
E-Day is set 14 years before the first Gears game, and “tells the story of the first Locust emergence on Sera.” It’s being billed as an origin story, and once again stars Marcus Fenix. E-Day is the first title in the series since Gears 5 debuted in 2019.
Last month, Microsoft also announced a Gears of War remaster that also brings the franchise to PlayStation for the first time. Gears of War: Reloaded is launching on August 26th for Xbox Series X / S, PlayStation, and PC for $39.99. The remaster features 4K resolution, 120fps support, and cross-progression and cross-play for all platforms. Gears of War: Reloaded will also have two-player co-op for the campaign and 8-player multiplayer.
Xbox chief Phil Spencer confirmed the E-Day release window during the Xbox Games Showcase earlier today, and also revealed “the next Forza” is coming in 2026 too, as well as “the return of a classic that’s been with us since the beginning.” That classic may well be the Halo CE remaster I wrote about last year.
© Microsoft
Back in March, we outlined six features we wanted to see on what was then just a rumored Xbox-branded, Windows-powered handheld gaming device. Today, Microsoft's announcement of the Asus ROG Xbox Ally hardware line looks like it fulfills almost all of our wishes for Microsoft's biggest foray into portable gaming yet.
The Windows-11-powered Xbox Ally devices promise access to "all of the games available on Windows," including "games from Xbox, Game Pass, Battle.net, and other leading PC storefronts [read: Steam, Epic Games Store, Ubisoft Connect, etc]." But instead of having to install and boot up those games through the stock Windows interface, as you often do on handhelds like the original ROG Ally line, all these games will be available through what Microsoft is calling an "aggregated gaming library."
Asus and Microsoft are stressing how that integrated experience can be used with games across multiple different Windows-based launchers, promising "access to games you can't get elsewhere." That could be seen as a subtle dig at SteamOS-powered devices like the Steam Deck, which can have significant trouble with certain titles that don't play well with Steam and/or Linux for one reason or another. Microsoft also highlights how support apps like Discord, Twitch, and downloadable game mods will also be directly available via the Xbox Ally's Windows backbone.
Something strange is going on with Microsoft’s Xbox app on Windows. Over the past few days, the Xbox PC app has started showing Xbox console games inside the library. While you can’t install games like the original Alan Wake for Xbox 360, it shows up if you own it as part of the “My PC Games” list inside the Xbox PC app.
I don’t believe this is a simple bug, but more the result of Microsoft’s plans to more closely combine its Xbox and Windows stores. I wrote about this effort in March, when I revealed in Notepad that Microsoft is working with Asus on a Project Kennan handheld. “It’s part of a larger effort from Microsoft to unify Windows and Xbox towards a universal library of Xbox and PC games,” I wrote at the time.
This effort also involves enabling Steam and Epic Games Store games to be visible in the Xbox PC app library. Microsoft accidentally revealed mockup images showing Steam games in the Xbox PC library earlier this year, and at the time sources familiar with the company’s plans told me Microsoft was working on an Xbox app update that will show every game you have installed on your PC.
Microsoft has also been working on making the Xbox app the home of PC gaming over the past year, and it has recently started referring to its Xbox PC app as simply “Xbox PC.” This new branding first showed up in Microsoft’s announcement of Gears of War: Reloaded, and a new gameplay trailer for MIO: Memories In Orbit also shows off the Xbox PC branding and logo that we’re going to see whenever Microsoft wants to let PC players know the game is available on its Microsoft Store.
Microsoft is also combining ‘the best of Xbox and Windows together’ for handhelds, in changes that we should see later this year. Microsoft is in desperate need of a response to SteamOS, particularly as PC makers like Lenovo are starting to put SteamOS on their own handheld gaming PCs.
All of these Xbox PC changes and the handheld work means we’re probably close to seeing exactly how Microsoft lists additional games in the Xbox PC app. The big question will be whether Xbox console games will actually be playable on PC, and Microsoft may need to leverage its cloud infrastructure for that unless it has an emulation breakthrough ready to finally make the dream of playing old Xbox games on PC a reality.
Imagine playing Fortnite, but instead of fighting other players, all you want to do is break into houses to look for caches of slurp juice. Yes, the storm is closing in on you, and there's a bunch of enemies waiting to kill you, but all you want to do is take a walking tour of Tilted Towers. Then when the match is over, instead of queueing again, you start reading the in-game lore for Peely and Sabrina Carpenter. You can count your number of player kills on one hand meanwhile your number of deaths is in the hundreds. You've never achieved a victory royale, but you've never had more fun.
That's how I play Elden Ring Nightreign.
Nightreign is FromSoftware's first Elden Ring spinoff, and it's unlike any Souls game that the developer has done before. Nightreign has the conceit of so many battle royale games - multiplayer combat focused on acquiring resources across a large map that slowly shrinks over time - wrapped in the narrative, visual aesthetics, and combat of Elden Ring. Instead of the Tarnished, you are a Nightfarer. Instead of the expansive Lands Between, you are sent to Limveld, an island with an ever-shifting landscape. And instead of becoming the Elden Lord, your goal is …
Finding the best iPad accessories can seriously upgrade your tablet experience, whether you're using it to sketch, binge your favorite shows or stay productive on the go. With the right gear, you can customize your iPad setup to match your needs — from a slim folio for iPad that protects your screen to a magic keyboard case that turns it into a full-blown laptop alternative. And if you’re rocking the new iPad Air 11-inch, there are even more tailored options to get the most out of your device.
Accessories aren't just about looks, either. Swapping out worn pencil tips, grabbing a longer Lightning cable or finding the right stand can make a big difference in how smoothly you move through your favorite apps. Whether you're upgrading for work, creativity or just everyday convenience, there's no shortage of smart picks out there to make your iPad even more powerful (and fun).
Before you splurge on a bunch of accessories, you should double check which iPad generation you own. There are a couple of ways to do this: first, you can check the back of your tablet for its model number, which will start with an “A” and end with a series of numbers. You can also go into Settings on your iPad, then General and look up the model number in the top section. If you see a series of letters and numbers with a slash (“/“) in it, just tap that to reveal the iPad’s true model number.
The most important iPad details to consider before buying accessories are the charging port, screen size and Apple Pencil compatibility. Most iPads now have USB-C charging, save for the now discontinued 9th-gen iPad that still requires a Lightning cable. Make sure to double check your iPad’s screen size before buying a folio for iPad or a screen protector — especially if you have the new iPad Air 11-inch. As for the Apple Pencil, check out this guide to how to choose the right Apple Pencil (and even replacement pencil tips) to make sure you're getting the right one for the tablet you have.
If you’re a heavy user of the Apple Pencil or some other stylus, you should consider getting a screen protector for your new iPad. They pull double-duty: Not only do they act as a first line of defense if your iPad goes careening onto concrete, but they can also enhance the digital drawing and writing experience. Using a stylus on an iPad is strange at first because gliding the stylus nib over a glass surface feels nothing like “normal” writing. Matte screen protectors can get closer to replicating the pen-on-paper experience, and they also prevent the stylus nib from wearing down as quickly.
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© Engadget
Shares of Box (NYSE: BOX) surged as much as 19.7% higher on Wednesday, peaking around 1:30 p.m. ET. The cloud-based data storage and content management veteran reported robust first-quarter fiscal-year 2026 results on Tuesday evening. By 3:10 p.m. ET, the stock was up about 18% from the previous day's close.
Image source: Getty Images.
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Box's Q1 2026 sales rose 4% year over year to $276.3 million. Adjusted earnings fell from $0.39 to $0.30 per diluted share, including a $0.01 headwind from changing foreign currency exchange rates. Your average Wall Street analyst would have settled for earnings near $0.26 per share on revenue in the neighborhood of $275.1 million.
Looking ahead, Box's management projects second-quarter revenue of approximately $290 million with roughly $0.30 of adjusted earnings per share. These numbers will compare to $270 million and $0.44 per share, respectively, in the year-ago period.
Non-cash tax charges are weighing on Box's bottom-line results this year. The company recently turned profitable and is now recognizing $248 million of deferred tax credits, little by little. This item reduced Box's first-quarter adjusted earnings by $0.12 per share.
The company recently unveiled a brand-new artificial intelligence (AI) platform that will help enterprise-scale clients feed data to their AI agents. Box's stock is trading at an all-time high today, boosted by a promising AI strategy and five straight quarters of analyst-stumping financial results. Even so, Box shares trade at a fairly modest valuation. In that context, today's significant price jump looks reasonable.
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Image source: The Motley Fool.
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Box (NYSE:BOX) reported double-digit year-over-year billings and RPO growth in Q1 FY2026, supported by accelerated adoption of AI-driven solutions and momentum for the Enterprise Advanced suite. Customer expansion was propelled primarily by increased pricing rather than seat growth, with management confirming this strategy’s outsized impact on near-term results. The company raised its FY26 revenue outlook by $10 million and highlighted newly secured FedRAMP High authorization as a catalyst for future public sector wins. Management emphasized its intention to maintain adjusted operating margins while absorbing higher AI functionality by leveraging falling AI inference costs and disciplined cost controls. Forward guidance reflects caution regarding macroeconomic uncertainties, with a point lower billings growth forecast on a constant currency basis for FY2026 and explicit adjustments for early renewals, FX, and deferred tax expenses.
Aaron Levie, Box Co-Founder and CEO, and Dylan Smith, Box Co-Founder and CFO. Following our prepared remarks, we will take your questions. Today's call is being webcast and will be available for replay on our Investor Relations website at boxinvestorrelations.com. Our webcast will be audio only. However, supplemental slides are now available for download from our website. On this call, we will be making forward-looking statements, including our second quarter and full year 2026 financial guidance, and our expectations regarding our financial performance for fiscal 2026 and future periods.
Including gross margins, operating margins, operating leverage, future profitability, net retention rates, remaining performance obligations, revenue and billing, and the impact of foreign currency exchange rates and deferred tax expenses and our expectations regarding the size of our market opportunity, our planned investments, future product offerings, and growth strategies, our ability to achieve our revenue, operating the timing and market adoption of and benefits from our new products, pricing models and partnerships, our ability to address enterprise challenges and deliver cost savings for our customers the impact of the macro environment on our business and operating results, and our capital allocation strategies, including potential repurchase of our common stock.
These statements reflect our best judgment based on factors currently known to us, and actual events or results may differ materially. Please refer to our earnings press release filed today and the risk factors in documents we file with the SEC, including our most recent annual report on Form 10-K for information on risks and uncertainties that may cause actual results to differ materially from statements made on this earnings call. These forward-looking statements are being made as of today, May 27, 2025, and we disclaim any obligation to update or revise them should they change or cease to be up to date. In addition, during today's call, we will discuss our non-GAAP financial measures.
These non-GAAP financial measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results in our earnings press release and in the related supplemental slides, which can be found on the IR page of our website. Unless otherwise indicated, all references to financial measures are on a non-GAAP basis. Thank you. And with that, let me turn the call over to Aaron.
Aaron Levie: Thank you, Cynthia, and thank you all for joining the call today. We had a strong start to FY26 with results reflecting continued growth in customer demand for BoxAI. In Q1, our revenue grew 4% year over year or 5% in constant currency, RPO grew 21% year over year, and we saw strong outperformance on billings. We delivered operating margins of 25.3% and EPS of $0.30, $0.04 above our guidance. Following the launch of Enterprise Advanced late in Q4, in Q1, we saw strong momentum in customer adoption as enterprises look to Box to help them transform their AI-driven workflows around content. Examples include a leading university hospital, upgraded to Enterprise Advanced, and significantly expanded their Box seats.
Currently, content is siloed across the organization, and they aim to make Box their single source of truth while unlocking value through Box apps and AI-driven metadata extraction. An investment advisory firm who has already been leveraging the Box AI API for metadata extraction, upgraded to Enterprise Advanced to expand their use of diverse AI models through the Box AI Studio. They also plan to use Box apps dashboards to manage and organize critical business information more strategically and leverage DocGen to further streamline operations. A financial services firm and a new Box customer purchased Enterprise Advanced to modernize and secure their critical business data by moving from an outdated on-prem system to Box.
Looking to improve their control over sensitive content, for personally identifiable information, enhance their user experience, and optimize their retention strategy, they needed a scalable compliant platform supporting loan origination, HR, and legal functions. In the first quarter, I had the opportunity to meet with well over a hundred customers, and it's incredibly clear that there is a fundamental shift in what business will look like in an AI-first world. In fact, tomorrow, we are releasing our first state of AI in the enterprise. Where we recently surveyed over 1,300 IT leaders across a range of industries and geographies.
More than half of the respondents expect to see transformation from AI in the next two years, and nearly 90% are already using AI agents in some capacity. And many of the top desired use cases for AI are around working with documents and unstructured data. What's clear is that as companies increasingly go AI-first, they are beginning to rethink how they can take advantage of their enterprise content. From their contracts and invoices to their research data and marketing assets. For years, the value of this content has been limited to only what humans can do with this information. Which means most companies have never been able to truly tap into the full value of this information.
But in a world of AI and AI agents, this finally becomes possible. Inside all of this information are the answers to a company's next product breakthrough. Their customer upsell opportunities, how they can hire amazing new talent, or optimize their supply chains. AI agents make this all possible. At Box, we are building out the leading intelligent content management platform to help enterprises fully connect the power of AI to their content. Now, to deliver on this strategy, at our Content+ AI Summit in mid-May, we announced our biggest set of AI agent updates ever. Designed to transform how organizations work with their content.
We unveiled all new capabilities to support AI agents that can do deep research, search, and enhance data extraction on content. Securely in Box. And all with a focus on openness and interoperability. Imagine being able to have AI agents that can comb through any amount of your unstructured data contracts, research documents, marketing assets, film scripts, financial documents, invoices, and more. To produce insights or automate work. Box AI agents will enable enterprises to streamline a due diligence process on hundreds or thousands of documents in an M&A transaction. Correlate customer trends amongst customer surveys and product research data, or analyze life sciences and medical research documents to generate reports on new drug discovery and development.
None of this would have been possible even a year ago. But with the cost of AI inference dropping, context windows expanding to support larger datasets, reasoning models handling much more complex tasks, and better understanding of designing agentic workflows this all of a sudden becomes possible. Next, we believe in a world where AI agents work together. To complete tasks across platforms. So this means that an AI agent from Box could work across an enterprise's entire AI stack.
In addition to our newly announced Box AI agent for Microsoft 365 Copilot and IBM Watson x Orchestra, Box.ai agents are available or in development with Google Agent Space, Salesforce Agent Force, Slack AI, ServiceNow AI Agent Fabric, and the Zoom AI Companion. Developers can also build custom agents that leverage Box content using the Box MCP server, the Google Agent SDK, and OpenAI's Agent SDK. As well as through their preferred developer and data platforms. Building on these recent announcements, just last week, ChatGPT officially integrated Box as a secure connected data source for their deep research AI agent.
Now instead of moving your data around between each platform that you want to work in, you can just work where you want and have the AI agents coordinate together in the background to get the data that you need from Box. This is the future of software in an era of AI. Finally, we will continue to partner with the broader AI model ecosystem to ensure customers have the choice of any model provider they want to work with.
Just in Q1 alone, we saw incredible examples of us sitting at the center of this industry such as the recent Nvidia GTC keynote from Jensen [Huang] mentioning Box, Box joining OpenAI as a launch partner, for their agent SDK, Meta is showcasing Box and IBM support for Llama their latest AI developer event. Box serving as a day one Grok 3 API launch partner with XAI. And many more. Being neutral to the AI models means that our customers get instant access to the best that AI has to offer on their content instead of having to keep their data stuck with just one particular AI provider. And this partner momentum will only increase in Q2 and beyond.
Over the coming months, we will be gearing up for Boxworks in September. Which will include our biggest and most exciting announcements we have ever had on this platform. This is the year of AI agents and the ability to drive automation around any kind of workflow with AI. And Box will be building out the leading capabilities to help our customers do this with their enterprise content at scale. We look forward to sharing more early September at Boxworks. Now, turning to go to market. We are continuing to drive enterprise advanced momentum across segments and geographies.
Even after the large number of early adopters we saw in Q4, bringing on enterprise advanced, we were pleased to see the continued growth in deals in Q1. Our seasonally lowest quarter. With a strong pipeline continuing to build as customers look to drive intelligent workflows in Box. Additionally, continuing to drive pricing improvements, in our target 20% to 40% increase range for these enterprise advanced deals. As we have discussed, one of our key initiatives to drive growth is to expand and grow our partner ecosystem. Particularly with global and regional system integrators. In Q1, we are already seeing solid momentum in customer wins enabled by our partners.
After announcing our partnership with DataBank in March, we had a great win with a local government upgrading to enterprise advanced to replace legacy enterprise content management system. We also partnered with regional SIs in financial services and life sciences with partner-enabled deals to replace legacy systems and automate processes to deliver secure compliance solutions that are well-suited for regulated environments. Also in the first quarter, we were excited to announce we received FedRAMP high authorization, allowing U.S. government agencies and authorized government contractors the ability to leverage Box's intelligent content management platform for highly sensitive data. Finally, before I turn the call over to Dylan, let me discuss how we at Box are building an AI-first company.
As customer zero, we are driving an AI-first culture as we use BoxAI to help us move faster, make better decisions, and automate work. Not only will this drive productivity and innovation, going AI-first as a company is also important for our strategy of building the leading AI platform for enterprise content. Paul Graham famously gave the startup advice of, live in the future and then build what's missing. The idea behind this is that the teams that deeply figure out where the world is going will often see the new opportunities that arise far sooner than others. This is what we are doing at Box.
Across Box, we are seeing Box AI be leveraged to help transform how we work every day. Internally, we use AI-powered hubs to help answer customer support questions, onboard new sales reps faster, get HR questions answered instantly, and much more. Boxers can access every leading AI model alongside their content to streamline understanding data, reviewing code, or generating new content for marketing assets or product documentation. Boxers are creating custom AI agents to generate call scripts, create more personalized sales materials, or answer RFPs. And we use AI agents to extract metadata on policy documents, to help streamline internal compliance document management workflows.
And finally, beyond Box.ai, we use AI-first coding tools customer service tools to augment our workforce and drive productivity. Importantly, our principal focus of going AI-first is to move faster, and be able to deliver better outcomes for our customers. We want to ensure that every boxer is fully equipped to be as productive as possible with AI. Which is why we are making it easy to experiment with AI across the company, and we are highlighting the best practices as they emerge. And driving as much upskilling of our workforce as possible. And for new employees coming in, we will increasingly look for AI-first skills as a part of our hiring criteria.
This is the biggest shift in work we have ever seen in our lifetimes. And we are excited to make sure that Box sits right at the center of it. With that, let me turn the call over to Dylan.
Dylan Smith: Thanks, Aaron. Good afternoon, everyone, and thank you for joining us today. Q1 was a strong start to the year as we exceeded all guidance while also delivering double-digit billings and short-term RPO growth. These strong results enable us to deliver on our key FY26 priorities. Investing in our intelligent content management platform and key go-to-market initiatives, generating consistent operating leverage, and executing on a disciplined capital allocation strategy. Q1 revenue of $276 million was up 4% year over year and up 5% in constant currency. We now have approximately 1,940 total customers paying us at least $100,000 annually up 8% year over year. Suite customers now represent 61% of our revenue, up from 56% a year ago.
Our continued suites momentum was driven by early traction with enterprise advanced and strong demand for our various AI capabilities. We ended Q1 with remaining performance obligations or RPO of $1.5 billion a 21% year-over-year increase and up 17% in constant currency. Our strong long-term RPO growth was driven by continued lengthening in customer contract relations. We expect to recognize roughly 55% of our RPO over the next twelve months. Q1 billings of $242 million were up 27% year over year and up 17% in constant currency. This result exceeded our expectations of low to mid-teens growth due to strong bookings, including a tailwind from early renewals of approximately 400 basis points.
FX also provided a tailwind of 700 basis points versus our prior expectations. We ended Q1 with a net retention rate of 102% up from 101% a year ago, and in line with our expectations. Our annualized full churn rate remained at 3% demonstrating the continued stickiness of our platform. We continue to expect our net retention rate to improve to 103% exiting FY26. We delivered Q1 gross margin of 80.5% up 30 basis points year over year. As a reminder, in Q1 of last year, our gross margin benefited by approximately 100 basis points due to data center equipment sales in the quarter.
Q1 gross profit of $222 million was up 5% year over year slightly exceeding our revenue growth rate. We delivered Q1 operating income of $70 million and operating margin of 25.3% versus 26.6% in the year-ago period. Adjusting for the impact of data center equipment sales, the leap year and FX, operating margin would have been up 90 basis points year over year. As a result, we delivered EPS of $0.30 in Q1, $0.04 above the high end of our guidance. This includes a negative impact of $0.01 from FX, and $0.12 from non-cash deferred tax expenses. I'll now turn to our cash flow and balance sheet.
In Q1, we generated free cash flow of $118 million and cash flow from operations of $127 million. We ended Q1 with $792 million in cash, cash equivalents, restricted cash, and short-term investments. In Q1, we repurchased 1.6 million shares for approximately $50 million. As of April 30, 2025, we had approximately $152 million of remaining buyback capacity under our current share repurchase plan. We remain committed to opportunistically returning capital to our shareholders through our ongoing stock repurchase program. With that, let me now turn to our Q2 and FY26 guidance. As a reminder, approximately one-third of our revenue is generated outside of the U.S. with roughly 65% of our international revenue coming from Japan.
Before providing guidance, I wanted to remind you of the tax impacts we mentioned on our last call. We continue to expect that the non-cash deferred tax expenses will be an incremental non-GAAP EPS headwind of $0.52 in FY26. For the second quarter of fiscal 2026, we expect Q2 revenue to be in the range of $290 million to $291 million representing approximately 8% year-over-year growth at the high end of the range, and 6% growth in constant currency. We anticipate our Q2 billings to be roughly flat year over year. This includes an expected tailwind from FX of approximately 70 basis points as well as roughly 230 basis point negative impact from Q1 early renewals.
We expect Q2 gross margin to be approximately 81%. We anticipate our Q2 non-GAAP operating margin to be approximately 28% versus 28.4% a year ago. Note that this includes the impact of a 70 basis point headwind from data center equipment sales in the year-ago period, offset by an expected FX tailwind of approximately 80 basis points. We expect our Q2 non-GAAP EPS to be in the range of $0.30 to $0.31, which includes an expected tailwind of approximately $0.02 from FX. Weighted average diluted shares are expected to be approximately 150 million. For the full fiscal year ending Jan. 31, 2026.
While our strong Q1 results and enterprise advanced momentum give us confidence in our ability to execute, we are mindful of the macroeconomic uncertainty and potential impact to IT spending. While this environment has not had a material impact on our business so far, we want to remain prudent in our outlook for the remainder of fiscal 2026. We now expect revenue to be in the range of $1.165 to $1.17 billion representing a $10 million increase versus our previous guidance, and roughly consistent on a constant currency basis. This represents approximately 7% year-over-year growth or approximately 6% in constant currency. We now expect a tailwind of approximately 120 basis points from FX.
We expect our FY26 billings growth to be approximately 9%, including a tailwind of approximately 340 basis points from FX. We expect FY26 gross margin to be approximately 81%. When adjusting for the impact from data center equipment sales last year, which also flows through the operating margin, this represents a year-over-year improvement of 40 basis points. We expect our FY26 non-GAAP operating margin to be approximately 28%, including a tailwind of approximately 40 basis points from FX. As we look at the linearity of operating margin in the second half of the year, please note that our annual customer conference Boxworks has moved from Q4 to Q3, shifting approximately $3 million in expenses into Q3.
We now expect FY26 adjusted EPS to be in the range of $1.22 to $1.26, including an expected tailwind of approximately $0.07 from FX. This represents an increase of $0.09 or $0.02 on a constant currency basis. Weighted average diluted shares are expected to be approximately 151 million. FY26 is off to a strong start, driven by continued growth in customer demand for Box.ai. As we outlined at Financial Analyst Day, we are in the early innings of a once-in-a-generation opportunity that will revolutionize how AI can transform content in the enterprise.
We will continue to invest in our intelligent content management platform and key go-to-market initiatives to execute against this opportunity and we remain firmly committed to driving meaningful long-term improvements in our financial profile from top to bottom. With that, Aaron and I will be happy to take your questions. Operator?
Operator: Thank you. We will now begin the question-and-answer session. Again, press star one. Your first question comes from George Kurosawa with Citi. Please go ahead.
George Kurosawa: Actually, operator pardon me, George. Yeah. One quick correction, Dylan. Go ahead.
Dylan Smith: Oh, just wanted to note, for our Q1 results, for EPS, that was that had included a benefit of one cent from FX. Whereas I had mentioned that as a one cent negative impact.
Aaron Levie: So it's actually a one-penny tailwind due to FX. The quarter.
Operator: Great. Thank you. George, you can go ahead with your question.
George Kurosawa: Okay. Great. Thanks for taking the question, Aman. For Steve, maybe just to touch on the demand picture, you know, kind of the topic of the quarter. It sounds like you are not seeing much in the business. But maybe there's a little bit incrementally baked into the guide. If you could just talk about you know, how customer conversations have been and then help us frame what kind of incremental prudence you have baked into the guidance.
Aaron Levie: Yeah. So, overall, very healthy, robust customer conversations as you saw in the Q1 results. We are very happy with the Q1 performance. Seeing strong momentum coming into Q2. The AI you know, kind of first strategy that we have laid out for customers, I think, is resonating. All of our customer conversations are either starting with or at some point in the conversation turning into really AI-oriented conversations around how companies can get the most out of their unstructured data, automate workflows, bring intelligence to their content. So a lot of momentum on that front. And then overall, we wanted to just be prudent with the overall environment.
Obviously, it's a dynamic macro, and so, you know, just trying to balance all those factors right now.
George Kurosawa: Okay. Great. That's helpful. And then maybe just a follow-up. You know, question we are getting is you know, billings and RPO growth really strong, 17% quarter on quarter. You know, you guys are guiding to 6% for constant currency revenue growth. If you could just kinda help us bridge the gap there. It sounds like maybe there was a little timing in Q1. Just anything else we should keep in mind there.
Dylan Smith: Yeah. So really primarily comes down to the timing, and we had even called out heading into the quarter that we did expect to see somewhat of a unique dynamic in the billings growth rate between Q1 and Q2. But with the first half and second half being relatively consistent. And then we saw that even a little bit more pronounced because of that early renewal dynamic. So we called that out. And in terms of the impact, we saw about $7 million in early renewals included in that benefit to Q1 billings. That's what represents the roughly 400 basis points impact that I mentioned. That's what that $7 million is.
And about $6 million of that comes straight out of Q2. So basically making that Q1 to Q2 impact a little bit more pronounced. And then in terms of the HAPS overall, can now see that in we expect a little bit more strength in the first half because some of those dynamics as well as that incremental conservatism that we mentioned related to the macroeconomic environment. So no big change relative to our original expectations. Other than the early renewal dynamics between the first and the second quarter.
George Kurosawa: Super helpful, Collier. Thanks for taking the questions.
Operator: Your next question comes from the line of Jason Ader with William Blair. Please go ahead.
Jason Ader: Thank you. Good afternoon, guys. I just wanna ask about seats. I think you called out a customer where there was good seat growth. Can you just comment overall on what you are seeing out of seat growth and even some down if there's any down sell or how that has trended for some of your some of your customers. Thank you.
Dylan Smith: Yeah. So overall, the trends that we are seeing and the dynamic between seat growth and then pricing improvements have been pretty consistent with what we have seen over the last several quarters, where seats are growing on a net basis. But, you know, pretty minor contribution to growth. Most of that customer expansion is being driven by pricing increases. We have seen that continue and expect to do the same, especially with the impact of enterprise advanced and the healthy pricing uplift that we see as customers upsell into that suite. And so that's really the dynamic that we have been seeing pretty consistent over the past few quarters.
But there's a lot that we are doing especially with a lot of these new enterprise advanced and AI-driven use cases that we do think open up, you know, some new opportunities to expand across departments.
Jason Ader: Okay. So it but just to be clear, it sounds like price is gonna be a bigger driver of growth, let's call it, over the next several quarters than seats. If so, I you know, what do you think you guys need to do or you need to see, I guess, on the seat side for you to be able to say, okay. We are starting to see an inflection on seat growth.
Dylan Smith: Yeah. So that's exactly right in terms of what we are baking in. To our expectations for this year with pricing and driving the lion's share of that expansion. And then on the seat side, you know, a lot we are doing again around the use cases that we are pushing Enterprise Advanced enables, you know, as well as with new logos and some of the go-to-market investment we have called out as a way to reach new customers and grow the overall seat base from there. And then certainly as that dynamic evolves, we will be sure to provide updates in terms of what we are seeing in the business.
And then I would also note, and as we have called out in the past, that seat growth and that net seat growth tends to be more closely correlated with the economic environment whereas, you know, in good and bad, we continue to see steady and strong pricing improvements. That seat dynamic is a little bit more sensitive to the overall macroeconomic environment.
Jason Ader: Very helpful. Thank you.
Aaron Levie: And I would just note that, you know, overall to Dylan's point, obviously, enterprise advanced is the primary focus, which is both driving the price per seat increase as well as expanded use cases. So we feel pretty comfortable at the momentum and overall spot that we are in.
Operator: Your next question comes from the line of Michael Funk with Bank of America. Please go ahead.
Michael Funk: We want one follow-up on the earlier renewals. You called out earlier 400 basis points of help. In the quarter. Can you remind us what you are expecting during the quarter? And then also what are you doing to catalyze early renewals?
Dylan Smith: Yeah. So for early renewals, the biggest driver that we saw in Q1 was really around the adoption of customers looking to adopt our AI capabilities. Both with enterprise plus and now more and more with enterprise advanced even though we are early days. So that was, you know, the majority of those enterprise advanced sales that we saw in the first quarter were customers early renewing looking to move and bring on those capabilities sooner than their scheduled renewal date.
Michael Funk: And then on you guys in the call, cost of AI inferencing dropping, and that's helpful. So maybe two questions there. You know, first, how should we think about cost of AI and compute impacting margin? You made some margin expectation comments earlier. And then as you land with customers with AI, is it still primarily smaller seat counts or customers still doing smaller use case testing? Is there wider deployment? We are all just trying to know where are we in the spectrum of adoption with AI as an adopter product?
Aaron Levie: Yeah. So, two the two parts of that. So on the AI inference side, we have just been very happy about the rate of like-for-like AI model improvements that we are seeing from a cost standpoint. And that can show up in two ways. The first is that you can take an existing use case, and it might just, on a one-to-one basis, be cheaper on a kind of, you know, pre-regular basis every kind of six to twelve months. A minimum.
Alternative is that you get a new capability unlock because you can either get the base model just is getting much better, or you can use an existing model and do multiple passes through the model for better accuracy, or more complex use cases. So depending on the use case, we have some things that quite literally just immediately get cheaper for us, and then other use cases where we start to unlock more powerful capabilities both of those are driven by inference prices going down which I think we have all kind of collectively seen and that trend is alive and well right now, which is fantastic to see.
And then on the rollouts, you know, it's a broad mix. We have a couple benefits in our platform. So we have made BoxAI for sort of base use cases. Querying documents, asking questions of data, generating summaries of content, that's now an included capability in all of our business plans on Above. So customers really have an easy way to start to try, you know, AI, deploy it for really kind of core end-user productivity use cases, then we have got multiple upsell vectors, either for your entire enterprise instance, to be upgraded with enterprise advanced, and we sort of talked about the early strong momentum we are seeing there.
Or AI unit volume consumption for more either, you know, complex use cases or much more kind of high volume use cases. So you can already start to try it, you know, quite easily by just using some of the included functionality. And then we have got, again, multiple upsell paths that we are driving customers through. So I think we have landed on a very strategic pricing model for our customers that they have been, you know, quite happy about. We have generally had very, very strong positive interactions with customers on that upsell motion because it's very logical. Enterprise Advanced unlocks a whole new set of features as well as kind of core AI use cases.
Michael Funk: And just to clarify the first question, the price per performance are they largely offsetting, you say margin neutral from rolling out AI, or is one greater factor than the other?
Aaron Levie: Well, you know, we have called out that we are aiming to have AI be relatively margin neutral over the least medium term, and then, you know, I think it only gets better from there. And so but, you know, there's because we are not directly charging customers on a, you know, kind of a per-use case basis, because some of our core AI functionality is included. It's sort of hard to exactly parse something as margin-neutral without a dedicated kind of, you know, pricing line for it. I would just say overall as a company, we are intending to remain more or less margin neutral even as we bake in more AI functionality.
And the reason that we can do that is because the cost of inference is dropping even as we add more capabilities to our customers.
Michael Funk: No. Thank you so much for the time.
Operator: Your next question comes from the line of Lucky Schreiner with DA Davidson. Please go ahead.
Lucky Schreiner: Thanks for taking my questions and congrats on the great quarter. Maybe just know, with all the recent platform innovation and the rapid advancements across the ecosystem, how is that impacting your ability to win customers migrating away from the legacy ECM providers that typically aren't able to keep pace, you noticing an uptick in win rates in those deals early on? And maybe as a follow-up, you know, how do you notice the improvement maybe in the Box in the market overall from overall customer awareness? Thanks.
Aaron Levie: Yeah. So I think, you know, great performance on both of those topics. We are seeing more customers elect to move and migrate to modern platforms for driving AI-driven workflows on content. We announced this partnership with DataBank, as folks remember in our financial analyst day. That's a great example of a partner who works with a lot of the traditional document management environments out there. And really is in a position to help customers accelerate their move to cloud, and we are seeing great momentum with them as an example.
Similarly, we have had strong momentum with folks like Slalom and other system integrators on similar use cases of customers that want to migrate or modernize their IT infrastructure and get content to the cloud to be able to use AI on that content. So that's the first part. And then on the second part, you know, if you just look at Q1 alone, and I mentioned this in the call, but just to be redundant, if you look at the announcements of Claude 3.7 in Q1, Grok 3.0, OpenAI's agent SDK, NVIDIA at GTC, and a number of other announcements in Q1 from the AI ecosystem Box was included in every single one of those.
And then right at the start of the quarter, at the tail end of Q1, Lama Khan announcing the work that IBM and Box are doing together to bring Lamna 4.0 to customers. So we are sitting very naturally at the center of so much of the innovation happening in AI right now. And, I think it helps that we are not competing with any of the AI model providers. We are bringing together an ecosystem of all the leading AI to our customers, so we act as a very natural kind of convening point for these AI models when customers want to be able to use data on with any of these leading platforms.
So I think the momentum is building around Box, Box.ai as a platform. That's certainly, you know, starting to show up in our brand, we are seeing strong enterprise advanced pipeline begin to build. That's effectively all AI-driven pipeline in terms of the use cases customers are unlocking. So overall, we are really happy with the momentum.
Lucky Schreiner: Awesome. And then, you know, last question from me. You had a nice diversity of wins and expansions across industries. Know, anything to call out, I think the early renewals were especially, I guess, impressive to hear, given the April volatility. That we all experienced. And so anything to call out in the pipeline from an industry perspective, given the macro backdrop and your recent partner go-to-market improvements. Thanks.
Aaron Levie: I think from an industry standpoint, no major shifts. We were continuing to see, you know, strength in a lot of our the core industries that we have talked about, especially spaces where the customer is in a regulated environment. Data is mission-critical for them. So you know, one thing that can't be underscored enough is as you want to do AI on your data, all of the things that we have gotten very good at over nearly two decades of working in the enterprise become mission-critical. So, do I secure my content? How do I make sure it's compliant? How do I only the right people have access to the data? Especially via agent interactions?
Our CTO has a great quote of AI agents can't keep a secret. And so you never want to put your security in the agent part of the infrastructure. You want to ensure that data access controls are actually maintaining the security of your information. And so you don't want to be in a position where you are trying to pack too much of that intelligence into the model layer you want to pack that into the data the data plane and the architecture around that, which is what Box provides customers.
So that then means that companies in life sciences or banking and you know, public sector you know, healthcare, all of these types of industries that really have sensitive mission-critical use cases are able to thoughtfully and safely deploy AI to their end users.
Lucky Schreiner: Appreciate the quest answering the questions.
Operator: Your next question comes from the line of Josh Baer with Morgan Stanley. Please go ahead.
Josh Baer: Thanks for the question. Congrats on a great quarter. Aaron, I was hoping you could talk a little bit more about platform revenue. Sure. It's still early days for AI unit consumption. But was hoping you could comment a little more on early traction as well as anything else driving that platform revenue in yeah, just thinking about the targets to grow that approximately 30% looking ahead and how we are tracking to that goal.
Aaron Levie: Yeah. So overall, you know, so still very early in the AI unit adoption. Obviously, this just became available to customers in the past quarter. So we are in the very early days of what that volume looks like. The deals know, are you know, kind of a pretty wide spectrum of deal sizes. So it's still in the kind of lumpy territory. So we are not at a kind of a normalized point. But in terms of the kinds of customers and the use cases, you know, just as we as we kind of think about industries and scan use cases, we have everything from the legal industry. We have public sector. We have universities.
We have financial services, you know, players and advisers. So really across the continuum, and the most common use case right now, just based on where the functionality is most robust is I have a set of data I want to be able to run an AI agent or many AI agents across all that data to do some form of data extraction data parsing on my content. And so that could be looking through contracts to pull out, you know, critical details from contracts. Taking bank statements to, you know, read and validate the information in the bank statement, you know, some customers are doing the very early phases of image extraction where you give the AI model.
It could be handwritten content or images from a construction site. And be able to label all that data. So we are seeing kind of healthy early adoption. This is gonna be a continued focus of ours, and we expect it to be a, you know, a healthy contributor to our overall top line over the coming, you know, quarters and years.
Josh Baer: Great. Very clear. Dylan, I was hoping you could just comment on early renewals. Appreciate all the color in Q1. I'm really just wondering when you guide and, like, thinking about Q2, do you embed like, what's the assumption? Is it just for on-time renewals? Just thinking about early renewals contributed in Q4 as well in a positive way. Just wondering if it's a trend, if it's something that can continue to benefit, and what assumptions you have in guidance.
Dylan Smith: Sure. So we do assume that there's some volume of early renewals. And because we don't have perfect line of sight into those, we tend to be fairly conservative. And to your point, that has been an area of outperformance, you know, a few times over the past year or two. So we do assume that we are gonna have some early renewals but, you know, not at the same rate as we saw over the past couple of quarters, especially because you know, some of those were just customers who were looking to get into enterprise advanced as quickly as possible.
Some of our most loyal customers who had been more familiar with that, but, you know, certainly, optimistic that we will continue to see higher than historical volumes of those early renewals. And to the extent that becomes more consistent trends, then we would update those assumptions around early renewal volume as it relates to our guidance as well.
Josh Baer: Great. Thanks.
Operator: Your next question comes from the line of Pinjalim Bora with JPMorgan. Please go ahead.
Pinjalim Bora: Great. One question for Aaron. I have a follow-up for Dylan. Aaron, if Box kind of integrates with different AI partners, OpenAI, deep research, and others. How do you make sure that the engagement with some of these external events is versus you keeping the engagement within the Box platform? Because Box was also thinking of coming out with deep research. Right now, you can actually do deep research with OpenAI. So how do you think of that bifurcation? How are you monetizing people who are doing deep research on Box through OpenAI, for instance, and as that can proliferate beyond OpenAI and some other AI partners.
Aaron Levie: Yeah. Great question. Something we think, you know, quite a bit about and spend a lot of time on. You know, there's a just to get Phil to talk over for five seconds. There's, you know, gonna be this question for years and years, I think, in AI. Around kind of which layer of the stack do you occupy and you know, what's everybody's role in this. And we sort of are gonna occupy two parts of the stack.
So, you know, if there's, like, two or three or four layers, down to the infrastructure, we are in two to three we are in about two of them, which is we are in the software plane for the end-user interaction at the SaaS level, and then we are in the data kind of platform, you know, playing as well as an API either agentic APIs or regular APIs. And we want to basically, have both of those execute as fast as possible and as much in tandem as possible because we are not going to be no single company is gonna decide where all the user does its work. It's just not possible.
And Bill Joy had this famous quote, you know, thirty-five years ago or whatever that said, there's more developers outside of Sun than inside of Sun. And so or more smart developers with the implication being, like, you just have to let a thousand flowers bloom. You do not want to be in a position where you are trying to, you know, kind of king make any particular experience or platform or use case. There's just simply too much innovation happening. And so, you know, kind of similarly, your data is gonna eventually need to flow to wherever the work is getting done.
And no one platform will be able to control where that work is getting done because the Internet's too large, companies have too many different use cases they want to go and solve. So because of that, our focus is ensuring that we can agentically bring information to wherever the user is doing their work. So there's, like, no game theory where you could ever kind of contemplate closing off access to a particular platform simply because the users want to be able to do the work where they want. And so given that, we kind of flip it and we say, okay. So then we should be everywhere.
And ensure that the customer never has to make a sort of a core decision about where their content can be managed by virtue of where they want users doing work. We want to make sure that you can manage your content one place ensure that it works everywhere. From a monetization standpoint, there's a few different ways that gets monetized. Certainly, the end-user seat gets monetized. And so to the extent that you have a user on chat with you, asking a deep research question, by definition, they have a seat that is sort of processing that. And that's where I get into this idea of AI agents can't manage security.
The end-user still has to have access controls that allow them to access the content that is relevant for that deep research query. So there's no way to sort of game the system sort of have all the data in one end-user account and have that show up to multiple users in ChatGPT, by definition, you need those two things to be aligned. Ensure that the proper security. So that's how you monetize via seats. And then in this case, Deep Research is using our direct APIs.
But as more and more use cases emerge where you have a third-party system that wants to use an AI agent within Box, where we have announced partnerships with Salesforce Agentforce and Google Agent Space and IBM, kind of Watson x, Orchestrate, as you have those use cases, that will be monetized via our AI unit volume. So as you have more queries, going into Box that are agentic in nature, then we will just charge on a per volume basis for those.
So let's say you are inside of Agentforce inside of Salesforce, and you want an AI agent to go extract metadata from documents, we will monetize that exactly the same way that we would monetize that if that workflow was driven, you know, directly in the Box product. From an end-user standpoint. So we think we have got our bases covered. Obviously, you know, over time, you might be able to argue, okay. Well, there might be a slightly different margin on the modality of the usage. But overall, we are just massive believers that an open Internet is a better one. And interoperability is long-term always gonna be better for us.
Because the more places people want to be able to do work from and the more places they can successfully do that work from, the more need they have for an open and interoperable data platform connected to all those systems. So if you just kind of compare the alternative world where everything gets closed down you only have one or two providers that's actually a worse world. And it's the one that we don't think is gonna happen because of how much kind of agent interoperability is starting to emerge. So that's a little bit of the philosophy that we are running with.
Pinjalim Bora: Makes a lot of sense. Thank you for the detail on the One for Dylan. Dylan, when I look at the billings guide for the year, if I did this now pretty quickly, but sounds like pre in the and when you first gave the guidance, it was about 7% USD with 30 basis points of tailwind from FX. Now it seems like 9% USD with 340 basis points of FX tailwind. Sounds like on a constant currency basis, you are guiding billings down. What am I reading wrong? Because you had a very strong Q1, and I understand the early renewals, but why would that impact full year?
So is that largely driven by some of the prudence that you are talking about? Maybe talk about the same kinds of the year.
Dylan Smith: Yeah. That's exactly right. So on that cost currency basis, down about a point. And some of that is just, you know, we round as we give guidance on an as-reported basis and in round numbers. And then a portion of that is, as we discussed, just that incremental conservatism around the back half. And so that's the exact dynamic. I mean, you are doing the math right. But overall, you know, very, you know, kind of optimist about what we are seeing in the business.
And the, you know, trends and how kind of customer conversations materializing, but, you know, did want to be, you know, kind of prudent with what we are assuming in the back half of the year.
Pinjalim Bora: Got it. Thank you.
Operator: Your next question comes from the line of Brian Peterson with Raymond James. Please go ahead.
Brian Peterson: Congrats on the strong start to the year, guys. So I'll keep it to one. I know you answered the questions on industries before, but I know there's been a lot of debate on what's going on in the federal vertical. Anything that you guys would call out in terms of customer trends or pipeline, any color there? Thanks, guys.
Aaron Levie: Yeah. So, you know, still a bit of a dynamic where I think we expect, you know, a degree of kind of caution on the federal side. We have put a lot of emphasis in our kind of state and local part of the business in the meantime. FedRAMP High, which obviously we just got certified for, is clearly gonna be a sort of a, you know, a net helper to the overall dynamic on the federal side because a lot of the use cases that will continue to get funded are those out of DOD and much more kind of highly sensitive use cases. So we are now in a better position to go capture those.
So I would still say, dynamic environment and but we are happy with FedRAMP high as a way to bolster that position. And we are very happy about the kind of overall AI momentum that we are driving.
Brian Peterson: Thanks, Aaron.
Operator: And that concludes our question and answer session. I will now turn the call back over to Cynthia Hiponia for closing comments.
Cynthia Hiponia: Great. Thank you everyone for joining us today, and we look forward to updating you again on our next earnings call. And this concludes today's conference call. Thank you for your participation, and you may now disconnect.
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Earlier this month, Nintendo received a lot of negative attention for an end-user license agreement (EULA) update granting the company the claimed right to render Switch consoles "permanently unusable in whole or in part" for violations such as suspected hacking or piracy. As it turns out, though, Nintendo isn't the only console manufacturer that threatens to remotely brick systems in response to rule violations. And attorneys tell Ars Technica that they're probably well within their legal rights to do so.
Sony's System Software License Agreement on the PS5, for instance, contains the following paragraph of "remedies" it can take for "violations" such as use of modified hardware or pirated software (emphasis added).
If SIE Inc determines that you have violated this Agreement's terms, SIE Inc may itself or may procure the taking of any action to protect its interests such as disabling access to or use of some or all System Software, disabling use of this PS5 system online or offline, termination of your access to PlayStation Network, denial of any warranty, repair or other services provided for your PS5 system, implementation of automatic or mandatory updates or devices intended to discontinue unauthorized use, or reliance on any other remedial efforts as reasonably necessary to prevent the use of modified or unpermitted use of System Software.
The same exact clause appears in the PlayStation 4 EULA as well. The PlayStation 3 EULA was missing the "disabling use... online or offline" clause, but it does still warn that Sony can take steps to "discontinue unauthorized use" or "prevent the use of a modified PS3 system, or any pirated material or equipment."
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Microsoft has announced that a new “Retro Classics” collection is now available to Game Pass subscribers. Reminiscent of the Nintendo Switch Online classic games library, the collection includes Pitfall, Grand Prix, and more than 50 other Activision titles from the 1980s and 1990s. It’s not as many titles as the 1,300 retro games that Antstream, Microsoft’s partner in the offering, has available on its streaming service, but it won’t cost Game Pass subscribers any extra.
Retro Classics, which Microsoft writes is part of its “commitment to game preservation and backwards compatibility,” is available on Xbox consoles, PC, or via Xbox cloud gaming on compatible devices like some LG and Samsung smart TVs and the Meta Quest headset. Other games included in the collection include Cosmic Ark, MechWarrior 2: 31st Century Combat, and Atlantis.
Based on screenshots, it looks like the collection will include titles from the original PlayStation, the SNES, MS-DOS, and more. Players will be able to collect achievements and participate in events like tournaments and community challenges as well.
Microsoft says this is only the start; the collection will expand to include more than 100 games from Activision and Blizzard eventually. Like Nintendo’s retro collection, you’re out of luck if you don’t have Microsoft’s gaming subscription, as the titles in the collection aren’t available for sale separately.
Antstream Arcade separately announced a temporary deal for Game Pass subscribers. Until June 4th, members can sign up for a year of access to Antstream’s library, which includes more than 1,300 games, for $9.99 via the Microsoft Store.
Here is the full collection of launch titles for the Retro Classics collection, which Activision’s Dustin Blackwell sent to The Verge:
Update, May 21st: Added list of Retro Classics launch titles.
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