Box(BOX)2025-05-29 20:05Financial Performance - For the three months ended April 30, 2025, revenue was $276.3 million, a year-over-year growth of 4%[113] - Billings for the three months ended April 30, 2025, were $242.3 million, an increase of 27% from $190.5 million for the same period in 2024[123] - Revenue for the three months ended April 30, 2025 was $276,272,000, a $11,614,000 or 4% increase from $264,658,000 in 2024, driven by seat growth and strong attach rates[145][147] - Gross profit for the three months ended April 30, 2025, was $215.6 million, with a gross margin of 78.0%[113] - Operating income for the three months ended April 30, 2025, was $6.3 million, with an operating margin of 2.3%[113] - Non-GAAP free cash flow for the three months ended April 30, 2025, was $118.3 million, a decrease of 4% from $123.2 million for the same period in 2024[127] Remaining Performance Obligations - Remaining performance obligations (RPO) as of April 30, 2025, were $1.469 billion, representing a 21% increase from $1.212 billion as of April 30, 2024[119] - The increase in RPO was primarily driven by expansion within existing customers and the addition of new customers, with a 390 basis point impact from favorable foreign currency exchange rates[120] Customer Retention - The net retention rate is a key metric indicating the long-term value of subscription agreements, reflecting the company's ability to retain and grow revenue from existing customers[129] - The net retention rate was 102% and 101% as of April 30, 2025 and 2024, respectively, indicating strong customer retention despite budget scrutiny[130] - The company expects to maintain a net retention rate above 100% in the foreseeable future as it continues to penetrate customer accounts[130] Expenses - Cost of revenue increased by $2,421,000 or 4% to $60,673,000, with gross margin remaining at 78%[148] - Research and development expenses rose by $9,628,000 or 15% to $72,301,000, representing 26% of revenue, driven by increased headcount and related costs[150][151] - Sales and marketing expenses increased by $6,426,000 or 7% to $99,099,000, accounting for 36% of revenue, influenced by workforce reorganization and employee-related costs[152][153] - General and administrative expenses grew by $4,808,000 or 15% to $37,861,000, representing 14% of revenue, primarily due to increased stock-based compensation and headcount[154][155] Cash Flow and Investments - As of April 30, 2025, cash and cash equivalents totaled $792.1 million, with operating cash flow generated of $127.1 million during the three months[161] - Net cash provided by operating activities decreased by $4.1 million to $127.1 million, attributed to a $9.0 million decrease in net income[162] - Net cash used in investing activities decreased by $12.8 million to $(10.4) million, primarily due to a $14.2 million decrease in purchases of short-term investments[164] - Net cash used in financing activities increased by $26.1 million to $(61.8) million, mainly due to a $17.5 million increase in stock repurchases[165] Debt and Financing - The company issued $460.0 million of 1.50% convertible senior notes due September 15, 2029, with a conversion price of approximately $43.46 per share[166] - A share repurchase plan was authorized, with $150 million allocated for repurchases; 1.6 million shares were repurchased at an average price of $31.28 per share for a total of $49.6 million[171] - The company had no debt outstanding on the June 2023 Facility as of April 30, 2025[169] Foreign Currency Exposure - Approximately one-third of the company's revenue is represented by customer contracts denominated in foreign currencies, including the Japanese Yen, Euro, and British Pound[186] - For the three months ended April 30, 2025, total revenue was unfavorably impacted by approximately 90 basis points due to foreign currency fluctuations compared to the prior period[187] - The company recognized $2.8 million in foreign currency exchange gains for the three months ended April 30, 2025, net of losses from foreign currency derivative contracts[189] - The company has entered into foreign currency derivative contracts to hedge unrealized gains and losses from remeasurement of monetary assets and liabilities denominated in foreign currencies[189] - The company has increasing exposure to fluctuations in foreign currency exchange rates as foreign operations grow, particularly in Japan[186] - The company has entered into foreign currency derivative contracts designated as cash flow hedges to mitigate the impact of foreign exchange rate fluctuations on future cash flows and earnings[189] Interest Income and Expense - Interest income for the three months ended April 30, 2025 was $6,698,000, an increase of $1,009,000 or 18% from $5,689,000 in 2024, attributed to higher cash and short-term investment balances[156][157] - Interest expense increased by $1.9 million, or 235%, to $(2.7) million for the three months ended April 30, 2025, primarily due to a $2.1 million increase related to the 2029 Convertible Notes[158] Tax Provision - Provision for income taxes rose by $0.3 million, or 7%, to $4.95 million, mainly due to increases in foreign income taxes from profitability and U.S. income taxes from the release of the U.S. valuation allowance[160]