| --- | --- | --- | |-------|-------|-------| | | | | | | | | | | | | Forward-looking statements & non-GAAP financial measures This presentation contains forward-looking statements that involve risks, uncertainties, and assumptions, including statements regarding Box's expectations regarding its growth and profitability, the size of its market opportunity, its investments in go-to-market programs, the demand for its products, the potential of AI and its impact on Box, the timing of recent and planned produc ...

Financial Performance - Revenue for Q3 FY25 was $276 million, a 5% increase year-over-year, or 6% growth on a constant currency basis[4] - GAAP operating margin reached a record 8.5%, while non-GAAP operating margin was 29.1%[4] - GAAP net income per share was $0.05, and non-GAAP net income per share was a record $0.45[4] - Billings for Q3 FY25 were $264.7 million, a 4% increase from the previous year[4] - Non-GAAP free cash flow for Q3 FY25 was $57.4 million, a 2% decrease from the previous year[4] - Total revenue for the three months ended October 31, 2024, was $275.9 million, a 5.3% increase from $261.5 million in the same period last year[35] - Gross profit for the three months ended October 31, 2024, was $220.4 million, representing a gross margin of 79.9%, compared to $192.3 million in the prior year[35] - Net income for the three months ended October 31, 2024, was $12.9 million, up 21.3% from $10.7 million in the same period last year[35] - Non-GAAP net income attributable to common stockholders for the three months ended October 31, 2024, was $67.462 million, compared to $53.225 million in the prior year, reflecting a year-over-year increase of 26.7%[41] - GAAP net income attributable to common stockholders for the three months ended October 31, 2024, was $7.626 million, compared to $5.647 million in the same period of 2023, representing an increase of 35.0%[39] Future Projections - Q4 FY25 revenue is expected to be approximately $279 million, up 6% year-over-year[10] - Full year FY25 revenue is expected to be approximately $1.090 billion, up 5% year-over-year[12] - The company expects GAAP net income per share attributable to common stockholders for the three months ending January 31, 2025, to be $0.07, with a non-GAAP net income per share guidance of $0.41[44] Performance Obligations and Cash Flow - Remaining performance obligations (RPO) as of October 31, 2024, were $1.3 billion, up 13% year-over-year, or 14% growth on a constant currency basis[2] - The company reported billings as a significant performance measure, reflecting sales to new customers, subscription renewals, and expansions within existing customers[26] - Remaining performance obligations (RPO) indicate contracted revenue not yet recognized, consisting of deferred revenue and backlog, which are crucial for future revenue projections[28] - Box's non-GAAP free cash flow is defined as cash flows from operating activities minus capital expenditures, indicating the cash available for business investments[29] - Non-GAAP free cash flow for the three months ended October 31, 2024, was $57.361 million, slightly down from $58.317 million in the same period of 2023[39] - The company reported a net cash provided by operating activities of $62.6 million for the three months ended October 31, 2024, compared to $71.8 million in the prior year[37] - GAAP net cash provided by operating activities for the three months ended October 31, 2024, was $62.582 million, compared to $71.782 million in the same period last year, a decrease of 12.2%[39] Strategic Initiatives - Box introduced a new Suites plan, Enterprise Advanced, enhancing its Intelligent Content Management platform[7] - Box expanded its strategic partnership with Amazon Web Services (AWS) to integrate advanced AI capabilities[7] - The company aims to maintain profitability and achieve revenue growth rates while managing operating efficiencies and foreign currency fluctuations[1] - Box's fiscal year 2025 targets include expanding operating margins and achieving a cash flow margin that supports long-term financial health[1] - The company emphasizes the importance of strategic partnerships and acquisitions to enhance its market position and product offerings[1] - The company is focused on leveraging AI and new product introductions to drive market adoption and retention[1] Balance Sheet and Liabilities - Total current assets increased to $962.6 million as of October 31, 2024, compared to $842.2 million as of January 31, 2024[33] - Total liabilities rose to $1.34 billion as of October 31, 2024, compared to $1.18 billion as of January 31, 2024[33] - Cash and cash equivalents increased to $608.8 million as of October 31, 2024, from $383.7 million as of January 31, 2024[33] - The company issued $448.9 million in convertible notes during the financing activities for the three months ended October 31, 2024[37] - The company’s total stockholders' deficit was $479.9 million as of October 31, 2024, compared to $431.1 million as of January 31, 2024[33] Economic and Market Conditions - The impact of macroeconomic conditions, including inflation and geopolitical conflicts, poses risks to Box's growth and profitability expectations[1] - Box's management believes that non-GAAP financial measures provide meaningful insights into operational performance and facilitate comparisons with competitors[21] - Box's non-GAAP gross profit and gross margin are calculated by excluding stock-based compensation and intangible asset amortization, providing a clearer view of core business performance[23]

Financial Performance - Revenue for the three months ended July 31, 2024, was $270,039,000, representing an increase of 3% compared to $261,428,000 for the same period in 2023[16]. - Gross profit for the six months ended July 31, 2024, was $420,932,000, up from $384,662,000 in the same period of 2023, reflecting a growth of 9.4%[16]. - Net income for the three months ended July 31, 2024, was $20,496,000, compared to $10,791,000 for the same period in 2023, indicating an increase of 90.5%[19]. - For the six months ended July 31, 2024, net income was $37,718,000, compared to $19,141,000 for the same period in 2023, representing a 97% increase[29]. - The company reported a net income of $20.5 million for the three months ended July 31, 2024, compared to $10.8 million in the same period of 2023[124]. - The company reported a net income of $37.7 million for the six months ended July 31, 2024, with stock-based compensation of $106.3 million and depreciation and amortization expenses of $10.0 million[148]. Assets and Liabilities - Total current assets decreased to $733,659,000 as of July 31, 2024, down from $842,180,000 as of January 31, 2024, a decline of 12.9%[13]. - Total liabilities decreased to $1,066,992,000 as of July 31, 2024, from $1,180,130,000 as of January 31, 2024, a reduction of 9.6%[13]. - Cash and cash equivalents increased to $406,620,000 as of July 31, 2024, from $383,742,000 as of January 31, 2024, an increase of 5.4%[13]. - The company’s accumulated deficit as of July 31, 2024, was $(1,169,046,000), a slight improvement from $(1,206,764,000) as of January 31, 2024[14]. - The company’s total stockholders' deficit as of July 31, 2024, was $(439,399,000), compared to $(431,062,000) as of January 31, 2024[14]. - Total stockholders' deficit as of July 31, 2024, was $439,399,000, a decrease from $536,964,000 as of July 31, 2023[26]. Cash Flow and Investments - Cash provided by operating activities for the six months ended July 31, 2024, was $167,502,000, compared to $157,606,000 for the same period in 2023, indicating a 6% increase[29]. - The company reported a net cash increase of $23,459,000 for the six months ended July 31, 2024, compared to a decrease of $32,346,000 in the same period of 2023[29]. - Cash provided by investing activities was $15.6 million, primarily from $79.5 million in maturities and sales of short-term investments, offset by $56.5 million in purchases of short-term investments[151]. - Cash used in financing activities totaled $157.1 million, mainly due to $138.7 million in stock repurchases and $37.8 million in employee payroll taxes related to stock awards[152]. Stock and Share Repurchase - The company repurchased common stock totaling $138,686,000 during the six months ended July 31, 2024, compared to $104,906,000 in the same period of 2023[29]. - The company repurchased 3.9 million shares at an average price of $26.25 per share for a total of $101.9 million during the three months ended July 31, 2024[70]. - The company repurchased 5.3 million shares at a weighted average price of $26.48 per share for a total of $139.1 million during the six months ended July 31, 2024, with an additional $100 million authorized for repurchase through August 25, 2025[156]. Revenue Recognition and Performance Obligations - Revenue recognized from deferred revenue for the three months ended July 31, 2024, was $222.5 million, compared to $219.1 million for the same period in 2023[44]. - Remaining performance obligations from contracts with customers totaled $1.3 billion as of July 31, 2024, with 57% expected to be recognized as revenue within the next 12 months[45]. - Remaining performance obligations (RPO) as of July 31, 2024, were $1.272 billion, a 12% increase from $1.138 billion as of July 31, 2023[102]. Operating Expenses - Operating expenses for the three months ended July 31, 2024, were $194,246,000, an increase of 5.5% from $184,540,000 in the same period of 2023[16]. - Total operating expenses for the three months ended July 31, 2024, were $194.2 million, an increase from $184.5 million in the same period of 2023[124]. - Research and development expenses for the three months ended July 31, 2024, were $65.4 million, compared to $63.3 million in the same period of 2023[124]. - Sales and marketing expenses for the three months ended July 31, 2024, were $95.2 million, an increase from $88.6 million in the same period of 2023[124]. - General and administrative expenses for the three months ended July 31, 2024, increased by $0.9 million, or 3%, to $33.6 million, remaining at 12% of revenue[138]. Market and Competitive Environment - The market for cloud content management services is fragmented and highly competitive, with primary competitors including Microsoft and Google[176]. - The company’s growth is contingent on the widespread adoption of cloud computing and cloud-based content management services[181]. - The introduction of new technologies and market entrants is expected to intensify competition in the future[176]. - The company faces challenges in selling to government entities, including changes in certification requirements and budgetary cycles affecting demand[190]. Risks and Challenges - Adverse economic conditions may lead to reduced sales, longer sales cycles, and increased price competition, negatively impacting the business[185]. - The company faces risks related to customer satisfaction, pricing pressures, and the effectiveness of customer support services[179]. - The company must effectively manage its technical operations infrastructure to avoid service delivery issues that could harm business[176]. - The company has encountered issues with service disruptions and outages, which could lead to service credits and negatively impact revenue[192]. - The company faces increasing cybersecurity threats, including ransomware and phishing attacks, which could compromise sensitive data[200]. Compliance and Regulatory Environment - Compliance with evolving privacy laws, such as the GDPR and CCPA, may impose additional burdens and costs on the company[206]. - Legislative changes, such as the California Privacy Rights Act, may require modifications to data processing practices and incur substantial compliance costs[209]. - The company must adapt to new data localization laws in various regions, which could limit service offerings and lead to fines[210]. - Ongoing changes in global privacy regulations may delay product development and increase operational costs[211].

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $270 million, representing a 3% year-over-year increase and a 6% increase in constant currency [23][27] - Record gross margin of 81.6%, up 470 basis points year-over-year [26][27] - Operating margin improved to 28.4%, an increase of 360 basis points year-over-year [27] - Billings grew by 10% year-over-year, reaching $256 million [25][27] - Remaining performance obligations (RPO) increased by 12% year-over-year to $1.3 billion [25][27] Business Line Data and Key Metrics Changes - The Enterprise Plus suite accounted for 87% of deals over $100,000, up from 78% a year ago [17][24] - Revenue from suite customers increased to 58%, compared to 48% in the same quarter last year [24] - Customer demand for Box AI drove upgrades and new customer acquisitions, particularly in the Enterprise Plus segment [8][17] Market Data and Key Metrics Changes - Strong performance noted in Japan, with record attach rates and significant adoption of Box AI [17][76] - The public sector business showed strong bookings, attributed to modernization efforts and the need for cloud-based solutions [56][57] Company Strategy and Development Direction - The company is focused on expanding its Intelligent Content Management platform, integrating AI capabilities to enhance customer productivity [10][13] - Recent acquisition of Alphamoon aims to enhance document processing capabilities within Box AI [13][14] - Plans to host BoxWorks, a flagship customer conference, to unveil new product enhancements and partnerships [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the macro environment compared to previous quarters, with continued demand for Box AI and Enterprise Plus [38][39] - The company anticipates a net retention rate of approximately 102% by the end of FY '25, an improvement from previous expectations [26][34] - Future growth is expected to be driven by improved net retention rates and expansion into new markets [60][61] Other Important Information - The company generated free cash flow of $33 million, up 59% year-over-year [27][28] - A new stock repurchase plan of $100 million was authorized by the Board [28] - The company is on track to meet FedRAMP High Compliance, expanding its use cases in the federal government [16] Q&A Session Summary Question: What is the current macro and deal environment? - Management noted stable performance compared to Q1, with strong demand for Box AI and Enterprise Plus driving results [38] Question: What is the contribution of AI to revenue? - AI is seen as a key driver for upgrades to the Enterprise Plus plan, facilitating customer transitions and enhancing deal closures [41][42] Question: What are the trends in seat growth? - Seat growth remains stable, with pressure on expansion rates, but pricing improvements are contributing to net retention [47] Question: What is the reasoning behind unlimited AI queries in the Enterprise Plus plan? - The decision was made to lower friction for adoption and capitalize on decreasing costs of AI models [49][50] Question: How is the demand environment evolving? - Healthy linearity was observed in Q2, with expectations embedded in Q3 guidance [54] Question: What is driving the strength in the public sector? - The platform's modernization capabilities resonate well with government agencies transitioning from legacy systems [56][57] Question: What is the growth algorithm for returning to double-digit growth? - Expected improvements in net retention rates and a balanced contribution from seat growth and pricing are anticipated [60][61] Question: What impact do recent acquisitions have on revenue or EPS? - No immediate revenue impact from acquisitions, but they are incorporated into future guidance [64] Question: What is driving the uptick in bookings in Japan? - Continued strong performance in Japan attributed to early adoption of Box AI and significant market potential [76]

| --- | --- | |-------|-------| | | | | | | | | | Forward-looking statements & non-GAAP financial measures This presentation contains forward-looking statements that involve risks, uncertainties, and assumptions, including statements regarding Box's expectations regarding its growth and profitability, the size of its market opportunity, its investments in go-to-market programs, the demand for its products, the potential of AI and its impact on Box, the timing of recent and planned product introductions, enh ...

Revenue and Growth - Revenue for Q2 FY25 was $270 million, a 3% increase year-over-year, or 6% growth on a constant currency basis[3]. - Q3 FY25 revenue guidance is expected to be between $274 million and $276 million, representing a 5% year-over-year increase[9]. - Full year FY25 revenue is expected to be in the range of $1.086 billion to $1.09 billion, up 5% year-over-year[11]. - Revenue for the three months ended July 2024 was $270,039,000, an increase of 3% compared to $261,428,000 for the same period in 2023[31]. - GAAP revenue for the three months ended July 31, 2024, was $270,039,000, compared to $261,428,000 for the same period in 2023, representing a growth of 2.3%[39]. Profitability Metrics - GAAP operating margin for Q2 FY25 was 7.5%, compared to 3.8% in Q2 FY24[3]. - Non-GAAP operating income for Q2 FY25 was a record $76.7 million, or 28.4% of revenue, up from 24.8% in Q2 FY24[3]. - Non-GAAP diluted net income per share for Q2 FY25 was $0.44, compared to $0.36 in Q2 FY24[3]. - GAAP net income attributable to common stockholders for the three months ended July 31, 2024, was $14,341,000, compared to $5,744,000 in the same period last year, marking a significant increase of 149.5%[36]. - Non-GAAP net income per share attributable to common stockholders for the three months ended July 31, 2024, was $0.44, compared to $0.36 in the prior year, indicating a growth of 22.2%[42]. Cash Flow and Financial Position - Box's cash and cash equivalents increased from $383,742,000 to $406,620,000, an increase of approximately 5.4%[29]. - Cash provided by operating activities for the six months ended July 2024 was $167,502,000, compared to $157,606,000 for the same period in 2023, indicating a growth of 6%[34]. - GAAP net cash provided by operating activities for the three months ended July 31, 2024, was $36,298,000, compared to $32,676,000 in the prior year, indicating an increase of 20.2%[37]. - The company reported a net cash used in financing activities of $121,407,000 for the three months ended July 2024, compared to $99,136,000 in the same period in 2023[34]. - The cash, cash equivalents, and restricted cash at the end of the period were $407,716,000, compared to $396,694,000 at the end of the previous year[34]. Performance Obligations and Billings - Remaining performance obligations (RPO) as of July 31, 2024, were $1.272 billion, a 12% increase from $1.138 billion a year ago[3]. - Billings for Q2 FY25 were $256.4 million, a 10% increase from $232.5 million in Q2 FY24[3]. - Billings for the three months ended July 31, 2024, were $256,435,000, compared to $232,501,000 in the same period last year, representing a growth of 10.3%[39]. - Remaining performance obligations (RPO) represent contracted revenue not yet recognized, indicating future revenue potential[26]. - Deferred revenue at the end of the period was $502,104,000, up from $479,293,000 at the end of the same period last year, reflecting a growth of 4.8%[39]. Expenses and Liabilities - Operating expenses for the three months ended July 2024 totaled $194,246,000, an increase of 5% from $184,540,000 in the same period last year[31]. - Research and development expenses for the three months ended July 2024 were $65,445,000, an increase from $63,316,000 in the same period last year[31]. - The company's deferred revenue decreased from $562,859,000 to $483,987,000, a reduction of about 14.0%[29]. - Box's total liabilities decreased from $1,180,130,000 to $1,066,992,000, reflecting a decrease of approximately 9.6%[29]. - Total stock-based compensation for the three months ended July 2024 was $55,111,000, slightly up from $53,346,000 in the same period last year[32]. Strategic Initiatives - The company announced a new $100 million expansion of its stock repurchase program[1]. - The acquisition of Alphamoon enhances Box's Intelligent Content Management platform capabilities[6].

PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Presents the unaudited condensed consolidated financial statements for the quarter ended April 30, 2024 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $1.18 billion, while the total stockholders' deficit narrowed to $(397.9) million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | April 30, 2024 | January 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $449,507 | $383,742 | | Accounts receivable, net | $143,053 | $281,487 | | Total current assets | $788,673 | $842,180 | | Total assets | $1,176,097 | $1,241,163 | | **Liabilities & Stockholders' Deficit** | | | | Deferred revenue (current) | $493,003 | $562,859 | | Total current liabilities | $591,438 | $679,280 | | Debt, net, non-current | $371,323 | $370,822 | | Total liabilities | $1,081,386 | $1,180,130 | | Total stockholders' deficit | $(397,874) | $(431,062) | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Quarterly revenue grew 5% to $264.7 million, with net income increasing to $17.2 million Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :--- | :--- | :--- | | Revenue | $264,658 | $251,898 | | Gross Profit | $206,406 | $190,247 | | Income from operations | $18,007 | $8,335 | | Net income | $17,222 | $8,350 | | Diluted net income per share | $0.08 | $0.02 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased 5% to $131.2 million for the three-month period Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $131,204 | $124,930 | | Net cash used in investing activities | $(23,170) | $(8,782) | | Net cash used in financing activities | $(35,695) | $(60,921) | | Net increase in cash | $66,128 | $53,176 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides supplementary details on significant accounting policies, commitments, debt, and equity - As of April 30, 2024, the company had remaining performance obligations (RPO) of **$1.2 billion**, with **59%** expected to be recognized as revenue over the next 12 months[41](index=41&type=chunk) - Future minimum payments under non-cancellable contractual purchase obligations, primarily for public cloud hosting, totaled **$316.1 million** as of April 30, 2024[56](index=56&type=chunk)[57](index=57&type=chunk) - During the quarter, the company repurchased **1.4 million shares** of common stock for **$37.2 million**, with **$126.4 million** remaining available for future repurchases[67](index=67&type=chunk) - Total stock-based compensation expense for the quarter was **$51.2 million**, an increase from **$47.3 million** in the prior-year period[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes quarterly financial performance, key metrics, and the impact of macroeconomic factors [Current Period Highlights](index=30&type=section&id=Current%20Period%20Highlights) Revenue grew 5% to $264.7 million, with a 14% increase in non-GAAP free cash flow to $123.2 million Q1 FY2025 Financial Highlights vs. Q1 FY2024 | Metric | Q1 FY2025 | Q1 FY2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $264.7M | $251.9M | +5% | | Gross Margin | 78.0% | 75.5% | +250 bps | | Operating Margin | 6.8% | 3.3% | +350 bps | | RPO | $1.212B | $1.179B | +3% | | Net Cash from Operations | $131.2M | $124.9M | +5% | | Non-GAAP Free Cash Flow | $123.2M | $108.2M | +14% | [Key Business Metrics](index=30&type=section&id=Key%20Business%20Metrics) RPO grew 3% to $1.212 billion while the net retention rate declined to 101% due to customer budget scrutiny - Remaining Performance Obligations (RPO) were **$1.212 billion**, up 3% YoY, with growth negatively impacted by **470 basis points** from foreign currency exchange rates[94](index=94&type=chunk) - Billings were **$190.5 million**, a decrease of 1% YoY, primarily driven by a **550 basis point** negative impact from foreign currency exchange rates[97](index=97&type=chunk) - The net retention rate was **101%** as of April 30, 2024, down from **106%** as of April 30, 2023, due to heightened budget scrutiny and increased partial customer churn[104](index=104&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Revenue increased 5% to $264.7 million, driven by existing customers despite negative foreign exchange impacts - Revenue increased by **$12.8 million (5%)**, driven by seat growth in existing customers and strong attach rates of multi-product Suites, partially offset by a **260 basis point** negative currency impact[115](index=115&type=chunk) - Cost of revenue decreased by **$3.4 million (6%)**, primarily due to a **$7.0 million** decrease in depreciation expense following the completion of the migration to the public cloud[117](index=117&type=chunk) - Sales and marketing expenses increased by **$6.5 million (7%)**, driven by a **$2.3 million** increase in marketing event costs and a **$2.4 million** increase in stock-based compensation[121](index=121&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company held $567.0 million in cash and short-term investments and generated $131.2 million in operating cash flow - The company had cash, cash equivalents, restricted cash, and short-term investments of **$567.0 million** as of April 30, 2024[127](index=127&type=chunk) - Cash used in financing activities was **$35.7 million**, primarily driven by **$32.1 million** in common stock repurchases and **$3.8 million** in dividend payments to preferred stockholders[133](index=133&type=chunk) - The Board of Directors authorized an additional **$100 million** for the share repurchase plan on March 4, 2024, with **$126.5 million** remaining available for repurchases as of April 30, 2024[138](index=138&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Identifies primary market risks from interest rates and foreign currency fluctuations, particularly the Japanese Yen - The company is exposed to interest rate risk from its **$150.0 million** revolving loan facility, which is partially mitigated by a swap agreement with a notional value of **$30.0 million**[148](index=148&type=chunk)[149](index=149&type=chunk) - Approximately **one-third of revenue** is denominated in foreign currencies, with fluctuations unfavorably impacting total revenue by approximately **260 basis points** for the quarter[150](index=150&type=chunk) - To mitigate foreign currency risk, the company has entered into derivative contracts to hedge a portion of its net outstanding monetary assets and liabilities[152](index=152&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Based on an evaluation as of the end of the period, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective** at the reasonable assurance level[154](index=154&type=chunk) - There were **no changes** in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[155](index=155&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course litigation but does not anticipate any material loss from current contingencies - The company is subject to litigation and claims arising in the ordinary course of business but believes that as of April 30, 2024, there was **not a reasonable possibility** of incurring a material loss[58](index=58&type=chunk)[157](index=157&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) Details significant risks including intense competition, customer retention, economic conditions, and cybersecurity threats - The market for cloud content management is **intensely competitive**, with major competitors including Microsoft and Google, which could create pricing pressure[162](index=162&type=chunk) - The business substantially depends on customer renewals, and the **net retention rate declined to 101%** from 106% a year prior, which could harm future operating results[164](index=164&type=chunk) - Actual or perceived **security vulnerabilities** and unauthorized data access could harm the business, as the company stores large amounts of sensitive customer information[185](index=185&type=chunk)[186](index=186&type=chunk) - International operations expose the company to risks, including significant fluctuations in currency exchange rates, particularly the **Japanese Yen**, which has negatively impacted results[179](index=179&type=chunk)[181](index=181&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=91&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the repurchase of 1.4 million shares for $37.2 million and a $100 million increase to the buyback plan Share Repurchase Activity (Q1 FY2025) | Period | Total Shares Purchased (thousands) | Average Price Per Share | Total Cost (thousands) | | :--- | :--- | :--- | :--- | | Feb 2024 | 0 | N/A | $0 | | Mar 2024 | 94 | $28.43 | $2,672 | | Apr 2024 | 1,279 | $27.00 | $34,533 | | **Total** | **1,373** | **$27.10 (weighted avg)** | **$37,205** | - On March 4, 2024, the Board of Directors authorized an additional **$100 million** for the share repurchase plan, with approximately **$126.4 million** remaining available as of April 30, 2024[284](index=284&type=chunk) [Item 5. Other Information](index=91&type=section&id=Item%205.%20Other%20Information) Key executives and directors adopted pre-arranged Rule 10b5-1 trading plans during the quarter - CEO Aaron Levie adopted a Rule 10b5-1 trading plan on April 2, 2024, for the sale of up to **40,000 shares**, commencing July 2, 2024[285](index=285&type=chunk) - CFO Dylan Smith adopted a Rule 10b5-1 trading plan on April 2, 2024, for the sale of up to **156,000 shares**, commencing July 10, 2024[285](index=285&type=chunk) [Item 6. Exhibits](index=91&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the report, including required CEO and CFO certifications - The report includes certifications from the CEO and CFO pursuant to **Sections 302 and 906** of the Sarbanes-Oxley Act of 2002[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) - The filing includes **Inline XBRL** documents for financial data tagging[293](index=293&type=chunk) [Signatures](index=93&type=section&id=Signatures) The report was duly signed and authorized by the CEO and CFO on May 30, 2024 - The Form 10-Q was signed on **May 30, 2024**, by Aaron Levie (CEO) and Dylan Smith (CFO)[296](index=296&type=chunk)[297](index=297&type=chunk)

Box, Inc. (NYSE:BOX) Q1 2025 Earnings Conference Call May 28, 2024 5:00 PM ET Company Participants Cynthia Hiponia - Vice President, Investor Relations Aaron Levie - Co-Founder and Chief Executive Officer Dylan Smith - Co-Founder and Chief Financial Officer Conference Call Participants Brian Peterson - Raymond James & Associates Pinjalim Bora - JP Morgan Securities George Kurosawa - Steve Enders Josh Baer - Morgan Stanley George Iwanyc - Oppenheimer Rishi Jaluria - RBC Capital Markets Operator Hello, thank ...

Revenue and Growth - Revenue for Q1 FY25 was $264.7 million, up 5% YoY, or 8% growth on a constant currency basis[3] - Q2 FY25 revenue guidance is $268 million to $270 million, up 3% YoY at the high-end, or 6% growth on a constant currency basis[8] - Full-year FY25 revenue guidance is $1.075 billion to $1.08 billion, up 4% YoY at the high-end, or 7% growth on a constant currency basis[10] - Revenue increased to $264.7 million in April 2024, up 5.1% from $251.9 million in April 2023[29] Non-GAAP Financial Metrics - Non-GAAP operating margin for Q1 FY25 was 26.6%, exceeding guidance[3] - Non-GAAP free cash flow for Q1 FY25 was $123.2 million, up 14% YoY[3] - Non-GAAP diluted net income per share for Q1 FY25 was $0.39, up from $0.32 in Q1 FY24[3] - Non-GAAP gross margin improved to 80.2% in April 2024 from 77.9% in April 2023[34] - Non-GAAP operating income increased to $70.4 million in April 2024, up from $57.4 million in April 2023[34] - Non-GAAP net income attributable to common stockholders rose to $58.4 million in April 2024 from $47.5 million in April 2023[34] - Non-GAAP net income per share for Q3 2024 is $0.40, with a range of $0.40 to $0.41[37] - Non-GAAP net income per share for FY 2025 is $1.54, with a range of $1.54 to $1.58[37] - Non-GAAP operating margin for Q3 2024 and FY 2025 is 27.0%[39] Cash Flow and Liquidity - Box's cash and cash equivalents increased to $449.5 million as of April 30, 2024, compared to $383.7 million as of January 31, 2024[27] - Net cash provided by operating activities was $131.2 million in April 2024, up from $124.9 million in April 2023[32] - Cash, cash equivalents, and restricted cash increased to $450.4 million at the end of April 2024 from $384.3 million at the beginning of the period[32] Remaining Performance Obligations (RPO) and Billings - Remaining performance obligations (RPO) as of April 30, 2024 were $1.212 billion, up 3% YoY[3] - Box's remaining performance obligations (RPO) represent contracted revenue not yet recognized, consisting of deferred revenue and backlog[24] - Billings for April 2024 were $190.5 million, slightly down from $191.9 million in April 2023[36] - Box's billings reflect sales to new customers, subscription renewals, and expansion within existing customers, calculated by adding changes in deferred revenue and contract assets to revenue[22] Operating Expenses and Margins - Total operating expenses increased to $188.4 million in April 2024 from $181.9 million in April 2023[29] - GAAP operating margin for Q3 2024 is 6.0%, and 6.5% for FY 2025[39] - Stock-based compensation impact on operating margin is 20.5% for Q3 2024 and 20.0% for FY 2025[39] - Acquired intangible assets amortization impact on operating margin is 0.5% for both Q3 2024 and FY 2025[39] Stock-Based Compensation - Stock-based compensation expense totaled $51.2 million in April 2024, compared to $47.3 million in April 2023[30] - Stock-based compensation for Q3 2024 is $0.37 per share, and $1.45 per share for FY 2025[37] Net Income and Earnings Per Share - Net income attributable to common stockholders rose to $11.5 million in April 2024, compared to $3.7 million in April 2023[29] - Diluted GAAP net income per share for Q3 2024 is $0.06, with a range of $0.06 to $0.07[37] - Diluted GAAP net income per share for FY 2025 is $0.20, with a range of $0.20 to $0.24[37] Balance Sheet and Liabilities - Accounts receivable decreased to $143.1 million as of April 30, 2024, from $281.5 million as of January 31, 2024[27] - Deferred revenue decreased to $493.0 million as of April 30, 2024, from $562.9 million as of January 31, 2024[27] - Box's total liabilities decreased to $1.08 billion as of April 30, 2024, from $1.18 billion as of January 31, 2024[27] - Box's stockholders' deficit improved to $397.9 million as of April 30, 2024, from $431.1 million as of January 31, 2024[27] Product and Innovation - Box AI for Hubs introduced in public beta, enabling teams to unlock value from enterprise data[5] - Box Hubs public beta launched, offering a new intelligent portal solution for content curation and publishing[5] Foreign Exchange (FX) Impact - FX headwinds expected to impact full-year FY25 revenue growth by 250 basis points and operating margin by 160 basis points[6] Non-GAAP Definitions - Box defines non-GAAP gross profit as GAAP gross profit excluding stock-based compensation, intangible assets amortization, and other special items[19] - Box defines non-GAAP operating income as operating income excluding stock-based compensation, intangible assets amortization, and other special items[20] - Box defines non-GAAP net income attributable to common stockholders as GAAP net income excluding stock-based compensation, intangible assets amortization, and other special items[21]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-36805 Box, Inc. (Exact name of registrant as specified in its Charter) Delaware 20-2714444 (State or other jurisdiction of (I.R.S. Emp ...