Financial Data and Key Metrics Changes - The company reported Q2 revenue of 256 million [25][27] - Remaining performance obligations (RPO) increased by 12% year-over-year to 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 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]
Box(BOX) - 2025 Q2 - Earnings Call Transcript