Slide 1: First Fiscal Quarter FY24 Financial Results
First Fiscal Quarter FY24 Financial Results May 30, 2023
Slide 2: Forward-looking statements & non-GAAP financial measures
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, sales produ
Slide 3: Revenue growth driven by Suites momentum
Revenue growth driven by Suites momentum v e nu e u p 6% YoY Re co ns t a nt currency) (up 10% in $246 $250 $256 $252 $238 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Note: $ values are shown in millions. Note: Box fiscal year ends January 31.
Slide 4: RPO supports enduring growth and revenue visibility
RPO supports enduring growth and revenue visibility Driven by continued lengthening of contract durations partially offset by FX headwinds Total RPO up 17% YoY $1,245 $1,179 $1,005 $1,051 $1,056 $510 Long-Term RPO ($M) $478 $411 $406 $385 $735 $701 Short-Term RPO ($M) $620 $640 $649 Q1'23 Q2'23 Q3'2
Slide 5: Billings and deferred revenue
Billings and deferred revenue Billings up 11%* YoY Deferred revenue up 8%* YoY $567 $507 $357 $468 $458 $467 $258 $235 $192 $172 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Note: $ values are shown in millions. *Reconciliations of billings to revenue, deferred revenue, and contract a
Slide 6: Delivering leverage through gross margin expansion
Delivering leverage through gross margin expansion Optimizations from public cloud migration strategy resulted in reduced infrastructure costs and improved overall efficiencies Non-GAAP gross margin Up 160 bps YoY 76.3% 77.9% Q1'23 Q1'24 Note: A reconciliation of non-GAAP operating margin to the nea
Slide 7: Delivering significant operating margin improvements
Delivering significant operating margin improvements Operating discipline accelerates margin expansion Non-GAAP operating margin 0 b ps Yo Y Up 2 2 26.0% 24.0% 22.8% 20.6% 21.7% Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Note: A reconciliation of non-GAAP operating margin to the nearest GAAP financial measures c
Slide 8: Cash, cash equivalents, restricted cash, and short-term investments
Cash, cash equivalents, restricted cash, and short-term investments $ 125 $ 42 $ 518 $ 12 $ 15 $ 462 Q4'23 CFO Shares CAPEX & Cap Other* Q1'24 Repurchased Lease Payments *“Other” primarily consists of RSU taxes, capitalized internal-use software costs and payments of dividend to preferred stockholde
Slide 9: Share repurchase program
Share repurchase program • In Q1, the Company repurchased 1.7 million shares of Box’s Class A common stock for approximately $44 million. • As of April 30, 2023, the Company had approximately $97 million of remaining Board-approved buyback capacity under the current plan.
Slide 10: Resilient business model focused on driving growth and profitability
Resilient business model focused on driving growth and profitability FY’21 FY’22 FY’23 Q1’24 Annual Revenue Growth + FCF Margin 26% 33% 37% N/A YoY Revenue Growth 11% 13% 13% 6% Gross Margin 73% 74% 77% 78% S&M as a % of Revenue 30% 28% 28% 28% R&D as a % of Revenue 18% 17% 18% 18% G&A as a % of Rev
Slide 11: Guidance and Outlook
box Guidance and Outlook
Slide 12: Q2 and fiscal year 2024 guidance
Q2 and fiscal year 2024 guidance Q2’24 FY24 Revenue $260M – $262M $1.045B – $1.055B GAAP EPS 1¢ – 2¢ 17¢ – 23¢ Non-GAAP EPS (diluted) 34¢ - 35¢ $1.44 - $1.50 Weighted-average shares, diluted 150 million 151 million GAAP operating margin Approximately 3% Approximately 5% Non-GAAP operating margin App
Slide 13: Delivering revenue growth at scale
Delivering revenue growth at scale Offset by FX headwinds Q2 FY24 revenue guidance up 7% YoY1 FY24 revenue guidance up 6% YoY1 (Up 11% YoY in constant currency) (Up 10% in constant currency) $1,045-$1,055 $991 $246 $250 $257 $252 $260-$262 $874 $771 $696 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 FY20 FY21 FY22
Slide 14: Fueling growth and operating leverage
Fueling growth and operating leverage Driving continued “Rule of” expansion Revenue Growth + Free Cash Flow Margin(1) 45%+(2) 37% 37% 35% 33% 30% 25% 26% FY’21 FY’22 FY’23 FY’24 Long-term Stated Target Actuals Notes: (1) Note: Reconciliation to the nearest GAAP financial measure can be found in the
Slide 15: Key Customer Metrics
box Key Customer Metrics
Slide 16: Strong customer net retention
Strong customer net retention Stable low full churn rate of 3% Quarterly net retention rate 111% 112% -500 bps YoY 110% 108% 106% Q1'23 Q2'23 Q3'23 Q4'23 Q1'24
Slide 17: Customers increasingly adopting Suites
Customers increasingly adopting Suites Suites support high value use cases and reduce cost and complexity % of total revenue from Suites 46% 47% 40% 42% 37% Q1'23 Q2'23 Q3'23 Q4'23 Q1'24
Slide 18: Large customer growth demonstrates strength of business model
Large customer growth demonstrates strength of business model Steady growth in customers paying more than $100k annually 1,646 1,677 +14% YoY 1,530 1,586 1,472 Q1'23 Q2'23 Q3'23 Q4'23 1'24 Customers >$100k in average contract value
Slide 19: Strong Suites attach rates
Strong Suites attach rates Attach rates demonstrate platform’s enhanced strategic value Suites attach rate of 69%, down 400 bps 90 90% 80 73% 69% 70% 49% 70 50% 60 61 50 30% 40 44 10% 30 35 29 -10% 20 -30% 10 0 -50% Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Number of new Suites deals > $100K Suites attach rate
Slide 20: Appendix
Appendix
Slide 21: Estimated Q2 and fiscal year 2024 preferred share non-GAAP impact summary
Estimated Q2 and fiscal year 2024 preferred share non-GAAP impact summary Q2 FY24 FY24 Amortization of preferred share issuance costs $0.5M $2.1M Preferred stock dividend $3.7M $15.0M Undistributed earnings attributable to preferred $6.0M - $7.0M $29.0M - $30.0M shareholders The preferred stock divi
Slide 22: GAAP Revenue to Billings Reconciliation
GAAP Revenue to Billings Reconciliation ($ in thousands) Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 GAAP revenue $238,432 $246,015 $249,951 $256,476 $251,898 Deferred revenue, end of period 468,350 458,249 467,080 566,630 507,385 Less: Deferred revenue, beginning of period (534,242) (468,350) (458,249) (467
Slide 23: GAAP to Non-GAAP Reconciliation – Gross Margin
GAAP to Non-GAAP Reconciliation – Gross Margin As a % of As a % of As a % of As a % of As a % of ($ in thousands) Q1FY23 revenue Q2FY23 revenue Q3FY23 revenue Q4FY23 revenue Q1FY24 revenue GAAP gross margin $176,223 73.9% $181,172 73.6% $185,461 74.2% $195,462 76.2% $190,247 75.5% Add: Stock-based c
Slide 24: GAAP to Non-GAAP Reconciliation — Operating Expenses
GAAP to Non-GAAP Reconciliation — Operating Expenses As a % of As a % of As a % of As a % of As a % of ($ in thousands) Q1FY23 revenue Q2FY23 revenue Q3FY23 revenue Q4FY23 revenue Q1FY24 revenue GAAP research and development $61,733 26% $61,965 25% $59,107 24% $60,724 24% $62,518 25% Less: Stock-bas
Slide 25: GAAP to Non-GAAP Reconciliation — Operating Expenses
GAAP to Non-GAAP Reconciliation — Operating Expenses As a % of As a % of As a % of ($ in thousands) FY21 revenue FY22 revenue FY23 revenue GAAP research and development $201,262 26% $218,523 25% $243,529 25% Less: Stock-based compensation (61,145) (68,063) (68,900) Less: Restructuring activities - -
Slide 26: GAAP to Non-GAAP Reconciliation — Operating Margin
GAAP to Non-GAAP Reconciliation — Operating Margin As a % of As a % of As a % of As a % of As a % of ($ in thousands) Q1FY23 revenue Q2FY23 revenue Q3FY23 revenue Q4FY23 revenue Q1FY24 revenue GAAP operating margin $624 0.3% $3,140 1.3% $13,366 5.3% $19,710 7.7% $8,335 3.3% Add: Stock-based compensa
Slide 27: GAAP to Non-GAAP Reconciliation — Free Cash Flow
GAAP to Non-GAAP Reconciliation — Free Cash Flow As a % of As a % of As a % of ($ in thousands) FY21 revenue FY22 revenue FY23 revenue GAAP net cash provided by operating activities $196,834 26% $234,818 27% $297,980 30% Less: Purchases of property and equipment, net of (9,052) (4,702) (4,433) proce
Slide 28: GAAP to Non-GAAP Reconciliation — EPS Outlook
GAAP to Non-GAAP Reconciliation — EPS Outlook Three Months Ended Fiscal Year Ended July 31, 2023 January 31, 2024 GAAP net income per share attributable to common stockholders range, diluted $0.01 – $0.02 $0.17 - $0.23 Stock-based compensation 0.35 1.37 Acquired intangible asset amortization 0.01 0.
Slide 29: GAAP to Non-GAAP Reconciliation — Operating Margin Outlook
GAAP to Non-GAAP Reconciliation — Operating Margin Outlook Three Months Ended Fiscal Year Ended July 31, 2023 January 31, 2024 GAAP operating margin 3.0% 5.0% Add: Stock-based compensation 20.5% 19.5% Add: Acquired intangible assets amortization 0.5% 0.5% Add: Expenses related to litigation - 0.5% N