Slide 1: Third Fiscal Quarter FY23 Financial Results
Third Fiscal Quarter FY23 Financial Results November 30, 2022
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 the size of its market opportunity, sales productivity, its leadership positi
Slide 3: Revenue growth driven by Suites momentum
Revenue growth driven by Suites momentum v e nue up 12% YoY Re $246 $250 $233 $238 $224 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 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 Lengthened contract durations and strategic deals partially offset by FX headwinds RPO up 11% YoY $1,071 $1,051 $1,056 $1,005 $948 $416 $411 $406 $385 Long-Term RPO ($M) $363 $655 $620 $640 $649 $585 Short-Term RPO ($M) Q3'22 Q4'22 Q1'23 Q2'23 Q3'2
Slide 5: Billings and deferred revenue
Billings and deferred revenue Billings up 12%* YoY Deferred revenue up 9%* YoY $338 $534 $468 $458 $467 $258 $430 $231 $235 $172 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 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 Non-GAAP gross margin Up 180 bps YoY 74.7% 76.5% Q3'22 Q3'23 • Benefit from optimizations to reduce infrastructure costs and improve overall efficiencies. Note: A reconciliation of non-GAAP operating margin to the nearest GAAP financial measures can
Slide 7: Delivering significant operating margin improvements
Delivering significant operating margin improvements Operating discipline accelerates margin expansion Non-GAAP operating margin s Yo Y 30 b p 24.0% Up 3 21.7% 20.7% 20.8% 20.6% Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 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 $70 $30 $394 $12 $403 $19 Q2'23 CFO Shares CAPEX & Cap Other* Q3'23 Repurchased Lease Payments *“Other” primarily consists of RSU taxes, effect of exchange rate changes on cash and payments of dividend to preferred stockholders, par
Slide 9: Share repurchase program
Share repurchase program • In Q3, the Company repurchased 1.1 million shares of Box’s Class A common stock for approximately $29 million. • On November 29, 2022, the Board of Directors authorized an expansion of its stock repurchase program by $150 million of Box’s Class A common stock, increasing t
Slide 10: Resilient business model focused on driving growth and profitability
Resilient business model focused on driving growth and profitability FY’20 FY’21 FY’22 Q1’23 Q2’23 Q3’23 Annual Revenue Growth + FCF Margin 13% 26% 33% N/A N/A N/A YoY Revenue Growth 14% 11% 13% 18% 15% 12% Gross Margin 71% 73% 74% 76% 76% 77% S&M as a % of Revenue 40% 30% 28% 28% 28% 27% R&D as a %
Slide 11: Guidance and Outlook
box Guidance and Outlook
Slide 12: Q4 and fiscal year 2023 guidance
Q4 and fiscal year 2023 guidance Q4 FY23 Guidance Revenue $255M – $257M GAAP EPS 6¢ – 7¢ Non-GAAP EPS (diluted) 34¢ - 35¢ Weighted-average shares, basic 144 million Weighted-average shares, diluted 149 million GAAP operating margin Approximately 6.5% Non-GAAP operating margin Approximately 24.5% Fis
Slide 13: Delivering revenue growth at scale
Delivering revenue growth at scale Offset by FX headwinds Q4 FY23 revenue guidance up 10% YoY1 FY23 revenue guidance up 13% YoY1 $990-$992 $246 $250 $255-$257 $874 $233 $238 $224 $771 $696 $608 $506 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 FY18 FY19 FY20 FY21 FY22 FY23 Quarterly Revenue ($M) Annual Reven
Slide 14: Content cloud strategy creates a path to robust long-term growth
Content cloud strategy creates a path to robust long-term growth Committed to delivering multi-year revenue acceleration and operating margin expansion FY20A FY21A FY22A FY231 FY25 (Guidance) Target Revenue Growth + FCF Margin 13% 26% 33% 37% 43-44% Revenue Growth 14% 11% 13% 13% 15-17% Gross Margin
Slide 15: Fueling growth and generating operating leverage
Fueling growth and generating operating leverage Committed to consistent “Rule of” expansion over the next 3 years Revenue Growth + Free Cash Flow Margin(1) 43-44%(2) 40-41% 37% 33% 30% 25% 26% FY21 FY22 FY23 FY23 FY24 FY24 FY25 FY25 Stated Target Actuals Notes: (1) Note: Reconciliation to the neare
Slide 16: Key Customer Metrics
box Key Customer Metrics
Slide 17: Strong customer net retention
Strong customer net retention Driven by low full churn rate of 3% Quarterly net retention rate 111% 111% 112% +100 bps YoY 109% 110% Q3'22 Q4'22 Q1'23 Q2'23 Q3'23
Slide 18: Shift to multi-product solution selling is paying off
Shift to multi-product solution selling is paying off % of total revenue from Suites 42% 40% 35% 37% 31% Q3'22 Q4'22 Q1'23 Q2'23 Q3'23
Slide 19: Shift to multi-product solution selling is paying off
Shift to multi-product solution selling is paying off Attach rates demonstrate platform’s enhanced strategic value Suites attach rate of 73% 90 90% 80 73% 70% Suites attach rate 70 49% 50% 60 61 50 56 30% 40 10% 30 -10% 29 20 -30% 10 0 -50% Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Number of new Suites deals >
Slide 20: Appendix
Appendix
Slide 21: Q4 and fiscal year 2023 preferred share non-GAAP impact summary
Q4 and fiscal year 2023 preferred share non- GAAP impact summary Q4 FY23 FY23 Amortization of preferred share issuance costs $0.5M $2.1M Preferred stock dividend $3.8M $15.0M Undistributed earnings attributable to preferred $5.0M - $6.0M $21.5M - $22.5M shareholders As with FY22, the preferred stock
Slide 22: GAAP Revenue to Billings Reconciliation
GAAP Revenue to Billings Reconciliation ($ in thousands) Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 GAAP revenue $224,044 $233,361 $238,432 $246,015 $249,951 Deferred revenue, end of period 429,664 534,242 468,350 458,249 467,080 Less: Deferred revenue, beginning of period (422,039) (429,664) (534,242) (468
Slide 23: GAAP to Non-GAAP Reconciliation – Gross Margin
GAAP to Non-GAAP Reconciliation – Gross Margin As a % of As a % of As a % of As a % of As a % of ($ in thousands) Q3FY22 revenue Q4FY22 revenue Q1FY23 revenue Q2FY23 revenue Q3FY23 revenue GAAP gross margin $160,975 71.8% $168,681 72.3% $176,223 73.9% $181,172 73.6% $185,461 74.2% Add: Stock-based c
Slide 24: GAAP to Non-GAAP Reconciliation — Operating Expenses
GAAP to Non-GAAP Reconciliation — Operating Expenses As a % of As a % of As a % of As a % of As a % of ($ in thousands) Q3FY22 revenue Q4FY22 revenue Q1FY23 revenue Q2FY23 revenue Q3FY23 revenue GAAP research and development $55,837 25% $59,105 25% $61,733 26% $61,965 25% $59,107 24% Less: Stock-bas
Slide 25: GAAP to Non-GAAP Reconciliation — Operating Expenses
GAAP to Non-GAAP Reconciliation — Operating Expenses As a % of As a % of As a % of ($ in thousands) FY20 revenue FY21 revenue FY22 revenue GAAP research and development $199,750 29% $201,262 26% $218,523 25% Less: Stock-based compensation (62,565) (61,145) (68,063) Less: Restructuring activities (30
Slide 26: GAAP to Non-GAAP Reconciliation — Operating Margin
GAAP to Non-GAAP Reconciliation — Operating Margin As a % of As a % of As a % of As a % of As a % of ($ in thousands) Q3FY22 revenue Q4FY22 revenue Q1FY23 revenue Q2FY23 revenue Q3FY23 revenue GAAP operating margin ($11,087) (4.9%) ($166) (0.1%) $624 0.3% $3,140 1.3% $13,366 5.3% Add: Stock-based co
Slide 27: GAAP to Non-GAAP Reconciliation — Free Cash Flow
GAAP to Non-GAAP Reconciliation — Free Cash Flow As a % of As a % of As a % of ($ in thousands) FY20 revenue FY21 revenue FY22 revenue GAAP net cash provided by operating activities $44,713 6% $196,834 26% $234,818 27% Less: Purchases of property and equipment, net of (5,444) (9,052) (4,702) proceed
Slide 28: GAAP to Non-GAAP Reconciliation — EPS Outlook
GAAP to Non-GAAP Reconciliation — EPS Outlook Three Months Ended Fiscal Year Ended January 31, 2023 January 31, 2023 GAAP net income per share attributable to common stockholders range $0.06 – $0.07 $0.02 - $0.03 Stock-based compensation 0.31 1.29 Acquired intangible asset amortization 0.01 0.04 Exp
Slide 29: GAAP to Non-GAAP Reconciliation — Operating Margin Outlook
GAAP to Non-GAAP Reconciliation — Operating Margin Outlook Three Months Ended Fiscal Year Ended January 31, 2023 January 31, 2023 GAAP operating margin 6.5% 3.0% Add: Stock-based compensation 17.5% 19.0% Add: Acquired intangible assets amortization 0.5% 0.5% Non-GAAP operating margin 24.5% 22.5%