Slide 1: Fourth Fiscal Quarter and FY23 Financial Results
Fourth Fiscal Quarter and FY23 Financial Results March 1, 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 nue u p 10% YoY Re co ns t a nt currency) (up 15% in $246 $250 $256 $233 $238 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 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 Total RPO up 16% YoY $1,245 $1,071 $1,051 $1,056 $1,005 $510 Long-Term RPO ($M) $416 $411 $406 $385 $735 Short-Term RPO ($M) $655 $620 $640 $649 Q4'22 Q1'23 Q2'23 Q3
Slide 5: Billings and deferred revenue
Billings and deferred revenue Billings up 6%* YoY Deferred revenue up 6%* YoY $567 $534 $357 $468 $458 $467 $338 $258 $235 $172 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Note: $ values are shown in millions. *Reconciliations of billings to revenue, deferred revenue, and contract as
Slide 6: Delivering leverage through gross margin expansion
Delivering leverage through gross margin expansion Non-GAAP gross margin Up 340 bps YoY 75.1% 78.5% Q4'22 Q4'23 • 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 0 b ps Yo Y Up 5 2 26.0% 24.0% 20.8% 20.6% 21.7% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 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 $ 92 $9 $ 462 $ 12 $ 12 $ 403 Q3'23 CFO Shares CAPEX & Cap Other* Q4'23 Repurchased Lease Payments *“Other” primarily consists of RSU taxes, capitalized internal-use software costs and payments of dividend to preferred stockholders,
Slide 9: Share repurchase program
Share repurchase program • In Q4, the Company repurchased 328 thousand shares of Box’s Class A common stock for approximately $9 million. • In FY23, the Company repurchased 10.2 million shares of Box’s Class A common stock for approximately $267 million.
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 Q1’23 Q2’23 Q3’23 Q4’23 Annual Revenue Growth + FCF N/A N/A N/A N/A 26% 33% 37% Margin 18% 15% 12% 10% YoY Revenue Growth 11% 13% 13% 76% 76% 77% 78% Gross Margin 73% 74% 77% 28% 28% 27% 27% S&M as a % of Revenue
Slide 11: Guidance and Outlook
box Guidance and Outlook
Slide 12: Q1 and fiscal year 2024 guidance
Q1 and fiscal year 2024 guidance Q1’24 FY24 Revenue $248M – $250M $1.050B – $1.060B GAAP EPS (4¢) – (3¢) 17¢ – 23¢ Non-GAAP EPS (diluted) 26¢ - 27¢ $1.42 - $1.48 Weighted-average shares, basic 145 million 145 million Weighted-average shares, diluted 154 million 153 million GAAP operating margin Appr
Slide 13: Delivering revenue growth at scale
Delivering revenue growth at scale Offset by FX headwinds Q1 FY24 revenue guidance up 5% YoY1 FY24 revenue guidance up 7% YoY1 (Up 10% YoY in constant currency) (Up 10% in constant currency) $1,050-$1,060 $991 $250 $257 $248-$250 $874 $238 $246 $771 $696 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 FY20 FY21 FY22
Slide 14: Fueling growth and operating leverage
Fueling growth and operating leverage Driving “Rule of” expansion in FY25 Revenue Growth + Free Cash Flow Margin(1) 40-42%(2) 37% 37% 35% 33% 30% 25% 26% FY'21 FY'22 FY'23 FY'24 FY25 Stated Target Actuals Notes: (1) Note: Reconciliation to the nearest GAAP financial measure can be found in the Appen
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% 111% 112% -300 bps YoY 110% 108% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23
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% 40% 42% 35% 37% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23
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 +160 bps YoY 1,530 1,586 1,420 1,472 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 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 72%, up 700 bps Suites attach 90 rate 72% 65% 80 87 83 70 49% 60 61 50 40 30 20 29 10 0 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Number of new Suites deals > $100K
Slide 20: Appendix
Appendix
Slide 21: Estimated Q1 and fiscal year 2024 preferred share non-GAAP impact summary
Estimated Q1 and fiscal year 2024 preferred share non-GAAP impact summary Q1 FY24 FY24 Amortization of preferred share issuance costs $0.5M $2.1M Preferred stock dividend $3.7M $15.0M Undistributed earnings attributable to preferred $5.4M - $6.0M $29.0M - $30.0M shareholders The preferred stock divi
Slide 22: GAAP Revenue to Billings Reconciliation
GAAP Revenue to Billings Reconciliation ($ in thousands) Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 GAAP revenue $233,361 $238,432 $246,015 $249,951 $256,476 Deferred revenue, end of period 534,242 468,350 458,249 467,080 566,630 Less: Deferred revenue, beginning of period (429,664) (534,242) (468,350) (458
Slide 23: GAAP to Non-GAAP Reconciliation – Gross Margin
GAAP to Non-GAAP Reconciliation – Gross Margin As a % of As a % of As a % of As a % of As a % of ($ in thousands) Q4FY22 revenue Q1FY23 revenue Q2FY23 revenue Q3FY23 revenue Q4FY23 revenue GAAP gross margin $168,681 72.3% $176,223 73.9% $181,172 73.6% $185,461 74.2% $195,462 76.2% Add: Stock-based c
Slide 24: GAAP to Non-GAAP Reconciliation — Operating Expenses
GAAP to Non-GAAP Reconciliation — Operating Expenses As a % of As a % of As a % of As a % of As a % of ($ in thousands) Q4FY22 revenue Q1FY23 revenue Q2FY23 revenue Q3FY23 revenue Q4FY23 revenue GAAP research and development $59,105 25% $61,733 26% $61,965 25% $59,107 24% $60,724 24% Less: Stock-bas
Slide 25: GAAP to Non-GAAP Reconciliation — Operating Expenses
GAAP to Non-GAAP Reconciliation — Operating Expenses As a % of As a % of As a % of ($ in thousands) 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) Q4FY22 revenue Q1FY23 revenue Q2FY23 revenue Q3FY23 revenue Q4FY23 revenue GAAP operating margin ($166) (0.1%) $624 0.3% $3,140 1.3% $13,366 5.3% $19,710 7.7% Add: Stock-based compen
Slide 27: GAAP to Non-GAAP Reconciliation — Free Cash Flow
GAAP to Non-GAAP Reconciliation — Free Cash Flow As a % of As a % of As a % of ($ 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 April 30, 2023 January 31, 2024 GAAP net (loss) income per share attributable to common stockholders range ($0.04 – $0.03) $0.17 - $0.23 Stock-based compensation 0.33 1.41 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 April 30, 2023 January 31, 2024 GAAP operating margin 0.5% 4.5% Add: Stock-based compensation 19.5% 19.5% Add: Acquired intangible assets amortization 0.5% 0.5% Add: Expenses related to litigation 0.5% 0.