BOX - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Box, Inc. Fourth Quarter Fiscal 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today's recorded. [Operator Instructions] [Operator

now I today, the conference you. Alice to over hand Head ma’am. would ahead, Investor Please like of to go Thank Relations. Lopatto, your speaker

Alice Lopatto

Good afternoon quarter XXXX conference earnings Box's and fiscal call. welcome and to fourth

the we Levie, have On our Smith, Dylan and call CFO. today, our Aaron CEO;

for call website and will webcast Following remarks, our being Relations we prepared Investor be will replay available is at our take www.box.com/investors. questions. Today's on also

audio-only. be will webcast Our

now download for are website. our of post call also slides handle at We'll supplemental However, available today's from highlights @boxincir. the on the Twitter

On margins, periods, revenue and XXXX forward-looking planned products, future growth long-term operating financial making timing partnerships. maintaining and adoption flow, market our and this margins, fiscal to products, our statements, achieve targets other profitability positive revenue FY our and our our QX for expectations from of regarding benefits markets our and obligations, timing operating pricing and performance will size, call, our and our and unrecognized guidance market growth operating we of leverage, financial future including our and investments expectations our remaining ability and be model our performance cash our free expected strategies, regarding new and and XXXX

being as XXXX actual results cease to risks and forward-looking of risk recent results the on today, our including our differ or and disclaim materially. that Commission, them based statements up-to-date. to change to quarterly the to in on or statements obligation and they XX-Q, update press any Securities judgment we report cause These XXth, actual for file best with release events to or may Exchange These us Please should reflect may Form factors documents most information be on currently and February and differ known materially. made the we revise are refer factors uncertainties

financial from in measures. should These addition will as or discuss results. considered during GAAP in not call, today's non-GAAP to isolation be measures our non-GAAP for addition, In we financial substitute a

find our be can Unless and Relations earnings measures, non-GAAP to on these PowerPoint can our page financial a which the reconciliations are references on results, release in GAAP of in Investor otherwise indicated You regarding with the presentation, additional found comparable non-GAAP basis. related disclosures press including all measures website.

me it hand With to let that, Aaron. over

Aaron Levie

thanks the today. Thanks, And everyone Alice. for joining call

the most security growth. Box Box in major enhancements other we management these content cloud-content deliver we share year XXXX platform as deployed out year, in leading two we we as products workflow In Shield, Before into our and and advanced launched the powerful the I’d the profitable for a needs critical our of driving platform what business go and first to efficient customers to nearly XXX,XXX was native and thoughts a enabled us platform solution a fully the more the us quarterly year broad as have market. FY address Overall, XXXX. Relay accomplished to our about multi-product well technology of results, building like few in FY XXXs our

same portfolio with bundled single more the integration operations. toward through leverage the more a profitability meaningful we our experience to package customers our our driving enable bring full Adobe, and time, launched many and focus made of capabilities year expanded in With in to progress comprehensive the power product together in IBM, our more across others Suites Box. place, partnerships advanced a Enterprise and Google Splunk, we to efficiency At we our Microsoft, and

of them starting approach meaningful to balance the to more changes improve performance order profitability. a and drive impact our between our in to we FY areas to our efficiency are and we expect have XXXX to on call, mentioned positive beyond. a and greater stringent our Overall, all growth to yield financial last results, earnings based As in implemented business have ROI significantly

the to was year-ago up we QX non-GAAP million, Non-GAAP the our switching the first high-end versus also EPS negative fiscal above million, of the $X.XX guidance. of Now, $X.XX of was to positive non-GAAP of results a from profitability achieve year-over-year. XXXX full-year high-end and $XXX.X $X.XX to on year-ago. quarter. our was up above revenue XX% QX, Billings a EPS commitments with in $X.XX year-over-year our and XX% guidance delivered In our in year compared $XXX.X

wins delivered U.S. We expansions in including QX, with and customers XXXXs of

House versus include Japan ago, XX versus year at closed And year and more. one XX% plus ATB greater $X over Media year-ago, a XXX least versus Financial, deals our product. Bank, $XXX,XXX Vice in Macquarie We XX deals and XX a a the two ago. deals four many Service, million deals $XXX,XXX than of more [indiscernible] $XXX,XXX Forest than add-on over

year-over-year XX% to delivered we're at is history. its for exceeding record also continue customers thrilled expectations Enterprise making in We and Shield product Box rollout add-on that point growth. new other bookings our growing add-on faster successful in to our existing product to a share this the adopt be Box. than power of and already And over in Further, any of our full Suites easier it quarter

their a and Suite will contract add they plus Through has multinational technology since core been QX deal. XXXX Box company in expansion, this with Relay, The will these extend $XXX,XXX For a renewed sensitive Box bolster their most Box instance. IT Shield example, customer who their applications to deployment and add-on further infrastructure. entire Box their information products integrate and platform licenses of of security and

Relay Governance, technology services financial and paperless, in And of its experience that to employees risk, information figure and a engaging Shield. purchased including client use completely efficiency, leveraging in Box operational the Platform A deal an and create for finally Platform an deal clients six becoming for Box by organization collaborate agents extend purchased digital improve suite XXX by figure and entire Box costs international manage its will North countries. to six reduce enterprise in the portal to core company a Box Suite American company

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market content Content We cloud. proved the driving position to and collaboration growing cyber on is XXs these the the trends every after. And to spent deployed only the serve we're we're content And challenges of exponentially, being significant digital go enterprise and it billions time. management, moves apps are threats best in size going year the is after remain transformation to dollars more accelerating. are move enterprises and excited security going cloud compliance the better by overcome. of as and security around Collaboration becoming across Every employees. to difficult customers over enterprise more to is through of

And disrupt the approach And to of managing, securing, innovation how pace enterprises as governing, and basic only solve content. platform is can with truly only with. we Legacy are longer that content dealing the tools The storing increasing can We're our companies work building their works. sharing on scale. that driving file problems workflows no

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Zoom and to without Slack, collaboration for now allows users provide layer Also files management We in single video on enabling leave new easy for applications with to and QX, for Zoom the power content G Suite Box partnership integration name iWork to few. share more Microsoft Apple's just secure Office our The to having X,XXX Zoom and secure we Zoom all collaboration. a easily a Teams, content including expanded content XXX, than Box App.

in month security such Shield and integration in can using this as at the benefits threats, Box new teams Splunk exfiltration, investigate data launched several BoxWorks, we ability security with and new leverage behavior. earlier insider integration monitoring cloud-based first Splunk’s Finally, a to now announced of anomalous incidents Shield the the Splunk Shield

innovation will build-out innovation collaboration solutions, Throughout by expanding compliance XXXX, more FY our that continuing at the year and workflow the significant product applications world API's. and security with increasingly need organizations best-in-class risks, sophisticated setting against thrilled and XXXX a in a we together to banner stack well that We're our leading saw offerings intelligent defend works security into to delivery embed FY staff our up capabilities To delivering we're expanding for XXXX delivering. be be what and is with and platform FY Box. we is and

growth at October, Now, on a ahead scale. profitability laid we are as looking balance XXXX, in we FY out of as Day in focused we to driving Investor greater

the targeting For of revenue a cash growth XX%. flow of least full-year, margin at free we’re and combination

to greater we on our and drive growth, achieve execute to consistent will efficiency strategy profitability. achieving more To and drive committed have and go-to-market motion. to and this implemented We’re growth already in several drive goal our revenue initiatives efficient continue multi-product

markets of and new by in well focus to efficiently one growing driving our seat We’re to adoption on as largest SaaS going growth. drive expansion for the acquisition accounts in is product strategy markets after key existing continuing as and logo

billions of by our revenue within products. base and Just have selling opportunity today, we seats customer more

to to to the have customers products, performing months, regions continuing segments suites past further renewals, across compensation in are and scale, productivity incentives sales go-to-market including and and the segments for better optimize higher in drive shifted investments by lower to business. We from productivity selling aligning higher and our levels expanding add-on higher drive motion few we

profitability. Next to drive greater

in call, initiatives. key discussed we focused we’re As last on our three

workforce our by optimizing headcount First location expenses is strategy. further investments and optimizing

see XX% based efficient free growth will greater cash opportunity to FY efforts on improving to in more margins taking cloud efficiency, these FY three even least is And on our ahead at of across shortly. is infrastructure drive We're third all to executing public Second, XXXX. our flow areas of areas detail combination more and more cost including these business. the an ROI at in discipline greater provide XXXX XX% of already least spend, we of Dylan utilization revenue margin improving and and gross all approach strategy the platform. across through

key where a collaborative work. and employees the dedicated open, to the maintaining can to board and the you and a inclusive an to on share of first culture want Together at we've leadership evolution. I team our Box, cultivating this with be our our Box community, with take and conclude, an best I environment progress building and unparalleled moment amazing their continues made talent Before in foremost the Box Boxers driver have do of been to is

second the as one to XXX in for work. recognized were places we year a week, Magazine's last Top Just of Fortune row

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While more major on significantly to drive there's near-term our and healthy delivering are more forward. achieve to going long-term focused we growth foundation work year be the in made this business to profitability tremendous done, past progress in We've rates laying and

to milestones for it over hand I'll that, With FY XXXX. Dylan.

Dylan Smith

the cloud Thanks, content fourth and quarter, line you to continue And joining of for guidance. today. us In the our exceeding for momentum Aaron. demonstrate afternoon we everyone. our management ranges strategy top bottom thank in high-end Good

delivered full-year our the XXXX, first FY profitability. of on of For generate to our non-GAAP commitment we year

our of to As growth this committed remain plus non-GAAP operating cash delivering FY X% from we X% up at we mentioned and flow in significantly revenue achieving XX% Aaron target margin combined XX% plan our to FY versus profitability least to margin. of of in In free XXXX. improve X% particular, year XXXX, prior

and three operating As FY on accomplish drive we margin discipline in year profitability expect QX we To throughout the in continue we key to low-teens. the areas. focus will XXXX, cost with continue leverage to this, exit improvements to

our expenses lower headcount more non-strategic in workforce First, geographies, or lower and performing reducing locations. in we’re productive cost by optimizing roles, eliminating hiring

the end As result, at we had QX. exited with a XX employees QX fewer of than we

track improving we've We're our in we're and our key reduce coming structure. center the optimizing the deliver data majority on months by renegotiated now migration us, our with margin duplicative contracts cloud our costs complete behind public other cost of to Second, data gross service. center costs to footprint to also

working Finally, that R&D several drive our our to customers. in service is organization further on projects efficiencies delivering

based ROI business the by discipline more to approach a across take cost continuing driving we're to all Third, rigorous spending.

to For example, leveraging systems reducing automation our and events, drive T&E programs marketing we consulting and rationalizing scale. efficiencies and as streamlining outside we've been our spend,

above quarterly results. of in came revenue. on now United high-end QX, move regions accounts XX% delivered continued in the our of up than XX% million for to revenue strength QX of Let's revenue of our outside We Japan, of and our the by now States, XX% which from more year-over-year global $XXX.X driven guidance,

represents Our deferred This future as revenue QX periods. we that offset at non-cancelable remaining consists or revenue year-over-year. with contracts up performance to in XX% of RPO obligations RPO We and by contract assets. ended recognize metric $XXX.X million, backlog expect

recognize of next the this expect XX% We approximately XX over to RPO months.

$XX that FY quarter this would in normally billed footprint additional in fees. decided renewals Box million purchasing and have QX, of expansion in XXXX. and $XXX.X for would growth year-over-year. drove a early calculated representing and XXXX. been XX% by QX originally of we to QX, QX roughly billings FY QX duration Even customers renew Fourth In achieved came impact handful These large billings expand products quarter adjusting to billings growth at their in million for billings in XX% any additional adjusted our have set strongest in of

For renewals, with line of mentioned XXXX, FY the growth. adjusting in early revenue the after track expect to for growth billings full-year previously roughly we

in we're Box As introductions driven increasing seeing and customers momentum Management Shield Suites. of Box our Cloud mentioned, Content by Aaron recent the adopting portfolio Relay,

revenue. add-on We're XX% product improvement XX% products a up seeing closed up deals. in In deals our also XXX closing recurring in XX% add-on $XXX,XXX year-on-year were than large XX of continued bookings total more Total QX, worth we representing more year-over-year. now QX with than year-ago versus

versus a $X $XXX,XXX Additionally, four we versus deals year two over and over closed deals XX year-ago, XX ago. million

improvement in gross versus an margin margins, to year-ago, from XX.X% margin XX.X% Turning our of gross QX at a non-GAAP came XX.X%.

costs data throughout duplicative the previously, supported temporary migration regions FY centers. data As of XXXX, as footprint cost mentioned involve more we higher lower our to center scalable, we

QX of gross to FY expect expect in range and line QX margin of margin gross to XX%. we We roughly XX% be with in XXXX FY to be the XXXX

this future As data expect from at we've discussed, center other we we footprint upward benefit optimizations by in XXXX. to landing the our roughly consolidate years, trend FY and XX% continue

higher year-over-year at selling while regions, roles absolute with low generating decreased on points more already continue of revenue. initiatives. quarter in of quarter scale revenue we our XX% QX we we marketing combination the reductions broader product marketing offerings successful business will and million to leverage as expenses was and another $XX.X In execution focus and expected and driving of cost down we in the driving were by in performing across the prior-year. XX% a in from headcount and productivity XXXX, focus on percentage In of Sales dollars, non-strategic customers. year, efficiency our to consistent representing least expenses achieving made six leverage sales in the existing FY as the coming

reps X% the roughly carrying we of next provides against the performing sales quota the growth Note to XXXX year-over-year. reps remain to course FY flat targets. us sales deliver capacity sufficient our headcount greater quota expect with We're sales over with regions. high these that of entering in FY carrying proportion up XXXX This with year

we gross as Content continued executing revenue Relay. features FY efficiency last projects the were our while to capabilities to these expenses further and Box of improve on Research or software XXXX, Box platform of we million and continue offerings, year, and In including enhance our margin. significantly to will from differentiate XX% up also product Management Cloud products our Shield XX% development $XX.X enhanced development

R&D expect we XXXX, FY in such As

year-over-year percentage flat to a of roughly revenue. remain as

million, and of Our from year-ago. administrative $XX.X reduction were a one of or percentage costs point XX% revenue, general a

scale. G&A We operating expect discipline we to in drive in through greater continued leverage automation as

FY For as a roughly decrease percentage of one point. to G&A expect percentage XXXX, we revenue by spending

year-ago. Total represented XX% XX% a expenses QX revenue compared to operating of

with high-end at in discussed bottom above underway, QX up calculations $X,XXX, less gross QX currently margin, churn already X% temporary $X.XX and full margin which These X% results XXXX. with stable in and operating improvement XXX% Non-GAAP the paying revenue. drive customers EPS cost our us were an rate our than versus despite was our Aaron show FY discipline retention the basis The point QX, to initiatives are year-ago. will from at quarter. a I annualized on In at more year-ago of year-over-year X% two came in able percentage to X% last our XXX%, who $X.XX roughly in represent ended So that compared recurring XX% of versus guidance. down net line reduction exclude non-GAAP of we our fully throughout coming a we QX, rate an annualized well

net Going year-over-year forward, calculations, customers be which be we both will all of churn and including in our will retention measures.

on Given our of new large start revenue provide $X,XXX to sub view will customers overall go-to-market expand time. a significantly deployments growth. This and with how motion, focus methodology more driving contribute and over increased we're an expand enterprise customers land seeing efficient our existing comprehensive

methodology, XXX%. churn retention over and net QX new QX rate annualized full basis, our on was our this Under just an still was in X%

rate single once With As in users. We uptake we we strong XX.X beginning products. our customer respect to of our in on again in per price see we expect add-on the of the saw an year-over-year last reflecting a in QX customer paid an to have the seat we pricing large now year, improvement trends, year. basis of first million impact the saw quarter reduction, our lap this of net improvement retention

the to by cash. compared public $XX.X ended last quarter in we operations Let and with our $XX.X cash the call, to Cash February was that elevated on a that in customer our was from in This migration. year-ago. sheet in which balance QX restricted impacted ultimately we had earnings QX on payments to provider we prepayment a and closed cash payments $XXX.X move million cash, me with expected equivalents associated flow million We now lease to mentioned cloud million and flow. data collect center capital our

to Collectively, impact. these three $XX factors roughly million amounted

As $X.X compared $XX.X data year-ago. million flow were essentially year-ago. fourth we $XX.X in CapEx a to a which million equipment CapEx free year-ago, was to factor positive payments lease of the were total Combined flow $X.X zero was invested lease migration a project. cash center In into quarter million Capital versus QX, million our our and a million capital free cash versus $X.X as related in calculation revenue. X% we payments result,

expect We and QX be for of to XXXX. roughly capital revenue of of payments CapEx X% X% in and to lease revenue full-year the X% combined FY

guidance. let's With turn to that, now our

full-year we be expect growth. the to million For million, of $XXX to fiscal the in XX% to XX% range of revenue representing year-over-year $XXX XXXX, approximately

the in We on to expect non-GAAP diluted our be XXX EPS shares. FY of $X.XX million range XXXX $X.XX to approximately

negative expected EPS the Our in to approximately GAAP is XXX negative be shares. million $X.XX to range on $X.XX of

of representing revenue million the we of quarter XX% approximately in to XXXX, $XXX fiscal $XXX million year-over-year setting first range guidance For growth. the are to XX%

to be million the on XXX negative We to $X.XX XXX of $X.XX and $X.XX shares and expect EPS non-GAAP in to our range of EPS GAAP our approximately in negative $X.XX the million range respectively. be for to

XXXX. portfolio our growth committed flow we're optimizing In motions least continue the combination free building to plan FY to our Cloud Content questions. further leadership pleased cash XX% With profitable years at drive long-term. in in the for to in the confident year product summary, to progress growth, least building achieving made would on sets FY and Operator? to as XXXX in come this at go-to-market our we revenue that it while for and drive more margin that, improvements and year's Management position out with stage the past plus of the predictable we I up this open like profitability We're we're XX%

Operator

from from Fargo. Your the of Wells [Operator Winslow Instructions] line comes Phil question first

open. is line Your

Rich Hilliker

a finish guys, strong Hi for is the on Congrats this year. Rich on Hilliker to Phil.

one Aaron. Dylan and one Just a quick for for

on Day and XXXX this for contributions XX% So so flow your to a call, of guided of, mentioned equal would free plus guidance revenue cash a kind to a little guidance. guess you expected. first it you before down Dylan, we're you XXXX Analyst guidance slight and see revenue guys few regarding margin, attributed because XXXX fiscal growth of fiscal was slight I times with better implies tick prudence the XXXX that a fiscal to a downtick bit was there. We And then noticed from it from while than that glad combined

I we understand end to of what question kind deferred despite help drove Analyst as Kind us strong of could Day. So if you year. posed curious this guess and the revenue the billings change same at

you your guess I onto possibility curious table, also increased still and the well, thanks. guidance margin to that whether given on So reacceleration as add operating the for just that

Dylan Smith

Sure.

in our exceed. guidance a we What margin margin growth as are and profitability we're balance the haven't cash of revenue between well don't margin. with how revenue to meet we changed. laid flow and So our we free provide guidance, consistent the high-end free at XX% deliver flow overall growth we both of as way commitment that ranges of combination that Day and to operating cash And guidance Analyst expect set or terms dynamic and out the the in commitment that about that thinking

note things cash our And growth, in as dynamic healthy flow than focused broader points I margin performing go-to-market of operating few invest impact coming see really due to offerings. types customer our that we have we existing billings difference sale margin combined And and more have within confidence rate. free product we that normalized give very that growth the revenue. That cash lower in our growth the growth now execution, the with flow is from consistent typically from a rates regions. lot performing of And the kind fairly to higher of focus percentage expect largely and a of resources the of have And we rate stabilizing base, more this also of annual cash regions driving expansion our overall especially are in on should efficient we the our between us higher terms a maintaining year, to which future seeing on type on in overall focused well. and reallocated are driving

Rich Hilliker

for had and talk saw that's from particularly adoption release, about Thanks. more you great, press Aaron a about on call some guys suite strong the bit just adoption business to about here. talked and record Enterprise little little you on could close helpful and Okay, to if the adoption products was Relay? then was a up one you add-on wondering maybe I talked impact how Suite and In you even bit or Shield, Shield’s Shield’s impact on suite impact, relative suites the

Aaron Levie

you thank the question. Yes, for

the you every can't that definitely is is challenges that happens of architecture a in industry changes, security. And really bolt-on for yourself adoption, completely have kind So of product you catalysts Shield your securing is data that center. content to technologies one one because as cloud that primarily it's you from of on-premises fundamentally Suite move the of an horizontal environment the the manage facing phenomenon core around really security content data key

becomes content. so providers security ensuring of the And responsibility it really your cloud the for

to this that's created opportunity content for innovation deliver Shield obviously that's more what around massive focused is security, us on. So and

sizes customers of share pool after again, all budget very that industries. that in across the broadening that's all so wallet we in within is probably go customers And and horizontal working can the way

obviously point momentum into and there's lot think around only the built-up coming QX is, then of I So a maybe Shield. other

of is. a that the lot as drivers deeper Shield of then customers. your happy workflow very probably us lot is with that the driving get So catalyst it's Shield into performance Suite that use point the to as a Relay, of that of far, driving fantastic cases one quantifiable of we're it is, to thus and a Suite less Relay second But our adoption was big the on

asset and what important it HR business is to approval, imagine review approvals, Box make So into whether embed onboarding, and you so really document onboarding, that's it which excited much digital over will is customer can far processes their about. deeply stickier more how time, we're ultimately

Operator

your question of Kidron next Ittai the comes open. Your is line from from line Oppenheimer,

Ittai Kidron

Thanks.

a it this and ask guys killed and the for especially of all context adoption see sell us the mandate Shield path really here. you that for the on is dividends. XXXK Aaron, understand Dylan many more You sales to sales? on in long, for you did deals? want the that hard mandated more Congrats Relay Can tell Ittai my Suite quarter help initiatives and great the about deals. on or maybe them I finally work on Suite what the walk Is then try you focused and so XXX, to Ittai, the pay great are first, some long, through name, to Suites to push the how of are

Aaron Levie

Thanks Ittai.

so that sales being add-on still are some to with selling what that doing more we're that there and doesn't they we is very of So make part customer best in differentiation on selling sure motion our versus Suites Suite reps particularly products the organically, efficient their want journey itself toward driving the the it's product where strategy with our Box, that differentiated being differentiate our add-on incentives of and again have add-on compensation interest first toward the Suites of seeing when the we question, are push in we’re our we're product because sales is said, because that growth. vastly

driving quarter. Salesforce seeing we thousands So into have those obviously entering It a that sales of increase have to But of we're motion uptick across our near-term. sure that just this the into our that the because we're each programs is part transactions additional adoption really that going across conversations. the customers And seeing is still overall, will early have only plenty make of Salesforce. and with we evolving we're an we're happy in we that of

Operator

the from line apologies your JPMorgan, Mark Mike is comes line Murphy question my open. of Murphy, from Your next --

Matt Coss

Hi, is Matt good This behalf of afternoon. Coss our Thanks taking on for questions. Mark Murphy.

changes are tracking and you Suites, Aaron, when efficient do towards sales motion vastly goal then you that reps improvement in you'll made that is XX% how reps to are productivity you been just sales other said sales add-on improvement get XX% to taken goals? what feel to products, this So sales incentivizing steps get productivity the sell or addition add, confident that have reps selling have more your to

Aaron Levie

pretty of of obviously we pricing certainly versus have average that at value a big build sell considerably. evolutions the kind able productivity reps area on sure drives higher packaging levers and handful and contract rates are so that That that our this. Yes, focus to making a

are So of that's that Suites were plus only question, really quarter do the those really seeing first deals, population about a growing Suites out there. Suites Ittai’s where $XXX, and we prior $X,XXX include to obviously,

with going to percentage. So a growing and that's, Shield so be that's

of is sales the first and expand we on how and reps sales do single cross is land motion, greater we've the are average the on of into repeatable is our of I the our motion on talked segments focus participating And bunch, upsells, So every management as single third second mix productivity business consistent driving think the as quarter we into shifting really do then see investment sells performance a that about where improvements significant that around more enablement performance on products the of of more base. customer and of dynamic driving just rep. every where get ACV higher and productivity month a increases, well a

call the moving see Day. of combination rates of Analyst productivity previously. dramatic addressable go didn't are drive call XX% that still those know reach we the into But we that dollars improvement, have segments, that that more in our that again so market so can productivity high and levers and we segment that that those And various we where and we in in I those

Matt Coss

Great. like RPO. that in was In QX. saw? addition reason any better sequential lot than is renewals the it early this then And behind a in to growth short-term it QX our you last there that Is looks the in

Aaron Levie

deals new customers normalized we we pleased renewals, benefit large well. we including had then RPO levels did up on But with had as more the contracts No, higher customer helps QX, expansion noted recovered as forth that, RPO which volume longer payments. volume a not we had quarter, necessarily the coming overall that expected, a as set executed to we successfully saw the top and multi-year which of and of a of expectation see those in pretty on and

Matt Coss

you. Thank

Operator

Your next Morgan the question line from Melissa of Stanley. from comes Franchi

open. line is Your

Melissa Franchi

Relay since I dig wondering Box of my you're out thanks any change and last version if into wanted question. meaningful Great, in Relay adoption came Box new, to updated a taking seeing just year? with all for you

Aaron Levie

Melissa. thanks Yes,

So bundle in part our definitely included pretty in we now Also, are uptick. Suite because seeing driving. healthy that it's a

So and Relay. that can ways getting you're multiple just go customers adopt

hands customers that the exceeding the able are of use more that document in types just QX either use And so to it's of drive in expectations. they're are are content process, a year. business We’ve at through of than that it have or other breadth cases workflows about email legacy the a with process. system, tools a where part cases end have customers from of satisfied paper of really vastly a or be of management legacy to they probably was based moving our process been the or really QX even The now last really, year, using

able or by type And any get customer, onboard you at so kind of contracts this you need be signed a when have need any can to to before client bank, when type be of any documentation process. asset digital new from a they to anything review of to a

as that we're our a base possible. cases. broad across Relay use customer So made easily seeing set adopted of horizontally And be can really we've as sure entire

for more price that and purchasing and going turn it's customers the entire once So see end-up which for we're organic on it to it their more organization. means use, to adoption company

it definitely which much was about goal us delivered let had, more So user on a experience. would we it that core solution that workflow rapidly into native and happy has Relay, the our that make having the sure was on embedded very innovate product

time, really also So as that that been, used process collaboration over just to been file out, is proven that to thesis more being have embedding strategy part for around opposed or into has sharing. important which business our

Melissa Franchi

one you terms comment what wondering Okay, if for a Dylan. of you're And then seeing can ASP. the thanks for quick color. on I'm in

the if are like-to-like a So it Suite product about ASP to of some on in see trends? basis. you early adoption. just starting core we're sounds thinking you're seeing What like terms But

Dylan Smith

been a we seen impact driven customers. we mentioned mentioned, as that did as being by see that the now and consistent even Suites primarily so for seat more that's is trend per Yes, we've price regularly more by now than adopted being our year. a year-on-year ASP and products have improving That add-on now or of more so,

uptick a a over core bit from time. well as price, an little seat of seeing We’re

from impact been these maintain the we capture offering, as value even able of we've to deals products. add-on and larger upside the the the So of sell core the

Melissa Franchi

That's much. great. Thank you very

Operator

the Raymond line comes next Your Brian question Peterson James. from of from

line open. Your is

Brian Peterson

number Thank really you, but just on you, maybe quarter for billings one gentlemen, and Aaron. a this congrats

R&D seen the already the curious, since today? broad a So is just really cadence the of going you've launched that lot the what platform IPO. going where announced I'm of focused to side, Or we products portfolio maybe on should the expect we're is of on forward? products new enough we've to be improvements what to

Aaron Levie

Yes, Brian. thanks

I think that's spot on.

had probably security. coincidental five focused started four your rigorous of company timeframe, year, workflow advanced just in add-on out the or with way. we Module, expanded Then past just IPO little time collaboration model. methodical, Governance Keysafe and has And a product platform like Security years, increase I We the Advanced on then broadened is file expanded Shield for in really a before and and things the think portfolio kind dramatic been a a with then the permissions first our product really and enterprises, this skills. then post-IPO purely have launched which around So obviously as tool of with our real now Data we the we bit sharing secure pretty or really right with our and our

at customers of use cloud the I to breadth have of extend retire be you use their now be to network the Box shares to hearing systems. think we able with move cases major or we're of kind legacy, cases help file content boxes capabilities, in management document to more terms to that checked from when maybe that look able to power

core is going much been. Really a obviously it's than platform it at it's now like within the ever better in And So deep moment. we about state the areas. these product feel

sell in workflow you're going to three been new categories customer or to that going pillars, this those of and deep the want cadence, to more say and of make it's each in on with of solve governance. now customers what security the in in sure can much a opposed for or deeper products, of skews, challenges innovation at see collaboration command security would we in point, have compliance plenty and think workflow to add-on maybe I I lot that same actually to we from in each about as So we've value is our But platform. do data those go we

so go And on see And appropriate lines to when expand in think sense, in as portfolio categories enter adjacent then us into I our space. you're these one either to the we to into core us another there's a basis think possibly it for opportunity going makes we or when think a big areas. add of of product regular course, deep continue more

a super in lot our majority So, that's we've about launched level and products. these deep really customer a but that lot the that's, innovation, pillars going a of under base of the now so getting high

Brian Peterson

how installed add-on focusing a thanks and contract could Understood, there that they that you. contract we see on fiscal significant selling the when any maybe change, see does a Dylan, And about Thank on impact date base in Aaron. really the beyond? trying coterminous, into as to does be work that perspective, about think to expanding, XXXX if just billings year from does become we as think

Dylan Smith

Yes, sure.

the sales and a magnitude sale contract of that renewal and times So what lot relative of the customer Suites particular. many a in saw that's cases, Shield doesn't to kind of when date. which by especially we're in in and a change exactly it we QX, sometimes is depends percent on the in that is become expansion expansion, of the dynamic coterminous contract that But the in the lot seeing then before will was And the will driven with that we or bring from reset often or market the situation and the particular a that larger date. paying pool

out that we in renew of So expanding QX set QX. billings called from that drove had who been customers million in to those $XX we additional example,

XXXX. them dates new with what end-up would their quarter of renewal FY in XXXX in them QX, So have twice contract those and for a billing been in cases, in we would did billing be a effectively billed early, FY new QX then

see situation. volumes pretty in in here. we on So consistent And the depends have execution short, if especially shouldn't it It

But a variability overall of run just billings is it the growth that to into an from much to could certainly rate too your will point a embedded we've of basis. impact be of business create the overall little rate bit as seen. quarter-to-quarter

Brian Peterson

thanks Dylan. it, Got

Operator

Capital from next from line Knoblauch Your question of Brett comes Markets. Berenberg the

Your line is open.

Brett Knoblauch

my taking couple a questions, for thanks me. for guys, Hi,

like you there XX% and your on closer is guys that first change step-up of percentage meaningful that's is in relatively revenue is your guess guidance The XXXX, comp driving stock-based to guide incentives any I around as a seems guide? FY for a have in comp large stock-based been XX% hovering really

Dylan Smith

of in would stock-based a been terms hasn't control front change No, expect over comp. leading what's we trend into while mindful have the that of say so and lead burn dilution would we there to on wouldn't, And down both in very overall rates factors that that, the stock-based don't all comp to and been that steadily that time.

Brett Knoblauch

thinking factored maybe a is there just or quarter. also into international your And like international guidance you. you And thank then Japan kind as in referenced the standout, Coronavirus Okay, maybe how strong about any that? you're seems from of was

Dylan Smith

we So, at haven't in customers. seen conversations impact with the an our moment,

So again showing anecdotally purely it's not yet up.

not guidance what it in no to obviously certainly and The sector. and We’re in have carefully. rest I mode this of but that now think believe obviously the like is right is that moment in watching risk reason at and factoring a see mode we're we providing see the watch very IT but watch the could we're happen,

Brett Knoblauch

you Thank All perfect. right, guys.

Operator

Rishi line question from from of D.A. Jaluria Your next Davidson. comes the

open. Your line is

Rishi Jaluria

board. see I've to Nice for questions. my questions quarter two taking for across solid got thanks pretty guys, Hey, you. Dylan, the

maybe just First, the on the prior I little to want follow-up bit on on question that. and stock-comp

to in given us about mean, feel in XXXX, to comp XX% ticking gives FY cash going guess that time then come from a right follow-up? potentially XXXX, to to then cash down I of of over little you’re has mean, tells to dilution bring headwind I’ve got a happen of some to your actually to X.X% up shift I if rate, you SBC that about free and growth create margins say going of that your will flow what levels down stock revenue. that comp guidance XX% revenue, your high is I does So and dilution stock-comp does this X.X% if SBC, FY the confidence

Dylan Smith

that comp, overall a we Sure, the trajectory optimizing cash intentionally drives over kind maps other say so to coming workforce and and to hiring what from set the to strategy overall more in for expectations that of we very and we’ve out certainly that that to the budgets would called earlier. our rather that, on trends overall on the I our was comp the dilution come expenses down the it's directly some confidence of there related make stock-based control necessarily not shift future into note but time, from a that is equity

lever pulling of where the of tend increasingly outside in tend have we've because certainly areas example, roles And those those for is those places and headcount then equity that location, folks dilution of comp. doing we're also in meeting part impact Area, requirements and to about overall in just Bay a we're managing then market overall talked is of amount that locations. and the So to those lower that everything growth higher around stock-based the will as the

the of company combination the doing grow the really it's where overall we'll to way as so. we well that expect So as be

Rishi Jaluria

in revenue. references your of lot if your is services you is just business I'm piece Thanks. business percent recognize a do that you made your of and And you helpful. services fix, then prepared big of professional do recurring non-recurring minus how Okay, from sizing remarks, remind the to as us not ratably? that you Can a great, all that's just mistaken,

Dylan Smith

revenue? Sorry, you clarify the asking services of you’re professional line about item

Rishi Jaluria

much is just And non-premier I'm that, So, your that revenue directionally. is professional does services? is how the asking implies non-recurring of that what

Dylan Smith

yes. Sure,

is all that that a that on exactly to. that margins XX% So been which revenue. X% business carry of at about is note, virtually of running noted to you what has just services. tends in XX% applies of it professional is And that that And X% to revenue it

overall our or So a on points kind margins higher. three gross percentage so of margins, that creates relative software which impact to gross are

Rishi Jaluria

you thank much. so Okay,

Operator

Chad comes Craig-Hallum. from Bennett Your from of line the question next

Your open. line is

Chad Bennett

Great. Thanks for taking my questions.

could that So comes implied this at new expansion? you in of some way any upsell from or versus how there is the year, revenue much sell guide give sense of least for us cross net customers

Dylan Smith

Sure.

pipeline. expecting focused We existing we're higher existing go our probably business expect starting currently be we're sell bit bookings And to of ratio what of two-thirds and been we're base. is and of where mentioned to the running portfolio, customer to product XX%, north in see with of that terms because as a now of in the customer historically we've do and base. our in upsell and from little portfolio cross coming new a about So terms broader

Chad Bennett

it. the Got the then at overall paid way base or base And any user to there is look $XX.X million. of

indicated you think I

from a standpoint? product core versus that base the penetration much how single of has just add-on products

Dylan Smith

Sure.

our I than revenue customers. coming at overall is XX% add-on of we we products. those at are given So look least the of say add-on number of that well, one from who haven't And first now that of are is revenue education I would seats or have when purchased using who customers a those one users products, least note more would of one our what at some

becoming is been steadily customers adopted our and more and So paying has pretty of that trajectory increasing and by more users.

Chad Bennett

matter, and then and income expansion Considering profitability cash management color one potential good jump for and for the Got in Op and for the last position maybe on one quick That's Board's flow off. or the stock that what I'll is buyback Thanks. dramatic pretty and it. me. then a

Aaron Levie

Yes, thanks.

we're considering so a again, that definitely in standpoint from is this free table certainly standpoint. value as and business Aaron have more we we from will flow levers Obviously, that compare cash the want on drive that a the a appreciation shareholder be cash to to generation. other topic we shareholder and So, anything

So, will that, remain a about. but this topic that talking be we'll

Chad Bennett

Thank you.

Operator

next First [Operator Kiwala question from the Instructions] line from Analysis. comes Terry Your of

Your line is open.

Terry Kiwala

changes wondering deals I deals any quarter, business my prior-quarters? the in just then about any Was in question. and thanks just prior if if there quarter And on were particular afternoon. length quarter. new of in the the And this the you any to this there perspective taking want comment versus then the I'm could sign executing Good Congratulations a quarters. for ask change close there regions rate versus pipeline? were outperformed. these new impact, in from that Thanks. time regional was for

Aaron Levie

in seen over a had and we good quarters, go-to-market so motion. especially the Yes, progress, our last repeatability couple of driving velocity

So and forecast seeing cycles stabilized last have over accuracy. few quarters, deal and predictability the we're more

So and the as that's trending with pleased way well. that in pretty was QX true

that levels across throughout the performance consistent different the some calling with out seeing been year. still we've but trends pretty various We’re regions

see and So particular you challenges markets. strength see mentioned continue some of emerging to Japan continuing and to our in in in EMEA some as

Dylan Smith

on on the the big had momentum see did and to Australia front. The positive some only also add that part in other we thing I the internal Canada we estimates would deal

Operator

fiscal joining call. earnings further Incorporated's today's you, conference ends XXXX call. everybody questions. no conference fourth are Box, There This Thank quarter for

disconnect. You may now

Box (BOX) 26 Feb 202020 Q4 Earnings call transcript