BOX - Earnings call transcript Q2 2022

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Operator

Good day and thank you for standing by and welcome to the Box Inc., Second Quarter Fiscal 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator instructions] I'd now like to hand the conference over to your speaker today, Cynthia Hiponia. Please go ahead.

Cynthia Hiponia

to quarter welcome earnings year and call. conference afternoon Box’s fiscal second XXXX Good Hiponia, Investor Vice Cynthia am I President, Relations.

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

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

are leverage, will regarding the growth our this revenue, XXXX margins, market free Our webcast to be and from of supplemental today’s website. QX we and also our We'll however financial guidance size on obligations margins, our and remaining highlights we Commission, regarding other our in KKR-led call now on of On are based and earnings stock. future press the forward-looking may this products, the recent and and business actual pricing our model Securities materially. from and achieve call. and differ results operating the our new uncertainties These will file made forward-looking unrecognized slides the report These be statements, gross the of of the investments information the to judgment known making on performance including impact long-term performance statements strategies, targets, our risks with operating and XXXX potential XX-Q including Fiscal earnings investment release on handle reflect partnerships, differ risk being and results our expectations best for Form currently planned Box to our to statements our on market acquisitions that product Twitter on at cause most profitability, billings Box annual as the fiscal including our flow, and the our materially timing adoption and repurchase post obligation our or COVID-XX or call XXXX, Year revise us actual and audio-only, we our date. pandemic made refer and ability opportunity, may any events for impact filed documents today they XX, change our factors periods, our to of offerings, from statements and cease up download available Exchange Please on disclaim or revenue operating to future any update expectations future should @boxincir. to results, be cash financial the August today, them factors of of common benefits and and for and operating

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

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

results. while me let X, performance. to call news We to discuss hand the of this our ask With annual keep purpose call, the we there's questions around upcoming call financial recognize during of focused on our portion today's September our Aaron. meeting Lastly, over that, Q&A is that your the been you on

Aaron Levie

of how a are processes security long-term to and a quarter non-GAAP billings policies. across of high revenue quarter still growth growth, We and quarter while second momentum, guidance. revenue thank decisions the quarter increasingly strategic and of second remote our clear growth all consecutive From and achieving it's We business metrics Cynthia both achieved maintaining of building EPS XX% digital our second XX%. consecutive today. on XX% revenue results support performance level year-over-year, of enterprises our Thanks, of accelerating RPO above and you that strong for and making compliance marking workforce joining a call growth fifth delivered

turning Box of result, secure working. are to a the to collaboration way more content for cloud built customers deliver and new As a this management content

momentum by the strong deal is our customer quarter. in metrics best Our illustrated second

retention metrics customer we Our XXX% from was up prior and the product, the one up executing that We work future and deals up in the on XX% the $XXX,XXX enterprise. over quarter new are in the three quarter. deals fiscal $XXX,XXX is XX rate quarter of XX% suite view 'XX. net major these up XX% changes in that on well XX% from from XXX% in over We prior year-over-year as around with happening QX had of the the a we strong a right in rate had evidence attach aligned

hybrid a to going be is going First, necessity forward. work

content organizations enterprises a new research it's integrate design, customer's purchase contract our financial of have life and gaps solve is legal ideate Today data, digital we've to on how data is companies the mix and for across change business. third and and privacy the for a security major Second, between ransomware a of transformation or tools, This to with at for enterprise risks leading rate CAD and as seen and management asset, and vendors increasing and how discover, sales significant how sciences all heart security are broken their scale deals growing disparate due with have entire and study, is cyber with increased attacks. product costs close products, These from threats drugs trends implications presentation, driving new at to fragmented industries how leads Content content whether develop processes a manufacturer onboard solutions customers. life consumer new clients content. or collaborate users, marketing work cycle. to firms treatments, deliver the banks recent

security. acquisition content approach M&A. cloud workflow. dollar e-signature, manual created cloud-based a Box analytics, incremental paper-based also Box through lifecycle, Critical a and to execute with launch publishing, our including from leadership why our ability Box total which of new our on to the product market. electronic trend the our the SignRequest, expands content deeper add more cloud content were our through to moving content and extend success is to advanced this the complete content in disciplined continue we to content on management, privacy transactions for into power is core This of roadmap pleased leading signature of collaboration from the product an with product capitalizing platform addressable roadmap, innovation. cycle experiences, and to vision our workflows, good while entire company to key workflows select leveraging integrate Our to the elements was addressing is market to moment data cloud, our is content By will on the our content new and Sign the Sign, deliver of our July value product developed and late multi-billion example customers of life

one features. well Our to very made significant Box time to decision the the response positive hold roadmap all flow document machine by our legal to quarter, and e-signature of we support the protect governance meaningful to help learning of within number was Sign to Box acquire driven needs business with with Shield updates rolling this this and as advanced innovation customer's particular versus content as Also retention functionality out feature throughout ahead. based over features customers enterprise developing market security has with new Initial last a being technology and year. from we're to requested internally been fall customers from customers

and security only the most our Our remain critical one compliance, data innovation and reasons is of choose content capabilities privacy accelerating. governance customers cloud the Box here

cloud. to and customers secured work our on to application for be continue and we and billion to announced Box's, quarter, at in the these Now, continue addition leading many partnerships part including it opportunity, amazing for cloud the work in market processing of plus other with content is Cisco Microsoft, building we customers many second Now's and platform interoperability for landscape, the legal advanced integration To content so updates customers with with we've with scale effectively expertise deeply we're by of cloud new success started. integrate getting by which together proposition, end done end make analysts service $XX and while to just confidential ensuring partners, independent This to product we cycle In benefits Slack legal quarter, can and regarded deepened management. flag to modernize minimize Service address technology as vendor great our SaaS also managing operations, securely content companies. content we're our for workflow building the manual value bringing and leading And and in legal to across the the a Service Webex announced a the key Box life easier critical is the strong delivery integrations new on to content

and Of hybrid strengthening our today's course drive enterprise strategy leading our strategy product of growth. remote needs part our with meet partnerships companies technology and evolving to to are only workforce

to also have efficient platform and new platform platform, sales go-to-market offerings, suites Plus, demand product methodically on and that the also offer enterprise go-to-market credits. life of the the planning, and greater couple our offering margin for of been strong customers. have model on been in focus we've of go net This higher more We sales pipeline our To actively multiproduct our we process. Box gross customers and retention, verticals, Enterprise our suites all generation, quarter. announced file federal in July, our called initiatives, success why our a we adopts enablement consulting working customer enhancing our including includes optimizing when and has uploads in implementing advanced a the sell second key we've and expand enhanced full to the suites, marketing improving efficient shield to and past land Box Box our is know programs our deliver to financial a growth, market relay, for number and through Sign, see accelerate government to for account our governance, sales support Building higher large addition late which a total years, aggressively territory and the of the as capabilities ability to over driving full bring packaging, to our services more value, segmentation and the to the doubling increasing down growing such We sciences adoption customers. success and pricing been strategic initiatives simplified

You can when success our efforts see most of looking QX our customer at expansion. the clearly go-to-market

collaboration, help in a The including and the virtual them shield and bank largest the have approach be a its services one model. prescriptive products, energy loan has use improve that to secure allows GXP instance, more customer For cases showcase Box, content claims the secure use to that global support our a the purchase figure new for power six-figure and deal An security for including able controls of workforce These with With Enterprise on collaboration. seven more content, detection biopharmaceutical and relay a manufactured critical with compliance, is internal expanded been world Box than to faster. banks business support multiple deals security Plus. environment. origination more multiple key and did governance, standardized platform with company that in of This to in scalable six-figure automate with a safe providing company's to since And purchases of also has Box processing threat business finally, mission a ELA dozen XXXX and external power and following and the innovative will around US. to transform them its foundation and its them leader Box enable internal to on workforce the work simplicity workflows. of are Box with a drugs to proactive a acquisitions growing way the expansion Box,

enhancement customers We through by products value within well through value that on new as as retention. are and seat going drive feature adding expanding focused to our organizations, additional more up wider customer growth additional

executing improvements year, strategy working. second Over have and been our continued growth margin reaccelerate the our results our demonstrate the in driving is that to past operating we on strategy quarter, also while

for XXXX XX% of growth guidance and our XX% non-GAAP a fiscal margin are full we reiterating FY'XX. to result, As operating in targets raised XX% to our long-term year the have XX% and revenue

and of driving as team our to the going much to in are strong fiscal company. for world-class want and on directors I confidence forward, prouder leadership hard our accomplish, not and that, and year on am have so that confident board still the shareholders. Box, well direct the of the turn of for and been to leadership we I'll targets result beyond Dylan. while and enhanced we've a and With execution to we I Our second work and this quarter be of it our is over that strategy committed could as results our right the a we have board outlook as execute driving value team focused at

Dylan Smith

Thanks thank joining for Aaron. and afternoon, everyone us. you Good

As proud build on Revenue to of of We from year-over-year QX. delivered $XXX key high in Aaron we cloud results million and and up XX% top of business was net acceleration clearly mentioned, acceleration we as momentum have the vision. across line revenue metrics; profit, revenue bottom are growth, our an strong our content end drove strong QX growth and above our guidance. XX% retention, demonstrating an operating

strong increasingly traction our Our and cloud suites rate net resonating offerings are content achieved by shown as QX. the retention we with in customers

the or one to capabilities, have and growth are rate least QX, product XX prior record to than $XXX,XXX traction greater were from up up deals QX to sales year longer ago of customers growth XX% with agreements who attributable million more performance Suites continue RPO more revenue time. advanced term worth drive larger more multi-product XX% points. have content growth we with from XX% streamline XX% and revenue RPO is products support now QX an We resulting of stickier XX% by ago. year-over-year. greater the basis A adopting here. to in In ended $XXX increasingly QX's comprised adoption and period. solutions are growth XX% as suite XX% deals acceleration up closed demonstrating XX% customers and we deferred of exceeding is at XX% sold our who the our and enabled encouraged expand year up by customers propensity revenue in stickiness to our us strategies. XX% additional purchased a XXXX as sign six-figure our our a of have a process year-over-year from As remaining of of growth backlog We customer's quarter's Box's in be couldn't a over our RPO obligations from

to generating and year-over-year a more growth mid-single in with ahead next well We the of we're million of execution range. we both SMB reflects the that productivity XX% the strong of our the sales rate up result deliver billings recognize digit and XX QX expect sales year-over-year to This XX% in teams enterprise saw double-digit billings improvements. over our $XXX than months. RPO expectations previous

QX. and net from basis retention retention rate stable by churn at result of rate Our over this of improvement retention, expansion and annualized end in a was expansion of our QX expect XXX% momentum we net X%. seeing strength was the deliver up XXX full points a Based and This on additional customer XXX% driven year. customer the we're rate course fiscal in to the strong in

our a was year-over-year, at exceeding growth revenue from Turning $XXX to XX% gross XX.X% in XX.X% points ago. XXX gross margins, million margin QX of profit basis came up a year up rate.

the the from ongoing and cloud generating our we're manage. infrastructure shift to and software benefit in data We efficiencies centers hardware to continue we both

margin expectations for be of FY'XX continue gross approximately to year XX%. Our full the

we profitability in operating Our drove margin income which XX.X%. off paying ongoing XX% year-over-year efforts to improvement leverage improve increased point in continue to model. basis QX our to turn QX are operating to unlock XXX a $XX in operating million, as

guidance expense our significant time we've certain cost disciplined will resulted away and cash sheet. $X.XX high California million in engineering additional locations. end in to and and from QX, the operations I'll diluted flow ago. ago deliver we engineering made growth management. drive which period. from from over as We year functions excellence in help progress Poland, efficiencies cash leverage year building transition profitable delivered operating delivering This QX up us the balance out to above a and continue from This of $XX year, center of non-GAAP and turn now higher our flow $X.XX our XX% up EPS of are we of In

free million XXX%. $XX year. $XX improvement were Capital payments, million, $XX cash in of a generated of from free which calculation down year our flow also in over QX we We million year of last flow cash include lease

FY'XX, For X% expect roughly and year to capital full continue combined of of we to be CapEx revenue. the payments lease

As tender equivalents $XXX cash, million We with $XXX we our auction cost a program. restricted $XXX quarter end a modified offer approximately million of in repurchase at completed June cash result, share authorized of cash. board the ended Dutch and subsequently our and the aggregate an for million

XX, total average XXXX, auction $XX.XX modified repurchased Combined turn for I a a total tender, to $XXX had the $XX would million. shares million of like repurchased X.X of A Dutch weighted a common a for million. that we August for fiscal shares As guidance our XXXX. of with at of QX total stock With of price we XX.X of million Class have and to

we our on expectations guidance. continued our have revenue raised shares EPS we that we margin today. business and based share our already EPS ago, year factor repurchased momentum, As Note count operating the announced a few and results strong our only full weeks QX that in and

While to ongoing on purchase year market program, our expect our and a we're prudent shares conditions significantly FY'XX approach taking amount outlook. QX manger repurchases the in could share we and under opportunistically of additional any based Therefore, not factors. their other assuming repurchase the vary through or future

to consecutive at of we representing For quarter million the revenue third year-over-year third end high quarter revenue and of the $XXX XX% growth anticipate growth of acceleration $XXX of range. fiscal million a XXXX, this

XXX be margin our representing XX% basis approximately non-GAAP point year-over-year. improvement to a We expect operating

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

with growth. roughly revenue rate growth our QX line We billings in be our to expect

year we January fiscal $XXX and up represents full raised the quarter's be XX, million full million XX% the an to from growth. of year million range $XXX our revenue to FY'XX and $XXX of This year. is expect guidance guidance ending last revenue increase revenue to For from have last million an over we $XXX XXXX, in year acceleration year's

the non-GAAP our to year's of of XXX expect operating million EPS be approximately to Due bottom we and increase now basis XX.X%. improvement $X.XX FY'XX strong shares. diluted representing We sizable on non-GAAP our XXX to in XX.X% from our XX% approximately to and XX.X% momentum, top of over our line guidance last be point margin previous $X.XX a to the result expect range

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

continue We and expect FY'XX. for the for revenue to RPO rate the FY'XX for growth full above be billings revenue full rate year of growth to to year of outpace growth our billings both our and growth

further QX into We details will expectations on provide earnings QX our our call.

margin our at now combined is XX%. today FY'XX rate FY'XX least growth of Box of free to Finally, revenue increase the XX% flow over XXXX. our previous Box not expected cash an with guidance least be is at

QX both Our resonating cloud the is years business of acceleration revenue content transformation ago. our for shareholders platform This the delivering we operating is year, two with proving we're customers. that strong performance our began leverage result and increased

XX% our delivering free our and to to We cash to previously revenue now. growth also XX%. operating are to In FY'XX, delivering margin target two we're well of revenue from on XX% years way XX% FY'XX XX% flow committed plus growth in against margin of stated

Aaron back a hand few remarks. for it to closing I'll Before we conclude,

Aaron Levie

Dylan. Thanks

State our Box Attendees vision also all-digital showcase from and event on of advancements. Before share we'll hosting an attendees of Five be revenue World shareholder strong we leaders up in growth were our all questions. will but that a that was on be customers, our our of we our at solutions Okta, margin more Slack will and the tens QX above improvements terms to and the rate but and growth others. as well X, quarter, a for existing indicators in are also share many value. open enterprises we year questions, revenue the among billings in success and will content the major will only base cloud net This retain we'll to Street operating of that be that customer happy hearing non-GAAP of CEOs and row. USA, another from including strategy year expand Services ultimately where of results incredible I an wanted like of show as Works, event would achieving be and retention, drive to RPO IT slate your it Zoom, only leading Content not Lions operating metrics the be power outstanding platform, guidance, thousands not Dylan for which Gates our to product second Operator. original our and to quarterly Fuel take speakers, showed October within

Operator

We Thank first Peterson have line from with the instructions] you. question Brian coming [Operator Raymond our of James.

open. Your line is

Brian Peterson

thanks and question. taking everyone the for Hi

look because hit the a execution of how wanted this that you what seeing back offering? the strong, conversations and that has been So to large little of you suites are unpack on bit generation terms quarter. are a deals the customer be with but maybe changed could pipeline maybe year the those in and sales pipeline Dylan, curious, does the how or I'd little Aaron for with bit obviously

Aaron Levie

even within the half healthy expansion increase think K deals an at big we're can number forward confident in evidenced to Brian. half very metrics deal back happy adoption to Yeah, certainly you the the well. we're the also on XXX,XXX results a pipeline. and is about when we thanks we're deals also tell we and feeling revenue a saw we've large the And Aaron. plus and see the momentum going guidance, first We're the the seen. deals, the plus look update in as that really and our as This year seeing I we suites we're that overall XXX QX that suite QX, of large now on look in and deals our And now the very as

of we're our and trends seeing right into fully that expanding the we're going down So to within overall that momentum. are base customers and multiproduct on doubling customer keep now set plans nice

Brian Peterson

my That's Okay. a good question. next segue into

thinking about that's up. go-to-market Just, It ramping focus. going best has been productivity I incremental how know you are looks investments like sales forward? guys in

investment how curious going forward? Thanks. thinking we're Just about headcount,

Aaron Levie

the past Yeah, I say of And consistent. to certainly think we're areas going of the productivity in think segments. that think we in And of in I calls investments to over we're QX, message though saw that earnings where QX. a in make highest would across into regions, couple incrementally is number the a seeing market I the now. key around that We're saw highest we've the in productivity the we segments, and right momentum. But had the investing is QX go number areas world capacity I increasing

of and operating the certainly we're that margin areas growth we're called in saying, sure incrementally out, really targets we're about but consistent going we're happy to the thank right that with down now So that want our we've doubling to invest results you. we make

Operator

line from Steve coming Enders have with question We our next Markets. the of Capital KeyBank

open. is line Your

Steve Enders

Okay, great. question. my taking Thanks for

on and front? your more think macro of strength proportion the in are that the Just want for there, towards to front? RPO and driven seeing guess on to attribute you XX% you bookings this up with the you macro I out growth what coming it's better the is kind sense you, of execution or on and better a but side, Do of impressive sales get XX% productivity markets there would what and better quarter

Aaron Levie

Steve. thanks Yeah,

of quarters and also trends then mega digital certainly been toward around push absolutely seeing many remote work cybersecurity work, the get moves favorable cloud base significant are tailwinds. it's we of and think massive here major a issues transformation customer challenges to I broad hybrid our within very and to

so our when the around you that cloud right message to mega product team add we're that up and deliver three and product. able right the tailwinds then in the with right building the that's or then out four And content those specifically market having

results. to just contributing these that we're think a events are of positive certainly seeing I confluence

that is then helping one advance well. workflow customers it a the driving had we to seen, we've and and platform employees and that IT been certainly front, across spending if our strong specific, on and the having even is has you this our integrating Box digital story, figure more Shield us but building our has they was open macro multiproduct sectors Relay landscape applications year On software years strong macro they their right the our our from level, when plus some very that right build an and is tailwinds again, of their enact markedly a suite year our have about custom you entire were macro and environment product. a plans, And incredibly I you doing, this the of later get in remote this layoffs a the deals us of Customers all as more The of and a the in peer shutdowns were think have Box really ago. the seven on deals transformation I'm can seen customers and improved environment well. performing seen of couple at that year for new and again, certainly look fundamentally sure capitalizing group deals, customers in are our that across were largest Many importantly, finally technology, worried we in that causing IT work, the quarter integrate. that $XXX,XXX with their and in both environment, digital decrease and into and buying partners. coming the nicely. with team absolutely experiences were past together

the are content we cloud this where right So market again, from toward. we're benefiting and I think having the is platform heading

Dylan Smith

to is go build approach shared, has because you geographies. in just that productivity is forward. and to is regions continue off And going to our higher really to particular bit, investments been strategy asked focus that our Dylan, as and market about sales the in take this paying we'll performing strategy sales on we've a and definitely That is

a saw strong improvements and So sales SMB year QX, in year quota, as of force productivity. for achieving as both increase AEs in in strong a on percentage the enterprise and we well QX

been, size as that to and grow So of we year. as percentage adding the to of remain have on sales this track sales Aaron incrementally, a that been in mentioned, the force low teens force

Steve Enders

hear. Okay, it's but for adoption within know in terms just out only of on been far? that about -- perfect. seen to product Box, a in have what I of guess now, Great month or terms you interest so And

Aaron Levie

overwhelming. is interest the and strong very absolutely Yeah, been

fortune customers in select to getting the it. XXX Sign their are throughout out was and roll on I to customers API. adopt was to of able also it customer topic rolling the to this We and fall, conversation end-users this a with midst of starting that was a all being of Box our product through yesterday the the the we're are call out main to out

multiple content same laid our that. much really categories retention So fit analytics, customers. with advanced we're It's out look of we because seeing platform very having build adjacent emerge. into new to for life that a message and that sharing much as categories And helping a is we're right publishing, And and cycle I entire into. workflow getting single use vendor is the of so, past functionality now or security, out of data collaboration, to that you can automation, because the our content strategic suite cases We're that great it's think, conversations. them, conversations fuller expand becoming lot renewals in the see at a over natural year are architecture. when content a a further more in more, strategic resonating well you And is content to us platform. whether and It's e-signature drive of also are customers getting customers strategy

Steve Enders

taking Okay, question. my for Thanks great to hear.

Operator

from We Cox have our of Matthew next question coming with line the JPMorgan.

Your is open. line

Matthew Cox

last productivity expectations afternoon. dig that And truly changed in my the good quarter? quarter, a may you to this into your expectations sales the to be want just so, exceed see happened versus that if quarter? this what at Dylan your sales did the last Hi, Thanks pace. for taking mentioned And I more measured expected you think productivity I you ramp question. to productivity, on improvement

Dylan Smith

reminder, year-over-year enterprise half the of that SMB. Sure, segment as middle In of we've year, this by of part the in seen year, in overall enterprise the primarily challenges first SMB was so last productivity both with growth we even XX% of and stronger the saw because the improved by sales and we in driven some a year. COVID force

gives So that large reasons investing make traction outperforming our and has as been of of the a that's we're what the lot look well are strong outperformed we seeing about, and suites region-by-region, to our Aaron expectations the that business had trends performance the in really in boosting basis and where momentum force as well. have we and confidence the the that on products and parts as continue to a newer been sales us as where as certainly productivity the the deals. grow of greatest we've business, And talked geography-by-geography at most seeing

we productivity do of going improvements mentioned, as we in of forward, for even sales improving SMB but metric modest that as force. force enterprise So the do both continue and expect we sales our more grow size the rate have expectations

Matthew Cox

reps how your can then this quarter share you And of ramped currently, maybe year? last are last many versus or Okay. time

Dylan Smith

break who numbers, entered percentage regions, year in ramped time out as a force. especially, performing say those higher don't a but sales are versus we year this reps the and we we'll a the see to tend ago of We stronger have higher same that specific

Matthew Cox

of or suggest pent-up attribute you're Okay. it's, a well, Aaron year much demand the where you're surge pent demand might you sort changing earlier, And what or as secularly to just secular what's then help in truly maybe closed have a normally to the is really one can what's seeing a simple out you alluded of might that the maybe a environment effort up versus versus is figure as last product demand something to anything strategy Can taking normal different. multi-year parse last trying seeing that How business you the more from that a me. behind now? or maybe

Aaron Levie

processes the sector, month a single that business. are trends or expanding, of buying the the even know CIO your figure and not the company and half you're the the XXX,XXX-person out remarkably services, the have I sustaining what's consistent of professional analog at given you're the conversations, government services, technology going across to is trends in to trying the my we're forward. of or XXX-person whether future life CIO, anecdotally CIO seeing workplace? going a future sectors just so dozens company, hundreds your every across what When that you're first the look workforce, sciences, any Certainly You interactions financial and your I of and past are in of healthcare, think CIO year, federal

premises have You the you're going any to part. moving going know for the some to to be that. most on There's But most certainly for cloud. that part, the to lag you're not infrastructure

dealing and and You with you're challenges. data ransomware privacy cyber security know, massive that

so, modern together. you have sure to have as work that thinking you're about major architecture, And you this vendors make

that fundamentally technologies. got Salesforce a have stack, stack helps or Now got you those Microsoft platform across that are architecturally focused our Google a a you seeing trends driven content when base, you -- that's we're stack are customer You've talent again, believe you Slack stack, just at And stack, driving a pick a seeing we're that we and And you've that have manage these up. why, I Service look need a will continued really we this architectural the long-term sustain on and performance. trends within

Operator

Craig coming Chad [Operator instructions] with line Capital. from next We our of have question Hallum the Bennett

is Your open. line

Chad Bennett

my taking for Thanks question. Great.

was on between of this perspective in terms of quarter RPO think at it guess quarters rate a look Delta the order we the grown now. from if has significantly significant above is RPO for, RPO So, current And, two. non-current I growth in six my

you're the and And up You strategic that rates attach you I with standpoint longer-term that get good guess versus of us sure since guys a how in, be kind about deals number. multi-year have year to are some Obviously up getting they in it which an talked where on can on a to like perspective the ago. looks improves impacts contract signing that went selling show sale did sales give update the that it'd more moving RPO duration? of now so much and quarter, comfortable this quarter. force suites repeatability making this certainly from it

Aaron Levie

Sure.

we year we backlog volume especially contributes lot on RPO you seeing growth see, did basis. improvements which point, and to higher that But a the generate quarter over contracts, in driven those all So multi-year sophisticated longer we're of a the customers term contracts. the by because components your point and on durations that a a by as we adopting that both what to signing large growth, customers of year you'd outsize who as quarter due month past of do your was on was a products. really expect see than contracts average, contract increasingly to more as are add seen our more have over longer On those improve for our to led that's are little year, solutions the

And RPO. backlog so overall as more adopt of the customers that is one shift and then category big that suites as well driving see and growth move longer that mix as of into things durations we to these the contributing that's

Chad Bennett

perspective of kind is these that X.X a terms we days, just increase a of just and for duration are And Dylan, X.X, some or at of there impact month, rough, in

Dylan Smith

of core year duration. Yeah, so than those and little customers kind more average plus But multi-year a it's on and total again, deals. to contract half contract suites for on tend a or a average a duration be

early on term. of long and renewing really in the that variability arrowhead customers this for growth bigger also who it they customers really by this we into are is, are some We're also quarter who those is some while in durations do are, for quarter contracts. those our driven what setting there a buy in so RPO being And see on their broader strategy it's function suite longer once us betting to

Chad Bennett

of just when growth to in in the really time terms And we business Okay. But, of acceleration in metrics relative you growth. expectations to want obviously secondary good guide the revenue looked conservative speak revenue and be and real then forward. in particular going have

maybe year, quarters, headwind, is think time Let's and I about quarter being I to there know rate and we're seeing? quarter revenue two professional last growth this the second same last guide type last that headwind seen just of the anything and kind of guide talking headwind we Thanks. a that a that not SMB say might is that's being roughly services the this your rate growth forecast half, anything the a be you've in there the in and

Dylan Smith

reflects of the months performance. your point Yeah, XX these prior so now business as revenue growth,

time. we flows revenue, we're our As business to the through to momentum do expect continued see upward not a over trends on seeing

QX the QX the higher growth full ending us a our growth and over improving guidance guidance So year the QX implied that's our or either at as actuals in really time. year than QX and for rate gives or our confidence what rate in

do COVID on of services from our headwinds, year the On are view And point in near then because term we a we both revenue the it's of view the trailing pressure of even least impacts some forward. continuing professional at see some from middle of to going now point the of to a see months, business. XX continue

to a to overall slight the So continues revenue headwind be that growth.

Chad Bennett

taking my questions. Great. Thanks for

Operator

has closing over call Cynthia back now now for turn The you. to will remarks. ended. I Thank the call any

Cynthia Hiponia

obtaining afternoon. call. us to for look everyone again next you, you this And joining earnings forward our on Thank we

Operator

today's conference Thank participating. you This call. for concludes

You may disconnect. now

Box (BOX) 26 Aug 212022 Q2 Earnings call transcript