BOX
$25.85
Box
$.48
1.89%
Earnings Details
3rd Quarter October 2021
Tuesday, November 30, 2021 4:05:00 PM
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Summary

Box Misses

Box (BOX) reported 3rd Quarter October 2021 earnings of $0.21 per share on revenue of $224.0 million. The consensus earnings estimate was $0.21 per share on revenue of $218.6 million. The Earnings Whisper number was $0.23 per share. Revenue grew 14.3% on a year-over-year basis.

The company said it expects fourth quarter non-GAAP earnings of $0.22 to $0.23 per share on revenue of $227.0 million to $229.0 million. The current consensus earnings estimate is $0.22 per share on revenue of $223.20 million for the quarter ending January 31, 2022.

Box Inc provides a cloud-based, mobile-optimized Enterprise Content Collaboration platform that enables organizations of all sizes to easily and securely manage content and collaborate internally and externally.

Results
Reported Earnings
$0.21
Earnings Whisper
$0.23
Consensus Estimate
$0.21
Reported Revenue
$224.0 Mil
Revenue Estimate
$218.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Box Reports Strong Fiscal Third Quarter 2022 Financial Results

Third Consecutive Quarter of Accelerating Growth, with Revenue Growth of 14% Year-Over-Year

Remaining Performance Obligations and Billings Year-Over-Year Growth of 25%

Revenue and Non-GAAP Operating Margin Guidance Raised for the Full Year of Fiscal 2022

New $200 Million Expansion of its Stock Repurchase Program

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Box, Inc. (NYSE:BOX), the leading Content Cloud, today announced preliminary financial results for the third quarter of fiscal year 2022, which ended October 31, 2021.

“Our strong third quarter results show the continued momentum of our long-term growth strategy, as more customers are turning to the Box Content Cloud to deliver secure content management and collaboration built for the new way of working,” said Aaron Levie, co-founder and CEO of Box. “In addition to our solid financial and customer metrics, we made meaningful product announcements in the third quarter, including the rollout of Box Sign globally, new malware deep scan capability in Box Shield to combat ransomware, and deeper integrations with Microsoft Office and Teams, Salesforce, Slack and Zoom. The confluence of remote work, digital transformation and cybersecurity challenges is causing enterprises to rethink how they work with their content. We believe Box’s leadership in the Content Cloud market is driving the acceleration of our growth and the expansion of our customer footprint.”

“We achieved strong third quarter results, marking our third consecutive quarter of accelerating revenue growth,” said Dylan Smith, co-founder and CFO of Box. “Strong Suites momentum is accelerating customer traction and adoption, driving a third quarter Net Retention Rate of 109%, up 600 basis points from 103% in the year ago period and up 300 basis points sequentially. Today we raised our outlook for FY22 revenue, non-GAAP operating margin, and non-GAAP EPS and our ongoing momentum provides us further confidence we will achieve our FY24 financial targets.”

Fiscal Third Quarter Financial Highlights

  • Revenue for the third quarter of fiscal year 2022 was $224.0 million, an increase of 14% from the third quarter of fiscal year 2021. For the third consecutive quarter, revenue growth accelerated on a year over year basis.
  • Remaining performance obligations as of October 31, 2021, were $948.1 million, a 25% increase from the third quarter of fiscal year 2021, and 1100 bps higher than revenue growth for the same period
  • Deferred revenue as of October 31, 2021, was $429.7 million, a 21% increase from the third quarter of fiscal year 2021.
  • Billings for the third quarter of fiscal year 2022 were $231.5 million, a 25% increase from the third quarter of fiscal year 2021.
  • GAAP gross profit for the third quarter of fiscal year 2022 was $161.0 million, or 72% of revenue. This compares to a GAAP gross profit of $139.2 million, or 71% of revenue, in the third quarter of fiscal year 2021.
  • Non-GAAP gross profit for the third quarter of fiscal year 2022 was $167.3 million, or 75% of revenue. This compares to a non-GAAP gross profit of $143.9 million, or 73% of revenue, in the third quarter of fiscal year 2021.
  • GAAP operating loss in the third quarter of fiscal year 2022 was $11.1 million, or 5% of revenue. This compares to a GAAP operating loss of $2.6 million, or 1% of revenue, in the third quarter of fiscal year 2021.
  • Non-GAAP operating income in the third quarter of fiscal year 2022 was $46.4 million, or 21% of revenue. This compares to a non-GAAP operating income of $35.2 million, or 18% of revenue, in the third quarter of fiscal year 2021.
  • GAAP net loss per share attributable to common stockholders, basic and diluted, in the third quarter of fiscal year 2022 was $0.12 on 151.4 million weighted-average shares outstanding. This compares to a GAAP net loss per share attributable to common stockholders of $0.03 in the third quarter of fiscal year 2021 on 157.5 million weighted-average shares outstanding.
  • Non-GAAP net income per share attributable to common stockholders, diluted, in the third quarter of fiscal year 2022 was $0.22. This compares to a non-GAAP net income per share attributable to common stockholders, diluted, of $0.20 in the third quarter of fiscal year 2021.
  • Net cash provided by operating activities in the third quarter of fiscal year 2022 was $46.1 million, an increase of 2% from net cash provided by operating activities of $45.1 million in the third quarter of fiscal year 2021.
  • Free cash flow in the third quarter of fiscal year 2022 was positive $31.2 million. This compares to free cash flow of positive $26.2 million in the third quarter of fiscal year 2021.

For more information on the non-GAAP financial measures and key metrics discussed in this press release, please see the section titled, “About Non-GAAP Financial Measures and Other Key Metrics,” and the reconciliations of non-GAAP financial measures and certain key metrics to their nearest comparable GAAP financial measures at the end of this press release.

Share Repurchase Program

On November 27, 2021, the Board of Directors authorized an expansion of its stock repurchase program by $200 million of Box’s Class A common stock, increasing the aggregate amount of its approved share buyback programs to $700 million, including the Dutch Tender Offer from earlier this year. With this expanded authorization, and excluding funds previously used to repurchase shares to date, as of November 29, 2021, the Company had approximately $260 million of remaining buyback capacity.

Business Highlights Since Last Earnings Release

  • Delivered wins and expansions with leading organizations such as Canon, Epic Games, General Services Administration, NASA, Johnson Space Center, Lionsgate, Robinhood Markets, U.S. Air Force Reserve Command, and Zoom Video Communications.
  • Named a Leader in the Gartner® Magic Quadrant™ for Content Services Platforms and a Major Player in “IDC MarketScape Worldwide eSignature Software 2021 Vendor Assessment.”
  • Expanded availability of Box Sign to customers around the world, delivering unlimited signatures using the Box Web App and a robust set of APIs to streamline and modernize the way agreements are managed and governed in the cloud.
  • Announced malware deep scan for Box Shield to help customers reduce the risk of ransomware by scanning files as they are uploaded to Box. The company also enhanced native security controls for Box Shield to help organizations manage access to their content with more granular authentication capabilities.
  • Released an all-new Box Notes and an updated Box Mobile app to help users easily collaborate from anywhere and on any device.
  • Announced several partner updates, including enhancements to the Box for Microsoft Office integration, a deepened integration with Slack, improvements to our Box for Salesforce integration, and a Box app for Zoom to make it even easier for joint users to work together securely across distributed teams.
  • Hosted the company's 11th annual BoxWorks, attracting thousands of attendees and featuring speakers from organizations such as Lionsgate, USAA, Vice Media, and World Fuel Services, as well as the CEOs from Okta, Slack, Uber, WarnerMedia, and Zoom.
  • Recognized as one of America's Most Loved Workplaces 2021 by Newsweek and one of PEOPLE’s 100 Companies That Care 2021.

Outlook

  • Q4 FY22 Guidance: Revenue is expected to be in the range of $227 million to $229 million, up 15% year-over-year at the high-end of the range. GAAP operating margin is expected to be approximately 1%, and non-GAAP operating margin is expected to be approximately 21%. GAAP basic and diluted net loss per share attributable to common stockholders are expected to be in the range of $0.06 to $0.05. Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of $0.22 to $0.23. Weighted-average basic and diluted shares outstanding are expected to be approximately 150 million and 158 million, respectively.
  • Full Year FY22 Guidance: Revenue is expected to be in the range of $868 million to $870 million, up 13% year-over-year at the high-end of the range and represents an acceleration from last year’s growth rate of 11%. GAAP operating margin is expected to be approximately negative 3%, and non-GAAP operating margin is expected to be approximately 20%. GAAP basic and diluted net loss per share attributable to common stockholders are expected to be in the range of $0.35 to $0.34. Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of $0.83 to $0.84. Weighted-average basic and diluted shares outstanding are expected to be approximately 156 million and 164 million, respectively.

All forward-looking non-GAAP financial measures contained in this section titled “Outlook” exclude estimates for stock-based compensation expense, intangible assets amortization, and as applicable, other special items. Box has provided a reconciliation of GAAP to non-GAAP net income (loss) per share guidance at the end of this press release.

Webcast and Conference Call Information

Box’s management team will host a conference call today beginning at 2:00 PM (PT) / 5:00 PM (ET) to discuss Box’s financial results, business highlights and future outlook. A live audio webcast of this call will be available through Box’s Investor Relations website at www.box.com/investors for a period of 90 days after the date of the call. Prepared remarks will be available on the Box Investor Relations website after the call ends.

The conference call can be accessed by registering online at http://www.directeventreg.com/registration/event/1147136 at which time registrants will receive dial-in information as well as a passcode and registrant ID. A telephonic replay of the call will be available approximately two hours after the call and will run for one week. The replay can be accessed by dialing:

+ 1-800-585-8367 (U.S. and Canada), conference ID: 1147136
+ 1-416-621-4642 (international), conference ID: 1147136

Box has used, and intends to continue to use, its Investor Relations website (www.box.com/investors), as well as certain Twitter accounts (@box, @levie and @boxincir), as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Information on or that can be accessed through Box’s Investor Relations website, these Twitter accounts, or that is contained in any website to which a hyperlink is provided herein is not part of this press release, and the inclusion of Box’s Investor Relations website address, these Twitter accounts, and any hyperlinks are only inactive textual references.

This press release, the financial tables, as well as other supplemental information including the reconciliations of non-GAAP financial measures and certain key metrics to their nearest comparable GAAP financial measures, are also available on Box’s Investor Relations website. Box also provides investor information, including news and commentary about Box’s business and financial performance, Box’s filings with the Securities and Exchange Commission, notices of investor events and Box’s press and earnings releases, on Box’s Investor Relations website.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks, uncertainties, and assumptions, including statements regarding Box’s expectations regarding the size of its market opportunity, sales productivity, its leadership position in the cloud content management market, the demand for its products, the timing of recent and planned product introductions, enhancements and integrations, the short- and long-term success, market adoption and retention, capabilities, and benefits of such product introductions and enhancements, the success of strategic partnerships, the impact of its acquisitions on future Box product offerings, the benefits to its customers from completing acquisitions, the time needed to integrate acquired businesses into Box, the impact of the COVID-19 pandemic on its business, its ability to grow and scale its business and drive operating efficiencies, its net retention rate, its ability to achieve revenue targets and billings expectations, its revenue growth rate plus free cash flow margin in fiscal year 2022 and beyond, its long-term financial targets for fiscal year 2024 and beyond, its ability to achieve profitability on a quarterly or ongoing basis, its free cash flow, its ability to continue to grow unrecognized revenue and remaining performance obligations, its revenue, billings, GAAP and non-GAAP gross margin, GAAP and non-GAAP net income (loss) per share, GAAP and non-GAAP operating margins, the related components of GAAP and non-GAAP net income (loss) per share, weighted-average outstanding share count expectations for Box’s fiscal fourth quarter and full fiscal year 2022 in the section titled “Outlook” above, equity burn rate, any potential repurchase of its common stock, whether, when, in what amount and by what method any such repurchase would be consummated, and the share price of any such repurchase. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: (1) adverse changes in general economic or market conditions, including those caused by the COVID-19 pandemic; (2) delays or reductions in information technology spending; (3) factors related to Box’s highly competitive market, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by Box’s current or future competitors; (4) the development of the cloud content management market; (5) the risk that Box’s customers do not renew their subscriptions, expand their use of Box’s services, or adopt new products offered by Box on a timely basis, or at all; (6) Box’s ability to provide timely and successful enhancements, integrations, new features and modifications to its platform and services; (7) actual or perceived security vulnerabilities in Box’s services or any breaches of Box’s security controls; (8) Box’s ability to realize the expected benefits of its third-party partnerships; and (9) Box’s ability to successfully integrate acquired businesses and achieve the expected benefits from those acquisitions. In addition, the preliminary financial results set forth in this release are estimates based on information currently available to Box. While Box believes these estimates are meaningful, they could differ from the actual amounts that Box ultimately reports in its Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2021. Box assumes no obligations and does not intend to update these estimates prior to filing its Form 10-Q for the fiscal quarter ended October 31, 2021.

Additional information on potential factors that could affect Box’s financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings Box makes with the Securities and Exchange Commission from time to time, including the Annual Report on Form 10-K filed for the fiscal year ended January 31, 2021. These documents are available on the SEC Filings section of Box’s Investor Relations website located at www.box.com/investors. Box does not assume any obligation to update the forward-looking statements contained in this press release to reflect events that occur or circumstances that exist after the date on which they were made.

About Non-GAAP Financial Measures and Other Key Metrics

To supplement Box’s consolidated financial statements, which are prepared and presented in accordance with GAAP, Box provides investors with certain non-GAAP financial measures and other key metrics, including non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share, billings, remaining performance obligations, and free cash flow. The presentation of these non-GAAP financial measures and key metrics is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures and key metrics, please see the reconciliation of these non-GAAP financial measures and certain key metrics to their nearest comparable GAAP financial measures at the end of this press release.

Box uses these non-GAAP financial measures and key metrics for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Box’s management believes that these non-GAAP financial measures and key metrics provide meaningful supplemental information regarding Box’s performance by excluding certain expenses that may not be indicative of Box’s recurring core business operating results. Box believes that both management and investors benefit from referring to these non-GAAP financial measures and key metrics in assessing Box’s performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures and key metrics also facilitate management's internal comparisons to Box’s historical performance as well as comparisons to Box’s competitors' operating results. Box believes these non-GAAP financial measures and key metrics are useful to investors both because they (1) allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) are used by Box’s institutional investors and the analyst community to help them analyze the health of Box’s business.

A limitation of non-GAAP financial measures and key metrics is that they do not have uniform definitions. Further, Box’s definitions will likely differ from the definitions used by other companies, including peer companies, and therefore comparability may be limited. Thus, Box’s non-GAAP financial measures and key metrics should be considered in addition to, and not as a substitute for, or in isolation from, measures prepared in accordance with GAAP. Additionally, in the case of stock-based compensation expense, if Box did not pay a portion of compensation in the form of stock-based compensation expense, the cash salary expense included in cost of revenue and operating expenses would be higher, which would affect Box’s cash position. The accompanying tables have more details on the reconciliations of non-GAAP financial measures and certain key metrics to their nearest comparable GAAP financial measures.

Non-GAAP operating income (loss) and non-GAAP operating margin. Box defines non-GAAP operating income (loss) as operating income (loss) excluding expenses related to stock-based compensation (“SBC”), intangible assets amortization, and as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income (loss) divided by revenue. Although SBC is an important aspect of the compensation of Box’s employees and executives, determining the fair value of certain of the stock-based instruments Box utilizes involves a high degree of judgment and estimation and the expense recorded may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards. Furthermore, unlike cash compensation, the value of stock options, which is an element of Box’s ongoing stock-based compensation expense, is determined using a complex formula that incorporates factors, such as market volatility, that are beyond Box’s control. For restricted stock unit awards, the amount of stock-based compensation expenses is not reflective of the value ultimately received by the grant recipients. Management believes it is useful to exclude SBC in order to better understand the long-term performance of Box’s core business and to facilitate comparison of Box’s results to those of peer companies. Management also views amortization of acquired intangible assets, such as the amortization of the cost associated with an acquired company’s developed technology and trade names, as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense that is not typically affected by operations during any particular period. Furthermore, Box excludes the following expenses as they are considered by management to be special items outside of Box’s core operating results: (1) fees related to shareholder activism, which include directly applicable third-party advisory and professional service fees, (2) expenses related to certain litigation, (3) expenses associated with restructuring activities, consisting primarily of severance and other personnel-related costs, and (4) expenses related to acquisitions, including transaction and discrete tax costs. There are no expenses related to litigation excluded from non-GAAP operating income (loss) in any of the periods presented.

Non-GAAP net income (loss) and non-GAAP net income (loss) per share. Box defines non-GAAP net income (loss) as GAAP net income (loss) excluding expenses related to SBC, intangible assets amortization, and as applicable, other special items as described in the preceding paragraph. In January 2021, Box issued $345 million aggregate principal amount of 0.00% convertible senior notes due in 2026 (the “Notes”). Upon issuance, Box recorded a debt discount for the conversion feature of the Notes, separately accounted for as equity, which was amortized as interest expense together with the issuance costs of the Notes. Box excluded the amortization of the debt discount and issuance costs associated with the Notes, in addition to the expenses described above, as they are considered by management to be special items outside of Box’s core operating results. Box adopted Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivative and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), effective February 1, 2021, and upon adoption, eliminated the debt discount for the conversion feature of the Notes. Box defines non-GAAP net income (loss) per share as non-GAAP net income (loss) divided by the weighted-average outstanding shares.

Billings. Billings reflect, in any particular period, (1) sales to new customers, plus (2) subscription renewals and (3) expansion within existing customers, and represent amounts invoiced for all products and professional services. Box calculates billings for a period by adding changes in deferred revenue and contract assets in that period to revenue. Box believes that billings help investors better understand sales activity for a particular period, which is not necessarily reflected in revenue as a result of the fact that Box recognizes subscription revenue ratably over the subscription term. Box considers billings a significant performance measure. Box monitors billings to manage the business, make planning decisions, evaluate performance and allocate resources. Box believes that billings offers valuable supplemental information regarding the performance of the business and helps investors better understand the sales volumes and performance of the business. Although Box considers billings to be a significant performance measure, Box does not consider it to be a non-GAAP financial measure because it is calculated using exclusively revenue, deferred revenue, and contract assets, all of which are financial measures calculated in accordance with GAAP.

Remaining performance obligations. Remaining performance obligations (“RPO”) represent, at a point in time, contracted revenue that has not yet been recognized. RPO consists of deferred revenue and backlog, offset by contract assets. Backlog is defined as non-cancellable contracts deemed certain to be invoiced and recognized as revenue in future periods. Future invoicing is determined to be certain when we have an executed non-cancellable contract and invoicing is not dependent on a future event such as the delivery of a specific new product or feature, or the achievement of contractual contingencies. While Box believes RPO is a leading indicator of revenue as it represents sales activity not yet recognized in revenue, it is not necessarily indicative of future revenue growth as it is influenced by several factors, including seasonality, contract renewal timing, average contract terms and foreign currency exchange rates. Box monitors RPO to manage the business and evaluate performance. Box considers RPO to be a significant performance measure. Box does not consider RPO to be a non-GAAP financial measure because it is calculated in accordance with GAAP, specifically under ASC Topic 606.

Free cash flow. Box defines free cash flow as cash flows from operating activities less purchases of property and equipment, principal payments of finance lease liabilities, capitalized internal-use software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of Box’s core business. Box specifically identifies adjusting items in the reconciliation of GAAP to non-GAAP financial measures. Box considers free cash flow to be a profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in Box's business and strengthening its balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.

About Box

Box (NYSE:BOX) is the leading Content Cloud that enables organizations to accelerate business processes, power workplace collaboration, and protect their most valuable information, all while working with a best-of-breed enterprise IT stack. Founded in 2005, Box simplifies work for leading organizations globally, including AstraZeneca, JLL, and Morgan Stanley. Box is headquartered in Redwood City, CA, with offices in the United States, Europe, and Asia. To learn more about Box, visit http://www.box.com. To learn more about how Box powers nonprofits to fulfill their missions, visit Box.org.

BOX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

 

 

 

October 31,

 

January 31,

 

 

2021

 

2021

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

568,265

 

 

$

595,082

 

Short-term investments

 

 

140,000

 

 

 

 

Accounts receivable, net

 

 

154,624

 

 

 

228,309

 

Prepaid expenses and other current assets

 

 

64,730

 

 

 

55,895

 

Total current assets

 

 

927,619

 

 

 

879,286

 

Property and equipment, net

 

 

117,397

 

 

 

160,148

 

Operating lease right-of-use assets, net

 

 

168,840

 

 

 

194,253

 

Goodwill

 

 

75,860

 

 

 

18,740

 

Other long-term assets

 

 

115,361

 

 

 

99,255

 

Total assets

 

$

1,405,077

 

 

$

1,351,682

 

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable, accrued expenses and other current liabilities

 

$

54,608

 

 

$

32,128

 

Accrued compensation and benefits

 

 

33,606

 

 

 

39,123

 

Finance lease liabilities

 

 

43,794

 

 

 

49,888

 

Operating lease liabilities

 

 

42,269

 

 

 

47,771

 

Deferred revenue

 

 

413,511

 

 

 

443,929

 

Total current liabilities

 

 

587,788

 

 

 

612,839

 

Debt, net, non-current

 

 

366,993

 

 

 

297,614

 

Finance lease liabilities, non-current

 

 

29,420

 

 

 

60,351

 

Operating lease liabilities, non-current

 

 

168,242

 

 

 

192,531

 

Deferred revenue, non-current

 

 

16,153

 

 

 

21,684

 

Other long-term liabilities

 

 

16,465

 

 

 

15,598

 

Total liabilities

 

 

1,185,061

 

 

 

1,200,617

 

Series A convertible preferred stock

 

 

493,166

 

 

 

 

Stockholders’ (deficit) equity:

 

 

 

 

 

 

Common stock (1)

 

 

15

 

 

 

16

 

Additional paid-in capital

 

 

1,089,180

 

 

 

1,474,843

 

Treasury stock

 

 

(1,177

)

 

 

(1,177

)

Accumulated other comprehensive loss

 

 

(2,914

)

 

 

(938

)

Accumulated deficit

 

 

(1,358,254

)

 

 

(1,321,679

)

Total stockholders’ (deficit) equity

 

 

(273,150

)

 

 

151,065

 

Total liabilities, convertible preferred stock and stockholders’ (deficit) equity

 

$

1,405,077

 

 

$

1,351,682

 

(1) As of October 31, 2021, there were 149,010 shares of Box’s Class A common stock outstanding.

BOX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

October 31,

 

 

October 31,

 

 

2021

 

 

2020

 

 

2021

 

2020

Revenue

 

$

224,044

 

 

 

$

196,003

 

 

 

$

640,971

 

 

$

571,857

 

Cost of revenue (1)

 

 

63,069

 

 

 

 

56,812

 

 

 

 

184,804

 

 

 

166,141

 

Gross profit

 

 

160,975

 

 

 

 

139,191

 

 

 

 

456,167

 

 

 

405,716

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development (1)

 

 

55,837

 

 

 

 

49,454

 

 

 

 

159,418

 

 

 

152,683

 

Sales and marketing (1)

 

 

76,368

 

 

 

 

67,112

 

 

 

 

218,967

 

 

 

207,619

 

General and administrative (1)

 

 

39,857

 

 

 

 

25,239

 

 

 

 

105,242

 

 

 

79,778

 

Total operating expenses

 

 

172,062

 

 

 

 

141,805

 

 

 

 

483,627

 

 

 

440,080

 

Loss from operations

 

 

(11,087

)

 

 

 

(2,614

)

 

 

 

(27,460

)

 

 

(34,364

)

Interest and other expense, net

 

 

(2,336

)

 

 

 

(2,319

)

 

 

 

(8,275

)

 

 

(3,235

)

Loss before provision for income taxes

 

 

(13,423

)

 

 

 

(4,933

)

 

 

 

(35,735

)

 

 

(37,599

)

Provision for income taxes

 

 

438

 

 

 

 

351

 

 

 

 

1,399

 

 

 

891

 

Net loss

 

$

(13,861

)

 

 

$

(5,284

)

 

 

$

(37,134

)

 

$

(38,490

)

Dividend on series A convertible preferred stock

 

 

(3,775

)

 

 

 

 

 

 

 

(7,104

)

 

 

 

Accretion of series A convertible preferred stock

 

 

(526

)

 

 

 

 

 

 

 

(982

)

 

 

 

Net loss attributable to common stockholders

 

$

(18,162

)

 

 

$

(5,284

)

 

 

$

(45,220

)

 

$

(38,490

)

Net loss per share attributable to common stockholders, basic and diluted

 

$

(0.12

)

 

 

$

(0.03

)

 

 

$

(0.29

)

 

$

(0.25

)

Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted

 

 

151,426

 

 

 

 

157,465

 

 

 

 

158,068

 

 

 

154,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

October 31,

 

 

October 31,

 

 

2021

 

 

2020

 

 

2021

 

2020

Cost of revenue

 

$

4,786

 

 

 

$

4,731

 

 

 

$

15,009

 

 

$

13,673

 

Research and development

 

 

17,712

 

 

 

 

14,581

 

 

 

 

49,791

 

 

 

46,139

 

Sales and marketing

 

 

13,872

 

 

 

 

10,619

 

 

 

 

38,342

 

 

 

31,364

 

General and administrative

 

 

9,219

 

 

 

 

7,903

 

 

 

 

28,365

 

 

 

24,262

 

Total stock-based compensation

 

$

45,589

 

 

 

$

37,834

 

 

 

$

131,507

 

 

$

115,438

 

BOX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

October 31,

 

 

October 31,

 

 

2021

 

2020

 

 

2021

 

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(13,861

)

 

$

(5,284

)

 

 

$

(37,134

)

 

$

(38,490

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

20,023

 

 

 

19,594

 

 

 

 

59,110

 

 

 

56,382

 

Stock-based compensation expense

 

 

45,589

 

 

 

37,834

 

 

 

 

131,507

 

 

 

115,438

 

Amortization of deferred commissions

 

 

11,705

 

 

 

9,286

 

 

 

 

33,287

 

 

 

26,065

 

Other

 

 

1,614

 

 

 

50

 

 

 

 

2,572

 

 

 

53

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(20,239

)

 

 

7,377

 

 

 

 

74,464

 

 

 

93,770

 

Prepaid expenses and other assets

 

 

(13,523

)

 

 

(8,934

)

 

 

 

(41,716

)

 

 

(28,656

)

Operating lease right-of-use assets, net

 

 

10,441

 

 

 

10,296

 

 

 

 

32,110

 

 

 

30,096

 

Accounts payable, accrued expenses and other liabilities

 

 

8,446

 

 

 

(2,719

)

 

 

 

9,118

 

 

 

(12,458

)

Operating lease liabilities

 

 

(11,737

)

 

 

(11,940

)

 

 

 

(36,190

)

 

 

(33,420

)

Deferred revenue

 

 

7,625

 

 

 

(10,508

)

 

 

 

(41,481

)

 

 

(69,486

)

Net cash provided by operating activities

 

 

46,083

 

 

 

45,052

 

 

 

 

185,647

 

 

 

139,294

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

 

(90,000

)

 

 

 

 

 

 

(140,000

)

 

 

 

Purchases of property and equipment, net of proceeds from sales

 

 

(1,242

)

 

 

(3,337

)

 

 

 

(3,477

)

 

 

(7,415

)

Capitalized internal-use software costs

 

 

(1,116

)

 

 

(964

)

 

 

 

(3,501

)

 

 

(6,357

)

Acquisitions, net of cash acquired

 

 

(2,753

)

 

 

 

 

 

 

(59,395

)

 

 

 

Other

 

 

(350

)

 

 

 

 

 

 

327

 

 

 

107

 

Net cash used in investing activities

 

 

(95,461

)

 

 

(4,301

)

 

 

 

(206,046

)

 

 

(13,665

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A convertible preferred stock, net of issuance costs

 

 

(1,695

)

 

 

 

 

 

 

485,103

 

 

 

 

Repurchases of common stock

 

 

(144,172

)

 

 

 

 

 

 

(428,253

)

 

 

 

Proceeds from borrowings

 

 

 

 

 

 

 

 

 

 

 

 

30,000

 

Principal payments on borrowings

 

 

 

 

 

(20,000

)

 

 

 

 

 

 

(20,000

)

Proceeds from issuances of common stock under employee equity plans

 

 

9,438

 

 

 

8,052

 

 

 

 

23,740

 

 

 

28,469

 

Employee payroll taxes paid related to net share settlement of restricted stock units

 

 

(12,586

)

 

 

(10,776

)

 

 

 

(43,677

)

 

 

(38,220

)

Principal payments of finance lease liabilities

 

 

(12,297

)

 

 

(14,584

)

 

 

 

(38,182

)

 

 

(46,159

)

Other

 

 

(293

)

 

 

 

 

 

 

(4,194

)

 

 

 

Net cash used in financing activities

 

 

(161,605

)

 

 

(37,308

)

 

 

 

(5,463

)

 

 

(45,910

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

 

(369

)

 

 

(49

)

 

 

 

(789

)

 

 

488

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

 

(211,352

)

 

 

3,394

 

 

 

 

(26,651

)

 

 

80,207

 

Cash, cash equivalents, and restricted cash, beginning of period

 

 

780,212

 

 

 

272,399

 

 

 

 

595,511

 

 

 

195,586

 

Cash, cash equivalents, and restricted cash, end of period

 

$

568,860

 

 

$

275,793

 

 

 

$

568,860

 

 

$

275,793

 

BOX, INC.

RECONCILIATION OF GAAP TO NON-GAAP DATA

(In Thousands, Except Per Share Data and Percentages)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

October 31,

 

 

October 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

GAAP gross profit

 

$

160,975

 

 

 

$

139,191

 

 

 

$

456,167

 

 

 

$

405,716

 

 

Stock-based compensation

 

 

4,786

 

 

 

 

4,731

 

 

 

 

15,009

 

 

 

 

13,673

 

 

Acquired intangible assets amortization

 

 

1,541

 

 

 

 

 

 

 

 

3,697

 

 

 

 

 

 

Non-GAAP gross profit

 

$

167,302

 

 

 

$

143,922

 

 

 

$

474,873

 

 

 

$

419,389

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross margin

 

 

72

 

%

 

 

71

 

%

 

 

71

 

%

 

 

71

 

%

Stock-based compensation

 

 

2

 

 

 

 

2

 

 

 

 

2

 

 

 

 

2

 

 

Acquired intangible assets amortization

 

 

1

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

Non-GAAP gross margin

 

 

75

 

%

 

 

73

 

%

 

 

74

 

%

 

 

73

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating loss

 

$

(11,087

)

 

 

$

(2,614

)

 

 

$

(27,460

)

 

 

$

(34,364

)

 

Stock-based compensation

 

 

45,589

 

 

 

 

37,834

 

 

 

 

131,507

 

 

 

 

115,438

 

 

Acquired intangible assets amortization

 

 

1,541

 

 

 

 

 

 

 

 

3,697

 

 

 

 

 

 

Acquisition-related expenses

 

 

180

 

 

 

 

 

 

 

 

1,215

 

 

 

 

 

 

Fees related to shareholder activism

 

 

10,146

 

 

 

 

 

 

 

 

15,978

 

 

 

 

1,402

 

 

Non-GAAP operating income

 

$

46,369

 

 

 

$

35,220

 

 

 

$

124,937

 

 

 

$

82,476

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin

 

 

(5

)

%

 

 

(1

)

%

 

 

(4

)

%

 

 

(6

)

%

Stock-based compensation

 

 

20

 

 

 

 

19

 

 

 

 

20

 

 

 

 

20

 

 

Acquired intangible assets amortization

 

 

1

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

Acquisition-related expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees related to shareholder activism

 

 

5

 

 

 

 

 

 

 

 

2

 

 

 

 

 

 

Non-GAAP operating margin

 

 

21

 

%

 

 

18

 

%

 

 

19

 

%

 

 

14

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss attributable to common stockholders

 

$

(18,162

)

 

 

$

(5,284

)

 

 

$

(45,220

)

 

 

$

(38,490

)

 

Stock-based compensation

 

 

45,589

 

 

 

 

37,834

 

 

 

 

131,507

 

 

 

 

115,438

 

 

Acquired intangible assets amortization

 

 

1,541

 

 

 

 

 

 

 

 

3,697

 

 

 

 

 

 

Acquisition-related expenses

 

 

180

 

 

 

 

 

 

 

 

1,215

 

 

 

 

 

 

Fees related to shareholder activism

 

 

10,146

 

 

 

 

 

 

 

 

15,978

 

 

 

 

1,402

 

 

Amortization of debt issuance costs

 

 

471

 

 

 

 

 

 

 

 

1,408

 

 

 

 

 

 

Undistributed earnings attributable to preferred stockholders

 

 

(4,374

)

 

 

 

 

 

 

 

(7,555

)

 

 

 

 

 

Non-GAAP net income attributable to common stockholders

 

$

35,391

 

 

 

$

32,550

 

 

 

$

101,030

 

 

 

$

78,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss per share attributable to common stockholders, basic and diluted

 

$

(0.12

)

 

 

$

(0.03

)

 

 

$

(0.29

)

 

 

$

(0.25

)

 

Stock-based compensation

 

 

0.30

 

 

 

 

0.24

 

 

 

 

0.83

 

 

 

 

0.75

 

 

Acquired intangible assets amortization

 

 

0.01

 

 

 

 

 

 

 

 

0.03

 

 

 

 

 

 

Acquisition-related expenses

 

 

 

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

Fees related to shareholder activism

 

 

0.07

 

 

 

 

 

 

 

 

0.10

 

 

 

 

0.01

 

 

Amortization of debt issuance costs

 

 

 

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

Undistributed earnings attributable to preferred stockholders

 

 

(0.03

)

 

 

 

 

 

 

 

(0.05

)

 

 

 

 

 

Non-GAAP net income per share attributable to common stockholders, basic

 

$

0.23

 

 

 

$

0.21

 

 

 

$

0.64

 

 

 

$

0.51

 

 

Non-GAAP net income per share attributable to common stockholders, diluted

 

$

0.22

 

 

 

$

0.20

 

 

 

$

0.61

 

 

 

$

0.48

 

 

Weighted-average shares used to compute GAAP net loss per share, basic and diluted

 

 

151,426

 

 

 

 

157,465

 

 

 

 

158,068

 

 

 

 

154,734

 

 

Weighted-average shares used to compute non-GAAP net income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

151,426

 

 

 

 

157,465

 

 

 

 

158,068

 

 

 

 

154,734

 

 

Diluted

 

 

159,249

 

 

 

 

163,455

 

 

 

 

165,816

 

 

 

 

161,622

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net cash provided by operating activities

 

$

46,083

 

 

 

$

45,052

 

 

 

$

185,647

 

 

 

$

139,294

 

 

Purchases of property and equipment, net of proceeds from sales

 

 

(1,242

)

 

 

 

(3,337

)

 

 

 

(3,477

)

 

 

 

(7,415

)

 

Principal payments of finance lease liabilities

 

 

(12,297

)

 

 

 

(14,584

)

 

 

 

(38,182

)

 

 

 

(46,159

)

 

Capitalized internal-use software costs

 

 

(1,296

)

 

 

 

(964

)

 

 

 

(7,046

)

 

 

 

(6,357

)

 

Non-GAAP free cash flow

 

$

31,248

 

 

 

$

26,167

 

 

 

$

136,942

 

 

 

$

79,363

 

 

GAAP net cash used in investing activities

 

$

(95,461

)

 

 

$

(4,301

)

 

 

$

(206,046

)

 

 

$

(13,665

)

 

GAAP net cash used in financing activities

 

$

(161,605

)

 

 

$

(37,308

)

 

 

$

(5,463

)

 

 

$

(45,910

)

 

BOX, INC.

RECONCILIATION OF GAAP REVENUE TO BILLINGS

(In Thousands)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

October 31,

 

October 31,

 

 

2021

 

2020

 

2021

 

2020

GAAP revenue

 

$

224,044

 

 

$

196,003

 

 

$

640,971

 

 

$

571,857

 

Deferred revenue, end of period

 

 

429,664

 

 

 

354,363

 

 

 

429,664

 

 

 

354,363

 

Less: deferred revenue, beginning of period

 

 

(422,039

)

 

 

(364,871

)

 

 

(465,613

)

 

 

(423,849

)

Contract assets, beginning of period

 

 

866

 

 

 

 

 

 

25

 

 

 

 

Less: contract assets, end of period

 

 

(1,073

)

 

 

 

 

 

(1,073

)

 

 

 

Billings

 

$

231,462

 

 

$

185,495

 

 

$

603,974

 

 

$

502,371

 

BOX, INC.

RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME PER SHARE GUIDANCE

(In Thousands, Except Per Share Data)

(Unaudited)

 

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

January 31, 2022

 

January 31, 2022

GAAP net loss per share attributable to common stockholders range, basic and diluted

 

$

(0.06

)

-

$

(0.05

)

 

$

(0.35

)

-

$

(0.34

)

Stock-based compensation

 

 

0.30

 

 

 

0.30

 

 

 

1.13

 

 

 

1.13

 

Acquired intangible asset amortization

 

 

0.01

 

 

 

0.01

 

 

 

0.03

 

 

 

0.03

 

Acquisition-related expenses

 

 

0.01

 

 

 

0.01

 

 

 

0.02

 

 

 

0.02

 

Fees related to shareholder activism

 

 

 

 

 

 

 

 

0.10

 

 

 

0.10

 

Amortization of debt issuance costs

 

 

 

 

 

 

 

 

0.01

 

 

 

0.01

 

Undistributed earnings attributable to preferred stockholders

 

 

(0.03

)

 

 

(0.03

)

 

 

(0.07

)

 

 

(0.07

)

Non-GAAP net income per share attributable to common stockholders range, basic

 

$

0.23

 

-

$

0.24

 

 

$

0.87

 

-

$

0.88

 

Non-GAAP net income per share attributable to common stockholders range, diluted

 

$

0.22

 

-

$

0.23

 

 

$

0.83

 

-

$

0.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares used to compute GAAP net loss per share attributable to common stockholders, basic and diluted

 

 

 

 

 

149,860

 

 

 

 

 

 

155,999

 

Weighted-average shares used to compute Non-GAAP net income per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

149,860

 

 

 

 

 

 

155,999

 

Diluted

 

 

 

 

 

158,114

 

 

 

 

 

 

163,873

 

BOX, INC.

RECONCILIATION OF GAAP TO NON-GAAP OPERATING MARGIN GUIDANCE

(Unaudited)

 

 

 

Three Months Ended

 

 

Fiscal Year Ended

 

 

 

January 31, 2022

 

 

January 31, 2022

 

GAAP operating margin

 

 

1.0

 

%

 

 

(3.0

)

%

Stock-based compensation

 

 

19.5

 

 

 

 

20.5

 

 

Acquired intangible assets amortization

 

 

0.5

 

 

 

 

0.5

 

 

Fees related to shareholder activism

 

 

 

 

 

 

2.0

 

 

Non-GAAP operating margin

 

 

21.0

 

%

 

 

20.0

 

%

 

Investors:
Cynthia Hiponia and Elaine Gaudioso
+1 650-209-3463
ir@box.com

Media:
Denis Roy and Rachel Levine
+1 650-543-6926
press@box.com

Source: Box, Inc.