Box Reports Fiscal Second Quarter 2025 Financial Results
Revenue of
GAAP Operating Margin of 7.5% and Record Non-GAAP Operating Margin of 28.4%
GAAP Net Income Per Share of
New
“As we enter the era of Intelligent Content Management, Box is delivering a singular platform that can power the lifecycle of content with intelligence built right in,” said
“We delivered a strong second quarter, with accelerated billings growth as well as record gross margin, operating margin, and EPS,” said
Fiscal Second Quarter Financial Highlights
-
Revenue for the second quarter of fiscal 2025 was
$270.0 million , a 3% increase from revenue for the second quarter of fiscal 2024 of$261.4 million , or 6% growth on a constant currency basis. -
Remaining performance obligations (“RPO”) as of
July 31, 2024 were$1.272 billion , a 12% increase from RPO as ofJuly 31, 2023 of$1.138 billion , or 14% growth on a constant currency basis. -
Billings for the second quarter of fiscal 2025 were
$256.4 million , a 10% increase from billings for the second quarter of fiscal 2024 of$232.5 million , or 9% growth on a constant currency basis. -
GAAP gross profit for the second quarter of fiscal 2025 was a record
$214.5 million , or 79.4% of revenue. This compares to a GAAP gross profit of$194.4 million , or 74.4% of revenue, in the second quarter of fiscal 2024. -
Non-GAAP gross profit for the second quarter of fiscal 2025 was a record
$220.2 million , or 81.6% of revenue. This compares to a non-GAAP gross profit of$201.1 million , or 76.9% of revenue, in the second quarter of fiscal 2024. -
GAAP operating income in the second quarter of fiscal 2025 was
$20.3 million , or 7.5% of revenue. This compares to a GAAP operating income of$9.9 million , or 3.8% of revenue, in the second quarter of fiscal 2024. -
Non-GAAP operating income in the second quarter of fiscal 2025 was a record
$76.7 million , or 28.4% of revenue. This compares to a non-GAAP operating income of$64.7 million , or 24.8% of revenue, in the second quarter of fiscal 2024. -
GAAP diluted net income per share attributable to common stockholders in the second quarter of fiscal 2025 was
$0.10 on 146.5 million weighted-average shares outstanding. This compares to GAAP diluted net income per share attributable to common stockholders of$0.04 in the second quarter of fiscal 2024 on 150.0 million weighted-average shares outstanding. GAAP diluted net income per share attributable to common stockholders in the second quarter of fiscal 2025 includes a negative impact of$0.05 year-over-year from unfavorable foreign exchange rates. -
Non-GAAP diluted net income per share attributable to common stockholders in the second quarter of fiscal 2025 was a record
$0.44 . This compares to non-GAAP diluted net income per share attributable to common stockholders of$0.36 in the second quarter of fiscal 2024. Non-GAAP diluted net income per share attributable to common stockholders in the second quarter of fiscal 2025 includes a negative impact of$0.05 year-over-year from unfavorable foreign exchange rates. -
Net cash provided by operating activities in the second quarter of fiscal 2025 was
$36.3 million , an 11% increase from net cash provided by operating activities of$32.7 million in the second quarter of fiscal 2024. -
Non-GAAP free cash flow in the second quarter of fiscal 2025 was
$32.7 million , a 59% increase from non-GAAP free cash flow of$20.6 million in the second quarter of fiscal 2024.
Growth on a constant currency basis and impact from foreign exchange is determined by comparing current period reported results with the current results calculated using the equivalent rates in the prior period.
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.
Recent Business Highlights
-
Delivered wins or expansions with leading organizations across a variety of industries, including Financial Services (Block, Moelis & Company and
Northwest Bank ), Hospitality (Resorts World Las Vegas ), Life Sciences (argenx,CymaBay Therapeutics andIQVIA ), Industrial Goods (H2 Green Steel and Heat and Control),Media and Entertainment (Fremantle andUnited Talent Agency ), Public Sector (State of Hawaii andUnited States Department of Agriculture ), Retail (FANATICS andSKECHERS USA ), and Transportation (East Japan Railway Company andSwissport International ). - Announced the acquisition of the AI-powered, intelligent document processing (IDP) technology and team of Alphamoon. This strategic move significantly expands the functionality of Box’s Intelligent Content Management platform.
- Announced unlimited end-user Box AI queries for Hubs, Documents, and Notes for customers on Enterprise Plus plans.
- Unveiled a new set of features in Box AI that includes an integration with GPT-4o, support for image and spreadsheet files, and the Box AI for Metadata API.
- Expanded its strategic partnership with Slack to bring secure AI to enterprise content. Also announced that joint customers now have access to unlimited Box AI queries directly in Slack.
-
Hosted BoxWorks Tokyo 2024 and AI Disrupt in
London , attracting thousands of attendees and customer speakers from leading organizations. -
Announced that the company's 14th annual BoxWorks will take place on
November 12, 2024 inSan Francisco where attendees will learn about Intelligent Content Management and hear from industry and customer speakers. -
Recognized as one of PEOPLE’s 100 Companies That Care in 2024 and in Fortune® magazine as #10 on the 100 Best Large Workplaces for Millennials for 2024 by
Great Place to Work®. -
Announced the appointment of
Samantha Wessels as President of Box Europe, theMiddle East andAfrica .Ms. Wessels brings over 20 years of technology experience to Box, having held leadership roles at Snyk, Elastic, andNTT . -
Announced the appointment of
Tricia Gellman as Chief Marketing Officer of Box.Ms. Gellman brings over two decades of experience driving growth for leading technology companies, including Salesforce and Adobe.
Update on Share Repurchase Plan
In the second quarter, approximately 3.9 million shares were repurchased for approximately
Outlook
As a reminder, approximately one third of Box’s revenue is generated outside of the
Additionally, as we have become consistently profitable in our international business, in the fourth quarter of fiscal year 2024 we released the valuation allowance against our deferred tax assets in the
Q3 FY25 Guidance
-
Revenue is expected to be in the range of
$274 million to$276 million , up 5% year-over-year, or 6% growth on a constant currency basis. - GAAP operating margin is expected to be approximately 7.5%, and non-GAAP operating margin is expected to be approximately 28%.
-
GAAP net income per share attributable to common stockholders is expected to be in the range of
$0.07 to$0.08 . GAAP EPS guidance includes an expected negative impact of$0.02 from unfavorable exchange rates and$0.01 from the recognition of deferred tax expenses in international countries. -
Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of
$0.41 to$0.42 . Non-GAAP EPS guidance includes an expected negative impact of$0.02 from unfavorable exchange rates and$0.01 from the recognition of deferred tax expenses in international countries. - Weighted-average diluted shares outstanding are expected to be approximately 148 million.
Full Year FY25 Guidance
-
Revenue is expected to be in the range of
$1.086 billion to$1.09 billion , up 5% year-over-year, or 7% growth on a constant currency basis. Due to the weakening of theU.S. dollar versus the Yen since we last provided guidance, we now expect FX to be a 170 basis point headwind to full fiscal year 2025 revenue growth, 80 basis points lower than our previous expectations. On a constant currency basis, our new guidance represents a$2 million increase from our previous guidance. - GAAP operating margin is expected to be approximately 7.0%, and non-GAAP operating margin is expected to be approximately 27.5%. For full fiscal year 2025 GAAP and non-GAAP operating margin, we now expect FX to be a headwind of 130 basis points, 30 basis points lower than our previous expectations.
-
GAAP net income per share attributable to common stockholders is expected to be in the range of
$0.31 to$0.33 . FY25 GAAP EPS guidance includes an expected negative impact of$0.12 from unfavorable exchange rates and$0.05 from the recognition of deferred tax expenses in international countries. -
Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of
$1.64 to$1.66 . FY25 non-GAAP EPS guidance includes an expected negative impact of$0.12 from unfavorable exchange rates and$0.05 from the recognition of deferred tax expenses in international countries. - Weighted-average diluted shares outstanding are expected to be approximately 148 million.
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 per share and operating margin 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
The conference call can be accessed by registering online at https://events.q4inc.com/attendee/414637595 at which time registrants will receive dial-in information as well as a conference 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:
+ 1-800-770-2030 (toll-free), conference ID: 23531
+ 1-609-800-9909 (
+ 1-647-362-9199 (
Box has used, and intends to continue to use, its Investor Relations website (www.box.com/investors), as well as certain X 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 X 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 X 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
Forward-Looking Statements
This press release contains forward-looking statements that involve risks, uncertainties, and assumptions, including statements regarding Box’s expectations regarding its growth and profitability, the size of its market opportunity, its investments in go-to-market programs, the demand for its products, the potential of AI and its impact on Box, 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 and acquisitions, the impact of macroeconomic conditions on its business, its ability to grow and scale its business and drive operating efficiencies, the impact of fluctuations in foreign currency exchange rates on its future results, its net retention rate, its ability to achieve revenue targets and billings expectations, its revenue and billings growth rates, its ability to expand operating margins, its revenue growth rate plus free cash flow margin in fiscal year 2025 and beyond, its long-term financial targets, its ability to maintain 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 margins, GAAP and non-GAAP net income per share, GAAP and non-GAAP operating margins, the related components of GAAP and non-GAAP net income per share, weighted-average outstanding share count expectations for Box’s fiscal third quarter and full fiscal year 2025 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 Hamas-Israel and
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
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 gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributable to common stockholders, non-GAAP net income per share attributable to common stockholders, billings, remaining performance obligations, non-GAAP free cash flow and free cash flow margin. 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 (including for purposes of determining variable compensation of members of management and other employees) 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 gross profit and non-GAAP gross margin. Box defines non-GAAP gross profit as GAAP gross profit excluding expenses related to stock-based compensation (“SBC”) included in cost of revenue, intangible assets amortization, and as applicable, other special items. Non-GAAP gross margin is defined as non-GAAP gross profit 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 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. 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. Box also excludes expenses associated with a non-recurring workforce reorganization from non-GAAP gross profit as they are considered by management to be special items outside of Box’s core operating results.
Non-GAAP operating income and non-GAAP operating margin. Box defines non-GAAP operating income as operating income excluding expenses related to SBC, intangible assets amortization, and as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenue. 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 (2) expenses related to certain litigation, (3) expenses associated with a non-recurring workforce reorganization, consisting primarily of severance and other personnel-related costs, and (4) expenses related to acquisitions.
Non-GAAP net income attributable to common stockholders and non-GAAP net income per share attributable to common stockholders. Box defines non-GAAP net income attributable to common stockholders as GAAP net income attributable to common stockholders excluding expenses related to SBC, intangible assets amortization, amortization of debt issuance costs, the income tax benefit from the release of a valuation allowance on deferred tax assets, undistributed earnings attributable to preferred stockholders, and as applicable, other special items as described in the preceding paragraph. Box defines non-GAAP net income per share attributable to common stockholders as non-GAAP net income attributable to common stockholders 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. 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 or a significant penalty that is due upon cancellation. 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.
Non-GAAP free cash flow and free cash flow margin. Box defines non-GAAP 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. Free cash flow margin is calculated as non-GAAP free cash flow divided by revenue. Box specifically identifies adjusting items in the reconciliation of GAAP to non-GAAP financial measures. Box considers non-GAAP 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 Intelligent Content Cloud, a single platform that enables organizations to fuel collaboration, manage the entire content lifecycle, secure critical content, and transform business workflows with enterprise AI. Founded in 2005, Box simplifies work for leading global organizations, including AstraZeneca, JLL, Morgan Stanley, and Nationwide. Box is headquartered in
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In Thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
||||||
|
2024 |
2024 |
||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
406,620 |
|
$ |
383,742 |
|
||
Short-term investments |
|
75,605 |
|
|
96,948 |
|
||
Accounts receivable, net |
|
177,487 |
|
|
281,487 |
|
||
Deferred commissions |
|
43,516 |
|
|
45,817 |
|
||
Other current assets |
|
30,431 |
|
|
34,186 |
|
||
Total current assets |
|
733,659 |
|
|
842,180 |
|
||
Operating lease right-of-use assets, net |
|
88,453 |
|
|
99,354 |
|
||
|
|
76,773 |
|
|
76,750 |
|
||
Deferred commissions, non-current |
|
58,464 |
|
|
63,541 |
|
||
Deferred tax assets |
|
73,411 |
|
|
75,665 |
|
||
Other long-term assets |
|
89,978 |
|
|
83,673 |
|
||
Total assets |
$ |
1,120,738 |
|
$ |
1,241,163 |
|
||
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT |
||||||||
Current liabilities: |
||||||||
Accounts payable, accrued expenses and other current liabilities |
$ |
44,076 |
|
$ |
52,737 |
|
||
Accrued compensation and benefits |
|
33,189 |
|
|
36,872 |
|
||
Operating lease liabilities |
|
25,662 |
|
|
26,812 |
|
||
Deferred revenue |
|
483,987 |
|
|
562,859 |
|
||
Total current liabilities |
|
586,914 |
|
|
679,280 |
|
||
Debt, net, non-current |
|
371,824 |
|
|
370,822 |
|
||
Operating lease liabilities, non-current |
|
82,173 |
|
|
94,165 |
|
||
Other liabilities, non-current |
|
26,081 |
|
|
35,863 |
|
||
Total liabilities |
|
1,066,992 |
|
|
1,180,130 |
|
||
Series A convertible preferred stock |
|
493,145 |
|
|
492,095 |
|
||
Stockholders’ deficit: |
||||||||
Common stock |
|
14 |
|
|
14 |
|
||
Additional paid-in capital |
|
740,292 |
|
|
785,374 |
|
||
Accumulated other comprehensive loss |
|
(10,659 |
) |
|
(9,686 |
) |
||
Accumulated deficit |
|
(1,169,046 |
) |
|
(1,206,764 |
) |
||
Total stockholders’ deficit |
|
(439,399 |
) |
|
(431,062 |
) |
||
Total liabilities, convertible preferred stock and stockholders’ deficit |
$ |
1,120,738 |
|
$ |
1,241,163 |
|
||
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In Thousands, Except Per Share Data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
||||||||||||
Revenue |
$ |
270,039 |
|
$ |
261,428 |
|
$ |
534,697 |
|
$ |
513,326 |
|
||||
Cost of revenue (1) |
|
55,513 |
|
|
67,013 |
|
|
113,765 |
|
|
128,664 |
|
||||
Gross profit |
|
214,526 |
|
|
194,415 |
|
|
420,932 |
|
|
384,662 |
|
||||
Operating expenses: |
||||||||||||||||
Research and development (1) |
|
65,445 |
|
|
63,316 |
|
|
128,118 |
|
|
125,834 |
|
||||
Sales and marketing (1) |
|
95,235 |
|
|
88,605 |
|
|
187,908 |
|
|
174,815 |
|
||||
General and administrative (1) |
|
33,566 |
|
|
32,619 |
|
|
66,619 |
|
|
65,803 |
|
||||
Total operating expenses |
|
194,246 |
|
|
184,540 |
|
|
382,645 |
|
|
366,452 |
|
||||
Income from operations |
|
20,280 |
|
|
9,875 |
|
|
38,287 |
|
|
18,210 |
|
||||
Interest and other income, net |
|
4,699 |
|
|
3,293 |
|
|
8,557 |
|
|
5,611 |
|
||||
Income before provision for income taxes |
|
24,979 |
|
|
13,168 |
|
|
46,844 |
|
|
23,821 |
|
||||
Provision for income taxes |
|
4,483 |
|
|
2,377 |
|
|
9,126 |
|
|
4,680 |
|
||||
Net income |
$ |
20,496 |
|
$ |
10,791 |
|
$ |
37,718 |
|
$ |
19,141 |
|
||||
Accretion and dividend on series A convertible preferred stock |
|
(4,310 |
) |
|
(4,307 |
) |
|
(8,550 |
) |
|
(8,531 |
) |
||||
Undistributed earnings attributable to preferred stockholders |
|
(1,845 |
) |
|
(740 |
) |
|
(3,313 |
) |
|
(1,209 |
) |
||||
Net income attributable to common stockholders |
$ |
14,341 |
|
$ |
5,744 |
|
$ |
25,855 |
|
$ |
9,401 |
|
||||
Net income per share attributable to common stockholders |
||||||||||||||||
Basic |
$ |
0.10 |
|
$ |
0.04 |
|
$ |
0.18 |
|
$ |
0.07 |
|
||||
Diluted |
$ |
0.10 |
|
$ |
0.04 |
|
$ |
0.18 |
|
$ |
0.06 |
|
||||
Weighted-average shares used to compute net income per share attributable to common stockholders |
||||||||||||||||
Basic |
|
144,070 |
|
|
144,248 |
|
|
144,678 |
|
|
144,490 |
|
||||
Diluted |
|
146,525 |
|
|
150,007 |
|
|
147,634 |
|
|
150,218 |
|
||||
|
||||||||||||||||
(1) Includes stock-based compensation expense as follows: |
||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
||||||||||||
Cost of revenue |
$ |
4,731 |
|
$ |
5,230 |
|
$ |
9,352 |
|
$ |
9,715 |
|
||||
Research and development |
|
19,676 |
|
|
18,722 |
|
|
37,495 |
|
|
35,724 |
|
||||
Sales and marketing |
|
19,173 |
|
|
17,546 |
|
|
36,956 |
|
|
32,864 |
|
||||
General and administrative |
|
11,531 |
|
|
11,848 |
|
|
22,470 |
|
|
22,320 |
|
||||
Total stock-based compensation |
$ |
55,111 |
|
$ |
53,346 |
|
$ |
106,273 |
|
$ |
100,623 |
|
||||
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||||||
(In Thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||||||||||
Net income |
$ |
20,496 |
|
$ |
10,791 |
|
$ |
37,718 |
|
$ |
19,141 |
|
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
Depreciation and amortization |
|
5,296 |
|
|
11,577 |
|
|
9,984 |
|
|
24,483 |
|
||||
Stock-based compensation expense |
|
55,111 |
|
|
53,346 |
|
|
106,273 |
|
|
100,623 |
|
||||
Amortization of deferred commissions |
|
13,178 |
|
|
13,621 |
|
|
26,538 |
|
|
27,369 |
|
||||
Other |
|
1,585 |
|
|
1,385 |
|
|
2,402 |
|
|
1,705 |
|
||||
Changes in operating assets and liabilities: |
||||||||||||||||
Accounts receivable, net |
|
(32,264 |
) |
|
(33,496 |
) |
|
103,301 |
|
|
96,309 |
|
||||
Deferred commissions |
|
(11,438 |
) |
|
(9,206 |
) |
|
(19,288 |
) |
|
(17,319 |
) |
||||
Operating lease right-of-use assets, net |
|
4,814 |
|
|
4,764 |
|
|
13,350 |
|
|
15,850 |
|
||||
Other assets |
|
1,071 |
|
|
712 |
|
|
(595 |
) |
|
(1,227 |
) |
||||
Accounts payable, accrued expenses and other liabilities |
|
1,787 |
|
|
14,608 |
|
|
(14,399 |
) |
|
(6,136 |
) |
||||
Operating lease liabilities |
|
(6,389 |
) |
|
(11,121 |
) |
|
(15,326 |
) |
|
(24,186 |
) |
||||
Deferred revenue |
|
(16,949 |
) |
|
(24,305 |
) |
|
(82,456 |
) |
|
(79,006 |
) |
||||
Net cash provided by operating activities |
|
36,298 |
|
|
32,676 |
|
|
167,502 |
|
|
157,606 |
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||||||||||
Purchases of short-term investments |
|
(8,966 |
) |
|
(30,307 |
) |
|
(56,455 |
) |
|
(65,745 |
) |
||||
Maturities of short-term investments |
|
51,000 |
|
|
17,000 |
|
|
75,896 |
|
|
50,000 |
|
||||
Sales of short-term investments |
|
— |
|
|
— |
|
|
3,567 |
|
|
— |
|
||||
Purchases of property and equipment |
|
(398 |
) |
|
952 |
|
|
(1,674 |
) |
|
(2,000 |
) |
||||
Proceeds from sales of property and equipment |
|
3,295 |
|
|
622 |
|
|
5,991 |
|
|
1,253 |
|
||||
Capitalized internal-use software costs |
|
(6,113 |
) |
|
(4,544 |
) |
|
(11,677 |
) |
|
(8,377 |
) |
||||
Other |
|
— |
|
|
— |
|
|
— |
|
|
(190 |
) |
||||
Net cash provided by (used in) investing activities |
|
38,818 |
|
|
(16,277 |
) |
|
15,648 |
|
|
(25,059 |
) |
||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||||||||||
Repurchases of common stock |
|
(106,552 |
) |
|
(62,535 |
) |
|
(138,686 |
) |
|
(104,906 |
) |
||||
Payments of dividends to preferred stockholders |
|
(3,750 |
) |
|
(3,750 |
) |
|
(7,500 |
) |
|
(7,443 |
) |
||||
Proceeds from exercise of stock options |
|
5,716 |
|
|
35 |
|
|
15,353 |
|
|
795 |
|
||||
Proceeds from issuances of common stock under employee stock purchase plan |
|
— |
|
|
— |
|
|
15,677 |
|
|
16,045 |
|
||||
Employee payroll taxes paid for net settlement of stock awards |
|
(16,474 |
) |
|
(21,450 |
) |
|
(37,783 |
) |
|
(42,026 |
) |
||||
Principal payments of finance lease liabilities |
|
— |
|
|
(9,071 |
) |
|
(2,141 |
) |
|
(18,952 |
) |
||||
Other |
|
(347 |
) |
|
(2,365 |
) |
|
(2,022 |
) |
|
(3,570 |
) |
||||
Net cash used in financing activities |
|
(121,407 |
) |
|
(99,136 |
) |
|
(157,102 |
) |
|
(160,057 |
) |
||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
3,622 |
|
|
(2,785 |
) |
|
(2,589 |
) |
|
(4,836 |
) |
||||
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
(42,669 |
) |
|
(85,522 |
) |
|
23,459 |
|
|
(32,346 |
) |
||||
Cash, cash equivalents, and restricted cash, beginning of period |
|
450,385 |
|
|
482,216 |
|
|
384,257 |
|
|
429,040 |
|
||||
Cash, cash equivalents, and restricted cash, end of period |
$ |
407,716 |
|
$ |
396,694 |
|
$ |
407,716 |
|
$ |
396,694 |
|
||||
|
||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP DATA |
||||||||||||||||
(In Thousands, Except Per Share Data and Percentages) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
||||||||||||
GAAP gross profit |
$ |
214,526 |
|
$ |
194,415 |
|
$ |
420,932 |
|
$ |
384,662 |
|
||||
Stock-based compensation |
|
4,731 |
|
|
5,230 |
|
|
9,352 |
|
|
9,715 |
|
||||
Acquired intangible assets amortization |
|
981 |
|
|
1,452 |
|
|
2,133 |
|
|
2,904 |
|
||||
Non-GAAP gross profit |
$ |
220,238 |
|
$ |
201,097 |
|
$ |
432,417 |
|
$ |
397,281 |
|
||||
|
||||||||||||||||
GAAP gross margin |
|
79.4 |
% |
|
74.4 |
% |
|
78.7 |
% |
|
74.9 |
% |
||||
Stock-based compensation |
|
1.8 |
|
|
2.0 |
|
|
1.8 |
|
|
1.9 |
|
||||
Acquired intangible assets amortization |
|
0.4 |
|
|
0.5 |
|
|
0.4 |
|
|
0.6 |
|
||||
Non-GAAP gross margin |
|
81.6 |
% |
|
76.9 |
% |
|
80.9 |
% |
|
77.4 |
% |
||||
|
||||||||||||||||
GAAP operating income |
$ |
20,280 |
|
$ |
9,875 |
|
$ |
38,287 |
|
$ |
18,210 |
|
||||
Stock-based compensation |
|
55,111 |
|
|
53,346 |
|
|
106,273 |
|
|
100,623 |
|
||||
Acquired intangible assets amortization |
|
981 |
|
|
1,452 |
|
|
2,133 |
|
|
2,904 |
|
||||
Acquisition-related expenses |
|
293 |
|
|
14 |
|
|
293 |
|
|
14 |
|
||||
Expenses related to litigation |
|
25 |
|
|
27 |
|
|
104 |
|
|
319 |
|
||||
Non-GAAP operating income |
$ |
76,690 |
|
$ |
64,714 |
|
$ |
147,090 |
|
$ |
122,070 |
|
||||
|
||||||||||||||||
GAAP operating margin |
|
7.5 |
% |
|
3.8 |
% |
|
7.2 |
% |
|
3.5 |
% |
||||
Stock-based compensation |
|
20.4 |
|
|
20.4 |
|
|
19.9 |
|
|
19.6 |
|
||||
Acquired intangible assets amortization |
|
0.4 |
|
|
0.6 |
|
|
0.4 |
|
|
0.6 |
|
||||
Acquisition-related expenses |
|
0.1 |
|
|
— |
|
|
— |
|
|
— |
|
||||
Expenses related to litigation |
|
— |
|
|
— |
|
|
— |
|
|
0.1 |
|
||||
Non-GAAP operating margin |
|
28.4 |
% |
|
24.8 |
% |
|
27.5 |
% |
|
23.8 |
% |
||||
|
||||||||||||||||
GAAP net income attributable to common stockholders |
$ |
14,341 |
|
$ |
5,744 |
|
$ |
25,855 |
|
$ |
9,401 |
|
||||
Stock-based compensation |
|
55,111 |
|
|
53,346 |
|
|
106,273 |
|
|
100,623 |
|
||||
Acquired intangible assets amortization |
|
981 |
|
|
1,452 |
|
|
2,133 |
|
|
2,904 |
|
||||
Acquisition-related expenses |
|
293 |
|
|
14 |
|
|
293 |
|
|
14 |
|
||||
Expenses related to litigation |
|
25 |
|
|
27 |
|
|
104 |
|
|
319 |
|
||||
Amortization of debt issuance costs |
|
477 |
|
|
474 |
|
|
953 |
|
|
948 |
|
||||
Undistributed earnings attributable to preferred stockholders |
|
(6,486 |
) |
|
(6,314 |
) |
|
(12,466 |
) |
|
(11,945 |
) |
||||
Non-GAAP net income attributable to common stockholders |
$ |
64,742 |
|
$ |
54,743 |
|
$ |
123,145 |
|
$ |
102,264 |
|
||||
|
||||||||||||||||
GAAP net income per share attributable to common stockholders, diluted |
$ |
0.10 |
|
$ |
0.04 |
|
$ |
0.18 |
|
$ |
0.06 |
|
||||
Stock-based compensation |
|
0.38 |
|
|
0.35 |
|
|
0.72 |
|
|
0.67 |
|
||||
Acquired intangible assets amortization |
|
0.01 |
|
|
0.01 |
|
|
0.01 |
|
|
0.02 |
|
||||
Acquisition-related expenses |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Expenses related to litigation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Amortization of debt issuance costs |
|
— |
|
|
— |
|
|
0.01 |
|
|
0.01 |
|
||||
Undistributed earnings attributable to preferred stockholders |
|
(0.05 |
) |
|
(0.04 |
) |
|
(0.09 |
) |
|
(0.08 |
) |
||||
Non-GAAP net income per share attributable to common stockholders, diluted |
$ |
0.44 |
|
$ |
0.36 |
|
$ |
0.83 |
|
$ |
0.68 |
|
||||
Weighted-average shares used to compute net income per share attributable to common stockholders, diluted |
|
146,525 |
|
|
150,007 |
|
|
147,634 |
|
|
150,218 |
|
||||
|
||||||||||||||||
GAAP net cash provided by operating activities |
$ |
36,298 |
|
$ |
32,676 |
|
$ |
167,502 |
|
$ |
157,606 |
|
||||
Proceeds from sales of property and equipment, net of purchases |
|
2,897 |
|
|
1,574 |
|
|
4,317 |
|
|
(747 |
) |
||||
Principal payments of finance lease liabilities |
|
— |
|
|
(9,071 |
) |
|
(2,141 |
) |
|
(18,952 |
) |
||||
Capitalized internal-use software costs |
|
(6,460 |
) |
|
(4,611 |
) |
|
(13,699 |
) |
|
(9,091 |
) |
||||
Non-GAAP free cash flow |
$ |
32,735 |
|
$ |
20,568 |
|
$ |
155,979 |
|
$ |
128,816 |
|
||||
GAAP net cash provided by (used in) investing activities |
$ |
38,818 |
|
$ |
(16,277 |
) |
$ |
15,648 |
|
$ |
(25,059 |
) |
||||
GAAP net cash used in financing activities |
$ |
(121,407 |
) |
$ |
(99,136 |
) |
$ |
(157,102 |
) |
$ |
(160,057 |
) |
||||
|
||||||||||||||||
RECONCILIATION OF GAAP REVENUE TO BILLINGS |
||||||||||||||||
(In Thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
||||||||||||
GAAP revenue |
$ |
270,039 |
|
$ |
261,428 |
|
$ |
534,697 |
|
$ |
513,326 |
|
||||
Deferred revenue, end of period |
|
502,104 |
|
|
479,293 |
|
|
502,104 |
|
|
479,293 |
|
||||
Less: deferred revenue, beginning of period |
|
(513,572 |
) |
|
(507,385 |
) |
|
(586,871 |
) |
|
(566,630 |
) |
||||
Contract assets, beginning of period |
|
3,345 |
|
|
2,642 |
|
|
2,452 |
|
|
1,900 |
|
||||
Less: contract assets, end of period |
|
(5,481 |
) |
|
(3,477 |
) |
|
(5,481 |
) |
|
(3,477 |
) |
||||
Billings |
$ |
256,435 |
|
$ |
232,501 |
|
$ |
446,901 |
|
$ |
424,412 |
|
||||
|
||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME PER SHARE GUIDANCE |
||||||||||||||||
(In Thousands, Except Per Share Data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
Three Months Ended |
Fiscal Year Ended |
||||||||||||||
|
|
|
||||||||||||||
GAAP net income per share attributable to common stockholders range, diluted |
$ |
0.07 |
|
-$ |
0.08 |
|
$ |
0.31 |
|
-$ |
0.33 |
|
||||
Stock-based compensation |
|
0.36 |
|
|
0.36 |
|
|
1.43 |
|
|
1.43 |
|
||||
Acquired intangible asset amortization |
|
0.01 |
|
|
0.01 |
|
|
0.03 |
|
|
0.03 |
|
||||
Acquisition-related expenses |
|
0.01 |
|
|
0.01 |
|
|
0.01 |
|
|
0.01 |
|
||||
Expenses related to litigation |
|
— |
|
|
— |
|
|
0.01 |
|
|
0.01 |
|
||||
Amortization of debt issuance costs |
|
— |
|
|
— |
|
|
0.01 |
|
|
0.01 |
|
||||
Undistributed earnings attributable to preferred stockholders |
|
(0.04 |
) |
|
(0.04 |
) |
|
(0.17 |
) |
|
(0.17 |
) |
||||
Non-GAAP net income per share attributable to common stockholders range, diluted |
$ |
0.41 |
|
-$ |
0.42 |
|
$ |
1.64 |
|
-$ |
1.66 |
|
||||
|
||||||||||||||||
Weighted-average shares, diluted |
|
148,000 |
|
|
148,500 |
|
||||||||||
Note: Figures may not sum due to rounding. |
||||||||||||||||
|
||||||
RECONCILIATION OF GAAP TO NON-GAAP OPERATING MARGIN GUIDANCE |
||||||
(Unaudited) |
||||||
|
Three Months Ended |
Fiscal Year Ended |
||||
|
|
|
||||
GAAP operating margin |
7.5 |
% |
7.0 |
% |
||
Stock-based compensation |
19.5 |
|
19.5 |
|
||
Acquired intangible assets amortization |
0.5 |
|
0.5 |
|
||
Other (1) |
0.5 |
|
0.5 |
|
||
Non-GAAP operating margin |
28.0 |
% |
27.5 |
% |
||
(1) Other includes acquisition-related expenses and expenses related to litigation |
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