Box Reports Strong Fiscal Second Quarter 2023 Financial Results
Box, Inc. reported preliminary Q2 FY23 results with revenue of $246 million, reflecting a 15% year-over-year growth. Despite foreign exchange headwinds impacting growth by 3 percentage points, the company maintained FY23 revenue guidance. Non-GAAP EPS increased to $0.28, up from $0.21 YOY, while GAAP EPS showed improvement with a loss of $0.02 per share compared to a loss of $0.08 last year. The Net Retention Rate rose to 112%. For Q3 FY23, revenue is projected between $250-$252 million, with GAAP EPS guidance of $0.01 to $0.02, including FX impacts.
- Revenue for Q2 FY23 increased by 15% YOY to $246 million.
- Non-GAAP EPS improved to $0.28 from $0.21 in Q2 FY22.
- Net Retention Rate rose to 112%, indicating strong customer retention.
- GAAP gross profit margin increased to 1.3% from a loss of 2.8% in Q2 FY22.
- Improved guidance for FY23 GAAP EPS from a loss range of $0.05 to $0.01 to a loss of $0.03 to zero.
- Q2 FY23 GAAP operating income was only $3.1 million, representing 1.3% of revenue.
- Free cash flow decreased to $18 million from $29.8 million in Q2 FY22.
- Continued FX headwinds expected to impact future revenue and EPS guidance.
Revenue Growth of
Operating Profitability on a GAAP and Non-GAAP Basis, with Margins of
Raising GAAP and Non-GAAP EPS Guidance, Maintaining FY23 Revenue Guidance Despite Incremental FX Headwinds
“As enterprises look to reduce the cost and complexity of their IT environments, they are turning to Box’s Content Cloud to simplify their technology stack, lower their spend and keep their information secure,” said
“Our Q2 revenue and non-GAAP EPS were at the high-end of our guidance, despite experiencing significant FX headwinds,” said
Fiscal Second Quarter Financial Highlights
-
Revenue for the second quarter of fiscal year 2023 was
$246.0 million 15% increase from revenue for the second quarter of fiscal year 2022 of$214.5 million -
Remaining performance obligations (“RPO”) as of
July 31, 2022 , were$1.05 billion 14% increase from remaining performance obligations as ofJuly 31, 2021 of$922.4 million -
Billings for the second quarter of fiscal year 2023 were
$235.0 million 10% increase from billings for the second quarter of fiscal year 2022 of$213.1 million -
GAAP gross profit for the second quarter of fiscal year 2023 was
$181.2 million 73.6% of revenue. This compares to a GAAP gross profit of$153.7 million 71.7% of revenue, in the second quarter of fiscal year 2022. -
Non-GAAP gross profit for the second quarter of fiscal year 2023 was
$187.4 million 76.2% of revenue. This compares to a non-GAAP gross profit of$159.8 million 74.5% of revenue, in the second quarter of fiscal year 2022. -
GAAP operating income in the second quarter of fiscal year 2023 was
$3.1 million 1.3% of revenue. This compares to a GAAP operating loss of$6.1 million 2.8% of revenue, in the second quarter of fiscal year 2022. -
Non-GAAP operating income in the second quarter of fiscal year 2023 was
$53.3 million 21.7% of revenue. This compares to a non-GAAP operating income of$44.2 million 20.6% of revenue, in the second quarter of fiscal year 2022. -
GAAP net loss per share attributable to common stockholders, basic and diluted, in the second quarter of fiscal year 2023 was
$0.02 $0.08 3 cents from FX. -
Non-GAAP net income per share attributable to common stockholders, diluted, in the second quarter of fiscal year 2023 was
$0.28 $0.21 3 cents from FX. -
Net cash provided by operating activities in the second quarter of fiscal year 2023 was
$28.3 million $136.1 million $44.8 million $139.6 million -
Free cash flow in the second quarter of fiscal year 2023 was
$18.0 million $108.8 million $29.8 million $105.7 million
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.
Business Highlights Since Last Earnings Release
-
Delivered wins or expansions with leading organizations such as Apellis Pharmaceuticals, ByteDance, Marriott International,
New York Genome Center ,Playbill Incorporated , and Reddit. - Announced that Box has attained Authorized security status for StateRAMP, a cybersecurity framework that ensures service providers offering solutions to state and local governments are receiving adequate protection for their sensitive content.
- Announced new security enhancements to its core platform that will help admins and security teams protect the flow of content inside and outside of the organization and across multiple devices.
-
Launched a new
France Zone which will enable organizations to store their content securely inFrance with a primary data center inParis and secondary inMarseille . The addition of theFrance Zone expands the global network of Box Zones offerings to nine zone locations, aimed at delivering flexibility for in-region storage. -
Announced enhancements to the Box for
Salesforce integration that enables customers to use Box for signature-based processes and workflows inSalesforce . Leveraging Box Sign, customers can send Box files for signature directly withinSalesforce . New features and developer tools that make it easy for joint customers to generate and execute agreements were also announced. -
Launched updates to its Trust Partner Program, which brings together a select group of industry-leading security and compliance platforms to advance security in the enterprise. These updates include new and deepened integrations with Cisco, Relativity,
Theta Lake , and Splunk. - Hosted BoxWorks Digital Tokyo, attracting 4,000 attendees and customer speakers from leading organizations.
-
Announced that the company's 12th annual BoxWorks will take place virtually on
October 6 and 7, where attendees will learn about the Content Cloud and hear from industry and customer speakers. -
Recognized by
Great Place to Work and Fortune as one of the 100 Best Large Workplaces for Millennials for 2022. -
Announced the appointment of
Amit Walia , CEO of Informatica, to the Board of Directors.
Outlook
Since our previous earnings call on
Q3 FY23 Guidance
-
Revenue is expected to be in the range of
$250 million $252 million 13% year-over-year at the high-end of the range. Revenue growth expectations include a negative impact of 4 percentage points from FX. -
GAAP operating margin is expected to be approximately
4% , and non-GAAP operating margin is expected to be approximately23% . -
GAAP net income per share attributable to common stockholders is expected to be in the range of
$0.01 $0.02 -
Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of
$0.29 $0.30 - Weighted-average basic and diluted shares outstanding are expected to be approximately 143 million and 151 million, respectively.
Full Year FY23 Guidance
-
Revenue is expected to be in the range of
$992 million $996 million 14% year-over-year at the high-end of the range and represents an acceleration from last year’s growth rate of13% . Revenue growth expectations include a negative impact of 4 percentage points from FX. -
GAAP operating margin is expected to be approximately
3% , and non-GAAP operating margin is expected to be approximately22.5% . -
GAAP net loss per share attributable to common stockholders is expected to be in the range of
$0.03 May 25, 2022 , which was basic and diluted net loss per share of$0.05 $0.01 $0.19 -
Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of
$1.13 $1.16 May 25, 2022 , which was$1.11 $1.15 $0.19 - Weighted-average basic and diluted shares outstanding are expected to be approximately 144.5 million and 151.5 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 operating margin and 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
The conference call can be accessed by registering online at https://conferencingportals.com/event/xgkBSAEo 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:
+ 1-800-770-2030 (toll-free), conference ID: 23531
+ 1-647-362-9199 (toll), conference ID: 23531
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
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 or the Russian invasion of
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 (loss), non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) attributable to common stockholders, non-GAAP net income (loss) per share attributable to common stockholders, 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 (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 (loss) and non-GAAP gross margin. Box defines non-GAAP gross profit (loss) as GAAP gross profit (loss) excluding expenses related to stock-based compensation (“SBC”) included in cost of revenue and intangible assets amortization. Non-GAAP gross margin is defined as non-GAAP gross profit (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. 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.
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 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. 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 restructuring activities, consisting primarily of severance and other personnel-related costs, and (4) expenses related to acquisitions, including transaction and discrete tax costs.
Non-GAAP net income (loss) attributable to common stockholders and non-GAAP net income (loss) per share attributable to common stockholders. Box defines non-GAAP net income (loss) attributable to common stockholders as GAAP net income (loss) attributable to common stockholders excluding expenses related to SBC, intangible assets amortization, amortization of debt issuance costs, undistributed earnings attributable to preferred stockholders, and as applicable, other special items as described in the preceding paragraph. Box defines non-GAAP net income (loss) per share attributable to common stockholders as non-GAAP net income (loss) 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, 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, a single platform that empowers organizations to manage the entire content lifecycle, work securely from anywhere, and integrate across best-of-breed apps. Founded in 2005, Box simplifies work for leading global organizations, including AstraZeneca, JLL, and Nationwide. Box is headquartered in
CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) (Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
2022 |
|
|
2022 |
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
348,783 |
|
|
$ |
416,274 |
|
Short-term investments |
|
|
44,745 |
|
|
|
170,000 |
|
Accounts receivable, net |
|
|
166,552 |
|
|
|
256,312 |
|
Deferred commissions |
|
|
45,809 |
|
|
|
46,025 |
|
Other current assets |
|
|
32,996 |
|
|
|
27,953 |
|
Total current assets |
|
|
638,885 |
|
|
|
916,564 |
|
Property and equipment, net |
|
|
78,558 |
|
|
|
105,755 |
|
Operating lease right-of-use assets, net |
|
|
153,604 |
|
|
|
172,808 |
|
|
|
|
71,712 |
|
|
|
74,466 |
|
Deferred commissions, non-current |
|
|
69,645 |
|
|
|
72,884 |
|
Other long-term assets |
|
|
53,908 |
|
|
|
49,532 |
|
Total assets |
|
$ |
1,066,312 |
|
|
$ |
1,392,009 |
|
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable, accrued expenses and other current liabilities |
|
$ |
52,623 |
|
|
$ |
58,942 |
|
Accrued compensation and benefits |
|
|
36,320 |
|
|
|
54,705 |
|
Finance lease liabilities |
|
|
37,337 |
|
|
|
41,235 |
|
Operating lease liabilities |
|
|
46,053 |
|
|
|
44,608 |
|
Deferred revenue |
|
|
449,267 |
|
|
|
519,485 |
|
Total current liabilities |
|
|
621,600 |
|
|
|
718,975 |
|
Debt, net, non-current |
|
|
368,406 |
|
|
|
367,463 |
|
Operating lease liabilities, non-current |
|
|
144,169 |
|
|
|
168,192 |
|
Other long-term liabilities |
|
|
22,735 |
|
|
|
44,586 |
|
Total liabilities |
|
|
1,156,910 |
|
|
|
1,299,216 |
|
Series A convertible preferred stock |
|
|
488,906 |
|
|
|
487,880 |
|
Stockholders’ deficit: |
|
|
|
|
|
|
||
Common stock |
|
|
14 |
|
|
|
15 |
|
Additional paid-in capital |
|
|
797,948 |
|
|
|
972,020 |
|
Accumulated other comprehensive loss |
|
|
(11,233 |
) |
|
|
(4,543 |
) |
Accumulated deficit |
|
|
(1,366,233 |
) |
|
|
(1,362,579 |
) |
Total stockholders’ deficit |
|
|
(579,504 |
) |
|
|
(395,087 |
) |
Total liabilities, convertible preferred stock and stockholders’ deficit |
|
$ |
1,066,312 |
|
|
$ |
1,392,009 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data) (Unaudited) |
||||||||||||||||||
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
||||
Revenue |
|
$ |
246,015 |
|
|
|
$ |
214,486 |
|
|
|
$ |
484,447 |
|
|
$ |
416,927 |
|
Cost of revenue (1) |
|
|
64,843 |
|
|
|
|
60,788 |
|
|
|
|
127,052 |
|
|
|
121,735 |
|
Gross profit |
|
|
181,172 |
|
|
|
|
153,698 |
|
|
|
|
357,395 |
|
|
|
295,192 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development (1) |
|
|
61,965 |
|
|
|
|
52,722 |
|
|
|
|
123,698 |
|
|
|
103,581 |
|
Sales and marketing (1) |
|
|
83,442 |
|
|
|
|
72,788 |
|
|
|
|
166,509 |
|
|
|
142,599 |
|
General and administrative (1) |
|
|
32,625 |
|
|
|
|
34,298 |
|
|
|
|
63,424 |
|
|
|
65,385 |
|
Total operating expenses |
|
|
178,032 |
|
|
|
|
159,808 |
|
|
|
|
353,631 |
|
|
|
311,565 |
|
Income (loss) from operations |
|
|
3,140 |
|
|
|
|
(6,110 |
) |
|
|
|
3,764 |
|
|
|
(16,373 |
) |
Interest and other expense, net |
|
|
(651 |
) |
|
|
|
(1,940 |
) |
|
|
|
(4,808 |
) |
|
|
(5,939 |
) |
Income (loss) before provision for income taxes |
|
|
2,489 |
|
|
|
|
(8,050 |
) |
|
|
|
(1,044 |
) |
|
|
(22,312 |
) |
Provision for income taxes |
|
|
1,444 |
|
|
|
|
650 |
|
|
|
|
2,610 |
|
|
|
961 |
|
Net income (loss) |
|
$ |
1,045 |
|
|
|
$ |
(8,700 |
) |
|
|
$ |
(3,654 |
) |
|
$ |
(23,273 |
) |
Accretion and dividend on series A convertible preferred stock |
|
|
(4,304 |
) |
|
|
|
(3,785 |
) |
|
|
|
(8,526 |
) |
|
|
(3,785 |
) |
Net loss attributable to common stockholders |
|
$ |
(3,259 |
) |
|
|
$ |
(12,485 |
) |
|
|
$ |
(12,180 |
) |
|
$ |
(27,058 |
) |
Net loss per share attributable to common stockholders, basic and diluted |
|
$ |
(0.02 |
) |
|
|
$ |
(0.08 |
) |
|
|
$ |
(0.08 |
) |
|
$ |
(0.17 |
) |
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted |
|
|
143,739 |
|
|
|
|
161,163 |
|
|
|
|
144,224 |
|
|
|
161,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1) Includes stock-based compensation expense as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
||||||||||||||||||
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
||||
Cost of revenue |
|
$ |
4,787 |
|
|
|
$ |
4,883 |
|
|
|
$ |
9,142 |
|
|
$ |
10,223 |
|
Research and development |
|
|
18,095 |
|
|
|
|
16,626 |
|
|
|
|
35,821 |
|
|
|
32,079 |
|
Sales and marketing |
|
|
14,800 |
|
|
|
|
12,919 |
|
|
|
|
30,089 |
|
|
|
24,470 |
|
General and administrative |
|
|
11,004 |
|
|
|
|
9,700 |
|
|
|
|
20,744 |
|
|
|
19,146 |
|
Total stock-based compensation |
|
$ |
48,686 |
|
|
|
$ |
44,128 |
|
|
|
$ |
95,796 |
|
|
$ |
85,918 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited) |
|||||||||||||||||
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
1,045 |
|
|
$ |
(8,700 |
) |
|
|
$ |
(3,654 |
) |
|
$ |
(23,273 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
17,781 |
|
|
|
19,707 |
|
|
|
|
36,317 |
|
|
|
39,087 |
|
Stock-based compensation expense |
|
|
48,686 |
|
|
|
44,128 |
|
|
|
|
95,796 |
|
|
|
85,918 |
|
Amortization of deferred commissions |
|
|
13,296 |
|
|
|
11,065 |
|
|
|
|
26,441 |
|
|
|
21,582 |
|
Other |
|
|
1,572 |
|
|
|
515 |
|
|
|
|
1,871 |
|
|
|
958 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts receivable, net |
|
|
(50,705 |
) |
|
|
(22,132 |
) |
|
|
|
86,171 |
|
|
|
94,703 |
|
Deferred commissions |
|
|
(14,502 |
) |
|
|
(12,307 |
) |
|
|
|
(23,561 |
) |
|
|
(20,234 |
) |
Operating lease right-of-use assets, net |
|
|
10,074 |
|
|
|
10,817 |
|
|
|
|
20,066 |
|
|
|
21,669 |
|
Other assets |
|
|
3,506 |
|
|
|
857 |
|
|
|
|
(11,862 |
) |
|
|
(7,959 |
) |
Accounts payable, accrued expenses and other liabilities |
|
|
16,455 |
|
|
|
12,578 |
|
|
|
|
(1,995 |
) |
|
|
672 |
|
Operating lease liabilities |
|
|
(10,347 |
) |
|
|
(10,526 |
) |
|
|
|
(22,213 |
) |
|
|
(24,453 |
) |
Deferred revenue |
|
|
(8,522 |
) |
|
|
(1,210 |
) |
|
|
|
(67,308 |
) |
|
|
(49,106 |
) |
Net cash provided by operating activities |
|
|
28,339 |
|
|
|
44,792 |
|
|
|
|
136,069 |
|
|
|
139,564 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Purchases of short-term investments |
|
|
(21,795 |
) |
|
|
— |
|
|
|
|
(59,678 |
) |
|
|
(50,000 |
) |
Maturities of short-term investments |
|
|
105,000 |
|
|
|
— |
|
|
|
|
185,000 |
|
|
|
— |
|
Purchases of property and equipment, net of sale proceeds |
|
|
(211 |
) |
|
|
(1,090 |
) |
|
|
|
(769 |
) |
|
|
(2,235 |
) |
Capitalized internal-use software costs |
|
|
(1,978 |
) |
|
|
(1,207 |
) |
|
|
|
(4,510 |
) |
|
|
(2,385 |
) |
Acquisitions, net of cash acquired |
|
|
(200 |
) |
|
|
— |
|
|
|
|
(500 |
) |
|
|
(56,642 |
) |
Other |
|
|
— |
|
|
|
677 |
|
|
|
|
(315 |
) |
|
|
677 |
|
Net cash provided by (used in) investing activities |
|
|
80,816 |
|
|
|
(1,620 |
) |
|
|
|
119,228 |
|
|
|
(110,585 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Series A convertible preferred stock, net of issuance costs |
|
|
(53 |
) |
|
|
486,798 |
|
|
|
|
(103 |
) |
|
|
486,798 |
|
Repurchases of common stock |
|
|
(117,646 |
) |
|
|
(284,081 |
) |
|
|
|
(234,886 |
) |
|
|
(284,081 |
) |
Payments of dividends to preferred stockholders |
|
|
(3,750 |
) |
|
|
— |
|
|
|
|
(7,500 |
) |
|
|
— |
|
Proceeds from issuances of common stock under employee equity plans |
|
|
276 |
|
|
|
436 |
|
|
|
|
14,740 |
|
|
|
14,302 |
|
Employee payroll taxes paid for net settlement of stock awards |
|
|
(16,888 |
) |
|
|
(15,407 |
) |
|
|
|
(58,727 |
) |
|
|
(31,091 |
) |
Principal payments of finance lease liabilities |
|
|
(7,913 |
) |
|
|
(12,623 |
) |
|
|
|
(19,416 |
) |
|
|
(25,885 |
) |
Other |
|
|
(2,679 |
) |
|
|
(133 |
) |
|
|
|
(4,952 |
) |
|
|
(3,901 |
) |
Net cash (used in) provided by financing activities |
|
|
(148,653 |
) |
|
|
174,990 |
|
|
|
|
(310,844 |
) |
|
|
156,142 |
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
(3,146 |
) |
|
|
(209 |
) |
|
|
|
(11,647 |
) |
|
|
(420 |
) |
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
|
(42,644 |
) |
|
|
217,953 |
|
|
|
|
(67,194 |
) |
|
|
184,701 |
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
392,338 |
|
|
|
562,259 |
|
|
|
|
416,888 |
|
|
|
595,511 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
349,694 |
|
|
$ |
780,212 |
|
|
|
$ |
349,694 |
|
|
$ |
780,212 |
|
RECONCILIATION OF GAAP TO NON-GAAP DATA (In Thousands, Except Per Share Data and Percentages) (Unaudited) |
||||||||||||||||||||
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
||||
GAAP gross profit |
|
$ |
181,172 |
|
|
|
$ |
153,698 |
|
|
|
$ |
357,395 |
|
|
|
$ |
295,192 |
|
|
Stock-based compensation |
|
|
4,787 |
|
|
|
|
4,883 |
|
|
|
|
9,142 |
|
|
|
|
10,223 |
|
|
Acquired intangible assets amortization |
|
|
1,452 |
|
|
|
|
1,255 |
|
|
|
|
2,904 |
|
|
|
|
2,156 |
|
|
Non-GAAP gross profit |
|
$ |
187,411 |
|
|
|
$ |
159,836 |
|
|
|
$ |
369,441 |
|
|
|
$ |
307,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP gross margin |
|
|
73.6 |
|
% |
|
|
71.7 |
|
% |
|
|
73.8 |
|
% |
|
|
70.8 |
|
% |
Stock-based compensation |
|
|
2.0 |
|
|
|
|
2.3 |
|
|
|
|
1.9 |
|
|
|
|
2.5 |
|
|
Acquired intangible assets amortization |
|
|
0.6 |
|
|
|
|
0.5 |
|
|
|
|
0.6 |
|
|
|
|
0.6 |
|
|
Non-GAAP gross margin |
|
|
76.2 |
|
% |
|
|
74.5 |
|
% |
|
|
76.3 |
|
% |
|
|
73.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP operating income (loss) |
|
$ |
3,140 |
|
|
|
$ |
(6,110 |
) |
|
|
$ |
3,764 |
|
|
|
$ |
(16,373 |
) |
|
Stock-based compensation |
|
|
48,686 |
|
|
|
|
44,128 |
|
|
|
|
95,796 |
|
|
|
|
85,918 |
|
|
Acquired intangible assets amortization |
|
|
1,452 |
|
|
|
|
1,266 |
|
|
|
|
2,904 |
|
|
|
|
2,167 |
|
|
Acquisition-related expenses |
|
|
— |
|
|
|
|
115 |
|
|
|
|
53 |
|
|
|
|
1,035 |
|
|
Fees related to shareholder activism |
|
|
— |
|
|
|
|
4,771 |
|
|
|
|
(77 |
) |
|
|
|
5,821 |
|
|
Non-GAAP operating income |
|
$ |
53,278 |
|
|
|
$ |
44,170 |
|
|
|
$ |
102,440 |
|
|
|
$ |
78,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP operating margin |
|
|
1.3 |
|
% |
|
|
(2.8 |
) |
% |
|
|
0.8 |
|
% |
|
|
(3.9 |
) |
% |
Stock-based compensation |
|
|
19.8 |
|
|
|
|
20.6 |
|
|
|
|
19.7 |
|
|
|
|
20.6 |
|
|
Acquired intangible assets amortization |
|
|
0.6 |
|
|
|
|
0.6 |
|
|
|
|
0.6 |
|
|
|
|
0.5 |
|
|
Acquisition-related expenses |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
0.2 |
|
|
Fees related to shareholder activism |
|
|
— |
|
|
|
|
2.2 |
|
|
|
|
— |
|
|
|
|
1.4 |
|
|
Non-GAAP operating margin |
|
|
21.7 |
|
% |
|
|
20.6 |
|
% |
|
|
21.1 |
|
% |
|
|
18.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP net loss attributable to common stockholders |
|
$ |
(3,259 |
) |
|
|
$ |
(12,485 |
) |
|
|
$ |
(12,180 |
) |
|
|
$ |
(27,058 |
) |
|
Stock-based compensation |
|
|
48,686 |
|
|
|
|
44,128 |
|
|
|
|
95,796 |
|
|
|
|
85,918 |
|
|
Acquired intangible assets amortization |
|
|
1,452 |
|
|
|
|
1,266 |
|
|
|
|
2,904 |
|
|
|
|
2,167 |
|
|
Acquisition-related expenses |
|
|
— |
|
|
|
|
115 |
|
|
|
|
53 |
|
|
|
|
1,035 |
|
|
Fees related to shareholder activism |
|
|
— |
|
|
|
|
4,771 |
|
|
|
|
(77 |
) |
|
|
|
5,821 |
|
|
Amortization of debt issuance costs |
|
|
472 |
|
|
|
|
468 |
|
|
|
|
943 |
|
|
|
|
937 |
|
|
Undistributed earnings attributable to preferred stockholders |
|
|
(5,410 |
) |
|
|
|
(3,515 |
) |
|
|
|
(9,960 |
) |
|
|
|
(3,360 |
) |
|
Non-GAAP net income attributable to common stockholders |
|
$ |
41,941 |
|
|
|
$ |
34,748 |
|
|
|
$ |
77,479 |
|
|
|
$ |
65,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP net loss per share attributable to common stockholders, basic and diluted |
|
$ |
(0.02 |
) |
|
|
$ |
(0.08 |
) |
|
|
$ |
(0.08 |
) |
|
|
$ |
(0.17 |
) |
|
Stock-based compensation |
|
|
0.34 |
|
|
|
|
0.28 |
|
|
|
|
0.66 |
|
|
|
|
0.53 |
|
|
Acquired intangible assets amortization |
|
|
0.01 |
|
|
|
|
0.01 |
|
|
|
|
0.02 |
|
|
|
|
0.01 |
|
|
Acquisition-related expenses |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
0.01 |
|
|
Fees related to shareholder activism |
|
|
— |
|
|
|
|
0.03 |
|
|
|
|
— |
|
|
|
|
0.04 |
|
|
Amortization of debt issuance costs |
|
|
— |
|
|
|
|
— |
|
|
|
|
0.01 |
|
|
|
|
0.01 |
|
|
Undistributed earnings attributable to preferred stockholders |
|
|
(0.04 |
) |
|
|
|
(0.02 |
) |
|
|
|
(0.07 |
) |
|
|
|
(0.02 |
) |
|
Non-GAAP net income per share attributable to common stockholders, basic |
|
$ |
0.29 |
|
|
|
$ |
0.22 |
|
|
|
$ |
0.54 |
|
|
|
$ |
0.41 |
|
|
Non-GAAP net income per share attributable to common stockholders, diluted |
|
$ |
0.28 |
|
|
|
$ |
0.21 |
|
|
|
$ |
0.51 |
|
|
|
$ |
0.39 |
|
|
Weighted-average shares used to compute GAAP net loss per share, basic and diluted |
|
|
143,739 |
|
|
|
|
161,163 |
|
|
|
|
144,224 |
|
|
|
|
161,443 |
|
|
Weighted-average shares used to compute non-GAAP net income per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
143,739 |
|
|
|
|
161,163 |
|
|
|
|
144,224 |
|
|
|
|
161,443 |
|
|
Diluted |
|
|
149,314 |
|
|
|
|
169,096 |
|
|
|
|
151,072 |
|
|
|
|
169,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP net cash provided by operating activities |
|
$ |
28,339 |
|
|
|
$ |
44,792 |
|
|
|
$ |
136,069 |
|
|
|
$ |
139,564 |
|
|
Purchases of property and equipment, net of proceeds from sales |
|
|
(211 |
) |
|
|
|
(1,090 |
) |
|
|
|
(769 |
) |
|
|
|
(2,235 |
) |
|
Principal payments of finance lease liabilities |
|
|
(7,913 |
) |
|
|
|
(12,623 |
) |
|
|
|
(19,416 |
) |
|
|
|
(25,885 |
) |
|
Capitalized internal-use software costs |
|
|
(2,257 |
) |
|
|
|
(1,275 |
) |
|
|
|
(7,062 |
) |
|
|
|
(5,750 |
) |
|
Non-GAAP free cash flow |
|
$ |
17,958 |
|
|
|
$ |
29,804 |
|
|
|
$ |
108,822 |
|
|
|
$ |
105,694 |
|
|
GAAP net cash provided by (used in) investing activities |
|
$ |
80,816 |
|
|
|
$ |
(1,620 |
) |
|
|
$ |
119,228 |
|
|
|
$ |
(110,585 |
) |
|
GAAP net cash (used in) provided by financing activities |
|
$ |
(148,653 |
) |
|
|
$ |
174,990 |
|
|
|
$ |
(310,844 |
) |
|
|
$ |
156,142 |
|
|
RECONCILIATION OF GAAP REVENUE TO BILLINGS (In Thousands) (Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
GAAP revenue |
|
$ |
246,015 |
|
|
$ |
214,486 |
|
|
$ |
484,447 |
|
|
$ |
416,927 |
|
Deferred revenue, end of period |
|
|
458,249 |
|
|
|
422,039 |
|
|
|
458,249 |
|
|
|
422,039 |
|
Less: deferred revenue, beginning of period |
|
|
(468,350 |
) |
|
|
(423,249 |
) |
|
|
(534,242 |
) |
|
|
(465,613 |
) |
Contract assets, beginning of period |
|
|
1,491 |
|
|
|
677 |
|
|
|
1,111 |
|
|
|
25 |
|
Less: contract assets, end of period |
|
|
(2,424 |
) |
|
|
(866 |
) |
|
|
(2,424 |
) |
|
|
(866 |
) |
Billings |
|
$ |
234,981 |
|
|
$ |
213,087 |
|
|
$ |
407,141 |
|
|
$ |
372,512 |
|
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME PER SHARE GUIDANCE (In Thousands, Except Per Share Data) (Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Fiscal Year Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
GAAP net income (loss) per share attributable to common stockholders range |
|
$ |
0.01 |
|
- |
$ |
0.02 |
|
|
$ |
(0.03 |
) |
- |
$ |
— |
|
Stock-based compensation |
|
|
0.32 |
|
|
|
0.32 |
|
|
|
1.31 |
|
|
|
1.31 |
|
Acquired intangible asset amortization |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.04 |
|
|
|
0.04 |
|
Amortization of debt issuance costs |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
Undistributed earnings attributable to preferred stockholders |
|
|
(0.04 |
) |
|
|
(0.04 |
) |
|
|
(0.15 |
) |
|
|
(0.15 |
) |
Non-GAAP net income per share attributable to common stockholders range, basic |
|
$ |
0.31 |
|
- |
$ |
0.32 |
|
|
$ |
1.19 |
|
- |
$ |
1.22 |
|
Non-GAAP net income per share attributable to common stockholders range, diluted |
|
$ |
0.29 |
|
- |
$ |
0.30 |
|
|
$ |
1.13 |
|
- |
$ |
1.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares, basic |
|
|
|
|
|
143,000 |
|
|
|
|
|
|
144,500 |
|
||
Weighted-average shares, diluted |
|
|
|
|
|
151,000 |
|
|
|
|
|
|
151,500 |
|
||
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 |
|
|
4.0 |
|
% |
|
|
3.0 |
|
% |
Stock-based compensation |
|
|
18.5 |
|
|
|
|
19.0 |
|
|
Acquired intangible assets amortization |
|
|
0.5 |
|
|
|
|
0.5 |
|
|
Non-GAAP operating margin |
|
|
23.0 |
|
% |
|
|
22.5 |
|
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220824005364/en/
Contacts
Investors:
+1 650-209-3463
ir@box.com
Media:
+1 650-543-6926
press@box.com
Source:
FAQ
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