Box Reports Strong Fiscal Third Quarter 2023 Financial Results
Box, Inc. (NYSE:BOX) reported preliminary Q3 FY2023 results showing a 12% revenue growth to $250 million and record operating margins of 5.3% GAAP and 24% non-GAAP. Remaining performance obligations rose to $1.056 billion. The company also announced a $150 million expansion of its stock repurchase program. Despite a $0.03 GAAP net income per share, FX impacts negatively affected earnings. Q4 FY23 guidance expects revenue between $255 million and $257 million, up 10% year-over-year, with an EPS of $0.06 to $0.07.
- 12% revenue growth year-over-year to $250 million.
- Record GAAP operating margin of 5.3% and non-GAAP margin of 24%.
- Remaining performance obligations increased 11% to $1.056 billion.
- Expansion of stock repurchase program by $150 million.
- Free cash flow surged 76% to $55 million.
- GAAP net income per share impacted negatively by FX at $0.03.
- FY23 GAAP EPS guidance includes a $0.18 negative impact from FX.
Delivers First
Record Operating Profitability on a GAAP and Non-GAAP Basis, with Operating Margins of
New
“We delivered strong third quarter results with revenue growth of
“The strength and resiliency of our business model has allowed us to deliver revenue growth while expanding operating and free cash flow margins,” said
Fiscal Third Quarter Financial Highlights
-
Revenue for the third quarter of fiscal year 2023 was
$250.0 million 12% increase from revenue for the third quarter of fiscal year 2022 of$224.0 million 17% growth on a constant currency basis. -
Remaining performance obligations (“RPO”) as of
October 31, 2022 , were$1.05 6 billion11% increase from remaining performance obligations as ofOctober 31, 2021 of$948.1 million 20% growth on a constant currency basis. -
Billings for the third quarter of fiscal year 2023 were
$258.2 million 12% increase from billings for the third quarter of fiscal year 2022 of$231.5 million 20% growth on a constant currency basis. -
GAAP gross profit for the third quarter of fiscal year 2023 was
$185.5 million 74.2% of revenue. This compares to a GAAP gross profit of$161.0 million 71.8% of revenue, in the third quarter of fiscal year 2022. -
Non-GAAP gross profit for the third quarter of fiscal year 2023 was
$191.2 million 76.5% of revenue. This compares to a non-GAAP gross profit of$167.3 million 74.7% of revenue, in the third quarter of fiscal year 2022. -
GAAP operating income in the third quarter of fiscal year 2023 was
$13.4 million 5.3% of revenue. This compares to a GAAP operating loss of$11.1 million 4.9% of revenue, in the third quarter of fiscal year 2022. -
Non-GAAP operating income in the third quarter of fiscal year 2023 was
$60.0 million 24.0% of revenue. This compares to a non-GAAP operating income of$46.4 million 20.7% of revenue, in the third quarter of fiscal year 2022. -
GAAP net income per share attributable to common stockholders, basic and diluted, in the third quarter of fiscal year 2023 was
$0.03 $0.12 6 cents from FX. -
Non-GAAP net income per share attributable to common stockholders, diluted, in the third quarter of fiscal year 2023 was
$0.31 $0.22 6 cents from FX. -
Net cash provided by operating activities in the third quarter of fiscal year 2023 was
$69.7 million 51% from net cash provided by operating activities of$46.1 million -
Free cash flow in the third quarter of fiscal year 2023 was
$55.0 million $31.2 million
For the purpose of this press release, impact from FX 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.
Share Repurchase Program
On
Business Highlights Since Last Earnings Release
-
Delivered wins or expansions with leading organizations such as
Eurostar International Limited ,Garmin International , McLarens,Mariner Wealth Advisors ,Regions Bank , Warner Music Group andWasserman Media Group . - Hosted the company’s 12th annual BoxWorks, attracting thousands of attendees and featuring speakers from organizations such as Heidrick & Struggles, Shriners Children’s and World Fuel Services, as well as CEOs from CrowdStrike, IBM, HubSpot and Zoom.
- Unveiled new features for Box Sign, Box’s native e-signature capability, and announced that Box Sign will now be available to all users at no additional cost. With these features, users can publish documents online for signature, edit signature requests in flight, enjoy an improved signer experience and more.
- Announced the general availability of the all-new Box Notes for real-time content collaboration and project management, along with the availability of Content Insights, for increased visibility on how content is accessed, consumed and used.
- Unveiled several enhancements to Box Shield at BoxWorks 2022, including improved Ethical Wall capabilities, which creates re-enforced information barriers within organizations to prevent communication or exchange of sensitive information that could lead to conflicts of interest between groups.
- Advanced Box Governance with the availability of modifiable retention policies designed for customers that need more flexibility as their external regulatory environments or internal governance policies change.
- Announced the general availability of an enhanced Box app for Zoom that enables customers to automatically save select Zoom recordings directly to Box. With this new feature, joint customers can manage their content in one place while maintaining enterprise-grade security, compliance and governance all within Zoom.
-
Recognized by
Fortune Magazine as one of the 40 Best Large Workplaces in Technology and 100 Best Large Workplaces for Women for 2022.
Outlook
The following guidance includes the impact of any expected FX headwinds, assuming present foreign currency exchange rates.
Q4 FY23 Guidance
-
Revenue is expected to be in the range of
$255 million $257 million 10% year-over-year at the high end of the range, or15% growth on a constant currency basis. -
GAAP operating margin is expected to be approximately
6.5% , and non-GAAP operating margin is expected to be approximately24.5% . -
GAAP net income per share attributable to common stockholders is expected to be in the range of
$0.06 $0.07 $0.05 -
Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of
$0.34 $0.35 $0.05 - Weighted-average basic and diluted shares outstanding are expected to be approximately 144 million and 149 million, respectively.
Full Year FY23 Guidance
-
Revenue is expected to be in the range of
$990 million $992 million 13% year-over-year at the high end of the range, or17% growth on a constant currency basis. -
GAAP operating margin is expected to be approximately
3.0% , and non-GAAP operating margin is expected to be approximately22.5% . -
GAAP net income per share attributable to common stockholders is expected to be in the range of
$0.02 $0.03 $0.18 -
Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of
$1.16 $1.17 $0.18 - Weighted-average basic and diluted shares outstanding are expected to be approximately 144 million and 150 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 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 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
+ 1-647-362-9199 (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, Morgan Stanley, and Nationwide. Box is headquartered in
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In Thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
2022 |
|
|
2022 |
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
358,060 |
|
|
$ |
416,274 |
|
Short-term investments |
|
|
44,567 |
|
|
|
170,000 |
|
Accounts receivable, net |
|
|
176,593 |
|
|
|
256,312 |
|
Deferred commissions |
|
|
46,120 |
|
|
|
46,025 |
|
Other current assets |
|
|
31,187 |
|
|
|
27,953 |
|
Total current assets |
|
|
656,527 |
|
|
|
916,564 |
|
Property and equipment, net |
|
|
67,755 |
|
|
|
105,755 |
|
Operating lease right-of-use assets, net |
|
|
142,147 |
|
|
|
172,808 |
|
|
|
|
70,702 |
|
|
|
74,466 |
|
Deferred commissions, non-current |
|
|
69,251 |
|
|
|
72,884 |
|
Other long-term assets |
|
|
50,068 |
|
|
|
49,532 |
|
Total assets |
|
$ |
1,056,450 |
|
|
$ |
1,392,009 |
|
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable, accrued expenses and other current liabilities |
|
$ |
45,552 |
|
|
$ |
58,942 |
|
Accrued compensation and benefits |
|
|
32,451 |
|
|
|
54,705 |
|
Finance lease liabilities |
|
|
31,175 |
|
|
|
41,235 |
|
Operating lease liabilities |
|
|
46,203 |
|
|
|
44,608 |
|
Deferred revenue |
|
|
442,015 |
|
|
|
519,485 |
|
Total current liabilities |
|
|
597,396 |
|
|
|
718,975 |
|
Debt, net, non-current |
|
|
368,878 |
|
|
|
367,463 |
|
Operating lease liabilities, non-current |
|
|
131,143 |
|
|
|
168,192 |
|
Other long-term liabilities |
|
|
37,193 |
|
|
|
44,586 |
|
Total liabilities |
|
|
1,134,610 |
|
|
|
1,299,216 |
|
Series A convertible preferred stock |
|
|
489,434 |
|
|
|
487,880 |
|
Stockholders’ deficit: |
|
|
|
|
|
|
||
Common stock |
|
|
14 |
|
|
|
15 |
|
Additional paid-in capital |
|
|
802,534 |
|
|
|
972,020 |
|
Accumulated other comprehensive loss |
|
|
(13,817 |
) |
|
|
(4,543 |
) |
Accumulated deficit |
|
|
(1,356,325 |
) |
|
|
(1,362,579 |
) |
Total stockholders’ deficit |
|
|
(567,594 |
) |
|
|
(395,087 |
) |
Total liabilities, convertible preferred stock and stockholders’ deficit |
|
$ |
1,056,450 |
|
|
$ |
1,392,009 |
|
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In Thousands, Except Per Share Data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenue |
|
$ |
249,951 |
|
|
$ |
224,044 |
|
|
$ |
734,398 |
|
|
$ |
640,971 |
|
Cost of revenue (1) |
|
|
64,490 |
|
|
|
63,069 |
|
|
|
191,542 |
|
|
|
184,804 |
|
Gross profit |
|
|
185,461 |
|
|
|
160,975 |
|
|
|
542,856 |
|
|
|
456,167 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development (1) |
|
|
59,107 |
|
|
|
55,837 |
|
|
|
182,805 |
|
|
|
159,418 |
|
Sales and marketing (1) |
|
|
81,566 |
|
|
|
76,368 |
|
|
|
248,075 |
|
|
|
218,967 |
|
General and administrative (1) |
|
|
31,422 |
|
|
|
39,857 |
|
|
|
94,846 |
|
|
|
105,242 |
|
Total operating expenses |
|
|
172,095 |
|
|
|
172,062 |
|
|
|
525,726 |
|
|
|
483,627 |
|
Income (loss) from operations |
|
|
13,366 |
|
|
|
(11,087 |
) |
|
|
17,130 |
|
|
|
(27,460 |
) |
Interest and other expense, net |
|
|
(1,427 |
) |
|
|
(2,336 |
) |
|
|
(6,235 |
) |
|
|
(8,275 |
) |
Income (loss) before provision for income taxes |
|
|
11,939 |
|
|
|
(13,423 |
) |
|
|
10,895 |
|
|
|
(35,735 |
) |
Provision for income taxes |
|
|
2,031 |
|
|
|
438 |
|
|
|
4,641 |
|
|
|
1,399 |
|
Net income (loss) |
|
$ |
9,908 |
|
|
$ |
(13,861 |
) |
|
$ |
6,254 |
|
|
$ |
(37,134 |
) |
Accretion and dividend on series A convertible preferred stock |
|
|
(4,278 |
) |
|
|
(4,301 |
) |
|
|
(12,804 |
) |
|
|
(8,086 |
) |
Undistributed earnings attributable to preferred stockholders |
|
|
(648 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net income (loss) attributable to common stockholders |
|
$ |
4,982 |
|
|
$ |
(18,162 |
) |
|
$ |
(6,550 |
) |
|
$ |
(45,220 |
) |
Net income (loss) per share attributable to common stockholders, basic and diluted |
|
$ |
0.03 |
|
|
$ |
(0.12 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.29 |
) |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
142,385 |
|
|
|
151,426 |
|
|
|
143,604 |
|
|
|
158,068 |
|
Diluted |
|
|
148,127 |
|
|
|
151,426 |
|
|
|
143,604 |
|
|
|
158,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1) Includes stock-based compensation expense as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Cost of revenue |
|
$ |
4,331 |
|
|
$ |
4,786 |
|
|
$ |
13,473 |
|
|
$ |
15,009 |
|
Research and development |
|
|
16,556 |
|
|
|
17,712 |
|
|
|
52,377 |
|
|
|
49,791 |
|
Sales and marketing |
|
|
14,158 |
|
|
|
13,872 |
|
|
|
44,247 |
|
|
|
38,342 |
|
General and administrative |
|
|
9,807 |
|
|
|
9,219 |
|
|
|
30,551 |
|
|
|
28,365 |
|
Total stock-based compensation |
|
$ |
44,852 |
|
|
$ |
45,589 |
|
|
$ |
140,648 |
|
|
$ |
131,507 |
|
|
|||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||||
(In Thousands) |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
9,908 |
|
|
$ |
(13,861 |
) |
|
|
$ |
6,254 |
|
|
$ |
(37,134 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
17,089 |
|
|
|
20,023 |
|
|
|
|
53,406 |
|
|
|
59,110 |
|
Stock-based compensation expense |
|
|
44,852 |
|
|
|
45,589 |
|
|
|
|
140,648 |
|
|
|
131,507 |
|
Amortization of deferred commissions |
|
|
13,437 |
|
|
|
11,705 |
|
|
|
|
39,878 |
|
|
|
33,287 |
|
Other |
|
|
1,054 |
|
|
|
1,614 |
|
|
|
|
2,925 |
|
|
|
2,572 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts receivable, net |
|
|
(12,008 |
) |
|
|
(20,239 |
) |
|
|
|
74,163 |
|
|
|
74,464 |
|
Deferred commissions |
|
|
(13,839 |
) |
|
|
(14,785 |
) |
|
|
|
(37,400 |
) |
|
|
(35,019 |
) |
Operating lease right-of-use assets, net |
|
|
10,230 |
|
|
|
10,441 |
|
|
|
|
30,296 |
|
|
|
32,110 |
|
Other assets |
|
|
4,840 |
|
|
|
1,262 |
|
|
|
|
(7,022 |
) |
|
|
(6,697 |
) |
Accounts payable, accrued expenses and other liabilities |
|
|
(9,729 |
) |
|
|
8,446 |
|
|
|
|
(11,724 |
) |
|
|
9,118 |
|
Operating lease liabilities |
|
|
(10,892 |
) |
|
|
(11,737 |
) |
|
|
|
(33,105 |
) |
|
|
(36,190 |
) |
Deferred revenue |
|
|
14,784 |
|
|
|
7,625 |
|
|
|
|
(52,524 |
) |
|
|
(41,481 |
) |
Net cash provided by operating activities |
|
|
69,726 |
|
|
|
46,083 |
|
|
|
|
205,795 |
|
|
|
185,647 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Purchases of short-term investments |
|
|
(27,575 |
) |
|
|
(90,000 |
) |
|
|
|
(87,253 |
) |
|
|
(140,000 |
) |
Maturities of short-term investments |
|
|
28,000 |
|
|
|
— |
|
|
|
|
213,000 |
|
|
|
— |
|
Purchases of property and equipment, net of sale proceeds |
|
|
(1,770 |
) |
|
|
(1,242 |
) |
|
|
|
(2,539 |
) |
|
|
(3,477 |
) |
Capitalized internal-use software costs |
|
|
(2,500 |
) |
|
|
(1,116 |
) |
|
|
|
(7,010 |
) |
|
|
(3,501 |
) |
Acquisitions, net of cash acquired |
|
|
— |
|
|
|
(2,753 |
) |
|
|
|
(500 |
) |
|
|
(59,395 |
) |
Other |
|
|
— |
|
|
|
(350 |
) |
|
|
|
(315 |
) |
|
|
327 |
|
Net cash (used in) provided by investing activities |
|
|
(3,845 |
) |
|
|
(95,461 |
) |
|
|
|
115,383 |
|
|
|
(206,046 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Series A convertible preferred stock, net of issuance costs |
|
|
— |
|
|
|
(1,695 |
) |
|
|
|
(103 |
) |
|
|
485,103 |
|
Repurchases of common stock |
|
|
(29,966 |
) |
|
|
(144,172 |
) |
|
|
|
(264,852 |
) |
|
|
(428,253 |
) |
Payments of dividends to preferred stockholders |
|
|
(3,750 |
) |
|
|
— |
|
|
|
|
(11,250 |
) |
|
|
— |
|
Proceeds from issuances of common stock under employee equity plans |
|
|
10,919 |
|
|
|
9,438 |
|
|
|
|
25,659 |
|
|
|
23,740 |
|
Employee payroll taxes paid for net settlement of stock awards |
|
|
(16,051 |
) |
|
|
(12,586 |
) |
|
|
|
(74,778 |
) |
|
|
(43,677 |
) |
Principal payments of finance lease liabilities |
|
|
(10,422 |
) |
|
|
(12,297 |
) |
|
|
|
(29,838 |
) |
|
|
(38,182 |
) |
Other |
|
|
(67 |
) |
|
|
(293 |
) |
|
|
|
(5,019 |
) |
|
|
(4,194 |
) |
Net cash used in financing activities |
|
|
(49,337 |
) |
|
|
(161,605 |
) |
|
|
|
(360,181 |
) |
|
|
(5,463 |
) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
(7,433 |
) |
|
|
(369 |
) |
|
|
|
(19,080 |
) |
|
|
(789 |
) |
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
9,111 |
|
|
|
(211,352 |
) |
|
|
|
(58,083 |
) |
|
|
(26,651 |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
349,694 |
|
|
|
780,212 |
|
|
|
|
416,888 |
|
|
|
595,511 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
358,805 |
|
|
$ |
568,860 |
|
|
|
$ |
358,805 |
|
|
$ |
568,860 |
|
|
||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP DATA |
||||||||||||||||
(In Thousands, Except Per Share Data and Percentages) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||||||
|
|
|
|
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
||||||||
GAAP gross profit |
$ |
185,461 |
|
$ |
160,975 |
|
$ |
542,856 |
|
$ |
456,167 |
|
||||
Stock-based compensation |
|
4,331 |
|
|
4,786 |
|
|
13,473 |
|
|
15,009 |
|
||||
Acquired intangible assets amortization |
|
1,452 |
|
|
1,541 |
|
|
4,356 |
|
|
3,697 |
|
||||
Non-GAAP gross profit |
$ |
191,244 |
|
$ |
167,302 |
|
$ |
560,685 |
|
$ |
474,873 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP gross margin |
|
74.2 |
% |
|
71.8 |
% |
|
73.9 |
% |
|
71.2 |
% |
||||
Stock-based compensation |
|
1.7 |
|
|
2.2 |
|
|
1.8 |
|
|
2.3 |
|
||||
Acquired intangible assets amortization |
|
0.6 |
|
|
0.7 |
|
|
0.6 |
|
|
0.6 |
|
||||
Non-GAAP gross margin |
|
76.5 |
% |
|
74.7 |
% |
|
76.3 |
% |
|
74.1 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP operating income (loss) |
$ |
13,366 |
|
$ |
(11,087 |
) |
$ |
17,130 |
|
$ |
(27,460 |
) |
||||
Stock-based compensation |
|
44,852 |
|
|
45,589 |
|
|
140,648 |
|
|
131,507 |
|
||||
Acquired intangible assets amortization |
|
1,452 |
|
|
1,541 |
|
|
4,356 |
|
|
3,697 |
|
||||
Acquisition-related expenses |
|
— |
|
|
180 |
|
|
53 |
|
|
1,215 |
|
||||
Fees related to shareholder activism |
|
— |
|
|
10,146 |
|
|
(77 |
) |
|
15,978 |
|
||||
Expenses related to litigation |
|
307 |
|
|
— |
|
|
307 |
|
|
— |
|
||||
Non-GAAP operating income |
$ |
59,977 |
|
$ |
46,369 |
|
$ |
162,417 |
|
$ |
124,937 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP operating margin |
|
5.3 |
% |
|
(4.9 |
)% |
|
2.3 |
% |
|
(4.3 |
)% |
||||
Stock-based compensation |
|
18.0 |
|
|
20.4 |
|
|
19.2 |
|
|
20.5 |
|
||||
Acquired intangible assets amortization |
|
0.6 |
|
|
0.7 |
|
|
0.6 |
|
|
0.6 |
|
||||
Acquisition-related expenses |
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
||||
Fees related to shareholder activism |
|
— |
|
|
4.5 |
|
|
— |
|
|
2.5 |
|
||||
Expenses related to litigation |
|
0.1 |
|
|
— |
|
|
— |
|
|
— |
|
||||
Non-GAAP operating margin |
|
24.0 |
% |
|
20.7 |
% |
|
22.1 |
% |
|
19.5 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income (loss) attributable to common stockholders |
$ |
4,982 |
|
$ |
(18,162 |
) |
$ |
(6,550 |
) |
$ |
(45,220 |
) |
||||
Stock-based compensation |
|
44,852 |
|
|
45,589 |
|
|
140,648 |
|
|
131,507 |
|
||||
Acquired intangible assets amortization |
|
1,452 |
|
|
1,541 |
|
|
4,356 |
|
|
3,697 |
|
||||
Acquisition-related expenses |
|
— |
|
|
180 |
|
|
53 |
|
|
1,215 |
|
||||
Fees related to shareholder activism |
|
— |
|
|
10,146 |
|
|
(77 |
) |
|
15,978 |
|
||||
Expenses related to litigation |
|
307 |
|
|
— |
|
|
307 |
|
|
— |
|
||||
Amortization of debt issuance costs |
|
472 |
|
|
471 |
|
|
1,415 |
|
|
1,408 |
|
||||
Undistributed earnings attributable to preferred stockholders |
|
(5,424 |
) |
|
(4,374 |
) |
|
(16,024 |
) |
|
(7,555 |
) |
||||
Non-GAAP net income attributable to common stockholders |
$ |
46,641 |
|
$ |
35,391 |
|
$ |
124,128 |
|
$ |
101,030 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income (loss) per share attributable to common stockholders, basic and diluted |
$ |
0.03 |
|
$ |
(0.12 |
) |
$ |
(0.05 |
) |
$ |
(0.29 |
) |
||||
Stock-based compensation |
|
0.32 |
|
|
0.30 |
|
|
0.98 |
|
|
0.83 |
|
||||
Acquired intangible assets amortization |
|
0.01 |
|
|
0.01 |
|
|
0.03 |
|
|
0.03 |
|
||||
Acquisition-related expenses |
|
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
||||
Fees related to shareholder activism |
|
— |
|
|
0.07 |
|
|
— |
|
|
0.10 |
|
||||
Expenses related to litigation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Amortization of debt issuance costs |
|
0.01 |
|
|
— |
|
|
0.01 |
|
|
0.01 |
|
||||
Undistributed earnings attributable to preferred stockholders |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.11 |
) |
|
(0.05 |
) |
||||
Non-GAAP net income per share attributable to common stockholders, basic |
$ |
0.33 |
|
$ |
0.23 |
|
$ |
0.86 |
|
$ |
0.64 |
|
||||
Non-GAAP net income per share attributable to common stockholders, diluted |
$ |
0.31 |
|
$ |
0.22 |
|
$ |
0.83 |
|
$ |
0.61 |
|
||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
142,385 |
|
|
151,426 |
|
|
143,604 |
|
|
158,068 |
|
||||
Diluted |
|
148,127 |
|
|
159,249 |
|
|
150,083 |
|
|
165,816 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP net cash provided by operating activities |
$ |
69,726 |
|
$ |
46,083 |
|
$ |
205,795 |
|
$ |
185,647 |
|
||||
Purchases of property and equipment, net of proceeds from sales |
|
(1,770 |
) |
|
(1,242 |
) |
|
(2,539 |
) |
|
(3,477 |
) |
||||
Principal payments of finance lease liabilities |
|
(10,422 |
) |
|
(12,297 |
) |
|
(29,838 |
) |
|
(38,182 |
) |
||||
Capitalized internal-use software costs |
|
(2,567 |
) |
|
(1,296 |
) |
|
(9,629 |
) |
|
(7,046 |
) |
||||
Non-GAAP free cash flow |
$ |
54,967 |
|
$ |
31,248 |
|
$ |
163,789 |
|
$ |
136,942 |
|
||||
GAAP net cash (used in) provided by investing activities |
$ |
(3,845 |
) |
$ |
(95,461 |
) |
$ |
115,383 |
|
$ |
(206,046 |
) |
||||
GAAP net cash used in financing activities |
$ |
(49,337 |
) |
$ |
(161,605 |
) |
$ |
(360,181 |
) |
$ |
(5,463 |
) |
||||
|
||||||||||||||||
RECONCILIATION OF GAAP REVENUE TO BILLINGS |
||||||||||||||||
(In Thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
GAAP revenue |
|
$ |
249,951 |
|
|
$ |
224,044 |
|
|
$ |
734,398 |
|
|
$ |
640,971 |
|
Deferred revenue, end of period |
|
|
467,080 |
|
|
|
429,664 |
|
|
|
467,080 |
|
|
|
429,664 |
|
Less: deferred revenue, beginning of period |
|
|
(458,249 |
) |
|
|
(422,039 |
) |
|
|
(534,242 |
) |
|
|
(465,613 |
) |
Contract assets, beginning of period |
|
|
2,424 |
|
|
|
866 |
|
|
|
1,111 |
|
|
|
25 |
|
Less: contract assets, end of period |
|
|
(2,969 |
) |
|
|
(1,073 |
) |
|
|
(2,969 |
) |
|
|
(1,073 |
) |
Billings |
|
$ |
258,237 |
|
|
$ |
231,462 |
|
|
$ |
665,378 |
|
|
$ |
603,974 |
|
|
||||||||||||||||
RECONCILIATION OF GAAP NET INCOME 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 |
|
$ |
0.06 |
|
- |
$ |
0.07 |
|
|
$ |
0.02 |
|
- |
$ |
0.03 |
|
Stock-based compensation |
|
|
0.31 |
|
|
|
0.31 |
|
|
|
1.29 |
|
|
|
1.29 |
|
Acquired intangible asset amortization |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.04 |
|
|
|
0.04 |
|
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 |
) |
|
|
(0.15 |
) |
|
|
(0.15 |
) |
Non-GAAP net income per share attributable to common stockholders range, basic |
|
$ |
0.35 |
|
- |
$ |
0.36 |
|
|
$ |
1.21 |
|
- |
$ |
1.22 |
|
Non-GAAP net income per share attributable to common stockholders range, diluted |
|
$ |
0.34 |
|
- |
$ |
0.35 |
|
|
$ |
1.16 |
|
- |
$ |
1.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares, basic |
|
|
|
|
|
143,500 |
|
|
|
|
|
|
144,000 |
|
||
Weighted-average shares, diluted |
|
|
|
|
|
149,000 |
|
|
|
|
|
|
150,000 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
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 |
|
|
6.5 |
|
% |
|
|
3.0 |
|
% |
Stock-based compensation |
|
|
17.5 |
|
|
|
|
19.0 |
|
|
Acquired intangible assets amortization |
|
|
0.5 |
|
|
|
|
0.5 |
|
|
Non-GAAP operating margin |
|
|
24.5 |
|
% |
|
|
22.5 |
|
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221130005484/en/
Investors:
+1 650-209-3463
ir@box.com
Media:
+1 650-543-6926
press@box.com
Source:
FAQ
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