Box (BOX) Preliminary Q2 Revenue Tops Consensus, Updates FY Guidance

Box, Inc. (NYSE: BOX), the leading Content Cloud, today announced preliminary financial results for the second quarter of fiscal year 2022, which ended July 31, 2021, and provided guidance for the third quarter and full-year fiscal 2022.

“Our strong second quarter preliminary results reflect the acceleration we are continuing to see across the business and we are raising our outlook for the full fiscal year,” said Aaron Levie, co-founder and CEO of Box. “Customers are recognizing the strategic importance of our comprehensive Content Cloud, as reflected in our Net Retention Rate of 106%, up 300 basis points from the first quarter. We were pleased to close 133 new deals over $100K in the first half of fiscal 2022, up 28% year over year. We also continued to deliver on our long-term vision for the Content Cloud with the launch of Box Sign, adding native e-signature capability to our platform. We are extending our leading position in cloud content management and driving our next phase of growth and value creation through the rest of fiscal 2022 and beyond.”

Fiscal Second Quarter 2022 Preliminary Results:

• Revenue of approximately $214 million, up 11% year-over-year, as compared to guidance of $211 million to $212 million, representing two consecutive quarters of accelerating revenue growth rates;
• GAAP operating margin of approximately negative 3%, as compared to guidance of a negative 5% to negative 4.5%;
• Non-GAAP operating margin of approximately 20%, as compared to guidance of 18% to 18.5%;
• Billings of approximately $213 million, up 13% year-over-year, as compared to guidance of mid-single digit growth year-over-year;
• Net Retention Rate of approximately 106%, up sequentially from 103% in the first quarter of fiscal 2022;
• An attach rate of over 70% on Suites in deals over $100K, up from a 49% attach rate in the first quarter of fiscal 2022 and a 45% attach rate in the fourth quarter of fiscal 2021; and
• As of August 11, 2021, since the completion of the Modified Dutch Auction Tender Offer, repurchased 2.5 million shares of Class A common stock at a weighted average price of $23.68, for a total of $59 million.

(*Consensus sees Q2 EPS of $0.17 on revenue of $211.53 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.

Outlook

Box is also today initiating Q3 FY22 revenue, GAAP operating margin and non-GAAP operating margin guidance, and is updating full year FY22 revenue, GAAP operating margin and non-GAAP operating margin guidance. The company will provide additional guidance when it reports full fiscal second quarter 2022 financial results on August 25, 2021.

Q3 FY22 Guidance:

• Revenue is expected to be in the range of $218 million to $219 million, up 11% to 12% year-over-year, representing the third quarter of continued revenue growth acceleration;
• GAAP operating margin is expected to be approximately negative 3.5%; and
• Non-GAAP operating margin is expected to be approximately 20%.

Full Year FY22 Guidance:

• Revenue is expected to be in the range of $856 million to $860 million, up 11% year-over-year, an increase over previous guidance of $845 million to $853 million and a revenue growth acceleration over the prior year;
• GAAP operating margin is expected to be approximately negative 3.0%, an improvement over previous guidance of negative 4%;
• Non-GAAP operating margin is expected to be approximately 19.5%, an increase over previous guidance of 18% to 18.5%; and
• FY22 revenue growth rate combined with FY22 free cash flow margin is expected to be at least 32%, an increase over previous guidance of at least 30%.

All forward-looking non-GAAP financial measures contained in this section titled “Outlook” exclude estimates for stock-based compensation expense, intangible assets amortization and fees related to shareholder activism.

Update on Share Repurchase Plan

On July 9, 2021, the Board of Directors authorized a $260 million Share Repurchase Plan, utilizing the unused portion of the $500 million intended for the Modified Dutch Auction Tender Offer to opportunistically repurchase additional shares of Box’s Class A common stock. As of August 11, 2021, the company had repurchased 2.5 million shares of its Class A common stock at a weighted average price of $23.68, for a total of $59 million under this Plan. Combined with the Modified Dutch Auction Tender, the company had repurchased a total of 11.8 million shares of Class A common stock for a total of $297 million.

Earnings Webcast and Conference Call Information

As previously announced, Box’s management team will host a conference call on August 25, 2021 at 2:00 PM (PT) / 5:00 PM (ET) to discuss Box’s financial results, business highlights and future outlook. A live audio webcast of this call will be available through Box’s Investor Relations website at www.box.com/investors for a period of 90 days after the date of the call.

The conference call can be accessed by registering online at http://www.directeventreg.com/registration/event/4886758, at which time registrants will receive dial-in information as well as a passcode and registrant ID. A telephonic replay of the call will be available approximately two hours after the call and will run for one week. The replay can be accessed by dialing:

+ 1-800-585-8367 (U.S. and Canada), conference ID: 4886758
+ 1-416-621-4642 (international), conference ID: 4886758

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