Box, Inc.

Ladies and gentlemen, good afternoon and thank you for standing by. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to the Box third quarter fiscal 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and I would now like to turn the conference over to Cynthia Hiponia, Vice President of Investor Relations. You may begin.

Good afternoon, and welcome to Box's third quarter fiscal 2025 earnings conference call. I'm Cynthia Hiponia, Vice President of Investor Relations. On the call today, we have Aaron Levy, Box co-founder and CEO, and Dylan Smith, Box co-founder and CFO. Following our prepared remarks, we will take your questions. Today's call is being webcast and will also be available for replay on our Investor Relations website at boxinvestorrelations.com. Our webcast will be audio only. However, supplemental slides are now available for download from our website. On this call, we will be making forward-looking statements, including our fourth quarter and full-year fiscal 2025 financial guidance, and our expectations regarding our financial performance for fiscal 2025 and future periods, including gross margins, operating margins, operating leverage, future profitability, net retention rates, remaining performance obligations, revenue and billings, and the impact of foreign currency exchange rates and deferred tax expenses, and our expectations regarding the size of our market opportunity, our planned investments, future product offerings, and growth strategies, our ability to achieve our revenue operating margins and other operating model targets, the timing and market adoption of and benefits from our new products, pricing models, and partnerships, the proceeds from the sale of our data center equipment, our ability to address enterprise challenges and deliver cost savings for our customers, the impact of the macro environment on our business and operating results, and our capital allocation strategies including potential repurchase of our common stock. These statements reflect our best judgment based on the factors currently known to us, and actual events or results may differ materially. Please refer to our earnings press release filed today and the risk factors in documents we filed with the Securities and Exchange Commission, including our most recent quarterly report on 410Q for information on the risks and uncertainties that may cause actual results to differ materially from statements made on this earnings call. These forward-looking statements are being made as of today, December 3rd, 2024, and we disclaim any obligation to update or revise them should they change or cease to be up to date. In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from our GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations and comparable GAAP results in our earnings press release and in the related supplemental slides, which can be found on the IR page of our website. Unless otherwise indicated, all references to financial measures are on a non-GAAP basis. With that, let me turn the call over to Aaron.

Thank you, Cynthia, and thanks everyone for joining us today. It has been an exciting period for Box. For the past several quarters, I have talked about our intense focus at Box on embedding AI into our platform, to revolutionize our customers' ability to create value from their content. Our strong financial results in Q3 reflects continued growth in customer demand for BoxAI. In Q3, our revenue grew 5% year-over-year, or 6% in constant currency, and RPO growth of 13% year-over-year. We delivered record gross margin of 82%, and our focus on operational discipline drove record operating margin of 29%, up 440 basis points from a year ago. BoxAI and Enterprise Plus drove strong customer demand in Q3. Examples of customers who chose Enterprise Plus to gain access to BoxAI include one of the largest advertising agency groups in the world expanded their use of Enterprise Plus within the company as they rolled out BoxAI and Hubs company-wide. With BoxAI, they are able to summarize documents quickly, sharing valuable insights with clients, and they are able to create hubs for each department of the business to better organize and get value for their critical business data. A U.S. federal agency upgraded to Enterprise Plus to support secure collaboration with BoxShield and to support hubs and AI use cases related to internal and external collaboration around inspections. and an American digital marketing and media company that has been a Box customer for 10 years, upgraded to Enterprise Plus, driven by our innovation with Box AI and Hubs. With Hubs AI, they are now able to provide their sales teams with quick and easy access to resources, as well as enable marketing to streamline their content creation process. We had a strong quarter overall and executed well on both the top and bottom lines. proving that our disciplined approach to profitable growth creates value for both our customers and our shareholders. And what I'm most excited about is the journey that now lies in front of us. At Boxworks, we rolled out key elements in our drive to create a new era of intelligent content management, which will be a major driver for growth going forward. First, we unveiled the most transformational product lineup in Box history, Second, we launched Enterprise Advanced, a higher-tier suite plan for customers to address even more complex and powerful enterprise use cases. And finally, we announced deeper integrations and relationships with key technology partners like Anthropic, OpenAI, Google, and we hosted hundreds of partners from all of our key regions who came to spend time with our customers and teams and dove into learning about how to build on Box and leverage Box AI. With Intelligent Content Management, businesses of all sizes are able to unleash the full value of their content and leverage the data within it to drive innovation, automate content-based processes to accelerate their businesses, and secure their most important information, both more easily and at a lower cost compared to legacy ECM systems. To deliver on the full potential of Intelligent Content Management, at Boxworks, we announced groundbreaking intelligent workflow automation capabilities, including Box Apps to enable customers to create no-code apps for any content-based business process inside of Box, leveraging AI-powered metadata views, custom dashboards, and more. Prior to having Box Apps, any enterprise that wanted to customize their Box user experience to power a critical workflow had to do this through our APIs. Now, building on the technology we acquired from Cruise earlier this year, Box Apps offers an additional way for customers and partners to rapidly customize and automate content-based workflows for any line of business or industry-specific use case, like contract management, digital asset management, invoice processing, loan document management, and more. Further, we announced Box Forms, which extends our workflow capabilities and allows customers to collect structured data in any workflow around content. Box DocGen, for the ability to automatically generate documents such as invoices or contracts, and Box Metadata Extraction APIs, to help intelligently extract and create structured data from documents to help power Box apps, as well as link data from Box to other systems tied to these critical workflows. This is the precursor functionality to our integrated AlphaMoon technology that we plan to launch in FY26. When combined, these workflow automation capabilities, tied to our advanced data security and compliance, open platform, and world-class end-user experience, allow enterprises to power a wide range of complex content-based workflows on Box with little customization or developer experience necessary. This dramatically expands the market opportunity for Box and lets us more successfully create value across more and more software categories. In addition to these intelligent workflow capabilities, Box also announced major features to further our leadership in intelligent content management. These include new advancements with AI to help customers interact with their content in new ways through hubs and multi-document querying inside its folders, and the ability to create custom AI agents that can be tuned to the specific needs of an enterprise or team through Box AI Studio, which also lets you manage and create these agents with many more third-party AI model providers, including the GPT family, the Gemini family, and the Anthropic family of models, with additional models coming in the future. And we announced Box Archive, which allows customers to manage large amounts of content, think petabytes and hundreds of millions or billions of files, that don't need to be actively engaged by end users for compliance, regulatory, or data governance purposes. And with Box Archive, we can handle more of our customers' most important compliance and security use cases without trading off performance or user experience. At Boxworks, we were also honored to have as keynote speakers the CEOs of Anthropic, Google Cloud, Slack, and Zoom, discussing what's possible with content and AI. We are driving deeper integrations with our technology partners as we continue to double down on our open platform. Further, in Q3, we announced an expanded strategic partnership with AWS, that will empower organizations of all sizes to build new applications and maximize productivity with generative AI. Box customers can access foundation models directly in Box AI using Amazon Bedrock, starting with Anthropix Cloud and Amazon Titan. With this integration, companies can quickly and securely build generative AI applications by combining some of the world's most advanced AI models with their data residing in Box's intelligent content management platform. Now, turning to go-to-market. We remain focused on leveraging our go-to-market engine to bring the full value of Box to all our customers by delivering high-value solutions through our multi-product suites and platform, complemented by our key partners. Our suites customers have higher contract values and higher net retention and gross expansion rates. And Enterprise Plus, which now offers unlimited user access to Box AI, continues to have solid suite attach rates in large deals across key verticals and record attach rates in the U.S. in Q3. Now, with the addition of Enterprise Advance, which will be generally available in January, companies can power intelligent content workflows across their business. It offers Box apps, for building no-code applications and dashboards to customize content experiences, Box Forms for creating forms natively in Box, Box DocGen for generating documents on the fly, Box AI Studio for creating custom AI agents, Box Archive for managing content at the end of its lifecycle, as well as higher API allowances and more, all available in one simple plan. Additionally, customers can purchase incrementally more API bundles, such as document generation and AI-powered metadata extraction, which are expected to drive growth in platform revenue. From initial conversations with customers at Boxworks, we're already seeing growing interest in this new plan to tap into Box's breakthrough new features. Looking forward, we will continue to drive Enterprise Plus expansion with our enhanced Box AI solutions, and we will address more complex use cases around content management, document workflows, security and governance with Enterprise Advanced. As I mentioned earlier, a key initiative in our go-to-market strategy is to work with a partner ecosystem of system integrators to drive larger deals with customers and power more of their mission-critical workflows. We recently announced a partnership with Slalom, the global business and technology consulting company, to help customers leverage advanced AI and machine learning to unlock valuable insights from their content. Box and Slalom are working together to enable enterprises to modernize workflows, enhance collaboration, and transform their content management processes with AI. As we are doubling down on partnership efforts, We will be focused on expanding our relationships with key system integrators like Slalom, Deloitte, PCS, IBM, and more. Working hand-in-hand with our partners will be especially helpful as we continue to drive more takeouts and replacements of legacy enterprise content management systems. The feedback from our customers at Boxworks was incredible. and it's clear that we have an opportunity using our AI-enabled platform to serve enterprises in all new ways to help them transform and accelerate their organizations. We believe our total addressable market is increasing substantially, and we can help customers retire more legacy systems and consolidate more into Box. It was also clear that partners are excited about expanding the work that they can do with Box which will become an even more important growth driver for us going forward. In this defining period that will shape how work gets done, I could not be prouder of how the company has executed on the innovation we delivered to our intelligent content management platform. Box is incredibly well positioned to capitalize on the mega trends in AI and workflow automation and power the full life cycle of content in the enterprise. With that, let me turn it over to Dylan.