Box, Inc.

Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the Box Inc. first quarter fiscal 2026 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 star followed by the number one on your telephone keypad. And if you would like to withdraw that question, again, press star 1. And I would now like to turn the conference over to Cynthia Hiponia, Vice President, Investor Relations. Please go ahead.

Good afternoon, and welcome to Box's first quarter fiscal 2026 earnings conference call. I am Cynthia Hiponia, Vice President, 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 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 second quarter and full year 2026 financial guidance, and our expectations regarding our financial performance for fiscal 2026 and future periods, including gross margins, operating margins, operating leverage, future profitability, net retention rates, remaining performance obligations, revenue and billing, 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, 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 factors currently known to us and actual events or results may differ materially. please refer to our earnings press release file today and the risk factors in documents we file with the SEC, including our most recent annual report on Form 10-K for information on 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, May 27th, 2025, 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 our non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with 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. Thank you. And with that, let me turn the call over to Aaron.

Thank you, Cynthia, and thank you all for joining the call today. We had a strong start to FY26 with results reflecting continued growth in customer demand for BoxAI. In Q1, our revenue grew 4% year-over-year, or 5% in constant currency. RPO grew 21% year-over-year, and we saw strong outperformance on billings. We delivered operating margins of 25.3% and EPS of 30 cents, 4 cents above our guidance. Following the launch of Enterprise Advance late in Q4, in Q1, we saw strong momentum in customer adoption as enterprises look to Box to help them transform their AI-driven workflows around content. Examples include a leading university hospital upgraded to Enterprise Advance and significantly expanded their Box seats. Currently, content is siloed across the organization, and they aim to make Box their single source of truth while unlocking value through Box apps and AI-driven metadata extraction. An investment advisory firm who has already been leveraging the Box AI API for metadata extraction upgraded to Enterprise Advance to expand their use of diverse AI models through the Box AI Studio. They also plan to use Box apps dashboards to manage and organize critical business information, more strategically and leverage DocGen to further streamline operations. A financial services firm and a new Box customer purchased Enterprise Advance to modernize and secure their critical business data by moving from an outdated on-prem system to Box. Looking to improve their control over sensitive content for personally identifiable information, enhance their user experience, and optimize their retention strategy, They needed a scalable, compliant platform supporting loan origination, HR, and legal functions. In the first quarter, I had the opportunity to meet with well over 100 customers, and it's incredibly clear that there is a fundamental shift in what business will look like in an AI-first world. In fact, tomorrow, we are releasing our first state of AI in the enterprise survey, where we recently surveyed over 1,300 IT leaders across a range of industries and geographies. More than half of the respondents expect to see transformation from AI in the next two years, and nearly 90% are already using AI agents in some capacity. And many of the top desired use cases for AI are around working with documents and unstructured data. What's clear is that as companies increasingly go AI first, they are beginning to rethink how they can take advantage of their enterprise content, from their contracts and invoices to their research data and marketing assets. For years, the value of this content has been limited to only what humans can do with this information, which means most companies have never been able to truly tap into the full value of this information. But in a world of AI and AI agents, this finally becomes possible. Inside all of this information are the answers to a company's next product breakthrough, their customer upsell opportunities, how they can hire amazing new talent or optimize their supply chains. AI agents make this all possible. At Box, we're building out the leading intelligent content management platform to help enterprises fully connect the power of AI to their content. Now, to deliver on this strategy, at our Content Plus AI Summit in mid-May, we announced our biggest set of AI agent updates ever. designed to transform how organizations work with their content. We unveiled all new capabilities to support AI agents that can do deep research, search, and enhance data extraction on content securely in Box, and all with a focus on openness and interoperability. Imagine being able to have AI agents that can comb through any amount of your unstructured data, contracts, research documents, marketing assets, film scripts, financial documents, invoices, and more to produce insights or automate work. Box AI agents will enable enterprises to streamline a due diligence process on hundreds or thousands of documents in an M&A transaction, correlate customer trends amongst customer surveys and product research data, or analyze life sciences and medical research documents to generate reports on new drug discovery and development. None of this would have been possible even a year ago. But with the cost of AI inference dropping, context windows expanding to support larger datasets, reasoning models handling much more complex tasks, and better understanding of designing agentic workflows, this all of a sudden becomes possible. Next, we believe in a world where AI agents work together to complete tasks across platforms. So this means that an AI agent from Box could work across an enterprise's entire AI stack. In addition to our newly announced Box AI agent from Microsoft 365 Copilot and IBM Watson X Orchestrate, Box AI agents are available or in development with Google AgentSpace, Salesforce AgentForce, Slack AI, ServiceNow AI Agent Fabric, and the Zoom AI Companion. Developers can also build custom agents that leverage Box content using the Box MCP server, the Google Agent SDK, and OpenAI's Agents SDK, as well as through their preferred developer and data platforms. Building on these recent announcements, just last week, ChatGPT officially integrated Box as a secure connected data source for their deep research AI agent. Now, Instead of moving your data around between each platform that you want to work in, you can just work where you want and have the AI agents coordinate together in the background to get the data that you need from Box. This is the future of software in an era of AI. Finally, we will continue to partner with the broader AI model ecosystem to ensure customers have the choice of any model provider they want to work with. Just in Q1 alone, we saw incredible examples of us sitting at the center of this industry, such as the recent NVIDIA GTC keynote from Jensen mentioning Box, Box joining OpenAI as a launch partner for their Asian SDK, Meta showcasing Box and IBM's support for Llama at their latest AI developer event, Box serving as a day one Grok 3 API launch partner with XAI, and many more. Being neutral to the AI models means that our customers get instant access to the best that AI has to offer on their content, instead of having to keep their data stuck with just one particular AI provider. And this partner momentum will only increase in Q2 and beyond. Over the coming months, we'll be gearing up for Boxworks in September, which will include our biggest and most exciting announcements we've ever had on this platform. This is the year of AI agents and the ability to drive automation around any kind of workflow with AI. And Box will be building out the leading capabilities to help our customers do this with their enterprise content at scale. We look forward to sharing more in early September at Boxworks. Now, turning to go to market. We're continuing to drive enterprise advanced momentum across segments and geographies. Even after the large number of early adopters we saw in Q4 bring on Enterprise Advance, we were pleased to see the continued growth in deals in Q1, our seasonally lowest quarter, with a strong pipeline continuing to build as customers look to drive intelligent workflows in Box. Additionally, we're continuing to drive pricing improvements in our target 20% to 40% increase range for these Enterprise Advance deals. As we've discussed, One of our key initiatives to drive growth is to expand and grow our partner ecosystem, particularly with global and regional system integrators. In Q1, we're already seeing solid momentum in customer wins enabled by our partners. After announcing our partnership with DataBank in March, we had a great win with a local government upgrading to Enterprise Advanced to replace legacy enterprise content management system. We also partnered with regional SIs in financial services and life sciences, with partner-enabled deals to replace legacy systems and automate processes to deliver secure compliance solutions that are well-suited for regulated environments. Also, in the first quarter, we were excited to announce that we received FedRAMP high authorization, allowing U.S. government agencies and authorized government contractors the ability to leverage Box's intelligent content management platform for highly sensitive data. Finally, Before I turn the call over to Dylan, let me discuss how we at Box are building an AI-first company. As customer zero, we are driving an AI-first culture as we use Box AI to help us move faster, make better decisions, and automate work. Not only will this drive productivity and innovation, going AI-first as a company is also important for our strategy of building the leading AI platform for enterprise content. Paul Graham famously gave the startup advice of live in the future and then build what's missing. The idea behind this is that the teams that deeply figure out where the world is going will often see the new opportunities that arise far sooner than others. This is what we're doing at Box. Across Box, we are seeing Box AI be leveraged to help transform how we work every day. Internally, we use AI-powered hubs to help answer customer support questions. onboard new sales reps faster, get HR questions answered instantly, and much more. Boxers can access every leading AI model alongside their content to streamline understanding data, reviewing code, or generating new content for marketing assets or product documentation. Boxers are creating custom AI agents to generate call scripts, create more personalized sales materials, or answer RFPs. And we use AI agents to extract metadata on policy documents to help streamline internal compliance and document management workflows. And finally, beyond Box AI, we use AI-first coding tools and customer service tools to augment our workforce and drive productivity. Importantly, our principal focus of going AI-first is to move faster and be able to deliver better outcomes for our customers. We want to ensure that every boxer is fully equipped to be as productive as possible with AI, which is why we're making it easy to experiment with AI across the company. And we're highlighting the best practices as they emerge and driving as much upskilling of our workforce as possible. And for new employees coming in, we will increasingly look for AI first skills as a part of our hiring criteria. This is the biggest shift in work that we've ever seen in our lifetimes. and we're excited to make sure that Box sits right at the center of it. With that, let me turn the call over to Dylan.