Box: Fiscal 3Q23 Financial Results

Box, Inc. announced preliminary financial results for the third quarter of fiscal year 2023, which ended October 31, 2022.

“We delivered strong third quarter results with revenue growth of 12% Y/Y and record operating margins,” said Aaron Levie, co-founder and CEO. “As companies prioritize strategic IT initiatives that allow them to efficiently lower IT expenses, the Box Content Cloud enables enterprises to streamline their businesses, drive up productivity, reduce risk, and lower costs. With our industry leading platform, Box is very well-positioned to execute through these dynamic times. As we continue to build an enduring business for the long run, we remain hyper focused on driving growth and even greater profitability.“

“The strength and resiliency of our business model has allowed us to deliver revenue growth while expanding operating and free cash flow margins,” said Dylan Smith, co-founder and CFO. “With operational discipline built into the core of our company, we remain committed to our FY23 operating margin target and to delivering revenue growth plus free cash flow margin of 37%.”

3FQ23 Highlights

• Revenue was $250.0 million, a 12% increase from revenue for 3FQ22 of $224.0 million, or 17% growth on a constant currency basis.
• Remaining performance obligations (RPO) as of October 31, 2022, were $1.056 billion, an 11% increase from remaining performance obligations as of October 31, 2021 of $948.1 million, or 20% growth on a constant currency basis.
• Billings were $258.2 million, a 12% increase from billings for 3FQ22 of $231.5 million, or 20% growth on a constant currency basis.
• GAAP gross profit was $185.5 million, or 74.2% of revenue. This compares to a GAAP gross profit of $161.0 million, or 71.8% of revenue, in 3FQ22.
• Non-GAAP gross profit was $191.2 million, or 76.5% of revenue. This compares to a non-GAAP gross profit of $167.3 million, or 74.7% of revenue, in 3FQ22.
• GAAP operating income was $13.4 million, or 5.3% of revenue. This compares to a GAAP operating loss of $11.1 million, or negative 4.9% of revenue, in 3FQ22.
• Non-GAAP operating income was $60.0 million, or 24.0% of revenue. This compares to a non-GAAP operating income of $46.4 million, or 20.7% of revenue, in 3FQ22.
• GAAP net income per share attributable to common stockholders, basic and diluted, was $0.03 on 142.4 million and 148.1 million weighted-average shares outstanding, respectively. This compares to a GAAP net loss per share attributable to common stockholders, basic and diluted, of $0.12 in v on 151.4 million weighted-average shares outstanding. GAAP net income per share attributable to common stockholders in 3FQ23 includes a negative impact of 6 cents from FX.
• Non-GAAP net income per share attributable to common stockholders, diluted, was $0.31. This compares to a non-GAAP net income per share attributable to common stockholders, diluted, of $0.22 in 3FQ22. Non-GAAP net income per share attributable to common stockholders includes a negative impact of 6 cents from FX.
• Net cash provided by operating activities was $69.7 million, an increase of 51% from net cash provided by operating activities of $46.1 million in 3FQ22.
• Free cash flow was $55.0 million. This compares to free cash flow of $31.2 million in 3FQ22.

4FQ23 Guidance

• Revenue is expected to be in the range of $255 million to $257 million, up 10% Y/Y at the high end of the range, or 15% 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 approximately 24.5%.
• GAAP net income per share attributable to common stockholders is expected to be in the range of $0.06 to $0.07. GAAP EPS guidance includes an expected negative impact from FX of $0.05.
• Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of $0.34 to $0.35. Non-GAAP EPS guidance includes an expected negative impact from FX of $0.05.
• Weighted-average basic and diluted shares outstanding are expected to be approximately 144 million and 149 million, respectively.

FY23 Guidance

• Revenue is expected to be in the range of $990 million to $992 million, up 13% Y/Y at the high end of the range, or 17% 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 approximately 22.5%.
• GAAP net income per share attributable to common stockholders is expected to be in the range of $0.02 to $0.03. FY23 GAAP EPS guidance includes an expected negative impact from FX of $0.18.
• Non-GAAP diluted net income per share attributable to common stockholders is expected to be in the range of $1.16 to $1.17. FY23 Non-GAAP EPS guidance includes an expected negative impact from FX of $0.18.
• Weighted-average basic and diluted shares outstanding are expected to be approximately 144 million and 150 million, respectively.