Q4 FY17 earnings presentation

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March 1, 2017

Fourth Quarter and Fiscal Year 2017 Financial Results

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Investor Disclosure: Forward‐Looking Statements and Non‐GAAP Measures• This presentation contains forward‐looking statements that involve risks and uncertainties, including statements regarding

Box’s expectations regarding the size of its market opportunity, the demand for its products, its ability to scale its business and drive operating leverage, its long‐term revenue target expectations, its ability to achieve and maintain positive free cash flow for the full fiscal year ending January 31, 2018, profitability, recent and planned product introductions and enhancements, benefits of such product introductions and enhancements, and success of strategic partnerships, as well as expectations regarding its revenue, billings, GAAP and non‐GAAP earnings per share, the related components of GAAP and non‐GAAP earnings per share, and weighted average basic and diluted outstanding share count expectations for Box’s fiscal first quarter and full fiscal year 2018.

• There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: (1) adverse changes in general economic or market conditions; (2) delays or reductions in information technology spending; (3) factors related to Box’s intensely competitive market, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by Box’s current or future competitors; (4) the development of the Cloud Content Management market; (5) risks associated with Box’s ability to manage its rapid growth effectively; (6) Box’s limited operating history, which makes it difficult to predict future results; (7) the risk that Box’s customers do not renew their subscriptions, expand their use of Box’s services, or adopt new products offered by Box; (8) Box’s ability to provide timely and successful enhancements, new features and modifications to its platform and services; (9) actual or perceived security vulnerabilities in Box’s services or any breaches of Box’s security controls; and (10) Box’s ability to realize the expected benefits of its third‐party partnerships. Further information on these and other factors that could affect the forward‐looking statements we make in this presentation can be found in the documents that we file with or furnish to the US Securities and Exchange Commission, including our most recent Quarterly Report on Form 10‐Q filed for the fiscal quarter ended October 31, 2016.

• You should not rely on any forward‐looking statements, and we assume no obligation, nor do we intend, to update them. All information in this presentation is as of March 1, 2017. This presentation contains non‐GAAP financial measures and key metrics relating to the company's past and expected future performance. You can find the reconciliation of these measures to the nearest comparable GAAP measures in the appendix at the end of this presentation. You can also find information regarding our use of non‐GAAP financial measures in our earnings release dated March 1, 2017.

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All your work, together

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Every business is becoming a digital business

New ways to work

Insight‐led collaboration & productivity

New approachesto IT

100% cloud to maximize agility

New digital experiences

User‐centric and best‐in‐class

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The new way to work

One platform for all your content

Secure and compliant for every industry

and geo

Integrated with every app you use

Built for collaboration and workflow

across borders

User centric and

developer friendly at the same time

Created to leverage cloud

economics

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Box is Cloud Content Management

Compliance

Data protection policies

Workflow automation

Key management

Information governance

Data residency

AnalyticsAPI

Files

Collaboration

Search

Metadata

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Where all your work comes together

Connects to all the apps your enterprise uses today

Adds security into every content application, automatically

End‐users love Box – fast adoption

CUSTOM APPS

BOX APPS

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Snapshot of Cloud Content Management use cases

Secure document vault

Field worker enablement

Content submission & approval

Document retention & disposition

Document workflow

Simplified digital asset management

Custom process integration

External & team collaboration

Mobile productivity

Real‐time notes for teams

Cloud file shares

Custom builtNative Box

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Fortune 50064%

71KCustomers

Box Transforms Work Across All Industries

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Enterprise File Sync and Share Cloud Content Management

Inflection Point in Growth and InnovationNew Products Provide Further Competitive Differentiation

Core Box

CY 2005‐ 2014

2015: Starting to replace legacy ECM solutions

New Cross Sell Opportunities

B2B2B & B2B2CBox Platform expands addressable market to hundreds of millions of potential new users

CY 2016

KeySafeEncryption Key Management

GovernanceData Retention & Classification

Core Box

ZonesIn‐Region Data

ShuttleData Migration



CY 2015

Core Box

CY 2017



Core Box with Launch of Box for

Desktop

ZonesIn‐Region Data

ShuttleData Migration

Relay (in beta)Workflow

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Fourth Quarter Fiscal 2017 Financial HighlightsRecord Revenue, Achieved Positive Free Cash Flow and Continued Operational Efficiencies

Q4FY17 Q4FY16 Y/Y Growth

Revenue $109.9M $85.0M 29%

Billings $159.3M $130.2M 22%

Deferred Revenue $242.0M $186.4M 30%

GAAP EPS (28¢) (41¢) 13¢

Non‐GAAP EPS (10¢) (26¢) 16¢

Cash Flow from Operations $14.7M $4.9M $9.9M

Free Cash Flow $10.2M ($21.3M) $31.5M

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Revenue

Strong Top Line Growth in Q4FY17Strong Execution, Momentum with New Products and Strategic Partner Traction

$85.0$90.2

$95.7$102.8

$109.9

Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

Billings

$130.2

$75.9

$106.5$112.4

$159.3

Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

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Significant Growth in Deferred Revenue and BacklogStrong Revenue Visibility Going Forward

$186.4$172.2

$183.0$192.6

$242.0

Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

Deferred Revenue Backlog (1)

$184.4

$258.1

FY2016 FY20171. Backlog is defined as executed, committed, non‐cancelable contracts for which invoicing is not dependent on the occurrence of future events.

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19% 14%

23% 20%

68%54%

Non‐GAAP Op Expense As a % of Revenue

G&A R&D S&MQ4’16 Q4’17

GAAP and Non‐GAAP Gross Margin and Op ExpenseGAAP Gross Margin 73.1%, Non‐GAAP 75.8%GAAP Op Expense $117M, Non‐GAAP $96M

Note: Expenses and operating margin shown on a non‐GAAP basis (reconciliations to the GAAP basis can be found in the Appendix of this presentation).

• S&M improved 14 percentage pts YoY, demonstrating leverage in model.

• R&D improved 3 percentage pts YoY, even including product offering expansion.

• G&A improved 5 percentage pts YoY due to efficiency improvements and lower legal expenses.

73.2% 72.4% 74.0% 76.1% 75.8%

Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

Non‐GAAP Gross Margin

Improved 22 pts

• Improvement driven by optimizations in infrastructure

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Best‐in‐Class Retention RateLow Churn Continues to Demonstrate Product Stickiness

1. Net expansion defined as the net increase in contract value from our existing customers, who had $5K+ in TAV 12 months ago.2. Retention rate defined as the net % of Total Account Value (“TAV”) retained from existing customers, including expansion. This metric is calculated by

dividing current TAV of customers who 12 months ago had $5K+ in TAV by their TAV 12 months ago.

Retention Rate(2)

115%18%3%Net Expansion(1)Churn

Product stickiness Continued growth within existing customers

Best‐in‐class

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$204.2

$14.7($1.3) ($4.1)

$194.9

Q3 Cash andEquivalents,

Restricted Cash(1)

CFO CAPX Other Q4 Cash andEquivalents,

Restricted Cash(1)

Cash, Cash Equivalents & Restricted CashHealthy Cash Balances for Long Term Growth

(Millions)

1. Balance includes ~$27 million in restricted cash for Q3FY17 and Q4FY17

• Cash from operations of $14.7M, compared to $4.9M a year ago – an improvement of 203%.

• ~$1.3M of CAPEX materially lower than $25M a year ago, following completion of move to Redwood City HQ.

• “Other” primarily consists of RSU taxes and capital lease payments (cash from financing)

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‐25%

‐18%

‐8%‐11%

9%

Q4'16 Q1'17 Q2'17 Q3'17 Q4'170%

First Ever Quarter of Positive Free Cash Flow Margin(1)

Significant YoY FCF improvement due to:• Improvements in non‐GAAP operating loss• Cash flow from operations improving with tighter working capital

management• End of significant HQ move costs

1. Free Cash Flow Margin = Free Cash Flow as a percentage of Revenue. Free Cash Flow is defined as cash (used in) provided by operating activities less purchases of property and equipment, principal payments of capital lease obligations, and other items that did not or are not expected to require cash settlement and which management considers to be outside of Box’s core business. Refer to the Appendix for the reconciliation of Free Cash Flow to the nearest comparable GAAP measure.

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Q1 and Fiscal Year 2018 Guidance Ranges

Q1 FY18 Guidance

Revenue GAAP EPS Non‐GAAP EPS Weighted Average Shares Outstanding

Low High Low High Low High

$114 M $115 M ($0.33) ($0.32) ($0.15) ($0.14) 131 million

FY 18 Guidance

Revenue GAAP EPS Non‐GAAP EPS Weighted Average Shares Outstanding

Low High Low High Low High

$500 M $504 M ($1.27) ($1.23) ($0.49) ($0.45) 134 million

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Appendix

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GAAP Revenue to Billings Reconciliation

($ in thousands) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17

GAAP revenue $84,982 $90,155 $95,713 $102,811 $109,926

Deferred revenue, end of period 186,413 172,184 183,004 192,598 241,984

Less: Deferred revenue, beginning of period (141,147) (186,413) (172,184) (183,004) (192,598)

Billings $130,248 $75,926 $106,533 $112,405 $159,312

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GAAP to Non‐GAAP Reconciliation – Gross Margin

($ in thousands) Q4FY16As a % of revenue Q1FY17

As a % of revenue Q2FY17



As a % of revenue

GAAP gross margin $59,301 69.8% $62,296 69.1% $68,111 71.2% $75,696 73.6% $80,372 73.1%Add: Stock‐based

compensation 1,500 1,512 1,830 1,986 2,554

Add: Intangible assets amortization 1,433 1,420 878 506 393

Non‐GAAP gross margin $62,234 73.2% $65,228 72.4% $70,819 74.0% $78,188 76.1% $83,319 75.8%

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GAAP to Non‐GAAP Reconciliation – Operating Expenses



As a % of revenue

GAAP research and development $26,589 31% $29,652 29% $31,104 28%

Less: Stock‐based compensation (6,675) (7,730) (9,194)

Non‐GAAP research and development $19,914 23% $21,922 21% $21,910 20%

GAAP sales and marketing $63,257 74% $66,796 65% $66,566 61%


Non‐GAAP sales and marketing $57,757 68% $60,052 58% $58,814 54%

GAAP general and administrative $19,019 22% $16,999 17% $19,095 17%


Less: Intangible assets amortization (37) (39) (39)Less: Expenses related to a legal verdict (309) ‐ ‐

Non‐GAAP general and administrative $15,691 19% 13,503 13% 15,254 14%

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GAAP to Non‐GAAP Reconciliation – Operating Margin



As a % of revenue

GAAP operating margin ($49,564) (58%) ($37,751) (37%) ($36,393) (33%)

Less: Stock‐based compensation 16,657 20% 19,917 19% 23,302 21%

Less: Intangible assets amortization 1,470 1% 545 1% 432 ‐

Less: Expenses related to a legal verdict 309 ‐ ‐ ‐ ‐ ‐

Non‐GAAP operating margin ($31,128) (37%) ($17,289) (17%) ($12,659) (12%)

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GAAP to Non‐GAAP Reconciliation – Free Cash Flow





As a % of revenue

GAAP net cash (used in) provided by operating activities

$4,865 6% ($4,231) (5%) ($4,879) (5%) ($6,829) (7%) $ 14,721 13%

Less: Purchases of property and equipment (25,097) (10,976) (771) (1,892) (1,317)

Less: Payments of capital lease obligations (1,108) (949) (2,312) (2,178) (3,236)

Free cash flow ($21,340) (25%) ($16,156) (18%) ($7,962) (8%) ($10,899) (11%) $10,168 9%

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GAAP to Non‐GAAP Reconciliation – EPS Outlook

For the Three Months Ended April 30, 2017

For the Year Ended January 31, 2018

GAAP net loss per share range, basic and diluted $(0.33) ‐ $(0.32) $(1.27) ‐ $(1.23)

Stock based compensation 0.18 0.78

Intangible assets amortization 0.00 0.00

Non‐GAAP net loss per share range, basic and diluted $(0.15) ‐ $(0.14) $(0.49) ‐ $(0.45)

Weighted average shares outstanding, basic and diluted 131,445 134,120

Investor Relations

Q4 FY17 earnings presentation