Box(BOX)2024-12-03 21:14Financial Performance - Revenue for Q3 FY25 was $276 million, a 5% increase year-over-year, or 6% growth on a constant currency basis[4] - GAAP operating margin reached a record 8.5%, while non-GAAP operating margin was 29.1%[4] - GAAP net income per share was $0.05, and non-GAAP net income per share was a record $0.45[4] - Billings for Q3 FY25 were $264.7 million, a 4% increase from the previous year[4] - Non-GAAP free cash flow for Q3 FY25 was $57.4 million, a 2% decrease from the previous year[4] - Total revenue for the three months ended October 31, 2024, was $275.9 million, a 5.3% increase from $261.5 million in the same period last year[35] - Gross profit for the three months ended October 31, 2024, was $220.4 million, representing a gross margin of 79.9%, compared to $192.3 million in the prior year[35] - Net income for the three months ended October 31, 2024, was $12.9 million, up 21.3% from $10.7 million in the same period last year[35] - Non-GAAP net income attributable to common stockholders for the three months ended October 31, 2024, was $67.462 million, compared to $53.225 million in the prior year, reflecting a year-over-year increase of 26.7%[41] - GAAP net income attributable to common stockholders for the three months ended October 31, 2024, was $7.626 million, compared to $5.647 million in the same period of 2023, representing an increase of 35.0%[39] Future Projections - Q4 FY25 revenue is expected to be approximately $279 million, up 6% year-over-year[10] - Full year FY25 revenue is expected to be approximately $1.090 billion, up 5% year-over-year[12] - The company expects GAAP net income per share attributable to common stockholders for the three months ending January 31, 2025, to be $0.07, with a non-GAAP net income per share guidance of $0.41[44] Performance Obligations and Cash Flow - Remaining performance obligations (RPO) as of October 31, 2024, were $1.3 billion, up 13% year-over-year, or 14% growth on a constant currency basis[2] - The company reported billings as a significant performance measure, reflecting sales to new customers, subscription renewals, and expansions within existing customers[26] - Remaining performance obligations (RPO) indicate contracted revenue not yet recognized, consisting of deferred revenue and backlog, which are crucial for future revenue projections[28] - Box's non-GAAP free cash flow is defined as cash flows from operating activities minus capital expenditures, indicating the cash available for business investments[29] - Non-GAAP free cash flow for the three months ended October 31, 2024, was $57.361 million, slightly down from $58.317 million in the same period of 2023[39] - The company reported a net cash provided by operating activities of $62.6 million for the three months ended October 31, 2024, compared to $71.8 million in the prior year[37] - GAAP net cash provided by operating activities for the three months ended October 31, 2024, was $62.582 million, compared to $71.782 million in the same period last year, a decrease of 12.2%[39] Strategic Initiatives - Box introduced a new Suites plan, Enterprise Advanced, enhancing its Intelligent Content Management platform[7] - Box expanded its strategic partnership with Amazon Web Services (AWS) to integrate advanced AI capabilities[7] - The company aims to maintain profitability and achieve revenue growth rates while managing operating efficiencies and foreign currency fluctuations[1] - Box's fiscal year 2025 targets include expanding operating margins and achieving a cash flow margin that supports long-term financial health[1] - The company emphasizes the importance of strategic partnerships and acquisitions to enhance its market position and product offerings[1] - The company is focused on leveraging AI and new product introductions to drive market adoption and retention[1] Balance Sheet and Liabilities - Total current assets increased to $962.6 million as of October 31, 2024, compared to $842.2 million as of January 31, 2024[33] - Total liabilities rose to $1.34 billion as of October 31, 2024, compared to $1.18 billion as of January 31, 2024[33] - Cash and cash equivalents increased to $608.8 million as of October 31, 2024, from $383.7 million as of January 31, 2024[33] - The company issued $448.9 million in convertible notes during the financing activities for the three months ended October 31, 2024[37] - The company’s total stockholders' deficit was $479.9 million as of October 31, 2024, compared to $431.1 million as of January 31, 2024[33] Economic and Market Conditions - The impact of macroeconomic conditions, including inflation and geopolitical conflicts, poses risks to Box's growth and profitability expectations[1] - Box's management believes that non-GAAP financial measures provide meaningful insights into operational performance and facilitate comparisons with competitors[21] - Box's non-GAAP gross profit and gross margin are calculated by excluding stock-based compensation and intangible asset amortization, providing a clearer view of core business performance[23]