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What changed in BOX INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BOX INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+363 added−355 removedSource: 10-K (2025-03-10) vs 10-K (2024-03-11)

Top changes in BOX INC's 2025 10-K

363 paragraphs added · 355 removed · 285 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

69 edited+22 added−15 removed65 unchanged
Biggest changeThis achievement positions us for ongoing environmental benefits, including reduced energy consumption and CO 2 footprint. • Rating Partners: Our dedication to sustainability is evident in our participation in Environmental, Social, and Governance (ESG) questionnaires for organizations such as Carbon Disclosure Project, Ecovadis, and Institutional Shareholder Services, Inc. • Internal Policies: Internally, we have published a waste management policy, serving as a cornerstone of our future broader environmental strategy. • Sustainable Offices: Our office buildings worldwide have received a number of certifications, including: ▪ BREEAM Certification in London and Warsaw. ▪ Energy Star Certified in Austin. ▪ Fitwel Certification in Redwood City and San Francisco. ▪ LEED Gold Certification in Redwood City, San Francisco, and Austin. ▪ LEED Silver Certification in New York. ▪ WELL Building Institute Gold Standard in Warsaw. ▪ WELL Health Safety Rated in Chicago and Warsaw. ▪ 100% Renewable Electricity in Tokyo. • Employee Engagement and Support: We continue to support our Boxers with internal events focused on sustainability, engaging both remote and office-based employees throughout the year.
Biggest changeThis assessment covered Scope 1, Scope 2, and 15 Scope 3 emissions from fiscal year 2024 and provided insights into our emissions profile to inform our strategy for addressing opportunities for improvement. • Environmental Transparency for Our Customers: In order to address increased interest and demand from customers and prospects, we published a Sustainability Data Sheet highlighting the environmental value proposition of Box. • Rating Partners: We participated in environmental, social, and governance surveys and evaluations for organizations such as Carbon Disclosure Project, Ecovadis, and Institutional Shareholder Services, Inc. • Sustainable Offices: Our office buildings worldwide have received a number of certifications, including: ▪ BREEAM Certification in London and Warsaw. ▪ Energy Star Certified in Austin. ▪ Fitwel Certification in Redwood City and San Francisco. ▪ LEED Gold Certification in Redwood City, San Francisco, and Austin. ▪ LEED Silver Certification in New York. ▪ WELL Building Institute Gold Standard in Warsaw. ▪ WELL Health Safety Rated in Chicago and Warsaw. ▪ 100% Renewable Electricity in Tokyo. • Employee Engagement and Support: We continue to support our employees with internal events focused on sustainability, engaging both remote and office-based employees throughout the year.
The principal competitive factors in our market include: • enterprise-grade security and compliance; • scalability of product and infrastructure for large deployments; • ability to store content in multiple geographic locations; 11 • speed, availability, and reliability of the service; • low-cost, quick deployment; • agnostic to device, operating system, and file type; • ease of user experience; • customer-centric product development; • current and forward-thinking product development; • automation and workflow management; • depth of integration into enterprise applications, including office productivity, desktop and mobile tools; • rich ecosystem of channel partners and applications; • open, extensible platform and APIs for custom application development; • intelligent content management including metadata capabilities; • superior customer service and commitment to customer success; • strength of professional services organization; and • self-service content migration tools.
The principal competitive factors in our market include: • enterprise-grade security and compliance; • scalability of product and infrastructure for large deployments; • ability to store content in multiple geographic locations; • speed, availability, and reliability of the service; • low-cost, quick deployment; • agnostic to device, operating system, and file type; • ease of user experience; • customer-centric product development; • current and forward-thinking product development; • automation and workflow management; • depth of integration into enterprise applications, including office productivity, desktop and mobile tools; 12 • rich ecosystem of channel partners and applications; • open, extensible platform and APIs for custom application development; • intelligent content management including metadata capabilities; • superior customer service and commitment to customer success; • strength of professional services organization; and • self-service content migration tools.
We define paying organizations as separate and distinct buying entities, such as a company, an educational or government institution, or a distinct business unit of a large corporation, that have entered into a subscription agreement with us to utilize our services.
We define paying organizations as separate and distinct buying entities, such as a company, an educational or government institution, or a distinct business unit of a large corporation, that have entered into a 10 subscription agreement with us to utilize our services.
Box does not train AI models with customer content without the customer’s explicit authorization. Box also does not allow any partners or third parties to use customer data to train their models. • User Controls. Enterprises are in full control of AI usage.
Box does not train AI models with customer content without the customer’s explicit authorization. Box also does not allow any partners or third parties to use customer data to train their models. 9 • User Controls. Enterprises are in full control of AI usage.
Pay Equity We hold ourselves accountable, which is why we signed the California Equal Pay Pledge. As part of our commitment, we conduct an annual company-wide gender pay analysis to promote and measure equitable compensation across gender.
Pay Equity We hold ourselves accountable, which is why we signed the California Equal Pay Pledge. As part of our commitment, we conduct an annual company-wide gender pay analysis to promote and measure equitable compensation across genders.
Box Canvas offers a flexible, virtual environment where users can ideate, brainstorm and collaborate visually directly in Box. • Content Insights. Content Insights shows how each piece of content is being used, who is using it, and when it is being accessed.
Box Canvas offers a flexible, virtual environment where users can ideate, brainstorm and collaborate visually directly in Box. 8 • Content Insights. Content Insights shows how each piece of content is being used, who is using it, and when it is being accessed.
Our pre-built integrations with Microsoft 365 and Google Workspace allow users to preview, open, create new, and co-author on content in real-time in the application of their choice. 7 • Intelligent Portals.
Our pre-built integrations with Microsoft 365 and Google Workspace allow users to preview, open, create new, and co-author on content in real-time in the application of their choice. • Intelligent Portals.
Employee Health and Safety The health and safety of our employees is one of our top priorities. We strive to create an environment where Boxers are physically and mentally safe and healthy. We offer a comprehensive health and wellness benefits package to all employees.
Employee Health and Safety The health and safety of our employees is one of our top priorities. We strive to create an environment where employees are physically and mentally safe and healthy. We offer a comprehensive health and wellness benefits package to all employees.
These services include 24x7 support provided by our Customer Success Management group and certain resellers; a professional services ecosystem that consists of our Box Consulting team and system integrators that help customers implement cloud content management oriented use cases; a Customer Success Management group to assist customers in production; and an online community with self-service training materials, best practice guides and product documentation.
These services include 24x7 support provided by our Customer Success Management group and certain resellers; a professional services ecosystem that consists of our Box Consulting team and system integrators that help customers implement intelligent content management oriented use cases; a Customer Success Management group to assist customers in production; and an online community with self-service training materials, best practice guides and product documentation.
In addition, we externally benchmark the compensation we provide for each role to ensure pay parity, and provide periodic pay equity updates to the Compensation Committee of our Board of Directors. Boxer Experience Surveys We survey employees once a year to ensure that everyone’s voice gets heard and we better understand the key areas where we can improve employee experience.
In addition, we externally benchmark the compensation we provide for each role to ensure pay parity and provide periodic updates to the Compensation Committee of our Board of Directors. Employee Experience Surveys We survey employees once a year to ensure that everyone’s voice gets heard and we better understand the key areas where we can improve employee experience.
Learning and Development We want all of our employees to have thriving careers where they grow and develop in meaningful ways. There is no one-size-fits-all career path at Box, so we seek to ensure that every Boxer has the tools and support they need to drive their career.
Learning and Development We want all of our employees to have thriving careers where they grow and develop in meaningful ways. There is no one-size-fits-all career path at Box, so we seek to ensure that every employee has the tools and support they need to drive their career.
Our proprietary cloud architecture is particularly well-suited for today’s dynamically changing business requirements because it enables use of the most up-to-date versions of our solutions at all times and administrators to immediately apply changes in policies and controls across all their organization’s critical content simultaneously.
Our proprietary cloud architecture is particularly well-suited for today’s dynamically changing business requirements because it enables use of the most up-to-date versions of our solutions and administrators to immediately apply changes in policies and controls across all their organization’s critical content simultaneously.
With our Software-as-a-Service (SaaS) platform, users can work with their content as they need – from secure external collaboration and sharing, to workspaces and portals, to e-signature processes and content workflows – improving employee productivity and accelerating business processes. IT teams can establish a space for compliant content management, and developers can easily create customized portals for white-labeled content collaboration.
With our Software-as-a-Service (SaaS) platform, customers can work with their content as they need – from secure external collaboration and workspaces to e-signature processes and content workflows – improving employee productivity and accelerating business processes. IT teams can establish a space for compliant content management, and developers can easily create customized portals for white-labeled content collaboration.
With Box Shield, users can assign access restrictions with Smart Access controls such as download and print restrictions, based on the classification of the document, and admins can set expiration dates for shared links.
With Box Shield, users can assign access restrictions with Smart Access controls such as download and print restrictions, based on the classification of the document, and administrators can set expiration dates for shared links.
In the future, we plan to enable customers to “bring your own model,” or BYOM, should they choose not to leverage default models. • Intelligent Documents. With Box AI for Documents, users can ask questions about a document they are viewing and uncover key findings or summarize complex topics, such as generating insights from a report.
In the future, we plan to enable customers to “bring your own model,” or BYOM, should they choose not to leverage default models. • Intelligent Documents. With Box AI for Documents, users can ask questions about a document to quickly uncover key findings or summarize complex topics, such as generating insights from a report.
We also provide educational opportunities such as bias training, courses for people leaders on topics such as fostering psychologically safe environments, and allyship courses to equip Boxers with the tools they need to create healthy and supportive environments for all individuals. Careers: We focus on ensuring that we are recruiting, developing and progressing a high performing workforce.
We also provide educational opportunities such as courses for people leaders on topics such as fostering psychologically safe environments and allyship courses to equip employees with the tools they need to create healthy and supportive environments for all individuals. Careers: We focus on ensuring that we are recruiting, developing and progressing a high performing workforce.
With the provided answers, users can also view citations and audit the source of the AI-generated statement. • AI for Real-Time Collaboration. Box AI for Notes helps to increase productivity further, and users will be able to create content from scratch, generate new material from existing information, or refine drafted material. 9 • Intelligent Portals.
With the provided answers, users can also view citations and audit the source of the AI-generated statement. • AI for Real-Time Collaboration. Box AI for Notes helps to increase productivity further, and users are able to create content from scratch, generate new material from existing information, or refine drafted material. • Intelligent Portals.
Customers As of January 31, 2024, we had over 100,000 paying organizations, and our solution was offered in 25 languages.
Customers As of January 31, 2025, we had over 100,000 paying organizations, and our solution was offered in 25 languages.
The Box Content Cloud enables our customers to securely manage the entire content lifecycle, from the moment a file is created or ingested to when it is shared, edited, published, approved, signed, classified, and retained.
The Box ICM platform enables our customers to securely manage the entire content lifecycle, from the moment a file is created or ingested to when it is shared, edited, published, approved, signed, classified, and retained.
Intellectual Property We rely on a combination of trade secrets, patents, copyrights and trademarks, as well as contractual protections, to establish and protect our intellectual property rights. As of January 31, 2024, our patents were set to expire between 2028 and 2042.
Intellectual Property We rely on a combination of trade secrets, patents, copyrights and trademarks, as well as contractual protections, to establish and protect our intellectual property rights. As of January 31, 2025, our patents were set to expire between 2028 and 2043.
Box.org focuses on areas where Box is uniquely positioned to make an impact, including child welfare, crisis response and the environment. The Box Solution We offer web, mobile and desktop applications for the Content Cloud on a single platform, as well as the ability to develop custom applications.
Box.org focuses on areas where Box is uniquely positioned to make an impact, including child welfare, crisis response and the environment. The Box Solution We offer web, mobile and desktop applications of our solution on a single platform, as well as the ability to develop custom applications.
Box Relay provides for more than 75 triggers and outcomes that enable a wide variety of file, folder, task, or metadata actions such as routing documents to specific folders, assigning tasks to individuals or teams, securing documents with watermarking and security classifications, dynamically naming files and folders at runtime, and managing metadata.
Box Relay provides for hundreds of combinations of triggers and outcomes that enable a wide variety of file, folder, task, metadata and e-signature actions such as routing documents to specific folders, assigning tasks to individuals or teams, securing documents with watermarking and security classifications, dynamically naming files and folders at runtime, and managing metadata.
We recently announced Box Hubs, which enables users to securely curate and publish content in centralized portals that can be shared across the organization – without needing IT or administrator resources.
In September 2024, we announced the general availability of Box Hubs, which enables users to securely curate and publish content in centralized portals that can be shared across the organization – without needing IT or administrator resources.
We approach DEI through the following areas: Culture: At Box, we prioritize creating an inclusive environment where everyone can thrive, regardless of their background or identity. We focus on fostering a sense of belonging through our Boxer Mindsets which promote behaviors that support inclusion for all Boxers.
We approach fostering a culture of belonging through the following areas: Culture: At Box, we prioritize creating an environment where everyone can thrive, regardless of their background or identity. We focus on fostering a culture of belonging through our “Boxer Mindsets,” which promote behaviors that support inclusion for all employees.
Administrators have a plethora of security, data protection, and compliance features they can activate to provide users with a better way meet legal and regulatory requirements, internal policies, and industry standards and regulations. The Box platform enables a broad range of high-value business use cases – and integrates with more than 1,500 leading business applications.
Administrators have a wide range of security, data protection, and compliance features they can activate to help meet legal and regulatory requirements, internal policies, and industry standards. The Box ICM platform enables a broad range of high-value business use cases and integrates with more than 1,500 leading business applications.
We stand behind the idea that enabling our employees to work cross-functionally and within different teams provides a broader perspective of Box that will allow them to succeed in the future. • LearnFest: LearnFest, our learning lineup for skill development and personal and professional growth, happens two times each year.
We stand behind the idea that enabling our employees to work cross-functionally and within different teams provides a broader perspective of Box that will allow them to succeed in the future. • LearnFest: LearnFest, our learning lineup for skill development and personal and professional growth, offers live courses and chances to learn in groups each year.
IT administrators can quickly add users and groups, set up permissions, migrate content, create folders and policies, and begin using our products almost immediately without the need to procure and provision hardware or install and configure software.
IT administrators can quickly add users and groups, set up permissions, migrate content, create folders and policies, and begin using our products almost immediately without the need to procure and provision hardware or install and configure software. Modern Workflow and Collaboration Experiences • Intelligent, No-code Apps.
Item 1. BUSINESS Overview Box is the Content Cloud: a secure and intelligent content platform. Box gives organizations a single platform for their unstructured data – which typically represents about 90% of all data within an organization.
Item 1. BUSINESS Overview Box is the leading Intelligent Content Management (ICM) provider. Box gives organizations a single platform for their unstructured data – which typically represents about 90% of all data within an organization.
We do this by giving all Boxers access to learning and development opportunities based around individual needs to build skill sets and experience. These initiatives include: • Internal mobility: We acknowledge that career progression looks less like a ladder and more like a climbing wall.
We do this by giving all employees access to learning and development opportunities that can be tailored to individual needs to help build skill sets and relevant experience. These initiatives include: • Internal mobility: We acknowledge that career progression looks less like a ladder and more like a climbing wall.
Between close partnerships with IT and end-user-driven bottoms-up adoption, we work with our customers to identify future opportunities for more automation and protection within the Box platform. We focus our efforts on larger enterprises, capitalize on international growth in key regions, and utilize our partner ecosystem where most advantageous.
Between close partnerships with IT, line of business leaders, and end-user-driven bottoms-up adoption, we work with our customers to identify future opportunities using the Box ICM platform. We focus our efforts on larger enterprises, capitalize on international growth in key regions, and utilize our partner ecosystem where most advantageous.
Administrators can turn Box AI on and off as well as choose which user groups get access to Box AI. Box AI is governed by Box’s built-in permissions and is designed to keep customers in control of their data so that users can only see and interact with the files and content they are allowed to access. • Reporting.
Box AI is governed by Box’s built-in permissions and is designed to keep customers in control of their data so that users can only see and interact with the files and content they are allowed to access. • Reporting.
Box Shield leverages advanced machine learning to scan files for sophisticated malware (including ransomware) and identify suspicious user behavior to detect and prevent threats before they become data breaches.
Box Shield provides granular, near real-time threat detection and protection capabilities. Box Shield leverages advanced machine learning to scan files for sophisticated malware (including ransomware) and identify suspicious user behavior to detect and prevent threats before they become data breaches.
Event highlights include beach and community clean-ups, tree plantings, clothing swaps, and tech donation drives. Our commitment to sustainability extends beyond operations and permeates our corporate culture, involving every member of the Box community in our collective efforts toward a greener future. Corporate Information Our website address is www.box.com, and our investor relations website is located at www.box.com/investors.
Our commitment to sustainability extends beyond operations and permeates our corporate culture, involving every member of the Box community in our collective efforts toward a greener future. Corporate Information Our website address is www.box.com, and our investor relations website is located at www.box.com/investors.
No customer represented 10% or more of our revenue in the year ended January 31, 2024. Our geographic revenue and segment information is set forth in Notes 2 and 14, respectively, of our Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
No single customer represented 10% or more of our revenue in the year ended January 31, 2025. Our geographic revenue and segment information is set forth in Note 2 in Part II, Item 8 of this Annual Report on Form 10-K.
We expect that software and other applications in our industry may be subject to third-party infringement claims as the number of competitors grows and the functionality of applications in different industry segments overlaps.
We expect that software and other applications in our industry may be subject to third-party infringement claims as the number of competitors grows and the functionality of applications in different industry segments overlaps. Any of these third parties might make a claim of infringement against us at any time.
We also offer a global 1:1 mentoring program, which enhances talent across the company, providing our employees with the skills and tools needed to thrive. Community: At Box, we have a dynamic array of employee resources communities (ERC) and interest communities, which support and develop members of diverse communities and their allies.
We also offer a global 1:1 mentoring program, which enhances talent across the company, providing our employees with the skills and tools needed to thrive. Community: At Box, we have a dynamic array of employee resources communities (ERCs) and interest communities, which foster supportive environments for employees to connect and belong.
Box AI is platform-neutral, consistent with the Box platform, and is powered by AI models from various AI vendors to provide the best user experience for Box customers. To date, Box has announced partnerships with Azure OpenAI and Google.
Box AI is platform-neutral, consistent with the Box platform, and is powered by AI models from various AI vendors to provide the best user experience for our customers. For example, Box has announced partnerships with Microsoft’s Azure OpenAI, Google Cloud’s Vertex AI, and Anthropic’s Claude and Amazon Titan via Amazon Bedrock.
Other trademarks, service marks, or trade names appearing in this Annual Report on Form 10-K are the property of their respective owners. 15 Available Information We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended.
Available Information We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended.
Diversity, Equity and Inclusion (DEI) At Box, our goal is to fully leverage and engage the individual talents and capabilities of our diverse teams, ultimately creating an inclusive environment where Boxers feel they belong and bring their (__ ) selves to work.
Belonging at Box At Box, our goal is to fully leverage and engage the individual talents and capabilities of our diverse teams, ultimately creating an environment where our employees feel they belong and can do their best work.
During LearnFest, the entire company has focused time for trainings, workshops, and other learning events. • Professional coaching and external leadership development programs: We offer targeted professional coaching for all levels of our executive leadership team ( i.e. , director-level and above) as well as access to business education and networking programs such as The Leadership Consortium affiliated with Harvard Business School, Women’s Executive Leadership program through Stanford Business School and Advancing Women Executives. • On-Demand Learning: We offer all Boxers access to an on-demand learning platform so they can develop a wide variety of skills at a time and place of their choosing.
We also have on demand learnings available year-round. • Professional coaching and external leadership development programs: We offer targeted professional coaching for all levels of our executive leadership team ( i.e. , director-level and above) as well as access to business education and networking programs such as The Leadership Consortium affiliated with Harvard Business School and Better Up. • On-Demand Learning: We offer all employees access to an on-demand learning platform so they can develop a wide variety of skills at a time and place of their choosing.
The increase of non-cancellable backlog as of January 31, 2024 was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites. The increase of non-cancellable backlog was also driven by the addition of new customers and the timing of customer-driven renewals.
We had $861.4 million and $720.9 million of non-cancellable backlog as of January 31, 2025 and 13 2024, respectively. The increase of non-cancellable backlog as of January 31, 2025 was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites.
To make the entire enterprise ecosystem more secure, we continue to add or enhance integrations within our Box Trust Partner Program. We also have a developer platform, a developer community, and robust set of APIs that provide organizations with the ability to build custom integrations and solution applications on Box. • Box Platform.
We also have a developer platform, a developer community, and robust set of APIs that provide organizations with the ability to build custom integrations and solution applications on Box. • Box Platform.
We also have a rich ecosystem of channel partners who expand our reach to both large and small enterprises. 10 We generate customer leads, accelerate sales opportunities and build brand awareness through our marketing programs and through our strategic relationships. Our marketing programs target senior IT leaders, technology professionals and senior line of business leaders.
We generate customer leads, accelerate sales opportunities and build brand awareness through our marketing programs and through our strategic relationships. Our marketing programs target senior IT leaders, technology professionals and senior line of business leaders.
Use of Box often spreads virally within and across organizations, as users adopt Box and invite new users to collaborate. This motion will often lead to an initial sale with an organization to unite their various users into an enterprise-governed implementation, and from there we continue our aforementioned high-touch sales efforts, with a focus on use case expansion.
This motion will often lead to an initial sale with an organization to unite their various users into an enterprise-governed implementation, and from there we continue our high-touch sales efforts, with a focus on use case expansion. Ultimately, our sales strategy is focused on ensuring that new and existing customers both understand and experience the transformative impact of Box.
The Box design logo, “Box” and our other registered and common law trade names, trademarks and service marks are the property of Box, Inc.
The Box design logo, “Box” and our other registered and common law trade names, trademarks and service marks are the property of Box, Inc. Other trademarks, service marks, or trade names appearing in this Annual Report on Form 10-K are the property of their respective owners.
Our sales team is composed of inside sales, outbound sales and field sales personnel who are generally organized by account size and geography, and/or major industry focus.
Our sales team is composed of inside sales, outbound sales and field sales personnel who are generally organized by account size and geography, and/or major industry focus. We also have a rich ecosystem of channel partners who expand our reach to both large and small enterprises.
This advanced encryption feature is valuable to many organizations, including those in highly regulated industries such as financial services, health care, government and legal. • Intelligent Threat Detection and Smart Access with Box Shield. Box Shield provides granular, near real-time threat detection and protection capabilities.
With Box KeySafe, organizations can implement higher levels of data security and protection by keeping control of the encryption keys that protect their content. This advanced encryption feature is valuable to many organizations, including those in highly regulated industries such as financial services, health care, government and legal. • Intelligent Threat Detection and Smart Access with Box Shield.
These relationships include software and technology partners, as well as consulting and implementation services providers that enable Box to address a broader set of use cases for our customers. Sales and marketing expenses were $348.6 million, $331.4 million and $298.6 million for the years ended January 31, 2024, 2023 and 2022, respectively.
These relationships include software and technology partners, as well as consulting and implementation services providers that enable Box to address a broader set of use cases for our customers.
In addition to our high-touch enterprise work, we field inbound inquiries and online sales opportunities. We further expand our market reach by leveraging our network of channel partners that include both value-added resellers and systems integrators. Additionally, we offer individuals a free version of Box that allows them to experience first-hand our easy-to-use and secure solution.
In addition to our high-touch enterprise sales efforts, we field inbound inquiries and online sales opportunities through our proven self-service purchasing online platform. We further expand our market reach by leveraging our network of channel partners that include both value-added resellers and systems integrators.
Our focus on a simple and elegant interface, coupled with compelling access, sharing, and collaboration features, aims to foster rapid adoption and user engagement. • Handle Content of Nearly Any Type.
Our focus on a simple and elegant interface, coupled with compelling access, sharing, and collaboration features, aims to foster rapid adoption and user engagement. • Handle Content of Nearly Any Type. Us ers can securely access, share, and collaborate on content, from virtually any device or operating system, across a wide-range of formats and file types, including large media files.
Customers can deploy Shield's access policies to restrict signature requests to authorized users. They can also use Relay to streamline and automate post-signature workflows.
Customers can deploy Shield's access policies to restrict signature requests to authorized users. They can also use Relay to streamline and automate post-signature workflows. We also offer APIs that allow organizations to power e-signatures in their custom integrations and applications to embed e-signature workflows in common business processes.
None of our employees are represented by a labor union. We have not experienced any work stoppages, and we consider our relations with our employees to be very good.
Accordingly, we believe that fluctuations in backlog are not always a reliable indicator of future revenue. Human Capital Resources As of January 31, 2025, we employed 2,810 people. None of our employees are represented by a labor union. We have not experienced any work stoppages, and we consider our relations with our employees to be very good.
In practice, we develop and maintain a set of sophisticated software services (e.g., search, share, secure, convert/view, logging) around content. These services, which comprise our platform, are used to develop our own applications (e.g., sync, desktop, web, native mobile) and also support the development of third-party applications.
These services, which comprise our platform, are used to develop our own applications (e.g., sync, desktop, web, native mobile) and also support the development of third-party applications. Our product development organization is responsible for the specification, design, development and testing of our platform and applications.
Future invoicing is determined to be certain when we have an executed non-cancellable contract or a significant penalty that is due upon cancellation. We had $720.9 million and $681.3 million of non-cancellable backlog as of January 31, 2024 and 2023, respectively.
To the extent future invoicing is determined to be certain, we consider such future subscription invoices to be non-cancellable backlog, which is disclosed as part of remaining performance obligations. Future invoicing is determined to be certain when we have an executed non-cancellable contract or a significant penalty that is due upon cancellation.
Our modern cloud infrastructure also powers global scalability and reliability with minimal downtime for our customers, ensuring their business-critical content is always secure, compliant, and available. • Enterprise-Grade Security. We have invested heavily to build robust, frictionless security features to protect our customers from the most pervasive security threats.
Our modern cloud infrastructure, supported by public cloud hosting services operated by third parties in various locations, also powers global scalability and reliability with minimal downtime for our customers, ensuring their business-critical content is always secure, compliant, and available. • Enterprise-Grade Security.
Our product development organization is responsible for the specification, design, development and testing of our platform and applications. We focus our efforts on providing a platform that accelerates business processes, improves employee productivity, enables secure remote work, and protects an organization’s most valuable data.
We focus our efforts on providing a platform that accelerates business processes, improves employee productivity, enables secure remote work, and protects an organization’s most valuable data. We strive to continually improve our applications so that they help users and teams become more productive in their day-to-day work.
Ultimately, our sales strategy is focused on ensuring that new and existing customers both understand and experience the transformative impact of Box. We have a rich technology partner ecosystem, offering integrations with partners such as Adobe, Apple, Cisco, Google, IBM, Microsoft, Okta, Oracle-NetSuite, Palo Alto Networks, Salesforce, ServiceNow, Slack, USDM, and Zoom.
We have a rich technology partner ecosystem, offering integrations with partners such as Adobe, Apple, Cisco, CrowdStrike, Google, Guidewire, IBM, Microsoft, Okta, Oracle-NetSuite, Palo Alto Networks, Salesforce, ServiceNow, Slack, USDM, and Zoom. This gives our customers seamless and secure access to their content across all their workflows and applications.
We offer more than 1,500 pre-built integrations with leading enterprise technology providers, including Adobe, Apple, Cisco, Google, IBM, Microsoft, Okta, Oracle-NetSuite, Salesforce, ServiceNow, Slack, USDM, and Zoom. Our integrations offer seamless interoperability that boosts user productivity and maintains enterprise security, privacy and compliance policies.
A Flexible and Interoperable Platform • Leading Pre-Built Integrations. Box provides a unified and secure content layer across the enterprise technology stack. We offer more than 1,500 pre-built integrations with leading enterprise technology providers, including Adobe, Apple, Cisco, CrowdStrike, Google, Guidewire, IBM, Microsoft, Okta, Oracle-NetSuite, Palo Alto Networks, Salesforce, ServiceNow, Slack, USDM, and Zoom.
Box Hubs, a portal for secure content creation and publishing – without needing IT or an administrator – will soon also be available with Box AI. Customers will be able to query multiple documents that are organized in a Hub – to quickly find answers, automatically summarize vast amounts of information, and effortlessly create new content.
Box Hubs, a portal for secure content creation and publishing – without needing IT or an administrator – is also available with Box AI. Using Box AI for Hubs, users can easily find answers to critical questions across multiple documents in Box and generate new content.
Box also provides security controls such as multi-factor authentication that ensure user identity when allowing access to content, as well as endpoint security tools to restrict access to only properly vetted devices. With Box KeySafe, organizations can implement higher levels of data security and protection by keeping control of the encryption keys that protect their content.
Box’s information rights management features enable secure access and management of files by providing granular control over users’ ability to access, view, download, edit, print or share content. Box also provides security controls such as multi-factor authentication that ensure user identity when allowing access to content, as well as endpoint security tools to restrict access to only properly vetted devices.
This includes automating the processing of files submitted via our File Request capability which enables users to source files easily and securely from anywhere. In addition, we provide a library of pre-built Box Relay workflow templates for users to get started quickly, and reporting capabilities to make it easy for users to track and manage their own workflows.
In addition, we provide a library of pre-built Box Relay workflow templates for users to get started quickly, and reporting capabilities to make it easy for users to track and manage their own workflows. Plus, Box Relay integrates with Box Shield to automatically secure content and with Box Sign to automate post-signature workflows. • Internal and External Collaboration.
To promote the well-being of our employees, we provide "Fresh Air Days," offering a few paid days off each year in addition to our generous paid time off and holidays.
To prioritize the well-being of our employees, we offer “ Fresh Air Days, ” a few company-wide paid days off each year. This is in addition to competitive paid time off and time off for holidays. We also provide various wellness initiatives such as meditation sessions, free coaching and therapy sessions for both employees and their dependents.
Until amounts are invoiced, they are typically not recorded in deferred revenue, billings or elsewhere in our consolidated financial statements other than disclosed as part of remaining performance obligations. To the extent future invoicing is determined to be certain, we consider such future subscription invoices to be non-cancellable backlog, which is disclosed as part of remaining performance obligations.
As a result, for multi-year contracts, we frequently invoice an initial amount at contract signing followed by subsequent annual invoices. Until amounts are invoiced, they are typically not recorded in deferred revenue, billings or elsewhere in our consolidated financial statements other than disclosed as part of remaining performance obligations.
Any of these third parties might make a claim of infringement against us at any time. 12 Backlog We generally sign annual and multi-year subscription contracts for our Content Cloud. The frequency of our invoices to each customer is negotiated and varies among our subscription contracts.
Backlog We generally sign annual and multi-year subscription contracts for our ICM platform. The frequency of our invoices to each customer is negotiated and varies among our subscription contracts. We continued to focus on annual payment frequencies for multi-year contracts in the twelve months ended January 31, 2025.
We strive to continually improve our applications so that they help users and teams become more productive in their day-to-day work. Research and development expenses were $248.8 million, $243.5 million and $218.5 million for the years ended January 31, 2024, 2023 and 2022, respectively. Competition The content management market is large, highly competitive and highly fragmented.
Research and development expenses were $264.9 million, $248.8 million and $243.5 million for the years ended January 31, 2025, 2024 and 2023, respectively. Competition The content management market is large, highly competitive and highly fragmented. It is subject to rapidly evolving technology, shifting customer needs and frequent introductions of new products and services.
Recognizing the profound impact of climate change on the global economy, our company, and our stakeholders, we embrace our responsibility to safeguard the planet.
Additionally, long-tenured employees have the opportunity to take sabbaticals, while our comprehensive benefits package includes family support and customized perks to support individuals throughout their career journey. Sustainability At Box, we are committed to operating sustainably. Recognizing the profound impact of climate change on the global economy, our company, and our stakeholders, we embrace our responsibility to safeguard the planet.
Research and Development Our ability to compete depends in large part on our continuous commitment to product development and our ability to rapidly introduce new applications, technologies, features and functionality. In simple conceptual form, we provide a single, secure, easy-to-use platform built for the entire content lifecycle.
Sales and marketing expenses were $380.2 million, $348.6 million and $331.4 million for the years ended January 31, 2025, 2024 and 2023, respectively. 11 Research and Development Our ability to compete depends in large part on our continuous commitment to product development and our ability to rapidly introduce new applications, technologies, features and functionality.
Our journey toward sustainability is ongoing, driven by a commitment to understand our environmental footprint and enhance our positive impact. • Cloud Migration and Environmental Wins: A significant milestone in our sustainability journey is the completion of our multi-year infrastructure migration to the public cloud.
We realize our journey toward sustainability is ongoing, driven by a commitment to understand our environmental footprint and enhance our positive impact. In fiscal year 2025, by analyzing emissions across our operations and value chain from fiscal year 2024, we gained critical insights that inform our strategy to improve environmental impact.
Our recruiting team focuses on a variety of diverse pipeline partnerships such as Latinas In Tech and Hiring our Heroes to support diverse talent in our field. In addition, we focus on enabling initiatives and resources that mitigate biases in our hiring, development and progression processes.
We take great pride in celebrating our differences, and we hire the best talent from all backgrounds. Our recruiting team also focuses on a variety of initiatives to attract a wide array of high-performing talent through pipeline partnerships such as Hiring our Heroes and myGwork.
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This gives our users seamless and secure access to their content across all their workflows and applications.
Added
Additionally, we offer individuals a free version of Box that allows them to experience the Box ICM platform first-hand without commitment. Use of Box often spreads virally within and across organizations, as users adopt Box and invite new users to collaborate.
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At the most basic level, all files stored in Box are encrypted at rest and in transit. Box’s information rights management features enable secure access and management of files by providing granular control over users’ ability to access, view, download, edit, print or share content.
Added
We have invested heavily to build robust, frictionless security features to protect our customers from the most pervasive security threats. At the most basic level, all files stored in Box are encrypted at rest and in transit.
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To give our customers the flexibility to choose between à la carte and bundled subscription options, we offer Box Shield, Box Governance, Box KeySafe, and Box Zones both as standalone add-ons and as part of our bundled Enterprise Plus plan. Modern Workflow and Collaboration Experiences • Internal and External Collaboration.
Added
With the general availability of Box Apps in January 2025, users have the flexibility to develop intelligent, no-code apps to accelerate mission-critical work throughout their business. Using our intuitive, no-code builder, both business process owners and IT can create purpose-built applications with custom dashboards, metadata views and integrated content workflows.
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Users can securely access, share, and collaborate on content, from virtually any device or operating system, across a wide-range of formats and file types, including large media files. • Electronic Signatures.
Added
Box Apps brings together the right content, metadata and workflows provisioned to the specific set of users who can use it to accelerate their daily work. Users can manage metadata at scale, leveraging AI to extract and validate metadata from content.
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We also offer APIs that allows organizations to power e-signatures in their custom integrations and applications, as well as integrations with tools like Appian, Certa, Form.io, Jotform, mxHERO, Reva (ServiceNow), Revv, Salesforce, Slack Workflows, UiPath, VersaFile docuflow (SAP), and Workato to embed e-signature workflows in common business processes.
Added
With smart content processing, advanced search and retrieval capabilities, and seamless content workflows integration, Box Apps empowers our customers to work with content their way. • Connected Forms. With the general availability of Box Forms in February 2025, we enable users to collect information and content needed for key business processes natively in Box.
Removed
Plus, Box Relay integrates with Box Shield to automatically secure content and with Box Sign to automate post-signature workflows. 8 A Flexible and Interoperable Platform • Pre-Built Integrations with Best-of-Breed Applications. Box provides a unified and secure content layer across the enterprise technology stack.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, Virginia, Colorado, Connecticut, and Utah enacted such legislation that became effective in 2023, and Delaware, Tennessee, Iowa, Indiana, Montana, Florida, Oregon, Texas, New Hampshire, and New Jersey have enacted privacy laws that become effective between 2024 and 2026. In addition, Pennsylvania, Massachusetts, and North Carolina, amongst other U.S. states, are anticipated to follow suit.
Biggest changeFor example, laws enacted in Colorado, Delaware, Iowa, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Texas, Utah, and Virginia are currently effective, and laws enacted in Maryland, Minnesota, and Tennessee are set to go into effect before the end of 2025. Additionally, laws enacted in Indiana, Kentucky and Rhode Island will become effective in 2026.
In addition, some of the industries and/or regions that we serve have specific requirements relating to security and regulatory standards, such as GxP, FedRAMP and StateRAMP, and those required by HIPAA, FINRA, HITECH Act, the Data Privacy Framework and Asia-Pacific Economic Cooperation Privacy Recognition for Processors and Cross Border Privacy Rules.
In addition, some of the industries and/or regions that we serve have specific requirements relating to security and regulatory standards, such as GxP, FedRAMP and StateRAMP, and those required by HIPAA, FINRA, the HITECH Act, the Data Privacy Framework and Asia-Pacific Economic Cooperation Privacy Recognition for Processors and Cross Border Privacy Rules.
We have encountered issues in the past that have caused Box services to be temporarily unavailable that resulted in our issuing service credits to some of our customers, and we cannot assure you that we will not experience interruptions or delays in our service in the future.
We have encountered issues in the past that have caused Box services to be temporarily unavailable that resulted in our issuing service credits to some of our customers, and we cannot assure you that we will not experience interruptions or delays in our service in the future.
We may not be able to obtain any further patents, and our pending applications may not lead to the issuance of patents. We may also have to expend significant resources to obtain additional patents as we expand our international operations. 35 In order to protect our intellectual property rights, we may spend significant resources to monitor and protect these rights.
We may not be able to obtain any further patents, and our 35 pending applications may not lead to the issuance of patents. We may also have to expend significant resources to obtain additional patents as we expand our international operations. In order to protect our intellectual property rights, we may spend significant resources to monitor and protect these rights.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, stockholders, officers or other employees to us or our stockholders, (3) any action arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws or (4) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware), except for any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such 40 court (and the indispensable party does not consent to the personal jurisdiction of such court within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, stockholders, officers or other employees to us or our stockholders, (3) any action arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws or (4) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware), except for any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction.
Furthermore, any failure in our delivery of high-quality customer support services may adversely affect our relationships with our customers and our financial results. • Our international operations expose us to significant risks, including the impact of fluctuations in currency exchange rates. • Actual or perceived security vulnerabilities in our services or any breaches of our security controls and unauthorized access to our or a customer’s data could harm our business and operating results. • Privacy concerns and laws or other domestic or foreign regulations may reduce the effectiveness of our services and harm our business, and we may not be able to satisfy data protection, security, privacy, and other government- and industry-specific requirements, which may harm our growth. • Our platform must integrate with a variety of operating systems, software applications and technologies that are developed by others, and if we are unable to ensure that our solutions interoperate with such systems, applications and technologies, our service may become less competitive, and our operating results may be harmed. • If we fail to effectively manage our technical operations infrastructure or suffer from interruptions or delays in service from our third-party providers, the delivery of our services may be harmed, which may adversely affect our business. 17 • Our services are becoming increasingly mission-critical for our customers and if these services fail to perform properly or if we are unable to scale our services to meet the needs of our customers, our reputation could be adversely affected, our market share could decline and we could be subject to liability claims. • Our growth depends in part on the success of our strategic relationships with third parties. • We depend on our key employees and other highly skilled personnel to grow and operate our business, and if we are unable to hire, retain and motivate our personnel, including expanding and optimizing our direct sales force, we may not be able to grow effectively. • We may be sued by third parties for alleged infringement of their proprietary rights. • Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and brand. • Our Series A Convertible Preferred Stock has rights, preferences and privileges that are not held by, and are preferential to the rights of, our Class A common stockholders, which could adversely affect our liquidity and financial condition.
Furthermore, any failure in our delivery of high-quality customer support services may adversely affect our relationships with our customers and our financial results. • Our international operations expose us to significant risks, including the impact of fluctuations in currency exchange rates. • Actual or perceived security vulnerabilities in our services or any breaches of our security controls and unauthorized access to our or a customer’s data could harm our business and operating results. • Privacy concerns and laws or other domestic or foreign regulations may reduce the effectiveness of our services and harm our business, and we may not be able to satisfy data protection, security, privacy, and other government- and industry-specific requirements, which may harm our growth. • Our platform must integrate with a variety of operating systems, software applications and technologies that are developed by others, and if we are unable to ensure that our solutions interoperate with such systems, applications and technologies, our service may become less competitive, and our operating results may be harmed. • If we fail to effectively manage our technical operations infrastructure or suffer from interruptions or delays in service from our third-party providers, the delivery of our services may be harmed, which may adversely affect our business. 17 • Interruptions or delays in service from our third-party cloud computing and hosting providers could impair the delivery of our services and harm our business. • Our services are becoming increasingly mission-critical for our customers and if these services fail to perform properly or if we are unable to scale our services to meet the needs of our customers, our reputation could be adversely affected, our market share could decline and we could be subject to liability claims. • Our growth depends in part on the success of our strategic relationships with third parties. • We depend on our key employees and other highly skilled personnel to grow and operate our business, and if we are unable to hire, retain and motivate our personnel, including expanding and optimizing our direct sales force, we may not be able to grow effectively. • We may be sued by third parties for alleged infringement of their proprietary rights. • Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and brand. • Our Series A Convertible Preferred Stock has rights, preferences and privileges that are not held by, and are preferential to the rights of, our Class A common stockholders, which could adversely affect our liquidity and financial condition.
Our bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders or employees.
Our bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 40 1933, as amended, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders or employees.
Despite precautions taken by these third-party providers, the occurrence of disasters, security issues (including an act of terrorism or an armed conflict), certain geopolitical events, labor or trade disputes, or pandemics, could lead to a decision to close the facilities without adequate notice or other unanticipated problems that result in lengthy interruptions in our service or cause us to not comply with certification requirements.
Despite precautions taken by these third-party providers, the occurrence of disasters, security issues 29 (including an act of terrorism or an armed conflict), certain geopolitical events, labor or trade disputes, or pandemics, could lead to a decision to close the facilities without adequate notice or other unanticipated problems that result in lengthy interruptions in our service or cause us to not comply with certification requirements.
Our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from additional sales must be recognized over the applicable subscription term. If we are unable to attract new customers at rates that are consistent with our expectations, our future revenue and operating results could be adversely impacted.
Our 19 subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from additional sales must be recognized over the applicable subscription term. If we are unable to attract new customers at rates that are consistent with our expectations, our future revenue and operating results could be adversely impacted.
In addition, upon prior written notice of certain change of control events, the shares of the Series A Convertible Preferred Stock will automatically be redeemed by us for a repurchase price equal to the stock at the then-current conversion price and (ii) an amount in cash equal to 100% of the then-current liquidation preference thereof plus all accrued but unpaid dividends.
In addition, upon prior written notice of certain change of control events, the shares of the Series A Convertible Preferred Stock will automatically be redeemed by us for (i) a repurchase price equal to the stock at the then-current conversion price and (ii) an amount in cash equal to 100% of the then-current liquidation preference thereof plus all accrued but unpaid dividends.
If we are unable to develop and offer services that meet these obligations or help our customers meet their requirements under the laws, regulations, case law or guidance issued relating to privacy, data protection, or 27 information security, we may become unable to provide services in these regions and/or be subject to significant fines and penalties, which would harm our business.
If we are unable to develop and offer services that meet these obligations or help our customers meet their requirements under the laws, regulations, case law or guidance issued relating to privacy, data protection, or information security, we may become unable to provide services in these regions and/or be subject to significant fines and penalties, which would harm our business.
Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business and operating results, and cause a decline in the market price of our Class A common stock. Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business and operating results, and cause a decline in the market price of our Class A common stock. 37 Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
If we are unsuccessful in detecting material exposures in a timely manner, any hedging strategies we deploy are not effective, or there are no hedging strategies available for certain exposures that are prudent given the associated risks and the potential mitigation of the underlying exposure achieved, our operating results or financial position could be negatively affected in the future.
If we are unsuccessful in detecting material exposures in a timely manner, any hedging strategies we deploy are not effective, or there are no hedging strategies available for certain 23 exposures that are prudent given the associated risks and the potential mitigation of the underlying exposure achieved, our operating results or financial position could be negatively affected in the future.
In addition, liabilities associated with taxes are often subject to an extended or indefinite statute of limitations period. Therefore, we may be subject to additional tax liability (including penalties and interest) for a particular year for extended periods of time. 38 Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
In addition, liabilities associated with taxes are often subject to an extended or indefinite statute of limitations period. Therefore, we may be subject to additional tax liability (including penalties and interest) for a particular year for extended periods of time. Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
We may not be successful in developing these modifications and enhancements or bringing them to market in a timely fashion, which may negatively impact our customer renewal rates, limit the market for our solutions, or impair our ability to attract new customers. Furthermore, modifications to existing platforms or technologies will increase our research and development expenses.
We may not be successful in developing these modifications and enhancements or bringing them to market in a timely fashion, which may negatively impact our customer renewal rates, limit the market for our solutions, or impair our ability to attract new customers. Furthermore, 20 modifications to existing platforms or technologies will increase our research and development expenses.
Furthermore, some potential customers, particularly large enterprises, may elect to develop their own internal solutions. For any of these reasons, we may not be able to compete successfully against our competitors. Our business depends substantially on customers renewing their subscriptions with us and expanding their use of our services.
Furthermore, some potential customers, particularly large enterprises, may elect to develop their own internal solutions. For any of these reasons, we may not be able to compete successfully against our competitors. 18 Our business depends substantially on customers renewing their subscriptions with us and expanding their use of our services.
These types of sales opportunities require us to provide greater levels of customer education regarding the uses and benefits of our services, as well as education regarding security, privacy, and data protection laws and regulations, especially for customers in more heavily regulated industries or with significant international operations.
These types of sales opportunities require us to provide greater levels of customer 21 education regarding the uses and benefits of our services, as well as education regarding security, privacy, and data protection laws and regulations, especially for customers in more heavily regulated industries or with significant international operations.
Any decrease in the use of our services or limitation on our ability to export or sell our services would likely adversely affect our business, financial condition and operating results. Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws could subject us to penalties and other adverse consequences.
Any decrease in the use of our services or limitation on our ability to export or sell our services would likely adversely affect our business, financial condition and operating results. 39 Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws could subject us to penalties and other adverse consequences.
The loss of one or more of our executive officers or key employees, or the failure of our senior management team to work together effectively and execute our plans and strategies, could harm our business. 33 Failure to adequately expand and optimize our direct sales force and successfully maintain our online sales experience could impede our growth.
The loss of one or more of our executive officers or key employees, or the failure of our senior management team to work together effectively and execute our plans and strategies, could harm our business. Failure to adequately expand and optimize our direct sales force and successfully maintain our online sales experience could impede our growth.
Rising interest rates may reduce our access to equity-linked or debt capital and increase our cost of borrowings, which could adversely impact our business, operating results and financial position. 36 Financing agreements we are party to or may become party to may contain operating and financial covenants that restrict our business and financing activities.
Rising interest rates may reduce our access to equity-linked or debt capital and increase our cost of borrowings, which could adversely impact our business, operating results and financial position. Financing agreements we are party to or may become party to may contain operating and financial covenants that restrict our business and financing activities.
In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical tax practices, provisions and accruals.
In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical tax practices, provisions and 38 accruals.
Any failure of our services to operate effectively with existing or future network platforms and technologies could reduce the demand for our services, result in customer dissatisfaction and adversely affect our business. 20 Issues relating to the use of artificial intelligence and machine learning could adversely affect our business and operating results.
Any failure of our services to operate effectively with existing or future network platforms and technologies could reduce the demand for our services, result in customer dissatisfaction and adversely affect our business. Issues relating to the use of artificial intelligence and machine learning could adversely affect our business and operating results.
We will need to continue to optimize our sales infrastructure in order to grow our customer base and business. As a result of weakened economic conditions, we have significantly curtailed our employees’ business-related travel, which may negatively impact our ability to recruit and train our sales force.
We will need to continue to optimize our sales infrastructure in order to grow our customer base and business. As a result of weakened economic conditions, we have significantly curtailed our employees’ business-related 33 travel, which may negatively impact our ability to recruit and train our sales force.
While we have policies and 39 procedures to address compliance with such laws, we cannot assure you that our employees and agents will not take actions in violation of our policies or applicable law, for which we may be ultimately held responsible.
While we have policies and procedures to address compliance with such laws, we cannot assure you that our employees and agents will not take actions in violation of our policies or applicable law, for which we may be ultimately held responsible.
The stock repurchase program could affect the price of our Class A common stock, increase volatility and diminish our cash reserves. Our repurchase program may be suspended or terminated at any time and, even if fully implemented, may not enhance long-term stockholder value.
The stock repurchase program could affect the price of our Class A common stock, increase volatility and diminish our 41 cash reserves. Our repurchase program may be suspended or terminated at any time and, even if fully implemented, may not enhance long-term stockholder value.
To the extent we are successful in increasing our customer base, we could incur increased losses because costs associated with new 19 customers are generally incurred up front, while revenue is recognized ratably over the term of our subscription services.
To the extent we are successful in increasing our customer base, we could incur increased losses because costs associated with new customers are generally incurred up front, while revenue is recognized ratably over the term of our subscription services.
Therefore, we may be unable to anticipate these techniques, react in a timely manner, or implement adequate preventive measures, and we may face delays in our detection or remediation of, or other responses to, security breaches and other security-related incidents or vulnerabilities.
Therefore, we may be unable to 25 anticipate these techniques, react in a timely manner, or implement adequate preventive measures, and we may face delays in our detection or remediation of, or other responses to, security breaches and other security-related incidents or vulnerabilities.
If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our Class A common stock, and our existing stockholders may experience dilution.
If we 36 raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our Class A common stock, and our existing stockholders may experience dilution.
If a counterparty to one or more Capped Calls becomes subject to insolvency 43 proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at the time under such transaction.
If a counterparty to one or more Capped Calls becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at the time under such transaction.
In addition, dividends on the 44 Series A Convertible Preferred Stock accrue and are cumulative at the rate of 3.0% per annum, compounding quarterly, and paid-in-kind or paid in cash, at our election.
In addition, dividends on the Series A Convertible Preferred Stock accrue and are cumulative at the rate of 3.0% per annum, compounding quarterly, and paid-in-kind or paid in cash, at our election.
Our failure to repurchase Convertible Notes following a fundamental change or to pay cash upon conversion or at maturity of the Convertible Notes as required by the indenture would constitute a default under such indenture.
Our failure to repurchase Convertible Notes following a fundamental change or to pay cash upon conversion or at maturity of the Convertible Notes as required by the applicable indenture would constitute a default under such indenture.
We cannot assure you that customers will renew their subscriptions upon 18 expiration at the same or higher level of service, for the same number of seats or for the same duration of time, if at all.
We cannot assure you that customers will renew their subscriptions upon expiration at the same or higher level of service, for the same number of seats or for the same duration of time, if at all.
In addition, we will face challenges in doing business internationally that could adversely affect our business, including: • the need to localize and adapt our services for specific countries, including translation into foreign languages and associated expenses; • laws (and changes to such laws) relating to privacy, data protection and data transfer that, among other things, could require that customer data be stored and processed in a designated territory; • difficulties in staffing and managing foreign operations especially in new markets with diverse cultures, languages, customs and legal systems; • different pricing environments, longer sales cycles and longer accounts receivable payment cycles and collections issues; • differing labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States; • new and different sources of competition; 22 • weaker protection for intellectual property and other legal rights than in the United States and practical difficulties in enforcing intellectual property and other rights outside of the United States; • laws and business practices favoring local competitors, including economic tariffs; • changes in the geopolitical environment, the perception of doing business with U.S. based companies, and changes in regulatory requirements that impact our operating strategies, access to global markets or hiring; • compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, tax, AI, privacy and data protection laws and regulations; • increased financial accounting and reporting burdens and complexities; • currency exchange rate fluctuations; • restrictions on the transfer of funds; • reliance on third-party resellers and other parties; • adverse tax consequences; and • unstable regional, economic, social and political conditions, such as the Hamas-Israel and Russia-Ukraine conflicts.
In addition, we will face challenges in doing business internationally that could adversely affect our business, including: • the need to localize and adapt our services for specific countries, including translation into foreign languages and associated expenses; 22 • laws (and changes to such laws) relating to privacy, data protection and data transfer that, among other things, could require that customer data be stored and processed in a designated territory; • difficulties in staffing and managing foreign operations especially in new markets with diverse cultures, languages, customs and legal systems; • different pricing environments, longer sales cycles and longer accounts receivable payment cycles and collections issues; • differing labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States; • new and different sources of competition; • weaker protection for intellectual property and other legal rights than in the United States and practical difficulties in enforcing intellectual property and other rights outside of the United States; • laws and business practices favoring local competitors, including economic tariffs; • changes in the geopolitical environment, the perception of doing business with U.S. based companies, and changes in regulatory requirements that impact our operating strategies, access to global markets or hiring; • compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, tax, AI, privacy and data protection laws and regulations; • increased financial accounting and reporting burdens and complexities; • currency exchange rate fluctuations; • restrictions on the transfer of funds; • reliance on third-party resellers and other parties; • adverse tax consequences; and • unstable regional, economic, social and political conditions, such as the Russia-Ukraine conflict and the conflict in the Middle East.
Any difficulties in 37 implementing these pronouncements could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in us.
Any difficulties in implementing these pronouncements could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in us.
These risks include, among others, the following: • If we do not compete effectively, our customers do not renew their subscriptions or expand their use of our services, we are unable to attract new customers at rates that are consistent with our expectations, or if the market for cloud-based enterprise services declines or develops more slowly than we expect, our business could be adversely affected. • Because we recognize revenue from subscriptions for our services over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results. • Adverse economic conditions have in the past and may in the future result in reduced sales, longer sales cycles, reduced renewal rates, slower adoption of new technologies and increased price competition, any of which could negatively impact our business. • As a substantial portion of our sales efforts are increasingly focused on cloud content management use cases and are targeted at enterprise and highly-regulated customers, our sales cycles may become longer and more expensive and we may encounter greater pricing pressure and implementation and customization challenges, all of which could harm our business and operating results. • Issues relating to the use of artificial intelligence and machine learning could adversely affect our business and operating results. • If we fail to meet the service level commitments we provide under our subscription agreements, we could be obligated to provide credits or refunds for prepaid amounts related to unused subscription services or face subscription terminations, which could adversely affect our revenue.
These risks include, among others, the following: • If we do not compete effectively, our customers do not renew their subscriptions or expand their use of our services, or if we are unable to attract new customers to our higher-tiered Suites plan or at rates that are consistent with our expectations, or if the market for cloud-based enterprise services declines or develops more slowly than we expect, our business could be adversely affected. • Because we recognize revenue from subscriptions for our services over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results. • Adverse economic conditions have in the past and may in the future result in reduced sales, longer sales cycles, reduced renewal rates, slower adoption of new technologies and increased price competition, any of which could negatively impact our business. • As a substantial portion of our sales efforts are increasingly focused on cloud content management use cases and are targeted at enterprise and highly-regulated customers, our sales cycles may become longer and more expensive and we may encounter greater pricing pressure and implementation and customization challenges, all of which could harm our business and operating results. • Issues relating to the use of artificial intelligence and machine learning in Box solutions could adversely affect our business and operating results. • If we fail to meet the service level commitments we provide under our subscription agreements, we could be obligated to provide credits or refunds for prepaid amounts related to unused subscription services or face subscription terminations, which could adversely affect our revenue.
Our ability to make required cash payments in connection with conversions of the Convertible Notes, repurchase the Convertible Notes in the event of a fundamental change, or to repay or refinance the Convertible Notes at maturity will depend on market conditions and our past and expected future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
Our ability to make required cash payments in connection with conversions of the Convertible Notes, repurchase the Convertible Notes in the event of a fundamental change, or to repay or refinance the Convertible Notes will depend on market conditions and our past and expected future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
From time to time, the counterparties to the Capped Calls or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our Class A common stock and/or purchasing or selling our Class A common stock or other securities of ours in secondary market transactions prior to the maturity of the Convertible Notes.
From time to time, the counterparties to the Capped Calls or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our Class A common stock and/or purchasing or selling our Class A common stock or other securities of ours in secondary market transactions prior to the maturity of the applicable series of Convertible Notes.
Holders of the Convertible 42 Notes also have the right to require us to repurchase all or a portion of their Convertible Notes upon the occurrence of a fundamental change (as defined in the indenture governing the Convertible Notes) at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid special interest, if any.
Holders of the Convertible Notes also have the right to require us to repurchase all or a portion of their Convertible Notes upon the occurrence of a fundamental change (as defined in the indenture governing the applicable Convertible Notes) at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid special interest, if any.
The United States and other key international economies have experienced cyclical downturns from time to time that have resulted in a significant weakening of the economy, more limited availability of credit, a reduction in business confidence and activity, and other difficulties that may affect the industries to which we sell our services.
The United States (U.S.) and other key international economies have experienced cyclical downturns from time to time that have resulted in a significant weakening of the economy, more limited availability of credit, a reduction in business confidence and activity, and other difficulties that may affect the industries to which we sell our services.
For us to compete effectively, we need to introduce new products and services in a timely and cost-effective manner, meet customer expectations and needs at prices that customers are willing to pay, and continue to enhance the features and functionalities of our cloud content management platform.
For us to compete effectively, we need to introduce new products and services in a timely and cost-effective manner, meet customer expectations and needs at prices that customers are willing to pay, and continue to enhance the features and functionalities of our intelligent content management platform.
Because we derive, and expect to continue to derive, substantially all of our revenue and cash flows from sales of our cloud content management solutions, our success will depend to a substantial extent on the widespread adoption of cloud computing in general and of cloud-based content management services in particular.
Since we derive, and expect to continue to derive, substantially all of our revenue and cash flows from sales of our cloud content management solutions, our success will depend to a substantial extent on the widespread adoption of cloud computing in general and of cloud-based content management services in particular.
For example, the European Union’s General Data Protection Regulation (GDPR), which imposes significant obligations on companies regarding the handling of personal data and penalties for noncompliance of up to the greater of 20 million Euros or four percent of a company’s global revenue.
For example, the European Union’s General Data Protection Regulation (GDPR) imposes significant obligations on companies regarding the handling of personal data and provides for penalties for noncompliance of up to the greater of 20 million Euros or four percent of a company’s global revenue.
The Capped Calls are expected generally to reduce or offset the potential dilution to our Class A common stock upon any conversion of the Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price.
The Capped Calls are expected generally to reduce or offset the potential dilution to our Class A common stock upon any conversion of the applicable series of Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price.
A default under the indenture or the fundamental change itself could also lead to a default under our senior credit facility, our other outstanding indebtedness, or agreements governing our future indebtedness and could have a material adverse effect on our business, results of operations, and financial condition.
A default under the indentures or the fundamental change itself could also lead to a default under our senior credit facility, our other outstanding indebtedness, or agreements governing our future indebtedness and could have a material adverse effect on our business, results of operations, and financial condition.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K, factors that could cause fluctuations in the market price of our Class A common stock include the following: • price and volume fluctuations in the overall stock market from time to time; 41 • volatility in the market prices and trading volumes of technology or other public company stocks; • changes in operating performance and stock market valuations of other technology companies generally or those in our industry in particular; • general economic conditions and slow or negative growth of our markets; • purchases and sales of shares of our Class A common stock by us or our stockholders; • whether our results of operations meet the expectations of securities analysts or investors and changes in actual or future expectations of investors or securities analysts; • the financial projections we may provide to the public, any changes in those projections or our failure to meet those projections; • announcements by us or our competitors of new products or services; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes in our operating results or fluctuations in our operating results; • actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • network or service outages, internet disruptions, the availability of our service, security breaches or perceived security breaches and vulnerabilities; • changes in accounting standards, policies, guidelines, interpretations or principles; • actions instituted by activist shareholders or others, and our response to such actions; • any significant change in our management; • fluctuations in foreign currency exchange rates; and • catastrophic events, including pandemics, earthquakes, fires, floods, tsunamis or other weather events, power loss, telecommunications failures, software or hardware malfunctions, cyber-attacks, wars, or terrorist attacks.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K, factors that could cause fluctuations in the market price of our Class A common stock include the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the market prices and trading volumes of technology or other public company stocks; • changes in operating performance and stock market valuations of other technology companies generally or those in our industry in particular; • general economic conditions and slow or negative growth of our markets; • purchases and sales of shares of our Class A common stock by us or our stockholders; • whether our results of operations meet the expectations of securities analysts or investors and changes in actual or future expectations of investors or securities analysts; • the financial projections we may provide to the public, any changes in those projections or our failure to meet those projections; • announcements by us or our competitors of new products or services; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes in our operating results or fluctuations in our operating results; • actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • network or service outages, internet disruptions, the availability of our service, security breaches or perceived security breaches and vulnerabilities; • changes in accounting standards, policies, guidelines, interpretations or principles; • actions instituted by activist shareholders or others, and our response to such actions; • any significant change in our management; • fluctuations in foreign currency exchange rates; and • catastrophic events, including pandemics, earthquakes, fires, floods, tsunamis or other weather events, power loss, telecommunications failures, software or hardware malfunctions, cyber-attacks, wars, or terrorist attacks. 42 In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies.
Many of our competitors and potential competitors are larger and have greater brand recognition, longer operating histories, and significantly greater resources than we do. Our primary competitors in the cloud content management market include Microsoft (SharePoint) and OpenText (Documentum).
Many of our competitors and potential competitors are larger and have greater brand recognition, longer operating histories, and significantly greater resources than we do. Our primary competitors in the enterprise content management market include Microsoft (SharePoint) and OpenText (Documentum).
This activity could also cause or prevent an increase or a decrease in the market price of our Class A common stock or the Convertible Notes. We are subject to counterparty risk with respect to the Capped Calls.
This activity could also cause or prevent an increase or a decrease in the market price of our Class A common stock. We are subject to counterparty risk with respect to the Capped Calls.
Any 29 damage to, or failure of, our systems generally, or those of the third-party cloud computing and hosting providers, could result in interruptions in our service, which may reduce our revenue, cause us to issue credits or pay penalties, cause customers to terminate their subscriptions and adversely affect our renewal rate and our ability to attract new customers.
Any damage to, or lack of availability or failure of, our systems generally, or those of the third-party cloud computing and hosting providers, could result in interruptions in our service, which may reduce our revenue, cause us to issue credits or pay penalties, cause customers to terminate their subscriptions and adversely affect our renewal rate and our ability to attract new customers.
We have observed increased level of sophistication in the types of techniques, including social engineering techniques, that malicious third parties may use in an attempt to gain access to our or our users’ data.
We have observed increased levels of sophistication in the types of techniques, including social engineering techniques, that malicious third parties may use in an attempt to gain access to our or our users’ data.
If the Convertible Notes have not previously been converted or repurchased, we will be required to repay the outstanding principal amount of the Convertible Notes, plus accrued and unpaid special interest, if any, in cash at maturity. The Convertible Notes are scheduled to mature on January 15, 2026.
If the Convertible Notes have not previously been converted or repurchased, we will be required to repay the outstanding principal amount of the Convertible Notes, plus accrued and unpaid special interest, if any, in cash at maturity. The 2026 Convertible Notes and the 2029 Convertible Notes are scheduled to mature on January 15, 2026 and September 15, 2029, respectively.
The capped call transactions we entered into in connection with the issuance of the Convertible Notes may affect the value of our Class A common stock. In connection with the issuance of the Convertible Notes, we entered into capped call transactions with various counterparties (the “Capped Calls”).
The capped call transactions we entered into in connection with the issuance of the Convertible Notes may affect the value of our Class A common stock. In connection with the issuance of each series of the Convertible Notes, we entered into capped call transactions with various counterparties (the “Capped Calls”).
For example, we have entered into agreements with partners such as Adobe, Apple, Cisco, Cloudflare, Google, IBM, Macnica Networks, Microsoft, Mitsui Knowledge Industry, Okta, Oracle-Netsuite, Palo Alto Networks, Salesforce, ServiceNow, Slack, USDM and Zoom to market, resell, integrate with or endorse our services. Identifying partners and resellers, and negotiating and documenting relationships with them, requires significant time and resources.
For example, we have entered into agreements with partners such as Adobe, Apple, Carahsoft, Cisco, Cloudflare, Google, Guidewire, IBM, Macnica, Microsoft, Mitsui Knowledge Industry, Okta, Oracle-Netsuite, Palo Alto Networks, Salesforce, ServiceNow, Slack, USDM, Zoom and Zscaler to market, resell, or integrate with our services. Identifying partners and resellers, and negotiating and documenting relationships with them, requires significant time and resources.
In December 31, 2023, Pillar Two was implemented by the Council of the European Union and its member states. Similar directives under Pillar Two are already adopted or expected to be adopted by taxing authorities in other countries where we do business, including the UK.
In December 31, 2023, Pillar Two was implemented by the Council of the European Union and its member states. Similar directives under Pillar Two are already adopted or expected to be adopted by taxing authorities in other countries where we do business, including the U.K.
Factors that may cause fluctuations in our quarterly financial results include, but are not limited to: • our ability to attract and retain new customers; • our ability to convert users of our limited free version to paying customers; • the addition or loss of large customers, including through acquisitions or consolidations; • changes in our net retention rate; • the timing of revenue recognition; • the timing and amount of contract renewals; • the impact on billings of customer shifts between payment frequencies; • the timing of cash collections and payments and its impact on cash flows; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; • network or service outages, internet disruptions, disruptions to the availability of our service, or actual or perceived security breaches, incidents and vulnerabilities; • general economic, industry and market conditions, including those caused by the Hamas-Israel and Russia-Ukraine conflicts, and as a result of inflation, rising interest rates, or bank failures and financial instability; • changes in our go-to-market strategies and/or pricing policies and/or those of our competitors; • seasonal variations in our billings results and sales of our services, which have historically been highest in the fourth quarter of our fiscal year; • the timing and success of new services and product introductions by us and our competitors or any other change in the competitive dynamics of our industry, including consolidation or new entrants among competitors, customers or strategic partners; • changes in usage or adoption rates of content management services; • the success of our strategic partnerships, including the performance of our resellers; and • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies. 24 Risks Related to Data Privacy and Data Security Actual or perceived security vulnerabilities in our services or any breaches of our security controls and unauthorized access to our or a customer’s data could harm our business and operating results.
Factors that may cause fluctuations in our quarterly financial results include, but are not limited to: • our ability to attract and retain new customers; • our ability to convert users of our limited free version to paying customers; • the addition or loss of large customers, including through acquisitions or consolidations; • changes in our net retention rate; • the timing of revenue recognition; • the timing and amount of contract renewals; • the impact on billings of customer shifts between payment frequencies; • the timing of cash collections and payments and its impact on cash flows; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; • network or service outages, internet disruptions, disruptions to the availability of our service, or actual or perceived security breaches, incidents and vulnerabilities; • general economic, industry and market conditions, including those caused by the Russia-Ukraine conflict and the conflict in the Middle East, and as a result of inflation, rising interest rates, or bank failures and financial instability; • changes in our go-to-market strategies and/or pricing policies and/or those of our competitors; • seasonal variations in our billings results and sales of our services, which have historically been highest in the fourth quarter of our fiscal year; • the timing and success of new services and product introductions by us and our competitors or any other change in the competitive dynamics of our industry, including consolidation or new entrants among competitors, customers or strategic partners; • changes in usage or adoption rates of content management services; 24 • the success of our strategic partnerships, including the performance of our resellers; and • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies.
Additional or modified guidance regarding, or changes to, UK cross border data transfers and/or overall UK data protection laws and/or guidance could occur, which may require us to change our policies, practices and engage in additional contractual negotiations. Such legislative and regulatory changes may result in increased costs of compliance and limitations on our customers and us.
Furthermore, additional or modified guidance regarding, or changes to, U.K. cross border data transfers and/or overall U.K. data protection laws and/or guidance could occur, which may require us to change our policies, practices and engage in additional contractual negotiations. Such legislative and regulatory changes may result in increased costs of compliance and limitations on our customers and us.
Our net retention rate has fluctuated from period to period and it may decrease again in the future if our customers do not renew their subscriptions with us or decrease their use of our services. Our net retention rate was approximately 101% and 108% as of January 31, 2024 and 2023, respectively.
Our net retention rate has fluctuated from period to period and it may decrease again in the future if our customers do not renew their subscriptions with us or decrease their use of our services. Our net retention rate was approximately 102% and 101% as of January 31, 2025 and 2024, respectively.
We cannot yet determine the impact such future laws, regulations and standards, or amendments to or re-interpretations of, existing laws and regulations, industry standards, or other obligations may have on us or our business.
As a result, we cannot yet determine the impact such future laws, regulations and standards, or amendments to or re-interpretations of, existing laws and regulations, industry standards, or other obligations may have on us or our business.
We currently primarily manage our exchange rate risk by maintaining offsetting foreign currency assets and liabilities and by minimizing non-U.S. dollar cash balances, and we plan to implement hedging programs in fiscal year 2025 to further mitigate the risk of exchange rate fluctuations.
We currently primarily manage our exchange rate risk by maintaining offsetting foreign currency assets and liabilities and by minimizing non-U.S. dollar cash balances, and we began implementing hedging programs in fiscal year 2025 to further mitigate the risk of exchange rate fluctuations.
These developments or other developments relating to cross-border data transfer may result in the EC, European Data Protection Board and/or other regulators applying differing standards for, and requiring ad hoc verification of, transfers of personal data from the European Economic 26 Area (EEA), Switzerland, or the United Kingdom (UK) to the U.S.
Additionally, developments relating to cross-border data transfer may result in the European Commission (EC), European Data 26 Protection Board and/or other regulators applying differing standards for, and requiring ad hoc verification of, transfers of personal data from the European Economic Area (EEA), Switzerland, or the United Kingdom (U.K.) to the U.S.
The risks we face in connection with acquisitions include: • diversion of management time and focus from operating our business to addressing acquisition integration challenges; • coordination of research and development and sales and marketing functions; • retention of key employees from the acquired company; • cultural challenges associated with integrating employees from the acquired company into our organization; • integration of the acquired company’s technology and products into our business, particularly if the acquired company’s software and services are not easily adapted to work with our products; • integration of the acquired company’s accounting, management information, human resources and other administrative systems, as well as the acquired operations, and any unanticipated expenses related to such integration; • the need to implement or improve controls, procedures, and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies; • liability for activities of the acquired company before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; • completing the transaction and achieving the anticipated benefits of the acquisition within the expected timeframe or at all; • unanticipated write-offs, expenses, charges or risks associated with the transaction; • litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders or other third parties, which may differ from or be more significant than the risks our business faces; and • acquisitions could result in dilutive issuances of equity securities or the incurrence of debt. 34 Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally.
The risks we face in connection with acquisitions include: • diversion of management time and focus from operating our business to addressing acquisition integration challenges; • coordination of research and development and sales and marketing functions; • retention of key employees from the acquired company; • cultural challenges associated with integrating employees from the acquired company into our organization; • integration of the acquired company’s technology and products into our business, particularly if the acquired company’s software and services are not easily adapted to work with our products; • integration of the acquired company’s accounting, management information, human resources and other administrative systems, as well as the acquired operations, and any unanticipated expenses related to such integration; • the need to implement or improve controls, procedures, and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies; • liability for activities of the acquired company before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; • completing the transaction and achieving the anticipated benefits of the acquisition within the expected timeframe or at all; • unanticipated write-offs, expenses, charges or risks associated with the transaction; • litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders, tax authorities or other third parties, which may differ from or be more significant than the risks our business faces; and • acquisitions could result in dilutive issuances of equity securities or the incurrence of debt.
Because of our limited experience with international operations and significant differences between international and U.S. markets, we may not succeed in creating demand for our services outside of the United States or in effectively selling our services in all of the international markets we enter.
Because of significant differences between international and U.S. markets, we may not succeed in creating demand for our services outside of the United States or in effectively selling our services in all of the international markets we enter.
An economic downturn, recession, or uncertainty about economic conditions, including volatility in the credit, equity and foreign exchange markets, inflation, rising interest rates, potential United States (U.S.) sovereign default, bank failures and financial instability, ongoing supply chain disruptions, unemployment trends, the adverse effects of pandemics and geopolitical issues, such as the Hamas-Israel and Russia-Ukraine conflicts, could cause customers to delay or reduce their information technology spending.
An economic downturn, recession, or uncertainty about economic conditions, including volatility in the credit, equity and foreign exchange markets, inflation, rising interest rates, potential U.S. sovereign default, bank failures and financial instability, supply chain disruptions, unemployment trends, the adverse effects of pandemics and geopolitical issues, such as the ongoing Russia-Ukraine conflict and the conflict in the Middle East, could cause customers to delay or reduce their information technology spending.
These laws and regulations, which may be enforceable by private parties and/or governmental entities, are constantly evolving and can be subject to significant change. A number of new laws coming into effect and/or proposals pending before federal, state and foreign legislative and regulatory bodies could affect our business.
These laws and regulations, which may be enforceable by private parties and/or governmental entities, are constantly evolving and can be subject to significant change. A number of existing data protection and privacy laws, as well as new laws coming into effect and/or proposals pending before federal, state and foreign legislative and regulatory bodies could affect our business.
The Capped Calls cover, subject to customary adjustments, the number of shares of our Class A common stock initially underlying the Convertible Notes.
The Capped Calls cover, subject to customary 43 adjustments, the number of shares of our Class A common stock initially underlying the applicable series of Convertible Notes.
Due to the Hamas-Israel and Russia-Ukraine conflicts, or other areas of geopolitical tension around the world, 25 we and the third parties on which we rely are vulnerable to a heightened risk of cybersecurity attacks, social engineering attacks, viruses, malware, ransomware, hacking or similar breaches and incidents from nation-state and affiliated actors, including attacks that could materially disrupt our supply chain and our systems, operations and platform.
Due to the Russia-Ukraine conflict and the conflict in the Middle East, or other areas of geopolitical tension around the world, we and the third parties on which we rely are vulnerable to a heightened risk of cybersecurity attacks, social engineering attacks, viruses, malware, ransomware, hacking or similar breaches and incidents from nation-state and affiliated actors, including attacks that could materially disrupt our supply chain and our systems, operations and platform.
Additionally, the California Privacy Rights Act (CPRA) was approved by California voters in November 2020 and amended and expanded the CCPA. The CPRA’s substantive provisions became effective on January 1, 2023, and the newly formed California Privacy Protection Agency began its rulemaking process to adopt proposed regulations, with those regulations adopted on March 29, 2023.
Additionally, the California Privacy Rights Act (CPRA) was approved by California voters in November 2020 and amended and expanded the CCPA. The CPRA’s substantive provisions became effective on January 1, 2023, and the newly formed California Privacy Protection Agency began its rulemaking process to adopt proposed regulations, with an enforcement date of March 29, 2024.
If our customers do not expand their use of our services, our operating results may be adversely affected. If the market for cloud-based enterprise services declines or develops more slowly than we expect, our business could be adversely affected. The market for cloud-based enterprise services is not as mature as the on-premise enterprise software market.
If our customers do not expand their use of our services, our operating results may be adversely affected. If the market for cloud-based enterprise services declines or develops more slowly than we expect, our business could be adversely affected.
Adverse economic conditions have in the past and may in the future result in reduced sales, longer sales cycles, reduced renewal rates, slower adoption of new technologies and increased price competition, any of which could negatively impact our business.
All of these factors could negatively impact our future revenue and operating results. Adverse economic conditions have in the past and may in the future result in reduced sales, longer sales cycles, reduced renewal rates, slower adoption of new technologies and increased price competition, any of which could negatively impact our business.
On occasion, we may need additional financing for a variety of reasons, including servicing our liabilities, operating or growing our business, responding to business opportunities, undertaking acquisitions, funding stock repurchases, satisfying our dividend or share redemption obligations of our Series A Convertible Preferred Stock, or repaying our 0.00% convertible senior notes due January 15, 2026 (the “Convertible Notes”).
On occasion, we may need additional financing for a variety of reasons, including servicing our liabilities, operating or growing our business, responding to business opportunities, undertaking acquisitions, funding stock repurchases, satisfying our dividend or share redemption obligations of our Series A Convertible Preferred Stock, or repaying our 1.50% convertible senior notes due September 15, 2029 (the “2029 Convertible Notes”) or our 0.00% convertible senior notes due January 15, 2026 (the “2026 Convertible Notes” and together with the 2029 Convertible Notes, the “Convertible Notes”).
These problems may be caused by a variety of factors, including infrastructure changes, changes to our core services architecture, changes to our infrastructure necessitated by legal and compliance requirements governing the storage and transmission of data, human or software errors, viruses, security attacks, fraud, spikes in customer usage, primary and redundant hardware or connectivity failures, dependent data center and other service provider failures and denial of service issues.
These problems may be caused by a variety of factors, including infrastructure changes, changes to our core services architecture, changes to our infrastructure necessitated by legal and compliance requirements governing the storage and transmission of data, human or software errors, viruses, cybersecurity attacks, fraud, spikes in customer usage, connectivity failures, and other third-party service provider failures and denial of service issues.
Moreover, an extended federal government shutdown resulting from budgetary decisions, a prolonged continuing resolution, breach of the federal debt ceiling, or potential U.S. sovereign default may limit or delay federal government spending on our solutions and adversely affect our revenue.
Moreover, recent efforts to reduce U.S. federal spending, make the federal government operate more efficiently, an extended federal government shutdown resulting from budgetary decisions, a prolonged continuing resolution, breach of the federal debt ceiling, or potential U.S. sovereign default may limit or delay federal government spending on our solutions and adversely affect our revenue.
Data Bridge and Swiss-U.S. Framework (together, the “Data Privacy Framework”) replacing the EU-U.S. Privacy Shield Framework. While the Data Privacy Framework could benefit the industry as a whole, and we presently maintain self-certification under the Data Privacy Framework, maintaining compliance with the Data Privacy Framework could result in additional costs. The EU-U.S.
While the Data Privacy Framework could benefit the industry as a whole, and we presently maintain self-certification under the Data Privacy Framework, maintaining compliance with the Data Privacy Framework could result in additional costs. The EU-U.S.
Our product development efforts could also be impacted by our workforce location strategy as we hire an increasing number of our employees in countries such as Poland and the Netherlands.
Our product development efforts could also be impacted by our workforce location strategy as we hire an increasing number of our employees in international locations, such as Poland.
Our success is also dependent upon contributions from our executive officers and other key employees and, in particular, Aaron Levie, our co-founder and Chief Executive Officer. In addition, occasionally, there may be changes in our senior management team that could disrupt our business. For example, in November 2023, Olivia Nottebohm joined us as our Chief Operating Officer.
Our success is also dependent upon contributions from our executive officers and other key employees and, in particular, Aaron Levie, our co-founder and Chief Executive Officer. In addition, occasionally, there may be changes in our senior management team that could disrupt our business.
If our customers do not renew their subscriptions, renew them on less favorable terms, purchase fewer seats, or fail to purchase new product offerings, our revenue may decline, and we may not realize improved operating results from our customer base. In addition, our business growth depends in part on our customers expanding their use of our services.
If our customers do not renew their subscriptions, renew them on less favorable terms, purchase fewer seats, or fail to purchase new product offerings, our revenue may decline, and we may not realize improved operating results from our customer base.
In the enterprise file sync and share market, our primary competitors include Microsoft (OneDrive), Google (Drive) and, to a lesser extent, Dropbox. We also compete with companies in the e-signature, content collaboration, workflow automation, and security and governance markets. With the introduction of new technologies and market entrants, we expect competition to intensify in the future.
In the enterprise file sync and share market, our primary competitors include Microsoft (OneDrive), Google (Drive) and, to a lesser extent, Dropbox. We also compete with companies in the e-signature, content collaboration, workflow automation, artificial intelligence, and security and governance markets.
In addition, as regulations in the EU and the UK continue to shift, it could impact our ability to comply with and maintain EU and UK Processor and Controller Binding Corporate Rules. 28 Risks Related to Our Technical Operations Infrastructure and Dependence on Third Parties If we are unable to ensure that our solutions interoperate with operating systems, software applications and technologies developed by others, our service may become less competitive, and our operating results may be harmed.
Processor and Controller Binding Corporate Rules. 28 Risks Related to Our Technical Operations Infrastructure and Dependence on Third Parties If we are unable to ensure that our solutions interoperate with operating systems, software applications and technologies developed by others, our service may become less competitive, and our operating results may be harmed.
For example, the Japanese Yen, the British pound and the Euro have all experienced declines in value vis-à-vis the U.S. dollar, which negatively affected our results of operations during the year ended January 31, 2024 and could continue to negatively impact our results of operations in future periods.
For example, the Japanese Yen has experienced a decline in value vis-à-vis the U.S. dollar, which negatively affected our results of operations during the year ended January 31, 2025 and could continue to negatively impact our results of operations in future periods.
Any share repurchases remain subject to the circumstances in place at that time, including prevailing market prices, and we are not obligated to repurchase a specified number or dollar value of shares. As a result, there can be no guarantee around the timing or volume of our share repurchases.
Any share repurchases remain subject to the circumstances in place at that time, including prevailing market prices, and we are not obligated to repurchase a specified number or dollar value of shares.
Some of our competitors offer their products or services at lower prices or for free as part of a broader bundled product sale or enterprise license arrangement, which has placed pricing pressure on our business. If we are unable to achieve our target pricing levels, our operating results will be negatively impacted.
If we fail to compete effectively, our business will be harmed. Some of our competitors offer their products or services at lower prices or for free as part of a broader bundled product sale or enterprise license arrangement, which has placed pricing pressure on our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeBoard members receive presentations on cybersecurity topics from our chief information security officer or external experts as part of the Board of Directors’ continuing education on topics that impact public companies. Our chief information security officer and chief compliance officer are responsible for assessing and managing our material risks from cybersecurity threats.
Biggest changeBoard members receive presentations on cybersecurity topics from our chief information security officer or external experts as part of the Board of Directors’ continuing education on topics that impact public companies. Senior leaders of global cybersecurity, governance, risk and compliance teams are responsible for assessing and managing our material risks from cybersecurity threats.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel ; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engage d by us; and alerts and reports produced by security tools deployed in the IT environment.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe periodically enter into pre-set trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act to effect such repurchases.
Biggest changeWe periodically enter into pre-set trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act to effect such repurchases. On March 4, 2025, we announced that our Board of Directors authorized a $150 million expansion of the share repurchase plan. The authorized repurchase plan will expire on March 3, 2026.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index on January 31, 2019 and its relative performance is tracked through January 31, 2024. The returns shown are based on historical results and are not intended to suggest future performance.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index on January 31, 2020 and its relative performance is tracked through January 31, 2025. The returns shown are based on historical results and are not intended to suggest future performance.
The issuance of the shares was deemed to be exempt from the registration requirement of the Securities Act of 1933, as amended (the “Securities Act”) in reliance on Section 4(a)(2) of the Securities Act, on the basis that, among other factors: (1) each of the Recipients represented that they were an “accredited investor” within the meaning of Rule 501(a) of Regulation D; (2) there was no general solicitation or advertising in connection with the issuance of the shares; (3) each of the Recipients represented that such Recipients (i) understood that the shares had not been registered under applicable federal and state securities laws, (ii) has the ability to bear the economic risks of their investments, (iii) acquired the shares for investment purposes and not with a view to resale, and (iv) will not sell or otherwise dispose of the shares while they are subject to restricted securities legends in the absence of registration or an applicable exemption from registration requirements; and (4) each Recipient or their purchaser representative, as applicable, received or had access to required information and had an opportunity to obtain additional information about us a reasonable period of time prior to the issuance of the shares. 48 Issuer Purchases of Equity Securities Share repurchase activity during the three months ended January 31, 2024 was as follows (in thousands, except per share data): Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) November 1, 2023 to November 30, 2023 352 $ 25.58 352 74,521 December 1, 2023 to December 31, 2023 442 $ 24.58 442 63,660 January 1, 2024 to January 31, 2024 — $ — — 63,660 Total 794 794 (1) During the three months ended January 31, 2024, we repurchased 0.8 million shares at a weighted average price of $25.03 per share for a total amount of $19.9 million.
The issuance of the shares was deemed to be exempt from the registration requirement of the Securities Act of 1933, as amended (the “Securities Act”) in reliance on Section 4(a)(2) of the Securities Act, on the basis that, among other factors: (1) each of the Recipients represented that they were an “accredited investor” within the meaning of Rule 501(a) of Regulation D; (2) there was no general solicitation or advertising in connection with the issuance of the shares; (3) each of the Recipients represented that such Recipients (i) understood that the shares had not been registered under applicable federal and state securities laws, (ii) has the ability to bear the economic risks of their investments, (iii) acquired the shares for investment purposes and not with a view to resale, and (iv) will not sell or otherwise dispose of the shares while they are subject to restricted securities legends in the absence of registration or an applicable exemption from registration requirements; and (4) each Recipient or their purchaser representative, as applicable, received or had access to required information and had an opportunity to obtain additional information about us a reasonable period of time prior to the issuance of the shares. 48 Issuer Purchases of Equity Securities Share repurchase activity during the three months ended January 31, 2025 was as follows (in thousands, except per share data): Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) November 1, 2024 to November 30, 2024 245 $ 33.20 245 86,476 December 1, 2024 to December 31, 2024 473 $ 32.12 473 71,240 January 1, 2025 to January 31, 2025 605 $ 31.77 605 52,014 Total 1,323 1,323 (1) During the three months ended January 31, 2025, we repurchased 1.3 million shares at a weighted average price of $32.16 per share for a total amount of $42.5 million.
Prior to that date, there was no public trading market for shares of our Class A common stock. Holders of Record As of February 29, 2024, there were 103 holders of record of our Class A common stock.
Prior to that date, there was no public trading market for shares of our Class A common stock. Holders of Record As of February 28, 2025, there were 96 holders of record of our Class A common stock.
Base Period Company/Index 1/31/2019 1/31/2020 1/31/2021 1/31/2022 1/31/2023 1/31/2024 Box, Inc. $ 100 $ 72 $ 83 $ 125 $ 153 $ 124 S&P 500 Index 100 119 137 167 151 179 NASDAQ Computer Index 100 144 210 264 204 317 Item 6. R ESERVED Not applicable. 50
Base Period Company/Index 1/31/2020 1/31/2021 1/31/2022 1/31/2023 1/31/2024 01/31/2025 Box, Inc. $ 100 $ 115 $ 174 $ 213 $ 173 $ 222 S&P 500 Index 100 115 140 126 150 187 NASDAQ Computer Index 100 146 183 142 220 289 Item 6. R ESERVED Not applicable. 50

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view our non-GAAP financial measures in conjunction with the most comparable GAAP financial measures. 65 Our reconciliation of the GAAP to non-GAAP financial measures for years ended January 31, 2024, 2023 and 2022 are as follows (in thousands, except per share data and percentages): Year Ended January 31, 2024 2023 2022 GAAP operating income (loss) $ 50,753 $ 36,840 $ (27,626 ) Stock-based compensation 198,783 185,632 178,974 Acquired intangible assets amortization 5,838 5,808 5,148 Acquisition-related expenses 120 53 1,282 Fees related to shareholder activism — (77 ) 15,644 Expenses related to litigation 361 722 — Workforce reorganization 912 — — Non-GAAP operating income $ 256,767 $ 228,978 $ 173,422 GAAP operating margin 4.9 % 3.7 % (3.2 ) % Stock-based compensation 19.2 18.7 20.5 Acquired intangible assets amortization 0.6 0.6 0.6 Acquisition-related expenses — — 0.1 Fees related to shareholder activism — — 1.8 Expenses related to litigation — 0.1 — Workforce reorganization — — — Non-GAAP operating margin 24.7 % 23.1 % 19.8 % GAAP net income (loss) attributable to common stockholders $ 99,147 $ 8,567 $ (53,878 ) Stock-based compensation 198,783 185,632 178,974 Acquired intangible assets amortization 5,838 5,808 5,148 Acquisition-related expenses 120 53 2,349 Fees related to shareholder activism — (77 ) 15,644 Expenses related to litigation 361 722 — Workforce reorganization 912 — — Amortization of debt discount and issuance costs 1,899 1,888 1,878 Benefit from the release of a valuation allowance on deferred tax assets (75,240 ) — — Undistributed earnings attributable to preferred stockholders (15,147 ) (22,187 ) (12,034 ) Non-GAAP net income attributable to common stockholders $ 216,673 $ 180,406 $ 138,081 GAAP net income (loss) per share attributable to common stockholders, diluted $ 0.67 $ 0.06 $ (0.35 ) Stock-based compensation 1.34 1.29 1.15 Acquired intangible assets amortization 0.04 0.04 0.03 Acquisition-related expenses — — 0.02 Fees related to shareholder activism — — 0.10 Expenses related to litigation — 0.01 — Workforce reorganization 0.01 — Amortization of debt discount and issuance costs 0.01 0.01 0.01 Benefit from the release of a valuation allowance on deferred tax assets (0.51 ) — Undistributed earnings attributable to preferred stockholders (0.10 ) (0.15 ) (0.08 ) Non-GAAP net income per share attributable to common stockholders, diluted $ 1.46 $ 1.20 $ 0.85 Weighted-average shares used to compute non-GAAP net income per share attributable to common stockholders Diluted 148,586 150,192 163,337 GAAP net cash provided by operating activities $ 318,727 $ 297,982 $ 234,818 Purchases of property and equipment, net of sale proceeds (1,843 ) (4,433 ) (4,702 ) Principal payments of finance lease liabilities (30,176 ) (40,353 ) (50,391 ) Capitalized internal-use software costs (17,742 ) (14,751 ) (9,486 ) Non-GAAP free cash flow $ 268,966 $ 238,445 $ 170,239 GAAP net cash (used in) provided by investing activities $ (82,792 ) $ 120,600 $ (239,368 ) GAAP net cash used in financing activities $ (272,896 ) $ (396,495 ) $ (172,861 ) 66
Biggest changeWe encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view our non-GAAP financial measures in conjunction with the most comparable GAAP financial measures. 66 Our reconciliation of the GAAP to non-GAAP financial measures for years ended January 31, 2025, 2024 and 2023 are as follows (in thousands, except per share data and percentages): Year Ended January 31, 2025 2024 2023 GAAP operating income $ 79,634 $ 50,753 $ 36,840 Stock-based compensation 219,003 198,783 185,632 Acquired intangible assets amortization 4,214 5,838 5,808 Acquisition-related expenses 378 120 53 Fees related to shareholder activism — — (77 ) Expenses related to litigation 419 361 722 Workforce reorganization — 912 — Non-GAAP operating income $ 303,648 $ 256,767 $ 228,978 GAAP operating margin 7.3 % 4.9 % 3.7 % Stock-based compensation 20.1 19.2 18.7 Acquired intangible assets amortization 0.4 0.6 0.6 Expenses related to litigation 0.1 — 0.1 Non-GAAP operating margin 27.9 % 24.7 % 23.1 % GAAP net income attributable to common stockholders $ 201,567 $ 99,147 $ 8,567 Stock-based compensation 219,003 198,783 185,632 Acquired intangible assets amortization 4,214 5,838 5,808 Acquisition-related expenses 378 120 53 Fees related to shareholder activism — — (77 ) Expenses related to litigation 419 361 722 Workforce reorganization — 912 — Amortization of debt issuance costs 2,662 1,899 1,888 Benefit from the release of a valuation allowance on deferred tax assets (177,190 ) (75,240 ) — Induced conversion expense 10,139 — — Undistributed earnings attributable to preferred stockholders (6,791 ) (15,147 ) (22,187 ) Non-GAAP net income attributable to common stockholders $ 254,401 $ 216,673 $ 180,406 GAAP net income per share attributable to common stockholders, diluted $ 1.36 $ 0.67 $ 0.06 Stock-based compensation 1.47 1.34 1.24 Acquired intangible assets amortization 0.03 0.04 0.04 Workforce reorganization — 0.01 — Amortization of debt issuance costs 0.02 0.01 0.01 Benefit from the release of a valuation allowance on deferred tax assets (1.19 ) (0.51 ) — Induced conversion expense 0.07 — — Undistributed earnings attributable to preferred stockholders (0.05 ) (0.10 ) (0.15 ) Non-GAAP net income per share attributable to common stockholders, diluted $ 1.71 $ 1.46 $ 1.20 Weighted-average shares used to compute GAAP net income per share attributable to common stockholders, diluted 148,643 148,586 150,192 Weighted-average shares used to compute non-GAAP net income per share attributable to common stockholders, diluted 148,870 148,586 150,192 GAAP net cash provided by operating activities $ 332,257 $ 318,727 $ 297,982 Purchases of property and equipment (2,573 ) (4,703 ) (5,034 ) Proceeds from sales of property and equipment 8,395 2,860 601 Principal payments of finance lease liabilities (2,141 ) (30,176 ) (40,353 ) Capitalized internal-use software costs (31,332 ) (17,742 ) (14,751 ) Non-GAAP free cash flow $ 304,606 $ 268,966 $ 238,445 GAAP net cash (used in) provided by investing activities $ (23,211 ) $ (82,792 ) $ 120,600 GAAP net cash used in financing activities $ (62,362 ) $ (272,896 ) $ (396,495 ) 67
Cost of Revenue Our cost of revenue consists primarily of costs related to providing our subscription services to our paying customers, including employee compensation and related expenses for data center operations, customer support and professional services personnel, public cloud hosting costs, depreciation of servers and equipment, security services and other tools, as well as amortization expense associated with acquired technology and capitalized internally developed software.
Cost of Revenue Our cost of revenue consists primarily of costs related to providing our subscription services to our paying customers, including employee compensation and related expenses for data center operations, customer support and 56 professional services personnel, public cloud hosting costs, depreciation of servers and equipment, security services and other tools, as well as amortization expense associated with acquired technology and capitalized internally developed software.
We consider non-GAAP free cash flow to be a profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in our business and strengthening ​the​ balance sheet; but it is not intended to represent the residual cash flow available for discretionary expenditures.
We consider non-GAAP free cash 65 flow to be a profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in our business and strengthening ​the​ balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures.
Each $1,000 principal amount of the Convertible Notes is convertible into 38.7962 shares of our Class A common stock, which is equivalent to a conversion price of approximately $25.78 per share, subject to adjustment upon the occurrence of specified events. We have made an irrevocable election to settle the principal portion of the Convertible Notes only in cash.
Each $1,000 principal amount of the 2026 Convertible Notes is convertible into 38.7962 shares of our Class A common stock, which is equivalent to a conversion price of approximately $25.78 per share, subject to adjustment upon the occurrence of specified events. We have made an irrevocable election to settle the principal portion of the 2026 Convertible Notes only in cash.
Series A Convertible Preferred Stock On April 7, 2021 we entered into an Investment Agreement with KKR and certain other investors relating to the issuance and sale of 500,000 shares of our Series A Convertible Preferred Stock, par value of $0.0001 per share, 62 for an aggregate purchase price of $500 million, or $1,000 per share (the “Issuance”).
Series A Convertible Preferred Stock On April 7, 2021 we entered into an Investment Agreement with KKR and certain other investors relating to the issuance and sale of 500,000 shares of our Series A Convertible Preferred Stock, par value of $0.0001 per share, for an aggregate purchase price of $500 million, or $1,000 per share (the “Issuance”).
Sales and marketing expense also consists of public cloud hosting, data center and customer support costs related to providing our cloud-based services to our free users. We market and sell our cloud content management services worldwide through our direct sales organization and through indirect distribution channels such as strategic resellers.
Sales and marketing expense also consists of public cloud hosting, data center and customer support costs related to providing our cloud-based services to our free users. We market and sell our intelligent content management services worldwide through our direct sales organization and through indirect distribution channels such as strategic resellers.
We recognize revenue as we satisfy our performance obligations to customers. Accordingly, due to our subscription model, we recognize revenue for our subscription services ratably over the term of the contract. We experience a range of profitability with our customers depending in large part upon their current stage.
We recognize revenue as we satisfy our performance 53 obligations to customers. Accordingly, due to our subscription model, we recognize revenue for our subscription services ratably over the term of the contract. We experience a range of profitability with our customers depending in large part upon their current stage.
Refer to Note 13 in Part II, Item 8 of this Annual Report on Form 10-K for more information. 63 Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world.
Refer to Note 13 in Part II, Item 8 of this Annual Report on Form 10-K for more information. Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world.
Management also views amortization of acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s developed technology and trade names, as items arising from pre-acquisition activities determined at the time of an acquisition.
Management also views amortization of acquired intangible assets, such as the amortization of the cost associated with an acquired company’s developed technology and trade names, as items arising from pre-acquisition activities determined at the time of an acquisition.
While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense, one that is not typically affected by operations during any particular period.
While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense that is not typically affected by operations during any particular period.
Our research and development efforts are focused on scaling our platform, building an ecosystem of best-of-breed applications and platforms, infrastructure, adding enterprise grade features, functionality and enhancements such as workflow automation, intelligent content management capabilities, advanced security, e-signature capability, native visual collaboration and whiteboarding, and artificial intelligence to enhance the ease of use of our cloud content management services.
Our research and development efforts are focused on scaling our platform, building an ecosystem of best-of-breed applications and platforms, infrastructure, adding enterprise grade features, functionality and enhancements such as workflow automation, intelligent content management capabilities, advanced security, e-signature capability, native visual collaboration and whiteboarding, and artificial intelligence to enhance the ease of use of our intelligent content management platform.
As of January 31, 2024, we had over 100,000 paying organizations, and our solution was offered in 25 languages. We define paying organizations as separate and distinct buying entities, such as a company, an educational or government institution, or a distinct business unit of a large corporation, that have entered into a subscription agreement with us to utilize our services.
As of January 31, 2025, we had over 100,000 paying organizations, and our solution was offered in 25 languages. We define paying organizations as separate and distinct buying entities, such as a company, an educational or government institution, or a distinct business unit of a large corporation, that have entered into a subscription agreement with us to utilize our services.
Our sales and marketing expenses are generally higher for acquiring new or expanding existing customers than for renewals of existing customer subscriptions. 57 General and Administrative.
Our sales and marketing expenses are generally higher for acquiring new or expanding existing customers than for renewals of existing customer subscriptions. General and Administrative.
We define non-GAAP net income (loss) per share attributable to common stockholders as non-GAAP net income (loss) attributable to common stockholders divided by the weighted-average outstanding shares.
We define non-GAAP net income per share attributable to common stockholders as non-GAAP net income attributable to common stockholders divided by the weighted-average outstanding shares.
Non-GAAP operating income (loss) and non-GAAP operating margin We define non-GAAP operating income (loss) as operating income (loss) excluding expenses related to stock-based compensation (SBC), acquired intangible assets amortization, and as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income (loss) divided by revenue.
Non-GAAP operating income and non-GAAP operating margin We define non-GAAP operating income as GAAP operating income excluding expenses related to stock-based compensation, acquired intangible assets amortization, and as applicable, other special items. Non-GAAP operating margin is defined as non-GAAP operating income divided by revenue.
We specifically identify other adjusting items in our reconciliation of GAAP to non-GAAP financial measures.
We specifically identify adjusting items in our reconciliation of GAAP to non-GAAP financial measures.
Refer to Note 9 in Part II, Item 8 of this Annual Report on Form 10-K for detailed descriptions of the Convertible Notes, the November 2017 Facility, and the June 2023 Facility.
Refer to Note 9 in Part II, Item 8 of this Annual Report on Form 10-K for detailed descriptions of the Convertible Notes and the June 2023 Facility.
Refer to Note 10 in Part II, Item 8 of this Annual Report on Form 10-K for a detailed description of our Series A Convertible Preferred Stock. Share Repurchase Plan In July 2021, our Board of Directors authorized a share repurchase plan to opportunistically repurchase shares of our outstanding Class A common stock in open market transactions.
Refer to Note 10 in Part II, Item 8 of this Annual Report on Form 10-K for a detailed description of our Series A Convertible Preferred Stock. Share Repurchase Plan Our Board of Directors has authorized a share repurchase plan to opportunistically repurchase shares of our outstanding Class A common stock in open market transactions.
As a result, we have experienced, and may continue to experience, increased customer churn and delayed sales cycles, as well as customers and prospective customers reducing budgets related to services that we offer.
As a result, we have experienced, and may continue to experience, increased customer churn and delayed sales cycles, as well as customers and prospective customers reducing budgets for services that we offer.
During the fiscal year ended January 31, 2024, in addition to headwinds from foreign exchange rate trends, we continued to see an impact from additional customer scrutiny being placed on larger deals and lower seat expansion rates due to the challenging macroeconomic environment.
During the year ended January 31, 2025, in addition to headwinds from foreign exchange rate trends, we continued to see an impact from additional customer scrutiny being placed on larger deals and lower seat expansion rates due to the challenging macroeconomic environment.
A discussion regarding our financial condition and results of operations for the year ended January 31, 2023 compared to the year ended January 31, 2022 can be found under Part II, Item 7 of our Annual Report on Form 10-K for the year ended January 31, 2023, filed with the SEC on March 13, 2023, which is available on the SEC’s website at www.sec.gov .
A discussion regarding our financial condition and results of operations for the year ended January 31, 2024 compared to the year ended January 31, 2023 can be found under Part II, Item 7 of our Annual Report on Form 10-K for the year ended January 31, 2024, filed with the SEC on March 11, 2024, which is available on the SEC’s website at www.sec.gov .
Customers can choose between an a la carte approach (i.e., by purchasing specific add-on products to complement their Box subscription) or one of our bundled Enterprise Plus plan, which include multiple add-on products to help accelerate customer time to value. We intend to continue scaling our organization to meet the increasingly complex needs of our customers.
Customers can choose between an a la carte approach (i.e., by purchasing specific add-on products to complement their Box subscription) or one of our bundled plans, which include multiple add-on products to help accelerate customer time to value. We intend to continue scaling our organization to meet the increasingly complex needs of our customers.
A discussion regarding our financial condition and results of operations for the year ended January 31, 2024 compared to the year ended January 31, 2023 is presented below.
A discussion regarding our financial condition and results of operations for the year ended January 31, 2025 compared to the year ended January 31, 2024 is presented below.
The Box Content Cloud enables our customers, to securely manage the entire content lifecycle, from the moment a file is created or ingested to when it is shared, edited, published, approved, signed, classified, and retained.
The Box ICM platform enables our customers to securely manage the entire content lifecycle, from the moment a file is created or ingested to when it is shared, edited, published, approved, signed, classified, and retained.
Net retention rate is an operational metric and there is no comparable GAAP financial measure to which we can reconcile this particular key metric. Our net retention rate was 101%, 108%, and 111% as of January 31, 2024, 2023 and 2022, respectively.
Net retention rate is an operational metric and there is no comparable GAAP financial measure to which we can reconcile this particular key metric. Our net retention rate was 102%, 101%, and 108% as of January 31, 2025, 2024 and 2023, respectively.
Although SBC is an important aspect of the compensation of our employees and executives, determining the fair value of certain of the stock-based instruments we utilize involves a high degree of judgment and estimation and the expense recorded may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards.
Although stock-based compensation is an important aspect of the compensation of our employees and executives, determining the fair value of certain of the stock-based instruments we utilize involves estimation and the expense recorded may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards.
We do not consider billings to be a non-GAAP financial measure because it is calculated using exclusively revenue, deferred revenue, and contract assets, all of which are financial measures calculated in accordance with GAAP. Billings for the year ended January 31, 2024 were $1.057 billion, an increase of 3% from the year ended January 31, 2023.
We do not consider billings to be a non-GAAP financial measure because it is calculated using exclusively revenue, deferred revenue, and contract assets, all of which are financial measures calculated in accordance with GAAP. Billings for the year ended January 31, 2025 were $1.110 billion, an increase of 5% from the year ended January 31, 2024.
For the year ended January 31, 2024, our Suites attach rate was 78% in deals over $100,000, an increase from 72% for the year ended January 31, 2023. The increase was partially offset by the weakening of foreign currency exchange rates, which negatively impacted our revenue growth rate by 260 basis points, and customers partially churning their deployment with Box.
For the year ended January 31, 2025, our Suites attach rate was 85% in deals over $100,000, an increase from 78% for the year ended January 31, 2024. The increase was partially offset by the weakening of foreign currency exchange rates, which negatively impacted our revenue growth rate by 210 basis points, and customers partially churning their deployment with Box.
Cash provided by operating activities during the year ended January 31, 2024 was further adjusted by net cash outflows of $41.8 million due to changes in our operating assets and liabilities.
Cash provided by operating activities during the year ended January 31, 2025 was further adjusted by net cash outflows of $42.8 million due to changes in our operating assets and liabilities.
Management believes it is useful to exclude SBC in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies.
Management believes it is useful to exclude stock-based compensation in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies.
Current Period Highlights For the years ended January 31, 2024 and 2023, our revenue was $1.038 billion and $0.991 billion, respectively, representing year-over-year growth of 5%, or 7% growth on a constant currency basis.
Current Period Highlights For the years ended January 31, 2025 and 2024, our revenue was $1.090 billion and $1.038 billion, respectively, representing year-over-year growth of 5%, or 7% growth on a constant currency basis.
While we believe IT budgets have tightened and some larger deals have required more scrutiny across verticals and geographies, we also believe we are well-positioned to execute through these dynamic times as the Box Content Cloud enables enterprises to streamline their businesses, drive up productivity, reduce risk, and lower costs.
While we believe IT budgets have tightened and some larger deals have required more scrutiny across verticals and geographies, we also believe we are well-positioned to execute through these dynamic times as Box's ICM platform enables enterprises to streamline their businesses, drive up productivity, reduce risk, and lower costs.
RPO as of January 31, 2024 was $1.305 billion, an increase of 5% from January 31, 2023. The increase in RPO was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites.
RPO as of January 31, 2025 was $1.466 billion, an increase of 12% from January 31, 2024. The increase in RPO was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites.
Administrators have a plethora of security, data protection, and compliance features they can activate to provide users with a better way to meet legal and regulatory requirements, internal policies, and industry standards and regulations. The Box platform enables a broad range of high-value business use cases – and integrates with more than 1,500 leading business applications.
Administrators have a wide range of security, data protection, and compliance features they can activate to help meet legal and regulatory requirements, internal policies, and industry standards. The Box platform enables a broad range of high-value business use cases and integrates with more than 1,500 leading business applications.
Non-GAAP Free Cash Flow We define non-GAAP free cash flow as cash flows from operating activities less purchases of property and equipment, principal payments of finance lease liabilities, capitalized internally developed software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business.
Non-GAAP Free Cash Flow We define non-GAAP free cash flow as cash flows from operating activities less net capital expenditures (purchases of property and equipment less proceeds from sales of property and equipment), principal payments of finance lease liabilities, capitalized internal-use software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business.
The primary drivers for the changes in operating assets and liabilities include a $49.3 million decrease in operating lease liabilities due to recurring lease payments, a $44.5 million increase in deferred commissions resulting from capitalization of incremental commissions paid to our sales force, and a $21.9 million increase in accounts receivable primarily due to the timing of our cash collections.
The primary drivers for the changes in operating assets and liabilities include a $52.3 million increase in deferred commissions resulting from capitalization of incremental commissions paid to our sales force, a $28.1 million decrease in operating lease liabilities due to recurring lease payments, and a $14.5 million increase in accounts receivable primarily due to timing of our cash collections.
For the year ended January 31, 2024, our operating income was $50.8 million and our operating margin was 4.9%, compared to our operating income of $36.8 million and our operating margin of 3.7% for the year ended January 31, 2023.
For the year ended January 31, 2025, our operating income was $79.6 million and our operating margin was 7.3%, compared to our operating income of $50.8 million and our operating margin of 4.9% for the year ended January 31, 2024.
We expect our general and administrative expenses to increase in absolute dollars but decrease as a percentage of revenue over time as we benefit from greater operational scale and efficiency.
General and administrative expense as a percentage of revenue increased 100 basis points year-over-year. We expect our general and administrative expenses to increase in absolute dollars but decrease as a percentage of revenue over time as we benefit from greater operational scale and efficiency.
Individual users and organizations can also simply sign up to use our solution on our website. We believe this approach not only helps us build a critical mass of users but also has a viral effect within organizations as more of their employees use our service and encourage their IT professionals to deploy our services to a broader user base.
We believe this approach not only helps us build a critical mass of users but also has a viral 51 effect within organizations as more of their employees use our service and encourage their IT professionals to deploy our services to a broader user base.
The increase in billings was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings through the conversion to multi-product Suites, the addition of new customers, and the timing of customer-driven renewals. Billings growth was partially offset by a negative impact of 240 basis points from foreign currency exchange rates.
The increase in billings was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites, the addition of new customers, and the timing of customer-driven renewals. Billings growth was impacted by 110 basis points from unfavorable foreign currency exchange rates.
The increase in RPO was also driven by the addition of new customers and the timing of customer-driven renewals. RPO growth was partially offset by a negative impact of 240 basis points from foreign currency exchange rates. Billings Billings represent our revenue plus the changes in deferred revenue and contract assets in the period.
The increase in RPO was also driven by the addition of new customers and the timing of customer-driven renewals. RPO growth was impacted by 160 basis points from unfavorable foreign currency exchange rates. Billings Billings represent our revenue plus the changes in deferred revenue and contract assets in the period.
For the year ended January 31, 2024, our non-GAAP free cash flow was $269.0 million, an increase of 13% from non-GAAP free cash flow of $238.4 million for the year ended January 31, 2023.
For the year ended January 31, 2025, our non-GAAP free cash flow was $304.6 million, an increase of 13% from non-GAAP free cash flow of $269.0 million for the year ended January 31, 2024.
During the year ended January 31, 2024, we repurchased 6.6 million shares at a weighted average price of $27.01 per share for a total amount of $177.0 million. As of January 31, 2024, $63.7 million remained authorized and available for additional repurchases.
During the year ended January 31, 2025, we repurchased 7.6 million shares at a weighted average price of $27.90 per share for a total amount of $211.5 million. As of January 31, 2025, $52.0 million remained authorized and available for additional repurchases.
We use non-GAAP financial measures and our key metrics for financial and operational decision-making (including for purposes of determining variable compensation of members of management and other employees) and as a means to evaluate period-to-period comparisons.
Our measure of non-GAAP free cash flow (as defined above) meets the definition of a non-GAAP financial measure. We use non-GAAP financial measures and our key metrics for financial and operational decision-making (including for purposes of determining variable compensation of members of management and other employees) and as a means to evaluate period-to-period comparisons.
A reconciliation of non-GAAP free cash flow to net cash provided by operating activities, its nearest GAAP equivalent, is presented in the non-GAAP Financial Measures section at the end of Item 7 of this Annual Report on Form 10-K.
The increase was partially offset by an increase in capitalized internal-use software costs. A reconciliation of non-GAAP free cash flow to net cash provided by operating activities, its nearest GAAP equivalent, is presented in the non-GAAP Financial Measures section at the end of Item 7 of this Annual Report on 55 Form 10-K.
As of January 31, 2024, our remaining performance obligations were $1.305 billion, representing a 5% increase from our remaining performance obligations of $1.245 billion as of January 31, 2023, or 9% growth on a constant currency basis.
As of January 31, 2025, our remaining performance obligations were $1.466 billion, representing a 12% increase from our remaining performance obligations of $1.305 billion as of January 31, 2024, or 14% growth on a constant currency basis.
The increased employee headcount and related costs are driven by the growth in lower cost regions. This increase was partially offset by an increase of $9.9 million in capitalized internally developed software costs and a decrease of $1.8 million in public cloud hosting costs. Research and development expenses as a percentage of revenue decreased 60 basis points year-over-year.
The increased employee headcount and related costs are driven by the growth in lower cost regions. This increase was partially offset by an increase of $12.1 million in capitalized internally developed software costs. Research and development expenses as a percentage of revenue remained flat year-over-year.
As of January 31, 2024, we evaluated all negative and positive evidence and determined that the UK deferred tax assets are more likely than not to be realizable resulting in an income tax benefit of $79.1 million.
As of January 31, 2025, we maintained our valuation allowance associated with the California state deferred tax assets. As of January 31, 2024, we evaluated all negative and positive evidence and determined that the U.K. deferred tax assets are more likely than not to be realizable resulting in an income tax benefit of $79.1 million.
Worsening economic conditions, including impacts from inflation, higher interest rates, slower growth, the stronger dollar versus foreign currencies, particularly the Japanese Yen, the ongoing Hamas-Israel and Russia-Ukraine conflicts and other changes in economic conditions, may adversely affect our results of operations and financial performance.
Economic conditions, including impacts from inflation, higher interest rates, tariffs, slower growth, the stronger dollar versus foreign currencies, particularly the Japanese Yen, reductions in U.S. federal spending, the ongoing Russia-Ukraine conflict and the ongoing conflict in the Middle East, and other changes in economic conditions, may adversely affect our results of operations and financial performance.
As we penetrate customer accounts, we expect our net retention rate to remain above 100% for the foreseeable future. 56 Components of Results of Operations Revenue We derive our revenue primarily from three sources: (1) subscription revenue, which is comprised of subscription fees from customers who have access to our content cloud platform including routine customer support; (2) revenue from customers purchasing our premier services package; and (3) revenue from professional services such as implementing best practice use cases, project management and implementation consulting services.
Components of Results of Operations Revenue We derive our revenue primarily from three sources: (1) subscription revenue, which is comprised of subscription fees from customers who have access to our ICM platform including routine customer support; (2) revenue from customers purchasing our premier services package; and (3) revenue from professional services such as implementing best practice use cases, project management and implementation consulting services.
With hundreds of file formats and media types supported, Box is compatible with multiple application environments, operating systems, and devices – ensuring that workers can securely access their critical business content whenever and wherever they need it. In addition, we continue to innovate by expanding our core services and offerings.
With hundreds of file formats and media types supported, Box is compatible with multiple application environments, operating systems, and devices – ensuring that workers can securely access their critical business content whenever and wherever they need it.
For the year ended January 31, 2024, our net cash provided by operating activities was $318.7 million, an 52 increase of 7% from net cash provided by operating activities of $298.0 million for the year ended January 31, 2023.
For the year ended January 31, 2025, our net cash provided by operating activities was $332.3 million, an increase of 4% from net cash provided by operating activities of $318.7 million for the year ended January 31, 2024.
We have historically invested our cash and cash equivalents in overnight deposits, certificates of deposit, money market funds, U.S. treasury securities and non-U.S. government issued securities.
Interest Income Interest income consists primarily of interest earned on our cash and cash equivalents and short-term investments. We have historically invested our cash and cash equivalents in overnight deposits, certificates of deposit, money market funds, U.S. treasury securities and non-U.S. government issued securities.
For the year ended January 31, 2024, our gross profit was $777.1 million, and our gross margin was 74.9%, compared to our gross profit of $738.3 million and our gross margin of 74.5% for the year ended January 31, 2023.
For the year ended January 31, 2025, our gross profit was $862.0 million, and our gross margin was 79.1%, compared to our gross profit of $777.1 million and our gross margin of 74.9% for the year ended January 31, 2024.
We believe our existing cash, cash equivalents and short-term investments, together with our credit facility, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months and beyond.
Since our inception, we have financed our operations primarily through equity financing, cash generated from operations and debt financing. We believe our existing cash, cash equivalents, and short-term investments, together with our credit facility, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months and beyond.
(Benefit from) Provision for Income Taxes Year Ended January 31, 2024 2023 $ Change % Change (dollars in thousands) (Benefit from) provision for income taxes $ (66,446 ) $ 7,624 $ (74,070 ) * * Percentage change not meaningful. We monitor the realizability of our deferred tax assets taking into account all relevant factors at each reporting period.
(Benefit from) Provision for Income Taxes Year Ended January 31, 2025 2024 $ Change % Change (dollars in thousands) (Benefit from) provision for income taxes $ (159,461 ) $ (66,446 ) $ (93,015 ) 140 % We monitor the realizability of our deferred tax assets taking into account all relevant factors at each reporting period.
If the customer negotiates to pay the full subscription amount at the beginning of the period, the total subscription amount for the entire term will be reflected in billings. If the customer negotiates to be invoiced annually or more frequently, only the amount billed for such period will be included in billings.
If the customer negotiates to pay the full subscription amount at the beginning of the period, the total subscription amount for the entire term will be reflected in billings.
(Benefit from) Provision for Income Taxes (Benefit from) provision for income taxes consists primarily of state and foreign income taxes and, as applicable, changes in our deferred taxes, related valuation allowance positions and uncertain tax positions.
Other expense, net consists primarily of induced conversion expense related to our 2026 Convertible Notes. (Benefit from) Provision for Income Taxes (Benefit from) provision for income taxes consists primarily of state and foreign income taxes payable and, as applicable, changes in our deferred taxes, related valuation allowance positions and uncertain tax positions.
We believe these key metrics are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by institutional investors and the analyst community to help analyze the health of our business. 54 Remaining Performance Obligations Remaining performance obligations (RPO) represent, at a point in time, contracted revenue that has not yet been recognized.
We believe these key metrics are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by institutional investors and the analyst community to help analyze the health of our business.
In addition, as we have gained and expect to continue to gain more traction with large enterprise customers, we also anticipate our quarterly billings to increasingly concentrate in the back half of our fiscal year, especially in the fourth quarter. 55 A calculation of billings starting with revenue, the most directly comparable GAAP financial measure, is presented below (in thousands): Year Ended January 31, 2024 2023 2022 GAAP revenue $ 1,037,741 $ 990,874 $ 874,332 Deferred revenue, end of period 586,871 566,630 534,242 Less: deferred revenue, beginning of period (566,630 ) (534,242 ) (465,613 ) Contract assets, beginning of period 1,900 1,111 25 Less: contract assets, end of period (2,452 ) (1,900 ) (1,111 ) Billings $ 1,057,430 $ 1,022,473 $ 941,875 Non-GAAP Free Cash Flow We define non-GAAP free cash flow as cash flows from operating activities less purchases of property and equipment, principal payments of finance lease liabilities, capitalized internal-use software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business.
A calculation of billings starting with revenue, the most directly comparable GAAP financial measure, is presented below (in thousands): Year Ended January 31, 2025 2024 2023 GAAP revenue $ 1,090,130 $ 1,037,741 $ 990,874 Deferred revenue, end of period 608,600 586,871 566,630 Less: deferred revenue, beginning of period (586,871 ) (566,630 ) (534,242 ) Contract assets, beginning of period 2,452 1,900 1,111 Less: contract assets, end of period (4,160 ) (2,452 ) (1,900 ) Billings $ 1,110,151 $ 1,057,430 $ 1,022,473 Non-GAAP Free Cash Flow We define non-GAAP free cash flow as cash flows from operating activities less net capital expenditures (purchases of property and equipment less proceeds from sales of property and equipment), principal payments of finance lease liabilities, capitalized internal-use software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business.
Results of Operations The following tables set forth our results of operations for the periods presented (in thousands, except per share data): Year Ended January 31, 2024 2023 2022 Consolidated Statements of Operations Data: Revenue $ 1,037,741 $ 990,874 $ 874,332 Cost of revenue (1) 260,612 252,556 249,484 Gross profit 777,129 738,318 624,848 Operating expenses: Research and development (1) 248,767 243,529 218,523 Sales and marketing (1) 348,638 331,400 298,635 General and administrative (1) 128,971 126,549 135,316 Total operating expenses 726,376 701,478 652,474 Income (loss) from operations 50,753 36,840 (27,626 ) Interest and other income (expense), net 11,833 (2,433 ) (9,838 ) Income (loss) before income taxes 62,586 34,407 (37,464 ) (Benefit from) provision for income taxes (66,446 ) 7,624 3,995 Net income (loss) 129,032 26,783 (41,459 ) Accretion and dividend on series A convertible preferred stock (17,105 ) (17,110 ) (12,419 ) Undistributed earnings attributable to preferred stockholders (12,780 ) (1,106 ) — Net income (loss) attributable to common stockholders $ 99,147 $ 8,567 $ (53,878 ) Net income (loss) per share attributable to common stockholders Basic $ 0.69 $ 0.06 $ (0.35 ) Diluted $ 0.67 $ 0.06 $ (0.35 ) Weighted-average shares used to compute net income (loss) per share attributable to common stockholders Basic 144,203 143,592 155,598 Diluted 148,586 150,192 155,598 (1) Includes stock-based compensation expense as follows: 58 Year Ended January 31, 2024 2023 2022 Cost of revenue $ 19,111 $ 17,816 $ 20,093 Research and development 70,240 68,900 68,063 Sales and marketing 65,886 58,448 52,547 General and administrative 43,546 40,468 38,271 Total stock-based compensation $ 198,783 $ 185,632 $ 178,974 Comparison of the Years Ended January 31, 2024 and 2023 Revenue Year Ended January 31, 2024 2023 $ Change % Change (dollars in thousands) Revenue $ 1,037,741 $ 990,874 $ 46,867 5 % The $46.9 million, or 5%, increase during the fiscal year was primarily driven by seat growth in existing customers, continued strong attach rates of our multi-product Suites offerings, particularly Enterprise Plus, and strong growth in Japan.
Results of Operations The following tables set forth our results of operations for the periods presented (in thousands, except per share data): Year Ended January 31, 2025 2024 2023 Consolidated Statements of Operations Data: Revenue $ 1,090,130 $ 1,037,741 $ 990,874 Cost of revenue (1) 228,105 260,612 252,556 Gross profit 862,025 777,129 738,318 Operating expenses: Research and development (1) 264,853 248,767 243,529 Sales and marketing (1) 380,154 348,638 331,400 General and administrative (1) 137,384 128,971 126,549 Total operating expenses 782,391 726,376 701,478 Income from operations 79,634 50,753 36,840 Interest income 23,709 18,714 5,904 Interest expense (6,075 ) (3,841 ) (4,872 ) Other expense, net (12,108 ) (3,040 ) (3,465 ) Income before income taxes 85,160 62,586 34,407 (Benefit from) provision for income taxes (159,461 ) (66,446 ) 7,624 Net income 244,621 129,032 26,783 Accretion and dividend on series A convertible preferred stock (17,143 ) (17,105 ) (17,110 ) Undistributed earnings attributable to preferred stockholders (25,911 ) (12,780 ) (1,106 ) Net income attributable to common stockholders $ 201,567 $ 99,147 $ 8,567 Net income per share attributable to common stockholders Basic $ 1.40 $ 0.69 $ 0.06 Diluted $ 1.36 $ 0.67 $ 0.06 Weighted-average shares used to compute net income per share attributable to common stockholders Basic 144,228 144,203 143,592 Diluted 148,643 148,586 150,192 (1) Includes stock-based compensation expense as follows: Year Ended January 31, 2025 2024 2023 Cost of revenue $ 18,656 $ 19,111 $ 17,816 Research and development 77,557 70,240 68,900 Sales and marketing 75,281 65,886 58,448 General and administrative 47,509 43,546 40,468 Total stock-based compensation $ 219,003 $ 198,783 $ 185,632 58 Comparison of the Years Ended January 31, 2025 and 2024 Revenue Year Ended January 31, 2025 2024 $ Change % Change (dollars in thousands) Revenue $ 1,090,130 $ 1,037,741 $ 52,389 5 % The $52.4 million, or 5%, increase in revenue during the year ended January 31, 2025 was primarily driven by seat growth in existing customers, continued strong attach rates of our multi-product Suites offerings, particularly Enterprise Plus, and strong growth in Japan.
As of January 31, 2024, we concluded that it is more likely than not that our UK deferred tax assets are realizable. We released $79.1 million of our valuation allowance associated with the UK deferred tax assets.
As of January 31, 2025, we concluded that it is more likely than not that our U.S. federal and state deferred tax assets are realizable, with the exception of California. We released $201.2 million of our valuation allowance associated with the U.S. federal and state deferred tax assets.
Contractual Obligations and Commitments Our principal commitments consist of (i) obligations under operating leases for office spaces, (ii) purchase obligations not recognized on the consolidated balance sheet as of January 31, 2024, which relate primarily to public cloud hosting services and IT software and support services, and (iii) debt, including obligations under both our June 2023 Facility and Convertible Notes.
Off-Balance Sheet Arrangements Through January 31, 2025, we did not have any relationships with unconsolidated entities that have, or are reasonably likely to have, a material effect on our financial statements. 63 Contractual Obligations and Commitments Our principal commitments consist of (i) obligations under operating leases for office spaces, (ii) purchase obligations not recognized on the consolidated balance sheet as of January 31, 2025, which relate primarily to public cloud hosting services and IT software and support services, and (iii) debt, including obligations under our June 2023 Facility and Convertible Notes.
We expect to continue to invest in capturing our large market opportunity globally and capitalize on our competitive position with a continued focus on our profitability objectives.
Sales and marketing expenses as a percentage of revenue increased 100 basis points year-over-year. We expect to continue to invest in capturing our large market opportunity globally and capitalize on our competitive position with a continued focus on our profitability objectives.
We believe our go-to-market efforts to deliver a solution selling strategy and our investments in product, customer success, and Box Consulting, including our Box Shuttle migration offering, have been significant factors in our customer retention results.
We believe our go-to-market efforts to deliver a solution selling strategy and our investments in product, customer success, and Box Consulting, including our Box Shuttle migration offering, are significant factors in our customer retention results. As we penetrate customer accounts, we expect our net retention rate to remain above 100% for the foreseeable future.
We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all.
We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing.
Approximately $75.2 million of the total valuation allowance release was related to deferred tax assets to be realized in the future years and the remainder benefited us during the year ended January 31, 2024. We continue to maintain a valuation allowance against our U.S. federal and state deferred tax assets.
Approximately $177.6 million of the total valuation allowance release was related to deferred tax assets to be realized in the future years and the remainder benefited us during the year ended January 31, 2025. As of January 31, 2025, we maintained our valuation allowance associated with the California state deferred tax assets.
This was partially offset by $28.2 million from issuances of common stock under our employee equity plans. Debt In January 2021, we issued $345.0 million aggregate principal amount of 0.00% convertible senior notes due January 15, 2026. The Convertible Notes are senior unsecured obligations and do not bear regular interest.
In January 2021, we issued $345.0 million aggregate principal amount of 0.00% convertible senior notes due January 15, 2026. The 2026 Convertible Notes are senior unsecured obligations and do not bear regular interest.
Recently Adopted and Issued Accounting Pronouncements Refer to Note 2 in Part II, Item 8 of this Annual Report on Form 10-K regarding the effect of recently adopted and issued accounting pronouncements on our financial statements.
Recently Adopted and Issued Accounting Pronouncements Refer to Note 2 in Part II, Item 8 of this Annual Report on Form 10-K regarding the effect of recently adopted and issued accounting pronouncements on our financial statements. 64 Non-GAAP Financial Measures Regulation S-K Item 10(e), “Use of Non-GAAP Financial Measures in Commission Filings,” defines and prescribes the conditions for use of non-GAAP financial information.
We believe that billings offer valuable supplemental information regarding the performance of our business and will help investors better understand the sales volumes and performance of our business.
We consider billings a significant performance measure. We monitor billings to manage our business, make planning decisions, evaluate our performance and allocate resources. We believe that billings offer valuable supplemental information regarding the performance of our business and will help investors better understand the sales volumes and performance of our business.
Research and Development Year Ended January 31, 2024 2023 $ Change % Change (dollars in thousands) Research and development $ 248,767 $ 243,529 $ 5,238 2 % Percentage of revenue 24.0 % 24.6 % 59 The $5.2 million, or 2%, increase during the fiscal year was primarily due to increases of $6.9 million and $5.0 million in allocated overhead costs and employee related costs, respectively, driven by a 4% increase in headcount, $3.8 million in stock-based compensation expense, and $1.2 million in subscription software contract expenses.
Research and Development Year Ended January 31, 2025 2024 $ Change % Change (dollars in thousands) Research and development $ 264,853 $ 248,767 $ 16,086 6 % Percentage of revenue 24 % 24 % The $16.1 million, or 6%, increase in research and development expense during the year ended January 31, 2025 was primarily due to increases of $15.5 million and $11.1 million in employee related costs and stock-based compensation expense, respectively, driven by a 22% increase in headcount.
Net cash provided by operating activities for the year ended January 31, 2024 was $318.7 million, representing an increase of 7% from the year ended January 31, 2023. Non-GAAP free cash flow for the year ended January 31, 2024 was $269.0 million, representing an increase of 13% from the year ended January 31, 2023.
Non-GAAP free cash flow for the year ended January 31, 2025 was $304.6 million, representing an increase of 13% from the year ended January 31, 2024.
RPO consists of deferred revenue and backlog. Backlog is defined as non-cancellable contracts deemed certain to be invoiced and recognized as revenue in future periods. Future invoicing is determined to be certain when we have an executed non-cancellable contract or a significant penalty is due upon cancellation.
Future invoicing is determined to be certain when we have an executed non-cancellable contract or a significant penalty is due upon cancellation.
General and Administrative Year Ended January 31, 2024 2023 $ Change % Change (dollars in thousands) General and administrative $ 128,971 $ 126,549 $ 2,422 2 % Percentage of revenue 12.4 % 12.8 % The $2.4 million, or 2%, increase during the fiscal year was primarily due to increases of $3.2 million in stock-based compensation expense and $1.7 million in subscription software contract expenses.
General and Administrative Year Ended January 31, 2025 2024 $ Change % Change (dollars in thousands) General and administrative $ 137,384 $ 128,971 $ 8,413 7 % Percentage of revenue 13 % 12 % The $8.4 million, or 7%, increase in general and administrative expense during the year ended January 31, 2025 was primarily due to increases of $4.8 million and $3.3 million in employee related costs and stock-based compensation expense, respectively, driven by a 9% increase in headcount.
Impact of Macroeconomic Factors on Our Business Our overall performance depends in part on worldwide economic and geopolitical conditions and their impact on customer behavior.
Box Archive is expected to be generally available in the first half of fiscal year 2026. Impact of Macroeconomic Factors on Our Business Our overall performance depends in part on worldwide economic and geopolitical conditions and their impact on customer behavior.
This was partially offset by a $35.2 million decrease in operating right-of-use assets due to amortization, a $32.7 million increase in deferred revenue, and a $6.8 million decrease in other assets.
These cash outflows were partially offset by a $27.7 million increase in deferred revenue, and a $23.3 million decrease in operating right-of-use assets due to amortization.
This increase was partially offset by decreases of $17.4 million in depreciation expense and $7.9 million in bandwidth and data center related expense due to the completion of our migration to the public cloud from our collocated data centers. Cost of revenue as a percentage of revenue decreased 40 basis points year-over-year.
This decrease was partially offset by an increase of $25.0 million in public cloud infrastructure costs, driven by our migration to the public cloud from our collocated data centers. Cost of revenue as a percentage of revenue decreased 420 basis points year-over-year.
Cost of Revenue Year Ended January 31, 2024 2023 $ Change % Change (dollars in thousands) Cost of revenue $ 260,612 $ 252,556 $ 8,056 3 % Percentage of revenue 25.1 % 25.5 % Gross margin 74.9 % 74.5 % The $8.1 million, or 3%, increase during the fiscal year was primarily due to increases of $32.2 million in public cloud hosting costs, driven by our migration to the public cloud from our collocated data centers, and $1.3 million in stock-based compensation costs.
Cost of Revenue Year Ended January 31, 2025 2024 $ Change % Change (dollars in thousands) Cost of revenue $ 228,105 $ 260,612 $ (32,507 ) (12 )% Percentage of revenue 20.9 % 25.1 % Gross margin 79.1 % 74.9 % The $32.5 million, or 12%, decrease in cost of revenue during the year ended January 31, 2025 was primarily due to decreases of $27.3 million in depreciation expense and $20.1 million in bandwidth and data center related expense due to the completion of our migration to the public cloud from our collocated data centers.
As our customers purchase add-on products or our bundled Enterprise Plus plan, we tend to realize significantly higher average contract values and stronger net retention rates as compared to customers who only purchase our core product.
Our net retention rate continues to be impacted by heightened budget scrutiny, putting pressure on seat expansion within existing customers and increased partial customer churn. As our customers purchase add-on products or our bundled plans, we tend to realize significantly higher average contract values and stronger net retention rates as compared to customers who only purchase our core product.
Interest expense consists primarily of interest charges for our line of credit and interest rate swap agreement, interest expense related to finance leases, and the amortization of issuance costs of our convertible senior notes. Interest income consists primarily of interest earned on our cash and cash equivalents and short-term investments.
Interest Expense Interest expense consists primarily of interest charges for our line of credit and convertible senior notes, interest expense related to finance leases, and the amortization of issuance costs of our convertible senior notes. 57 Other Expense, Net Other expense, net consists of gains and losses from foreign currency transactions and other income and expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+7 added−6 removed1 unchanged
Biggest changeWe do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates and we do not enter into investments for trading or speculative purposes. Interest rate risk also reflects our exposure to movements in interest rates associated with the June 2023 Facility.
Biggest changeWe do not enter into investments for trading or speculative purposes. Our cash and cash equivalents have limited exposure to market risk for changes in interest rates because they have a short-term maturity and are used primarily for working capital purposes. Our portfolio of short-term investments is subject to market risk due to changes in interest rates.
Additionally, our international subsidiaries maintain certain asset and liability balances as well as operating expenses that are denominated in foreign currencies other than the functional currency and as a result, may cause us to recognize transaction gains and losses in our statement of operations impacting our operating expenses which are recognized in interest and other income (expense), net on our consolidated statements of operations.
Additionally, our international subsidiaries maintain certain asset and liability balances as well as operating expenses that are denominated in foreign currencies other than the functional currency and as a result, may cause us to recognize transaction gains and losses in our statement of operations impacting our operating expenses which are recognized in other expense, net on our consolidated statements of operations.
Item 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk We had cash and cash equivalents, restricted cash, and short-term investments of $481.2 million as of January 31, 2024. Our cash and cash equivalents and short-term investments primarily consist of overnight cash deposits, money market funds, U.S. treasury securities, certificates of deposit and non-U.S. government issued securities.
Item 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk We had cash and cash equivalents, restricted cash, and short-term investments of $724.4 million as of January 31, 2025. Our cash and cash equivalents and short-term investments primarily consist of overnight cash deposits, money market funds, U.S. treasury securities, certificates of deposit and non-U.S. government issued securities.
For the year ended January 31, 2024, total revenue was unfavorably impacted by approximately 260 basis points, compared to the corresponding prior period. For the year ended January 31, 2024, total operating expenses were not materially impacted by fluctuations in exchange rates.
For the year ended January 31, 2025, total revenue was unfavorably impacted by approximately 210 basis points, compared to the corresponding prior period. For the year ended January 31, 2025, total operating expenses were not materially impacted by fluctuations in foreign currency exchange rates.
A hypothetical change in interest rates of 100 basis points after January 31, 2024 would not have a material impact on the combined net fair value of our outstanding debt and Swap Agreement. Foreign Currency Risk Approximately one-third of our revenue is represented by customer contracts denominated in foreign currencies, which include the Japanese Yen, Euro, and British Pound.
We carry the Convertible Notes at face value less unamortized issuance costs on our consolidated balance sheets, and we present the fair value for required disclosures only. Foreign Currency Risk Approximately one-third of our revenue is represented by customer contracts denominated in foreign currencies, which include the Japanese Yen, Euro, and British Pound.
Removed
As of January 31, 2024, we had total debt outstanding with a carrying amount of $30.0 million which approximates fair value. The revolving loans accrue interest at a SOFR rate plus a margin ranging from 1.45% to 1.95%.
Added
Fixed rate securities may have their market value adversely affected due to a raise in interest rates. Accordingly, our future investment income may fluctuate due to changes in interest rates or we may suffer losses in principal if we sell securities that decline in market value due to changes in interest rates.
Removed
Effective September 5, 2019, we entered into a swap agreement with Wells Fargo Bank, National Association (the "Swap Agreement") in order to minimize our interest rate risk exposure due to the volatility of the London Interbank Offered Rate (LIBOR).
Added
However, because we classify our short-term investments as "available for sale," no gains or losses are recognized due to changes in interest rates unless such securities are sold prior to maturity or declines in fair value are caused by expected credit losses.
Removed
Effective June 5, 2023, we amended the terms of the Swap Agreement to update our borrowing benchmark from LIBOR to the Secured Overnight Financing Rate (SOFR), in line with our June 2023 Facility.
Added
A hypothetical increase or decrease of 100 basis points in interest rates would not have a material impact on the market value of our portfolio of short-term investments as of January 31, 2025. This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur.
Removed
Under the Swap Agreement, we have hedged a portion of the variable interest payments of our debt by effectively fixing our interest payments over the five-year term of the agreement. As of January 31, 2024, our interest rate swap had a notional value of $30.0 million.
Added
In September 2024, we issued $460.0 million aggregate principal amount of 1.50% convertible senior notes due September 15, 2029. In January 2021, we issued $345.0 million aggregate principal amount of 0.00% convertible senior notes due January 15, 2026, of which $140.0 million aggregate principal amount was repurchased in September 2024.
Removed
For the years ended January 31, 2024, 2023, and 2022 we incurred $3.0 million, $3.4 million, and $3.7 million, respectively, in foreign currency exchange losses.
Added
The Convertible Notes have fixed annual interest rates and therefore we have no financial or economic interest exposure associated with changes in interest rates. However, the fair value of the Convertible Notes fluctuates when interest rates change. Additionally, the fair value of the Convertible Notes can be affected by fluctuations in our stock price.
Removed
To date we have managed our foreign currency risk by maintaining offsetting assets and liabilities and minimizing non-U.S. dollar cash balances and have not entered into derivatives or hedging transactions; however, we expect to do so in the future. 67
Added
For all periods presented, foreign currency exchange gains and losses were not material. To mitigate risks associated with fluctuations in foreign currency exchange rates, we have entered into foreign currency derivative contracts to hedge a portion of our net outstanding monetary assets and liabilities.
Added
These derivative contracts are intended to offset gains or losses related to remeasuring monetary assets and liabilities that are denominated in currencies other than the functional currency of the entities in which they are recorded. 68

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