10q10k10q10k.net

What changed in BOX INC's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of BOX INC's 2023 and 2024 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 2024 report.

+421 added−426 removedSource: 10-K (2024-03-11) vs 10-K (2023-03-13)

Top changes in BOX INC's 2024 10-K

421 paragraphs added · 426 removed · 304 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

67 edited+51 added−39 removed31 unchanged
Biggest changeBox.org is the social impact arm of Box and includes “Environment” as one of its three main areas of focus. Corporate Information Our website address is www.box.com, and our investor relations website is located at www.box.com/investors. The information on, or that can be accessed through, our website is not part of this Annual Report on Form 10-K.
Biggest changeThe information on, or that can be accessed through, our website is not part of this Annual Report on Form 10-K. We were incorporated in 2005 as Box.Net, Inc., a Washington corporation, and later reincorporated in 2008 under the same name as a Delaware corporation. In November 2011, we changed our name to Box, Inc.
We face competition from a broad spectrum of technology providers: traditional cloud content management vendors who deploy on-premise and offer deep records management, business process workflow, and archival capabilities; newer mobile enterprise vendors who are beginning to enter the content collaboration market; vendors whose core competency is simple file sync and share, which can be deployed on-premises, hybrid, or via a SaaS delivery model; and social collaboration vendors who focus on the conversations that occur between teams.
We face competition from a broad spectrum of technology providers: traditional content management vendors who deploy on-premise and offer deep records management, business process workflow, and archival capabilities; newer mobile enterprise vendors who are beginning to enter the content collaboration market; vendors whose core competency is simple file sync and share, which can be deployed on-premises, hybrid, or via a SaaS delivery model; and social collaboration vendors who focus on the conversations that occur between teams.
To date, tens of thousands of third-party developers have leveraged our platform as the secure content layer for their applications. We are committed to powering how the world does more good together. Founded in 2014, Box.org serves over 11,000 nonprofits globally with donated or discounted Box product, employee volunteer hours and grants from the Box Impact Fund .
To date, tens of thousands of third-party developers have leveraged our platform as the secure content layer for their applications. 5 We are committed to powering how the world does more good together. Founded in 2014, Box.org serves over 11,000 nonprofits globally with donated or discounted Box product, employee volunteer hours and grants from the Box Impact Fund.
Other trademarks, service marks, or trade names appearing in this Annual Report on Form 10-K are the property of their respective owners. 14 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.
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.
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; 10 • 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; 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.
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 security features to protect our customers from the most pervasive security threats.
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.
With our expanded product offerings and use cases, we also now compete with companies in the e-signature, content collaboration, workflow automation, and security and governance markets. Our primary competitors in the cloud content management market include, but are not limited to, Microsoft (SharePoint) and OpenText (Documentum).
With our expanded product offerings and use cases, we also now compete with companies in the e-signature, content collaboration, workflow automation, and security and governance markets. Our primary competitors in the content management market include, but are not limited to, Microsoft (SharePoint) and OpenText (Documentum).
Box also provides security controls like 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 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.
We also use our investor relations website as a channel of distribution for important company information. Important information, including press releases, analyst presentations and financial information regarding us, as well as corporate governance information, is routinely posted and accessible on certain Twitter accounts, such as @box, @levie and @boxincir.
We also use our investor relations website as a channel of distribution for important company information. Important information, including press releases, analyst presentations and financial information regarding us, as well as corporate governance information, is routinely posted and accessible on certain X accounts, such as @box, @levie and @boxincir.
Our native content authoring tool, Box Notes, enables users to seamlessly share and collaborate in real time with internal teams and external partners. Box Notes combines lightweight word processing functionality with easy-to-use tables, content organization, and commenting features to make it simple for users to work together on projects in real time. 7 • Whiteboarding and Visual Collaboration.
Our native content authoring tool, Box Notes, enables users to seamlessly share and collaborate in real time with internal teams and external partners. Box Notes combines lightweight word processing functionality with easy-to-use tables, content organization, and commenting features to make it simple for users to work together on projects in real time.
No customer represented 10% or more of our revenue in the year ended January 31, 2023. Our geographic revenue and segment information is set forth in Notes 2 and 15, respectively, of our Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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.
To give our customers the flexibility to choose between à la carte and bundled subscription options, we offer Box Shield, Box Governance, Box GxP, Box KeySafe, and Box Zones both as standalone add-ons and as part of our bundled Enterprise Plus plan. Seamless Collaboration and Workflow • Internal and External Collaboration.
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.
Information on, or that can be accessed through, our websites or these Twitter accounts is not part of this Annual Report on Form 10-K, and the inclusion of our website addresses and Twitter accounts are inactive textual references only. 15
Information on, or that can be accessed through, our websites or these X accounts is not part of this Annual Report on Form 10-K, and the inclusion of our website addresses and X accounts are inactive textual references only. 16
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, 2023, our patents were set to expire between 2028 and 2038.
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.
Accordingly, we believe that fluctuations in backlog are not always a reliable indicator of future revenue. Human Capital Resources Our company is built on people: We call them Boxers. They come from a range of backgrounds and experiences, and each of them has a unique story to tell.
Accordingly, we believe that fluctuations in backlog are not always a reliable indicator of future revenue. Human Capital Resources Our company is built on people: we call them Boxers. They come from a range of backgrounds and experiences, and each of them has a unique story to tell. As of January 31, 2024, we employed 2,530 people.
Box Shield also uses advanced machine learning to scan files for sophisticated malware (including ransomware) and identify suspicious user behavior to help organizations detect and prevent threats before they become data breaches.
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 Sign, our natively integrated e-signature capability, allows organizations to easily digitize signature workflows, such as signing contracts, employment offers, or statements of work, right where their content lives – with enterprise-grade security, privacy, and compliance built in.
Box Sign, our natively integrated e-signature capability, provides organizations with secure, seamless e-signature workflows, such as signing contracts, employment offers, or statements of work, right where their content lives – with enterprise-grade security, privacy, and compliance built in.
Our cloud-based software allows organizations to deploy our products easily, quickly, and inexpensively. 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.
The Box Content Cloud enables our customers, including 69% of the Fortune 500, to securely manage the entire content lifecycle, from the moment a file is created or ingested to when it’s shared, edited, published, approved, signed, classified, and retained.
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.
Box.org focuses on areas where Box is uniquely positioned to make an impact, including child welfare, crisis response and the environment. 5 The Box Solution We offer web, mobile and desktop applications for cloud content management on a platform for developing custom applications, as well as industry-specific capabilities.
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.
During LearnFest, the entire company has focused time for trainings, workshops, book clubs, 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 (Harvard), Stanford’s Women’s Executive Leadership program and AWE, Advancing Women Executives. • On-Demand Learning: We offer all Boxers access to an on-demand learning platform so they can develop anywhere, anytime, in any skills.
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 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 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.
Content insights shows how each piece of content is being used, who is using it, and when it is being accessed. With easy-to-understand visualizations and the ability to filter and drill down to see performance over time, Content Insights provides users with a clear picture of content performance and gives them the information needed to make data-driven decisions. • Mobility.
With easy-to-understand visualizations and the ability to filter and drill down to see performance over time, Content Insights provides users with a clear picture of content performance and gives them granular information needed to make data-driven decisions. • Mobility.
We focus our sales strategy on ensuring that new and existing customers understand and experience the transformative impact of Box. We have a rich technology partner ecosystem, offering more than 1,500 pre-built integrations with partners like Adobe, Apple, Cisco, Cloudfare, Google, IBM, Microsoft, Okta, Palo Alto Networks, Salesforce, ServiceNow, Slack, and Zoom.
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 want to build teams that are as diverse as our customers and the world we live in, with a broad representation of gender, ethnicity, sexual orientation, religion, backgrounds, and perspectives — among many other dimensions of diversity.
We take great pride in celebrating our differences, and we hire the best talent from all backgrounds. We want to build teams that are diverse, with a broad representation of gender, ethnicity, sexual orientation, religion, backgrounds, and perspectives — among many other dimensions of diversity.
Survey results are reviewed and become part of our action plans at all levels of the organization. Our People and Communities team incorporates survey feedback into our programs, policies, and the cultivated experiences that drive our culture.
These key areas include our experience with our managers, our ability to get work done, and our sense of belonging at work. Survey results are reviewed and become part of our action plans at all levels of the organization. Our People and Communities team incorporates survey feedback into our programs, policies, and the cultivated experiences that drive our culture.
Box Sign provides a seamless signer and sender experience across web and mobile devices, with flexible template options, support for more than 20 languages, and additional security features like signer authentication and password protection.
Box Sign provides a seamless signer and sender experience across web and mobile devices, with flexible template options, support for more than 20 languages, and additional security features such as signer authentication and password protection. Our native integration with Box Sign empowers customers to leverage its functionalities alongside Box Shield and Box Relay.
In order to make the entire enterprise ecosystem more secure, we updated our Box Trust Partner Program, with new and deepened integrations, including with Cisco and Splunk, among many others. We also have a robust set of APIs that provide organizations with the ability to build custom integrations and solution applications on Box. • Box Platform.
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.
For example, Box Relay provides for more than 75 triggers and outcomes that enable a wide variety of actions such as routing documents to specific folders, assigning tasks to individuals or teams, and adding metadata.
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.
We also offer an open API that allows organizations to power e-signatures in their custom integrations and applications, as well as integrations with tools like Appian, Certa, Crooze CLM, Jotform, Salesforce, UiPath, and VersaFile docuflow, to embed e-signature workflows in common business processes. • Real-Time Collaboration and Content Authoring.
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.
We further expand our market reach by leveraging our network of channel partners that comprises value-added resellers and systems integrators as well as our own consulting services. 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 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.
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 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.
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.
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 give IT administrators powerful enterprise-grade tools and automations to securely define access rights and permissions by users and groups, content type, devices, and business needs. Administrators can set specific content policies and restrictions, such as access by external groups, expiration dates to auto-delete files or deactivate links to time-sensitive materials. • Reporting and Insights for Visibility.
Administrators can set specific content policies and restrictions, such as access by external groups, expiration dates to auto-delete files or deactivate links to time-sensitive materials. • Reporting and Insights.
Our solution enables users to securely access, manage, share, and collaborate on their content anytime and from anywhere, using nearly any device and a variety of operating systems through both native and web browser applications.
With the Box Mobile application, users can securely access, manage, and share their content anytime and from anywhere, through native and web browser applications using nearly any device and a variety of operating systems, such as iOS and Android.
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.
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.
Our platform integrates with more than 1,500 leading enterprise business applications, supports hundreds of file formats and media types, and 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.
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. Our go-to-market strategy includes selling the entire platform to an organization with the full set of Box capabilities.
For the year ended January 31, 2023, our employees had a record 96% participation rate in the survey. 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.
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.
We had $681.3 million and $541.5 million of non-cancellable backlog as of January 31, 2023 and 11 2022, respectively. The increase of non-cancellable backlog as of January 31, 2023 was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings through the conversion to multi-product Suites, resulting in extended customer contract durations.
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.
The increase of non-cancellable backlog was also driven by the addition of new customers and the timing of customer-driven renewals. Non-cancellable backlog was partially offset by a negative impact from foreign currency exchange rates.
Non-cancellable backlog was partially offset by a negative impact from foreign currency exchange rates.
Box Shield reduces the risk of accidental data leakage through native security classifications and granular access controls by automatically applying classification to files that contain content like predefined attributes or personal identifiable information. • Comprehensive Data Governance Strategy.
Box Shield reduces the risk of accidental data leakage through native security classifications and granular access controls, and can automatically apply classification to content by identifying predefined attributes or personal identifiable information. • Comprehensive Data Governance Strategy. Box serves as a secure, centralized system of record for retaining content for operational use while supporting adherence to applicable laws and regulations.
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.
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.
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.
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.
All internal and external user activity and content interactions in Box can be tracked and is auditable by our customers’ authorized administrators through the Box Admin Console and via APIs. Administrators can gain insights with easy to use dashboards and visualizations for monitoring and reporting. • Simple and Rapid Deployment.
All internal and external user activity and content interactions in Box can be tracked and is auditable by our customers’ authorized administrators through the Box Admin Console and via APIs, providing visibility into how enterprise content is being accessed, used, and shared across the content lifecycle.
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.
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.
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 12 need to drive their career. We do this by giving all Boxers access to learning and development opportunities based around individual needs in order to build up skill sets and 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.
Box Zones enables businesses around the globe to adopt Box as their modern content management platform, while letting them store and manage their content locally in certain regions. This helps organizations address region-specific compliance mandates associated with data residency and privacy. • Content Migration.
With Box Governance, organizations can apply legal holds to preserve content and protect content from being deleted, helping customers to reduce legal risk. • Box Zones for In-Region Data Storage. Box Zones enables businesses around the globe to adopt Box as their modern content management platform by letting them store and manage their content locally in certain regions.
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 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.
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. These key areas include our experience with our managers, our ability to get work done, and our sense of belonging at work.
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.
We were incorporated in 2005 as Box.Net, Inc., a Washington corporation, and later reincorporated in 2008 under the same name as a Delaware corporation. In November 2011, we changed our name to 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.
The Box design logo, “Box” and our other registered and common law trade names, trademarks and service marks are the property of Box, Inc.
Item 1. BUSINESS Overview Box is the Content Cloud: a single, secure, cloud-native platform for managing the entire content journey. Content – from blueprints to wireframes, videos to documents, proprietary formats to PDFs – is the source of an organization’s unique value.
This data is content – from blueprints to wireframes, videos to documents, proprietary formats to PDFs – and it is the source of an organization’s unique value.
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. As of January 31, 2023, we employed 2,487 people. None of our employees are represented by a labor union.
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.
Our mobile apps allow users to preview, comment, and collaborate on content from anywhere, as well as make it easy to add content to Box with native scanning, uploading, and classification. • Elegant, Intuitive and User-Focused Interface. We are dedicated to keeping our solution easy for users to understand with little to no upfront training.
Our mobile applications empower users to preview, comment, annotate, and collaborate on content from anywhere, and they make it easy to add content to Box with native scanning, uploading, and classification.
Backlog We generally sign annual and multi-year subscription contracts for our cloud content management services. 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, 2023.
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.
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.
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.
Box provides a unified and secure content layer across the enterprise technology stack. We offer more than 1,500 pre-built integrations with seamless interoperability that boosts user productivity and maintains enterprise set security, privacy and compliance policies.
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.
We strive to enable quick and viral user adoption by maintaining a simple and elegant interface with compelling access, sharing and collaboration features. • Built to Handle Content of Nearly Any Type. We have designed our solution to serve as the central content management layer for an organization’s employees.
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.
This eliminates the need for customers to create and manage separate document repositories for performing functions such as image and character recognition, video and audio analysis and transcriptions, and document analysis on business content. 8 Customers As of January 31, 2023, we had over 100,000 paying organizations, and our solution was offered in 25 languages.
Customers As of January 31, 2024, we had over 100,000 paying organizations, and our solution was offered in 25 languages.
Users can securely access, share, and collaborate on all types of information, regardless of format or file type, including large media files, from virtually any device or operating system. • Automation and Workflow Management. Box Relay, our no-code process automation tool for content-centric workflows, enables users to build process automations in Box in a matter of minutes without writing code.
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.
Research and development expenses were $243.5 million, $218.5 million and $201.3 million for the years ended January 31, 2023, 2022 and 2021, respectively. Competition The cloud 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.
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.
These features target specific business problems within those industries with a combination of Box, integration with industry-specific partner technologies, and implementation expertise from Box Consulting and/or implementation partners.
Box works to target specific business problems within these industries with a combination of Box and industry partner technologies such as industry-specific tools like Guidewire's insurance platform and horizontal tools like Salesforce's customer relationship management platform.
We have not experienced any work stoppages, and we consider our relations with our employees to be very good. Box was recognized as number two in Glassdoor Best Places to Work in 2023 and as one of Great Place to Work’s Best Workplaces for Parents in 2022.
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 addition, we provide a library of more than 20 pre-built workflow templates 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 e-signature workflows. Integrations and Developer Platform • Pre-built Integrations with Best-of-Breed Applications.
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.
Sales and marketing expenses were $331.4 million, $298.6 million and $275.7 million for the years ended January 31, 2023, 2022 and 2021, respectively. 9 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.
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.
Box Canvas (public beta), our native visual collaboration and white boarding tool, brings working together to life with new ways to connect, innovate, and share securely. Box Canvas offers a flexible, virtual environment where users can ideate, brainstorm and collaborate visually directly in Box, right where their content lives. • Content Insights.
All content published in a Hub retains Box’s enterprise-grade security, governance, and compliance capabilities, so that content is only made available to its intended audience. • Whiteboarding and Visual Collaboration. Box Canvas, our native visual collaboration and white boarding tool, brings working together to life with new ways to connect, innovate, and share securely.
With both self-serve and managed migration options available through Box Consulting, organizations can accelerate their digital transformation by quickly and easily migrating data into the cloud at petabyte scale. 6 • Focus on Industry-Specific Capabilities. Box offers capabilities that meet industry-specific needs for those industries that have more complex content and collaboration challenges.
For tailored migration needs, Box Consulting offers comprehensive migration services, from tool enablement to fully managed migrations – helping organizations get their content into Box. • Focus on Industry-Specific Capabilities. Box offers solutions for industry-specific content needs, especially in industries that have more complex content, compliance, and collaboration challenges.
Three core capabilities differentiate Box from potential competitors: frictionless security and compliance, seamless collaboration and workflow, and integrations and APIs that connect your content across all applications. Box features and functionality include the following: Frictionless Security and Compliance • Global Cloud Architecture.
Four core capabilities differentiate Box from competitors: advanced data protection and compliance, modern workflow and collaboration experiences, a flexible and interoperable platform, and integration with advanced artificial intelligence (AI) models. Box features and functionality include the following: Advanced Data Protection and Compliance • Global Cloud Architecture.
Removed
With our Software-as-a-Service (SaaS) platform, users can collaborate on content both internally and with external parties, automate content-driven business processes, develop custom applications, and implement data protection, security and compliance features to comply with legal and regulatory requirements, internal policies and industry standards and regulations.
Added
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.
Removed
The Box Content Cloud accelerates business processes, improves employee productivity, enables secure hybrid work, and protects an organization’s most valuable data. Our platform enables a broad set of high-value business use cases across enterprises and user experiences.
Added
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.
Removed
Our go-to-market strategy is focused on selling our platform as a solution for the entire enterprise with the full set of Box capabilities, leveraging our product suite offerings, and driving high-value significant business outcomes for our customers. This strategy combines top-down, high-touch sales efforts with end-user-driven bottoms-up adoption.
Added
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.
Removed
We focus our efforts on larger enterprises, capitalizing on international growth, and utilizing our partner ecosystem, where most advantageous. Our sales representatives engage directly with IT decision makers including CEOs, CIOs, CISOs, IT directors and line of business department heads. We also field inbound inquiries and online sales opportunities.
Added
During that sales process, we partner with IT decision makers (including CEOs, CIOs, CISOs, and IT Directors), as well as departmental and line of business leaders, to identify their content-oriented pain points.
Removed
Use of Box often spreads virally within and across organizations, as users adopt Box and invite new users to collaborate. In addition, an organization will frequently purchase Box for one use case and then later expand its deployment to other use cases with larger groups of employees, leading to deeper engagement with our service.
Added
From there, we work together to create joint success plans that define the path to Box implementations that meet the needs of the organization, including through the sale of our own consulting services, and in conjunction with partners.
Removed
Box serves as a secure, centralized system of record for retaining content for operational use while ensuring adherence to applicable laws and regulations. Box Governance allows our users to manage the lifecycle of content and has robust integrations with leading eDiscovery and data privacy vendors.
Added
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.
Removed
Our Box Governance solution allows customers to create and manage retention policies, including both modifiable and non-modifiable policies, depending on an enterprises’ specific business needs. Box Governance also enables legal holds to protect content from being deleted and the automated disposition of data, helping customers to reduce legal risk. • Box Zones for In-Region Data Storage.

… 77 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

140 edited+29 added−23 removed242 unchanged
Biggest changeFactors 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 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 COVID-19 pandemic and the Russian invasion of Ukraine and as a result of inflation, rising interest rates, or bank failures; • 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.
Biggest changeFactors 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.
Hackers that acquire user account information at other companies can attempt to use that information to compromise the accounts of personnel, or our users’ accounts if an account shares the same sensitive information such as passwords.
Hackers that acquire user account information at other companies can attempt to use that information to compromise the accounts of our personnel, or our users’ accounts if an account shares the same sensitive information such as passwords.
For example, in January 2021, we issued $345.0 million aggregate principal amount of Notes, which we have irrevocably elected to settle in cash upon maturity. Additionally, in May 2021, we issued and sold 500,000 shares of our Series A Convertible Preferred Stock for an aggregate purchase price of $500 million.
For example, in January 2021, we issued $345.0 million aggregate principal amount of Convertible Notes, which we have irrevocably elected to settle in cash upon maturity. Additionally, in May 2021, we issued and sold 500,000 shares of our Series A Convertible Preferred Stock for an aggregate purchase price of $500 million.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report 39 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.
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.
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 and software applications that are developed by others, and if we are unable to ensure that our solutions interoperate with such systems and applications, 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. • 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. 16 • 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 • 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.
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.
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.
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 38 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.
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.
We and our third-party intermediaries may have direct or indirect interactions with officials and employees of 37 government agencies or state-owned or affiliated entities and may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries, our employees, representatives, contractors, channel partners, and agents, even if we do not explicitly authorize such activities.
We and our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries, our employees, representatives, contractors, channel partners, and agents, even if we do not explicitly authorize such activities.
Our customer contracts often include (i) specific obligations that we maintain the availability of the customer’s data through our service and that we secure customer content against unauthorized access or loss, and (ii) provisions whereby we indemnify our customers for third-party claims asserted against them that result from our 24 failure to maintain the availability of their content or securing the same from unauthorized access or loss.
Our customer contracts often include (i) specific obligations that we maintain the availability of the customer’s data through our service and that we secure customer content against unauthorized access or loss, and (ii) provisions whereby we indemnify our customers for third-party claims asserted against them that result from our failure to maintain the availability of their content or securing the same from unauthorized access or loss.
Any 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 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.
Under Sections 382 and 383 of Internal Revenue Code of 1986, as amended (the "Code"), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income and taxes may be limited.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income and taxes may be limited.
Our ability to make required cash payments in connection with conversions of the Notes, repurchase the Notes in the event of a fundamental change, or to repay or refinance the 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 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.
We depend upon these vendors to provide us with services that are always available and are free of errors or defects that could cause disruptions in our business processes, and any failure by these vendors to do so, or any disruptions in networks or the availability of the internet, would adversely affect our ability to operate and manage our operations.
We depend upon these vendors to provide us with services that are always available and are free of errors or defects that could cause disruptions in our 30 business processes, and any failure by these vendors to do so, or any disruptions in networks or the availability of the internet, would adversely affect our ability to operate and manage our operations.
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 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 Convertible Notes.
Additionally, the consent of the holders of a majority of the outstanding shares of Series A Convertible Preferred Stock is required in order for us to take certain actions, including issuances of securities that are senior to, 42 or equal in priority with, the Series A Convertible Preferred Stock, and payments of special dividends in excess of an agreed upon amount.
Additionally, the consent of the holders of a majority of the outstanding shares of Series A Convertible Preferred Stock is required in order for us to take certain actions, including issuances of securities that are senior to, or equal in priority with, the Series A Convertible Preferred Stock, and payments of special dividends in excess of an agreed upon amount.
Furthermore, as our employees work remotely from geographic areas across the globe and more of our employees work remotely on a permanent basis, we may need to reallocate our investment of resources and closely monitor a variety of local regulations and requirements, and we may experience unpredictability in our expenses and employee work culture.
Furthermore, as some of our employees work remotely from geographic areas across the globe and more of our employees work remotely on a permanent basis, we may need to reallocate our investment of resources and closely monitor a variety of local regulations and requirements, and we may experience unpredictability in our expenses and employee work culture.
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.
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.
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.
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.
In addition, as part of the Inflation Reduction Act signed into law in August 2022, the United States implemented a 1% excise tax on the value of certain stock repurchase by publicly traded companies. This tax could increase the costs to us of any share repurchases.
In addition, as part of the Inflation Reduction Act signed into law in August 2022, the United States implemented a 1% excise tax on the value of certain stock repurchases by publicly traded companies. This tax could increase the costs to us of any share repurchases.
If the Notes have not previously been converted or repurchased, we will be required to repay the outstanding principal amount of the Notes, plus accrued and unpaid special interest, if any, in cash at maturity. The 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 Convertible Notes are scheduled to mature on January 15, 2026.
In June 2021, the EC announced 25 a decision that the UK is an “adequate country” to which personal data could be exported from the EEA, but this decision must be renewed and may face challenges in the future, creating uncertainty regarding transfers of personal data to the UK from the EEA.
In June 2021, the EC announced a decision that the UK is an “adequate country” to which personal data could be exported from the EEA, but this decision must be renewed and may face challenges in the future, creating uncertainty regarding transfers of personal data to the UK from the EEA.
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. 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 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.
Furthermore, if any of the conditions to the convertibility of the Notes are satisfied, then we may be required under applicable accounting standards to reclassify the carrying value of the Notes to current, rather than long-term. This reclassification could materially reduce our reported working capital.
Furthermore, if any of the conditions to the convertibility of the Convertible Notes are satisfied, then we may be required under applicable accounting standards to reclassify the carrying value of the Convertible Notes to current, rather than long-term. This reclassification could materially reduce our reported working capital.
Moreover, an extended federal government shutdown resulting from budgetary decisions, a prolonged continuing 19 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, 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.
Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting 35 obligations and may result in a restatement of our financial statements for prior periods.
Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods.
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.
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.
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.
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.
If we are unsuccessful in establishing or maintaining our relationships with third parties, or realizing the anticipated benefits from such partnerships, our ability to compete in the marketplace or to grow our revenue could be impaired and our operating results may suffer.
If we are unsuccessful in establishing or maintaining our relationships with third parties, or realizing the anticipated benefits from such partnerships, our ability to compete in the marketplace or to grow our revenue could 31 be impaired and our operating results may suffer.
The Capped Calls are expected generally to reduce or offset the potential dilution to our Class A common stock upon any conversion of the 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 Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price.
If we cannot adequately comply with these requirements, our growth could be adversely impacted, we may face a loss of customers or difficulty attracting new customers in impacted industries, and we could incur significant liability and our reputation and business could be harmed.
If we cannot adequately comply with these requirements, our growth could be adversely impacted, we may face a loss of customers or difficulty attracting new customers in impacted industries, and we could incur significant liability and our reputation and business could be significantly harmed.
We have made an irrevocable election to settle the principal of the Notes in cash upon any conversion of the Notes. As a result, if holders of the Notes elect to convert their Notes, we will be required to make cash payments in respect of the Notes being converted.
We have made an irrevocable election to settle the principal of the Convertible Notes in cash upon any conversion of the Convertible Notes. As a result, if holders of the Convertible Notes elect to convert their Convertible Notes, we will be required to make cash payments in respect of the Convertible Notes being converted.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or to pay cash upon conversion or at maturity of the Notes.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Convertible Notes or to pay cash upon conversion or at maturity of the Convertible Notes.
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.
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.
Additionally, our ability to properly manage our technical operations infrastructure depends on the reliability of the 27 global supply chain for hardware, network, and platform infrastructure equipment. Significant and unforeseen disruptions to the supply chain may impede our ability to meet our infrastructure capacity requirements.
Additionally, our ability to properly manage our technical operations infrastructure depends on the reliability of the global supply chain for hardware, network, and platform infrastructure equipment. Significant and unforeseen disruptions to the supply chain may impede our ability to meet our infrastructure capacity requirements.
As a result, we may not have enough available cash or be able to obtain financing, or financing at acceptable terms, at the time we are required to repurchase or repay the Notes or pay cash with respect to Notes being converted.
As a result, we may not have enough available cash or be able to obtain financing, or financing at acceptable terms, at the time we are required to repurchase or repay the Convertible Notes or pay cash with respect to Convertible Notes being converted.
We also expect laws, regulations, industry standards and other obligations worldwide relating to privacy, data protection, ransomware and cybersecurity to continue to evolve, and that there will continue to be new, modified, and re-interpreted laws, regulations, standards, and other obligations in these areas.
We also expect laws, regulations, industry standards and other obligations worldwide relating to privacy, data protection, and cybersecurity to continue to evolve, and that there will continue to be new, modified, and re-interpreted laws, regulations, standards, and other obligations in these areas.
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.
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.
If any of the analysts who cover us adversely change their recommendations regarding our Class A common stock or provide 43 more favorable recommendations about our competitors, the market price of our Class A common stock would likely decline.
If any of the analysts who cover us adversely change their recommendations regarding our Class A common stock or provide more favorable recommendations about our competitors, the market price of our Class A common stock would likely decline.
We intend to continue scaling our business to increase our number of users and paying organizations and to meet the increasingly complex needs of our customers and may incur additional expenses as we make investments to scale our business.
We intend to 23 continue scaling our business to increase our number of users and paying organizations and to meet the increasingly complex needs of our customers and may incur additional expenses as we make investments to scale our business.
If our or our partners’ business continuity and disaster recovery arrangements prove to be inadequate, our services could be interrupted. Our 30 partners, suppliers, and customers are also subject to the risk of catastrophic events.
If our or our partners’ business continuity and disaster recovery arrangements prove to be inadequate, our services could be interrupted. Our partners, suppliers, and customers are also subject to the risk of catastrophic events.
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.
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.
Changes in economic conditions may financially impact 18 our existing and prospective customers and cause them to delay or reduce their technology spending, which may adversely affect our ability to attract new customers.
Changes in economic conditions may financially impact our existing and prospective customers and cause them to delay or reduce their technology spending, which may adversely affect our ability to attract new customers.
The capped call transactions we entered into in connection with the issuance of the Notes may affect the value of our Class A common stock. In connection with the issuance of the 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 the Convertible Notes, we entered into capped call transactions with various counterparties (the “Capped Calls”).
These service disruptions could 31 diminish the overall attractiveness to existing and potential customers of services that depend on the internet and could cause demand for our services to suffer.
These service disruptions could diminish the overall attractiveness to existing and potential customers of services that depend on the internet and could cause demand for our services to suffer.
In addition, liabilities associated with taxes are often subject to an extended or indefinite statute of limitations period. Therefore, we may 36 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.
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, 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, 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, HITECH Act, the Data Privacy Framework and Asia-Pacific Economic Cooperation Privacy Recognition for Processors and Cross Border Privacy Rules.
Holders of the Notes also have the right to require us to repurchase all or a portion of their Notes upon the occurrence of a fundamental change (as defined in the indenture governing the Notes) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid special interest, if any.
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.
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; • 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, 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 Russian invasion of Ukraine.
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.
We cannot fully predict the impact of these laws and other proposed federal and state privacy laws on our business or operations, but they may require us to modify our data processing practices and policies and incur substantial costs and expenses in an effort to comply.
We cannot fully predict the impact of these laws and other proposed federal and state laws relating to privacy and cybersecurity on our business or operations, but they may require us to modify our data processing practices and policies and incur substantial costs and expenses in an effort to comply.
If we are unable to meet our service level commitments or suffer periods of downtime that exceed the periods allowed under our customer agreements, we may be obligated to provide customers with service credits, which could significantly impact our revenue in the period in which the downtime occurs and the credits could be due.
If we are unable to meet our service level commitments or suffer periods of downtime that exceed the periods allowed under our subscription agreements, we may be obligated to provide customers with service credits, which could significantly impact our revenue in the period in which the downtime occurs and the credits could be due.
Our use of additional or alternative 29 third-party software would require us to enter into additional license agreements with third parties.
Our use of additional or alternative third-party software would require us to enter into additional license agreements with third parties.
The Capped Calls cover, subject to customary adjustments, the number of shares of our Class A common stock initially underlying the Notes.
The Capped Calls cover, subject to customary adjustments, the number of shares of our Class A common stock initially underlying the Convertible Notes.
Tax laws or regulations could be enacted or changed and existing tax laws or regulations could be applied to us or to our customers in a manner that could increase the costs of our services and adversely impact our business. The application of federal, state, local and international tax laws to services provided electronically is unclear and continuously evolving.
Tax laws or regulations could be enacted or changed and existing tax laws or regulations could be applied to us or to our customers in a manner that could increase the costs of our services and adversely impact our business. The application of federal, state, local and international tax laws to services provided electronically is complex and continuously evolving.
This activity could also cause or prevent an increase or a decrease in the market price of our Class A common stock or the Notes. 41 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 or the Convertible Notes. We are subject to counterparty risk with respect to the Capped Calls.
For example, the Japanese Yen, the British pound and the Euro have all recently experienced declines in value vis-à-vis the U.S. dollar, which negatively affected our results of operations during the year ended January 31, 2023 and could continue to negatively impact our results of operations in future periods.
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.
We also may not use the cash proceeds we raised through the issuance of the Notes in an optimally productive and profitable manner. Since inception, our business has generated net losses, and while we were profitable in fiscal year 2023, we may continue to incur significant losses in the future.
We also may not use the cash proceeds we raised through the issuance of the Convertible Notes in an optimally productive and profitable manner. Since inception, our business has generated net losses, and while we were profitable in fiscal year 2024, we may continue to incur significant losses in the future.
The occurrence of any catastrophic event, including a pandemic (such as COVID-19), earthquake, fire, flood, tsunami, or other weather event, power loss, telecommunications failure, software or hardware malfunctions, cyber-attack, war, or terrorist attack, could result in lengthy interruptions in our service. Our corporate headquarters is located in the San Francisco Bay Area, a region known for seismic activity.
The occurrence of any catastrophic event, including a pandemic, earthquake, fire, flood, tsunami, or other weather event, power loss, telecommunications failure, software or hardware malfunctions, cyber-attack, war, or terrorist attack, could result in lengthy interruptions in our service. Our corporate headquarters is located in the San Francisco Bay Area, a region known for seismic activity.
These sources can also implement social engineering techniques, such as 23 “phishing,” “smishing” or "vishing" attacks, to induce our partners, users, employees or customers to disclose passwords or other sensitive information or take other actions to gain access to our data or our users’ data.
These sources can also implement social engineering techniques, such as “phishing,” “smishing” or “vishing” attacks, to induce our partners, users, employees or customers to disclose passwords or other sensitive information or take other actions to gain access to our data or our users’ data.
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 could result in reduced sales, longer sales cycles, reduced renewal rates, slower adoption of new technologies and increased price competition, which may 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, we may encounter greater pricing pressure and implementation and customization challenges, and we may have to delay revenue recognition for more complicated transactions, all of which could harm 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, 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.
For example, we have entered into agreements with partners such as Adobe, Apple, Cisco, Cloudfare, Google, IBM, Macnica Networks, Microsoft, Mitsui Knowledge Industry, Okta, Palo Alto Networks, Salesforce, ServiceNow, Slack 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, 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.
We continuously evaluate our short- and long-term data center capacity requirements to ensure adequate capacity for new and existing customers while minimizing unnecessary excess capacity costs. If we overestimate the demand for our cloud content management services and therefore secure excess data center capacity, our operating margins could be reduced.
We continuously evaluate our short- and long-term cloud-based server capacity requirements to ensure adequate capacity for new and existing customers while minimizing unnecessary excess capacity costs. If we overestimate the demand for our cloud content management services and therefore secure excess cloud-based server capacity, our operating margins could be reduced.
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 and the COVID-19 pandemic, 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 travel, which may negatively impact our ability to recruit and train our sales force.
The success of any new services or enhancements to our existing services depends on several factors, including their timely completion, introduction and market acceptance. We also may experience business or economic disruptions that could adversely affect the productivity of our employees and result in delays in our product development process.
The success of any new services or enhancements to our existing services, such as Box AI and Box Hubs, depends on several factors, including their timely completion, introduction and market acceptance. We also may experience business or economic disruptions that could adversely affect the productivity of our employees and result in delays in our product development process.
If we underestimate our data center capacity requirements or if we are unable to meet our contractual minimum commitments, we may not be able to service the expanding needs of customers and may be required to limit new customer acquisition or provide credits or refunds to existing customers, which would impair our revenue growth and harm our operating results.
If we underestimate our cloud-based server capacity requirements or if we are unable to meet our contractual minimum commitments, we may not be able to service the expanding needs of customers and may be required to limit new customer acquisition or provide credits or refunds to existing customers, which would impair our revenue growth and harm our operating results.
Transitional climate change risks may subject us to increased regulations, reporting requirements, standards, or expectations regarding the environmental impacts of our business and untimely or inaccurate disclosure could adversely affect our reputation, business or financial performance. If we overestimate or underestimate our data center capacity requirements, our operating results could be adversely affected.
Transitional climate change risks may subject us to increased regulations, reporting requirements, standards, or expectations regarding the environmental impacts of our business and untimely or inaccurate disclosure could adversely affect our reputation, business or financial performance. If we overestimate or underestimate our cloud-based server capacity requirements, our operating results could be adversely affected.
The risks we face in connection with acquisitions include: 32 • 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.
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.
During the second half of our fiscal year 2023, we began to see an impact from additional customer scrutiny being placed on deals due to the economic environment. In addition, there can be no assurance that cloud content management and collaboration spending levels will increase following any recovery.
Since the second half of our fiscal year 2023, we have seen an impact from additional customer scrutiny being placed on deals due to the economic environment. In addition, there can be no assurance that cloud content management and collaboration spending levels will increase following any recovery.
Privacy Shield in light of the CJEU’s decision. 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 Area (EEA), Switzerland, or the United Kingdom (UK) to the U.S.
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.
For example, the European Commission enacted the General Data Protection Regulation (GDPR), which imposed 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), 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.
Our product development efforts could also be impacted by our workforce location strategy as we hire an increasing number of our engineers in regions 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 countries such as Poland and the Netherlands.
Further, it is difficult to predict the size and growth rate of our market, customer demand for our 22 platform and for any new features or products we develop, and the success of competitive products or services. As a result, we may not achieve or maintain profitability in future periods.
Further, it is difficult to predict the size and growth rate of our market, customer demand for our platform and for any new features or products we develop, and the success of competitive products or services. As a result, we may not sustain profitable growth in future periods.
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 greater of (i) the value of the shares of Series A Convertible Preferred Stock as converted into Class A common 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 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.
For example, we have re-opened our offices globally and maintain a hybrid workforce (with a mix of employees working from offices and others working remotely). This may lead to disruptions and decreased productivity that could result in delays in our product development process. Failure in this regard may significantly impair our revenue growth and our future financial results.
We maintain a hybrid workforce (with a mix of employees working from offices and others working remotely), which may lead to disruptions and decreased productivity that could result in delays in our product development process. Failure in this regard may significantly impair our revenue growth and our future financial results.
This could result in reduced sales, longer sales cycles, reduced renewal rates, slower adoption of new technologies, and increased price competition. Any of these events would likely have an adverse effect on our business, operating results and financial position.
This has 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 these events would likely have an adverse effect on our business, operating results and financial position.
In addition, some countries such as member states of the European Economic Area (EEA) are considering or have enacted legislation requiring storage localization and/or the processing of more regulated types of data in region, along with other limitations that could impact U.S. technology companies and more specifically, Box.
In addition, some countries, such as member states of the EEA are considering or have enacted legislation requiring storage localization and/or the processing of more regulated types of data in region, along with other limitations that could impact U.S. technology companies (e.g., cloud service providers) and more specifically, Box.
In 2020, the Court of Justice of the European Union (CJEU) invalidated the EU-US Privacy Shield framework, and imposed additional obligations on companies when relying on model contractual clauses approved by the European Commission (EC) to transfer personal data from the EU to the U.S. On September 8, 2020, the Swiss Federal Data Protection and Information Commissioner invalidated the Swiss-U.S.
Privacy Shield framework, and imposed additional obligations on companies when relying on model contractual clauses approved by the European Commission (EC) to transfer personal data from the EU to the U.S. On September 8, 2020, the Swiss Federal Data Protection and Information Commissioner invalidated the Swiss-U.S. Privacy Shield in light of the CJEU’s decision.
Despite precautions taken at our third-party data center hosting facilities, the occurrence of disasters, security issues (including an act of terrorism or an armed conflict), certain geopolitical events, labor or trade disputes, or pandemics (such as COVID-19), 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 (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.
Any acquisitions and investments we make could disrupt our business and harm our financial condition and operating results. We have acquired, and may in the future acquire, other companies, employee teams, or technologies to complement or expand our services and grow our business. We may not be able to successfully complete or integrate identified acquisitions.
Any acquisitions and investments we make could disrupt our business and harm our financial condition and operating results. We have acquired, and may in the future acquire, other companies, employee teams, or technologies to complement or expand our services and grow our business.
We sell our services and incur operating expenses in various currencies. Therefore, fluctuations in the relative value of the U.S. dollar and foreign currencies, particularly the Japanese Yen, and to a lesser extent, the British pound and the Euro, may impact our operating results.
Therefore, fluctuations in the relative value of the U.S. dollar and foreign currencies, particularly the Japanese Yen, and to a lesser extent, the British pound and the Euro, may impact our operating results.
We have encountered issues in the past that have caused Box services to be temporarily unavailable, 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.

… 112 more changes not shown on this page.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. LEGAL PROCEEDINGS Refer to Note 9 in Part II, Item 8 of this Annual Report on Form 10-K under the subheading “Legal Matters,” which is incorporated herein by reference. Item 4. MINE SAF ETY DISCLOSURE Not applicable. 44 PART II
Biggest changeItem 3. LEGAL PROCEEDINGS Refer to Note 8 in Part II, Item 8 of this Annual Report on Form 10-K under the subheading “Legal Matters,” which is incorporated herein by reference. Item 4. MINE SAF ETY DISCLOSURE Not applicable. 47 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+0 added−1 removed5 unchanged
Biggest changeThe 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. 45 Issuer Purchases of Equity Securities Share repurchase activity during the three months ended January 31, 2023 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, 2022 to November 30, 2022 — — — 150,204 December 1, 2022 to December 31, 2022 145 $ 28.25 145 146,109 January 1, 2023 to January 31, 2023 183 $ 28.49 183 140,891 Total 328 328 (1) Between July 2021 and January 31, 2023, our board of directors authorized the repurchase of up to an aggregate of $760 million of shares of our Class A common stock and we have repurchased approximately $595.3 million under these authorizations.
Biggest changeThe 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.
Refer to Note 11 in Part II, Item 8 of this Annual Report on Form 10-K for more information about such dividends. Unregistered Sales of Equity Securities In February 2022, we issued 559,336 shares of our Class A common stock to certain former holders of capital stock and employees of SignRequest B.V.
Refer to Note 10 in Part II, Item 8 of this Annual Report on Form 10-K for more information about such dividends. Unregistered Sales of Equity Securities In February 2022, we issued 559,336 shares of our Class A common stock to certain former holders of capital stock and employees of SignRequest B.V.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock 46 and in each index on January 31, 2018 and its relative performance is tracked through January 31, 2023. 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, 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.
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, 2023, there were 111 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 29, 2024, there were 103 holders of record of our Class A common stock.
Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Box, Inc. under the Securities Act of 1933, as amended, or the Exchange Act.
Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Box, Inc. under the Securities Act of 1933, as amended, or the Exchange Act. 49 The following graph compares the cumulative total return to stockholders on our common stock relative to the cumulative total returns of the Standard & Poor’s 500 Index, or S&P 500, and the NASDAQ Computer Index.
We have entered into pre-set trading plans adopted in accordance with Rule 10b5-1 to effect such repurchases. The authorized repurchase plan will expire on November 29, 2023.
We periodically enter into pre-set trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act to effect such repurchases.
Base Period Company/Index 01/31/2018 01/31/2019 01/31/2020 01/31/2021 01/31/2022 01/31/2023 Box, Inc. $ 100 $ 94 $ 68 $ 78 $ 117 $ 144 S&P 500 Index 100 96 114 132 160 144 NASDAQ Computer Index 100 98 141 206 258 200 Item 6. R ESERVED Not applicable. 47
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
Removed
The following graph compares the cumulative total return to stockholders on our common stock relative to the cumulative total returns of the Standard & Poor’s 500 Index, or S&P 500, and the NASDAQ Computer Index.

Item 7. Management's Discussion & Analysis

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

79 edited+36 added−59 removed59 unchanged
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. 64 Our reconciliation of the GAAP to non-GAAP financial measures for years ended January 31, 2023, 2022 and 2021 are as follows (in thousands, except per share data and percentages): Year Ended January 31, 2023 2022 2021 GAAP operating income (loss) $ 36,840 $ (27,626 ) $ (37,642 ) Stock-based compensation 185,632 178,974 154,292 Acquired intangible assets amortization 5,808 5,148 — Acquisition-related expenses 53 1,282 790 Fees related to shareholder activism (77 ) 15,644 1,402 Expenses related to litigation 722 — — Non-GAAP operating income $ 228,978 $ 173,422 $ 118,842 GAAP operating margin 3.7 % (3.2 ) % (4.9 ) % Stock-based compensation 18.7 20.5 20.0 Acquired intangible assets amortization 0.6 0.6 — Acquisition-related expenses — 0.1 0.1 Fees related to shareholder activism — 1.8 0.2 Expenses related to litigation 0.1 — — Non-GAAP operating margin 23.0 % 19.8 % 15.4 % GAAP net income (loss) attributable to common stockholders $ 8,567 $ (53,878 ) $ (43,433 ) Stock-based compensation 185,632 178,974 154,292 Acquired intangible assets amortization 5,808 5,148 — Acquisition-related expenses 53 2,349 790 Fees related to shareholder activism (77 ) 15,644 1,402 Expenses related to litigation 722 — — Amortization of debt discount and issuance costs 1,888 1,878 647 Undistributed earnings attributable to preferred stockholders (22,187 ) (12,034 ) — Non-GAAP net income attributable to common stockholders $ 180,406 $ 138,081 $ 113,698 GAAP net income (loss) per share attributable to common stockholders, basic and diluted $ 0.06 $ (0.35 ) $ (0.28 ) Stock-based compensation 1.29 1.15 0.99 Acquired intangible assets amortization 0.04 0.03 — Acquisition-related expenses — 0.02 0.01 Fees related to shareholder activism — 0.10 0.01 Expenses related to litigation 0.01 — — Amortization of debt discount and issuance costs 0.01 0.01 — Undistributed earnings attributable to preferred stockholders (0.15 ) (0.08 ) — Non-GAAP net income per share attributable to common stockholders, basic $ 1.26 $ 0.88 $ 0.73 Non-GAAP net income per share attributable to common stockholders, diluted $ 1.20 $ 0.85 $ 0.70 Weighted-average shares used to compute net income (loss) per share attributable to common stockholders Basic 143,592 155,598 155,849 Diluted 150,192 163,337 162,310 GAAP net cash provided by operating activities $ 297,982 $ 234,818 $ 196,834 Purchases of property and equipment, net of sale proceeds (4,433 ) (4,702 ) (9,052 ) Principal payments of finance lease liabilities (40,353 ) (50,391 ) (60,020 ) Capitalized internal-use software costs (14,751 ) (9,486 ) (7,438 ) Non-GAAP free cash flow $ 238,445 $ 170,239 $ 120,324 GAAP net cash provided by (used in) investing activities $ 120,600 $ (239,368 ) $ (16,383 ) GAAP net cash (used in) provided by financing activities $ (396,495 ) $ (172,861 ) $ 218,677 65
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
Each $1,000 principal amount of the 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 Notes only in cash.
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.
To date, practically all of our revenue has been derived from subscription and premier services. Subscription and premier services revenue are driven primarily by the number of customers, the number of seats sold to each customer and the price of our services. 53 We recognize revenue as we satisfy our performance obligations.
To date, practically all of our revenue has been derived from subscription and premier services. Subscription and premier services revenue are driven primarily by the number of customers, the number of seats sold to each customer and the price of our services. We recognize revenue as we satisfy our performance obligations.
Management believes it is useful to exclude SBC in order to better understand the long-term performance of our core business and to facilitate 63 comparison of our results to those of peer companies.
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.
As of January 31, 2023, 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, 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.
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 infrastructure 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 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.
This was partially offset by $32.2 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 Notes are senior unsecured obligations and do not bear regular interest.
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.
We believe our existing cash, cash equivalents and short-term investments, together with our credit facilities, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months and beyond.
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.
Off-Balance Sheet Arrangements Through January 31, 2023, we did not have any relationships with unconsolidated entities that have, or are reasonably likely to have, a material effect on our financial statements.
Off-Balance Sheet Arrangements Through January 31, 2024, we did not have any relationships with unconsolidated entities that have, or are reasonably likely to have, a material effect on our financial statements.
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, and a native visual collaboration and whiteboarding tool 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 cloud content management services.
In connection with the acquisition of new customers, we incur and recognize significant upfront costs. These costs include sales and marketing costs associated with acquiring new customers, such as sales commission expenses, a portion of which are deferred and then amortized over a period of benefit, and marketing costs, which are expensed as incurred.
In connection with the acquisition of new customers, we incur and recognize significant upfront costs. These costs include sales and marketing costs associated with acquiring new customers, such as sales commission expenses, substantially all of which are deferred and then amortized over a period of benefit, and marketing costs, which are expensed as incurred.
A discussion regarding our financial condition and results of operations for the year ended January 31, 2022 compared to the year ended January 31, 2021 can be found under Part II, Item 7 of our Annual Report on Form 10-K for the year ended January 31, 2022, filed with the SEC on March 16, 2022, 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, 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, 2023 compared to the year ended January 31, 2022 is presented below.
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.
Sales and marketing expense also consists of 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. General and Administrative.
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.
We expect our general and administrative expense to increase in absolute dollars but to decrease as a percentage of revenue over time as we benefit from greater operational efficiency.
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.
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 108%, 111%, and 102% as of January 31, 2023, 2022 and 2021, 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 101%, 108%, and 111% as of January 31, 2024, 2023 and 2022, respectively.
Our long-term capital requirements will depend on many factors including our growth rate, subscription renewal activity, billing frequency, public cloud obligations, repayment or refinancing of our debt obligations, the timing and extent of spending to support development efforts, the expansion of international activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of our services.
Our long-term capital requirements will depend on many factors including our growth rate, subscription renewal activity, billing frequency, public cloud obligations, repayment or refinancing of our debt obligations, settlement of our convertible senior notes and convertible preferred stock, the timing and extent of spending to support development efforts, the expansion of international activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of our services.
Worsening economic conditions, including impacts from inflation, higher interest rates, slower growth, the stronger dollar versus foreign currencies, particularly the Japanese Yen, the 50 ongoing Russia-Ukraine conflict and other changes in economic conditions, may adversely affect our results of operations and financial performance.
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.
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, 2023 were $1.022 billion, an increase of 9% from the year ended January 31, 2022.
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.
For the year ended January 31, 2023, our Suites attach rate was 72% in deals over $100,000, an increase from 64% for the year ended January 31, 2022. The increase was partially offset by the weakening of foreign currency exchange rates, which negatively impacted our revenue growth rate by 390 basis points, and customers partially churning their deployment with Box.
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.
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, a large multi-year prepayment, and the timing of customer-driven renewals. Billings growth was partially offset by a negative impact 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 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.
General and administrative expense consists primarily of employee compensation and related expenses for administrative functions including finance, legal, human resources, recruiting, information systems, enterprise security, compliance, fees for external professional services and cloud-based enterprise systems, as well as allocated overhead.
General and administrative expense consists primarily of employee compensation and related expenses for administrative functions including finance, legal, human resources, recruiting, information systems, enterprise security, compliance, fees for external professional services and cloud-based enterprise systems, as well as allocated overhead. External professional services fees are primarily comprised of outside legal, accounting, audit and outsourcing services.
While Box believes RPO is a leading indicator of revenue as it represents sales activity not yet recognized in revenue, it is not necessarily indicative of future revenue growth as it is influenced by several factors, including seasonality, contract renewal timing, average contract terms and foreign currency exchange rates.
While Box believes RPO is a leading indicator of revenue as it represents sales activity not yet recognized in revenue, it is not necessarily indicative of future revenue growth as it is influenced by several factors, including seasonality, contract renewal timing, average contract terms and foreign currency exchange rates. Box monitors RPO to manage the business and evaluate performance.
For more information regarding our obligations for leases, purchase agreements, and debt, refer to Notes 6, 9, and 10, respectively, in Part II, Item 8 of this Annual Report on Form 10-K. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States.
For more information regarding our obligations for leases, purchase agreements, and debt, refer to Notes 6, 8, and 9, respectively, in Part II, Item 8 of this Annual Report on Form 10-K. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Accordingly, due to our subscription model, we recognize revenue for our subscription and premier services ratably over the contract term. We typically invoice our customers at the beginning of the term, in multi-year, annual, quarterly or monthly installments.
We typically invoice our customers at the beginning of the term, in multi-year, annual, quarterly or monthly installments. We recognize revenue as we satisfy our performance obligations. Accordingly, due to our subscription model, we recognize revenue for our subscription services ratably over the term of the contract.
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.
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.
Cash provided by operating activities during the year ended January 31, 2023 was further adjusted by net cash outflows of $36.3 million due to changes in our operating assets and liabilities.
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.
We have historically invested our cash and cash equivalents in overnight deposits, certificates of deposit, money market funds, U.S. treasury securities and commercial paper.
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.
The Box Content Cloud enables our customers, including 69% of the Fortune 500, to securely manage the entire content lifecycle, from the moment a file is created or ingested to when it’s shared, edited, published, approved, signed, classified, and retained.
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 primary drivers for the changes in operating assets and liabilities include a $55.0 million increase in deferred commissions resulting from capitalization of incremental commissions paid to our sales force, a $44.6 million decrease in operating lease liabilities primarily due to recurring lease payments, an $8.9 million increase in accounts receivable primarily due to timing of our cash collections, and a $5.7 million increase in other assets.
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.
We also currently provide the following offerings: Box Sign, which enables customers to securely send documents for electronic signature directly from Box; Box Shield, our advanced security offering that helps customers reduce the risk of accidental content leakage and protect their business from insider threats and account compromise, as well as threat detection, response, and recovery for potential malware incidents, including ransomware; Box Relay, which allows our end users to easily build, manage and track their own workflows; Box Zones, which gives global customers the ability to store their content locally in certain regions; Box KeySafe, a solution that builds on top of Box’s strong encryption and security capabilities to give customers greater control over the encryption keys used to secure the file contents that are stored with Box; Box Platform, which further enables customers and partners to build enterprise apps using our open APIs and developer tools; Box Governance, which gives customers a better way to comply with regulatory policies, help satisfy e-discovery requests and effectively manage sensitive business information throughout its lifecycle; and Box Notes, our native content authoring tool which enables users to seamlessly share and collaborate in real time.
We also currently provide the following offerings: Box Sign, which enables customers with secure, seamless e-signatures right where their content lives in Box; Box Shield, our advanced security offering that helps customers reduce the risk of accidental content leakage and protect their business from insider threats and account compromise, as well as threat detection, response, and recovery for potential malware incidents, including ransomware; Box Relay, which allows our end users to easily build, manage, track, and automate workflows with no coding necessary; Box Zones, which gives global customers the ability to store their content locally in certain regions; Box KeySafe, a solution that builds on top of Box’s strong encryption and security capabilities to give customers greater control over the encryption keys used to secure the file contents that are stored with Box; Box Platform, which further enables customers and partners to build enterprise applications using our open APIs and developer tools; Box Governance, which gives customers a better way to comply with regulatory policies, help satisfy e-discovery requests and effectively manage sensitive business information throughout its lifecycle; Box Notes, our native content authoring tool which enables users to seamlessly share and collaborate in real time; and Box Shuttle, which allows for easy, affordable, self-service content migration directly from the admin console from more than ten source systems, into Box.
Liquidity and Capital Resources As of January 31, 2023, we had cash and cash equivalents, restricted cash, and short-term investments of $461.8 million. During the year ended January 31, 2023, we generated operating cash flow of $298.0 million. Since our inception, we have financed our operations primarily through equity financing, cash generated from operations and debt financing.
Liquidity and Capital Resources As of January 31, 2024, we had cash and cash equivalents, restricted cash, and short-term investments of $481.2 million. During the year ended January 31, 2024, we generated operating cash flow of $318.7 million. Since our inception, we have financed our operations primarily through equity financing, cash generated from operations and debt financing.
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.
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.
In addition, our overall performance depends in part on worldwide economic and geopolitical conditions and their impact on customer behavior.
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.
Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. 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.
Financing Activities Cash used in financing activities of $396.5 million for the year ended January 31, 2023 was primarily driven by $274.2 million in repurchases of our common stock, $93.9 million of employee payroll taxes paid related to net share settlement of stock awards, $40.4 million of principal payments of finance lease liabilities, and $15.1 million of dividend payments to preferred stockholders.
Financing Activities Cash used in financing activities of $272.9 million for the year ended January 31, 2024 was primarily driven by $177.1 million in repurchases of our common stock, $74.7 million of employee payroll taxes paid related to net share settlement of stock awards, $30.2 million of principal payments of finance lease liabilities, and $14.9 million of dividend payments to preferred stockholders.
For the year ended January 31, 2023, our net cash provided by operating activities was $298.0 million, an increase of 27% from net cash provided by operating activities of $234.8 million for the year ended January 31, 2022.
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.
Contractual Obligations and Commitments Our principal commitments consist of (i) obligations under operating leases for office spaces and data centers, (ii) obligations under finance leases for servers and related equipment for our data center operations, (iii) purchase obligations not recognized on the condensed consolidated balance sheet as of January 31, 2023, which relate primarily to public cloud infrastructure services and IT software and support services, and (iv) debt, including obligations under both our November 2017 Facility and Notes.
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.
This was partially offset by a $40.2 million decrease in operating right-of-use assets due to amortization and a $38.0 million increase in deferred revenue.
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.
A calculation of billings starting with revenue, the most directly comparable GAAP financial measure, is presented below (in thousands): Year Ended January 31, 2023 2022 2021 GAAP revenue $ 990,874 $ 874,332 $ 770,770 Deferred revenue, end of period 566,630 534,242 465,613 Less: deferred revenue, beginning of period (534,242 ) (465,613 ) (423,849 ) Contract assets, beginning of period 1,111 25 — Less: contract assets, end of period (1,900 ) (1,111 ) (25 ) Billings $ 1,022,473 $ 941,875 $ 812,509 52 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.
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.
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. As we penetrate customer accounts, we expect our net retention rate to remain above 100% for the foreseeable future.
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 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.
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.
Refer to Note 10 in Part II, Item 8 of this Annual Report on Form 10-K for detailed descriptions of the Notes and the November 2017 Facility. 59 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”).
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”).
Cash Flows For the years ended January 31, 2023, 2022, and 2021, our cash flows were as follows (in thousands): Year Ended January 31, 2023 2022 2021 Net cash provided by operating activities $ 297,982 $ 234,818 $ 196,834 Net cash provided by (used in) investing activities 120,600 (239,368 ) (16,383 ) Net cash (used in) provided by financing activities (396,495 ) (172,861 ) 218,677 58 Operating Activities For the year ended January 31, 2023, cash provided by operating activities was $298.0 million.
Cash Flows For the years ended January 31, 2024, 2023, and 2022, our cash flows were as follows (in thousands): Year Ended January 31, 2024 2023 2022 Net cash provided by operating activities $ 318,727 $ 297,982 $ 234,818 Net cash (used in) provided by investing activities (82,792 ) 120,600 (239,368 ) Net cash used in financing activities (272,896 ) (396,495 ) (172,861 ) 61 Operating Activities For the year ended January 31, 2024, cash provided by operating activities was $318.7 million.
For the year ended January 31, 2023, our operating income was $36.8 million and our operating margin was 3.7%, compared to our operating loss of $27.6 million and our operating margin of negative 3.2% for the year ended January 31, 2022.
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.
Over time, we expect our cost of revenue to increase in absolute dollars but decrease as a percentage of revenue as we continue to optimize data center efficiencies and invest in public cloud infrastructure.
Over time, we expect our cost of revenue to increase in absolute dollars but decrease as a percentage of revenue as we invest in public cloud hosting service optimization.
RPO growth was partially offset by a negative impact 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 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.
Research and Development Year Ended January 31, 2023 2022 $ Change % Change (dollars in thousands) Research and development $ 243,529 $ 218,523 $ 25,006 11 % Percentage of revenue 25 % 25 % The $25.0 million increase during the fiscal year was primarily due to increases of $23.1 million and $5.9 million in employee-related costs and allocated overhead costs, respectively, driven by a 27% increase in headcount, and a $2.2 million increase in stock-based compensation expense.
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.
The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.
The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity. Net Retention Rate Net retention rate is defined as the net percentage of Total Annual Recurring Revenue (Total ARR) retained from existing customers, including expansion.
During the second half of fiscal year ended January 31, 2023, in addition to increased headwinds from foreign exchange rate trends, we began to see an impact from additional customer scrutiny being placed on larger deals due to the worsening economic environment.
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.
Results of Operations The following tables set forth our results of operations for the periods presented (in thousands and as a percentage of our revenue): Year Ended January 31, 2023 2022 2021 Consolidated Statements of Operations Data: Revenue $ 990,874 $ 874,332 $ 770,770 Cost of revenue (1) 252,556 249,484 224,738 Gross profit 738,318 624,848 546,032 Operating expenses: Research and development (1) 243,529 218,523 201,262 Sales and marketing (1) 331,400 298,635 275,742 General and administrative (1) 126,549 135,316 106,670 Total operating expenses 701,478 652,474 583,674 Income (loss) from operations 36,840 (27,626 ) (37,642 ) Interest and other expense, net (2,433 ) (9,838 ) (4,584 ) Income (loss) before provision for income taxes 34,407 (37,464 ) (42,226 ) Provision for income taxes 7,624 3,995 1,207 Net income (loss) 26,783 (41,459 ) (43,433 ) Accretion and dividend on series A convertible preferred stock (17,110 ) (12,419 ) — Undistributed earnings attributable to preferred stockholders (1,106 ) — — Net income (loss) attributable to common stockholders $ 8,567 $ (53,878 ) $ (43,433 ) (1) Includes stock-based compensation expense as follows: Year Ended January 31, 2023 2022 2021 Cost of revenue $ 17,816 $ 20,093 $ 18,936 Research and development 68,900 68,063 61,145 Sales and marketing 58,448 52,547 42,015 General and administrative 40,468 38,271 32,196 Total stock-based compensation $ 185,632 $ 178,974 $ 154,292 55 Comparison of the Years Ended January 31, 2023 and 2022 Revenue Year Ended January 31, 2023 2022 $ Change % Change (dollars in thousands) Revenue $ 990,874 $ 874,332 $ 116,542 13 % The $116.5 million increase in revenue was primarily driven by seat growth in existing customers and higher attach rates of our multi-product Suites offerings, particularly Enterprise Plus.
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.
To best achieve this objective, we focus on growing the number of users and paying organizations through direct field sales, direct inside sales, indirect channel sales and through word-of-mouth by individual users, some of whom use our services at no cost. Individual users and organizations can also simply sign up to use our solution on our website.
Our objective is to build an enduring business that creates sustainable revenue and earnings growth over the long term. To best achieve this objective, we focus on growing the number of users and paying organizations through direct field sales, direct inside sales, indirect channel sales and through word-of-mouth by individual users, some of whom use our services at no cost.
Investing Activities Cash provided by investing activities of $120.6 million for the year ended January 31, 2023 was primarily driven by $240.0 million in maturities of short-term investments, partially offset by $102.1 million in purchases of short-term investments, $12.1 million of capitalized internally developed software costs, and $4.4 million of fixed asset purchases.
Investing Activities Cash used in investing activities of $82.8 million for the year ended January 31, 2024 was primarily driven by $169.4 million in purchases of short-term investments that were partially offset by $108.0 million in maturities of short-term investments, $16.6 million in capitalized internally developed software costs, $2.7 million in cash paid for acquisitions, net of cash acquired, and $1.8 million of fixed asset purchases, net of sale proceeds.
Future invoicing is determined to be certain when we have an executed non-cancellable contract or a significant penalty is due upon cancellation.
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.
Our platform integrates with more than 1,500 leading enterprise business applications, supports hundreds of file formats and media types, and 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.
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.
On November 27, 2017, we entered into a secured credit agreement (as amended or otherwise modified from time to time, the "November 2017 Facility").
On November 27, 2017, we entered into a secured credit agreement (as amended or otherwise modified from time to time, the “November 2017 Facility”), which provided for a $65.0 million revolving loan facility with a $45.0 million sublimit for the issuance of letters of credit.
Provision for Income Taxes Provision for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business and state income taxes in the United States and, as applicable, changes in our deferred taxes and related valuation allowance positions and uncertain tax positions, and taxes associated with jurisdictional transfers of intellectual property.
(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.
Our sales and marketing expenses are generally higher for acquiring new, or expanding existing, customers than for renewals of existing customer subscriptions. 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 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.
The increase in RPO was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings through the conversion to multi-product Suites, due to extended customer contract durations. The increase in RPO was also driven by the addition of new customers and the timing of customer-driven renewals.
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.
The increased employee headcount and related costs are mainly driven by the growth of our Research and Development Engineering center in Poland. The increase in research and development expenses was partially offset by an increase of $4.9 million in capitalized internally developed software costs and a decrease of $1.5 million in contractor related costs.
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 primary factors affecting our operating cash flows during this period were our net income of $26.8 million, non-cash charges of $185.6 million for stock-based compensation, $66.0 million for depreciation and amortization of our property and equipment and capitalized software, and $53.5 million for amortization of deferred commissions.
The primary factors affecting our operating cash flows during this period were our net income of $129.0 million, stock-based compensation of $198.8 million, amortization of deferred commissions of $54.2 million, and depreciation and amortization of our property and equipment and capitalized software of $51.2 million, partially offset by a non-cash income tax benefit from the release of a valuation allowance on deferred tax assets of $75.2 million.
The closing of the Issuance occurred on May 12, 2021. Refer to Note 11 in Part II, Item 8 of this Annual Report on Form 10-K for a detailed description of our Series A Convertible Preferred Stock.
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.
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. Despite these adverse impacts, the COVID-19 pandemic has fundamentally changed how organizations get work done, with many businesses shifting to remote and hybrid work environments.
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.
Overview Box is the Content Cloud: a single secure, cloud-native platform for managing the entire content journey. Content – from blueprints to wireframes, videos to documents, proprietary formats to PDFs – is the source of an organization’s unique value.
This data is content – from blueprints to wireframes, videos to documents, proprietary formats to PDFs – and it is the source of an organization’s unique value.
External professional services fees are primarily comprised of outside legal, accounting, audit and outsourcing services. 54 Interest and Other Expense, Net Interest and other expense, net consists of interest expense, interest income, gains and losses from foreign currency transactions, and other income and expense.
Interest and Other Income (Expense), Net Interest and other income (expense), net consists of interest expense, interest income, gains and losses from foreign currency transactions, and other income and expense.
This was partially offset by a decrease of $11.2 million in depreciation expense, a decrease of $4.9 million in bandwidth and data center rent expense, a decrease of $2.7 million in contractor related costs, and a decrease of $2.3 million in stock-based compensation expense. Cost of revenue as a percentage of revenue decreased 400 basis points year-over-year.
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.
The decrease in general and administrative expense was partially offset by an increase of $7.1 million in employee-related costs and an increase of $2.1 million in stock-based compensation expense. General and administrative expense as a percentage of revenue decreased 200 basis points year-over-year.
This was partially offset by decreases of $1.3 million in outside agency and consulting services, $0.8 million in legal services, and an increase of $0.4 million in capitalized software costs. General and administrative expense as a percentage of revenue decreased 40 basis points year-over-year.
We expect our research and development expenses to increase in absolute dollars but decrease as a percentage of revenue over time as we continue to make significant improvements to our content cloud product offerings and services and migrate a larger portion of our development to lower cost region. 56 Sales and Marketing Year Ended January 31, 2023 2022 $ Change % Change (dollars in thousands) Sales and marketing $ 331,400 $ 298,635 $ 32,765 11 % Percentage of revenue 33 % 34 % The $32.8 million increase during the fiscal year was primarily due to increases of $17.1 million and $5.1 million in employee-related costs and allocated overhead costs, respectively, driven by an 11% increase in headcount, an increase of $7.9 million in commission expense, and an increase of $5.9 million in stock-based compensation expense.
Sales and Marketing Year Ended January 31, 2024 2023 $ Change % Change (dollars in thousands) Sales and marketing $ 348,638 $ 331,400 $ 17,238 5 % Percentage of revenue 33.6 % 33.4 % The $17.2 million, or 5%, increase during the fiscal year was primarily due to increases of $7.4 million in stock-based compensation expense and $3.2 million and $1.6 million in allocated overhead costs and employee related costs, respectively, driven by a 1% increase in headcount.
Cost of Revenue Year Ended January 31, 2023 2022 $ Change % Change (dollars in thousands) Cost of revenue $ 252,556 $ 249,484 $ 3,072 1 % Percentage of revenue 25 % 29 % Gross margin 74.5 % 71.5 % The $3.1 million increase during the fiscal year was primarily due to an increase of $15.2 million in public cloud infrastructure costs, an increase of $8.2 million in subscription software contract expenses, and an increase of $0.7 million in acquired intangible assets amortization.
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.
The majority of our customers subscribe to our service through one-year contracts, although we also offer our services for terms ranging from one month to three years or more. We typically invoice our customers at the beginning of the term, in multi-year, annual, quarterly or monthly installments. We recognize revenue as we satisfy our performance obligations.
We offer our solution to our customers as a subscription-based service, with subscription fees based on the requirements of our customers, including the number of users and functionality deployed. The majority of our customers subscribe to our service through one-year contracts, although we also offer our services for terms ranging from one month to three years or more.
Net cash provided by operating activities for the year ended January 31, 2023 was $298.0 million compared to net cash provided by operating activities of $234.8 million for the year ended January 31, 2022.
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.
Furthermore, Box excludes the following expenses as they are considered by management to be special items outside of Box’s core operating results: (1) fees related to shareholder activism, which include directly applicable third-party advisory and professional service fees, (2) expenses related to certain litigation, (3) expenses associated with restructuring activities, consisting primarily of severance and other personnel-related costs, and (4) expenses related to announced acquisitions, including transaction and discrete tax costs.
Furthermore, Box excludes the following expenses as they are considered by management to be special items outside of Box’s core operating results: (1) fees related to shareholder activism, (2) expenses related to certain litigation, (3) expenses associated with a non-recurring workforce reorganization, consisting primarily of severance and other personnel-related costs, and (4) expenses related to acquisitions. 64 Non-GAAP net income (loss) attributable to common stockholders and non-GAAP net income (loss) per share attributable to common stockholders We define non-GAAP net income (loss) attributable to common stockholders as net income (loss) attributable to common stockholders excluding expenses related to stock-based compensation, acquired intangible assets amortization, amortization of debt issuance costs, the income tax benefit from the release of a valuation allowance on deferred tax assets, undistributed earnings attributable to preferred stockholders and as applicable, other special items.
Interest and Other Expense, Net Year Ended January 31, 2023 2022 $ Change % Change (dollars in thousands) Interest and other expense, net $ 2,433 $ 9,838 $ (7,405 ) -75 % The $7.4 million decrease during the fiscal year was primarily due to an increase of $5.3 million in interest income from our certificates of deposit, money market funds, and marketable securities, a decrease of $1.8 million in interest expense primarily related to our finance leases, and a decrease of $0.3 million in foreign currency losses. 57 Provision for Income Taxes Year Ended January 31, 2023 2022 $ Change % Change (dollars in thousands) Provision for income taxes $ 7,624 $ 3,995 $ 3,629 91 % The $3.6 million increase during the fiscal year was primarily due to $2.4 million in higher foreign tax expense as a result of increased profitability, and $1.2 million increased state tax expense due to higher US taxable income as a result of the new requirement to capitalize research and development expenses.
Interest and Other Income (Expense), Net Year Ended January 31, 2024 2023 $ Change % Change (dollars in thousands) Interest and other income (expense), net $ 11,833 $ (2,433 ) $ 14,266 * * Percentage change not meaningful. 60 The $14.3 million increase during the fiscal year was primarily due to an increase of $12.8 million in interest income from our certificates of deposit, money market funds, and short-term investments due to a higher interest rate environment and a decrease of $1.3 million in interest expense related to our finance leases.
Box Shuttle allows for easy, affordable, self-service content migration of any file type, on any source system, into Box. In addition, with Box Consulting, organizations can access professional services on critical topics like implementation, technology and app development, and change management and user training.
In addition, with Box Consulting, organizations can access 51 professional services for critical topics like implementation, technology and application development, and change management and user training. The increasing traction of these product innovations allows our customers to realize the full set of capabilities of our Content Cloud.
General and Administrative Year Ended January 31, 2023 2022 $ Change % Change (dollars in thousands) General and administrative $ 126,549 $ 135,316 $ (8,767 ) -6 % Percentage of revenue 13 % 15 % The $8.8 million decrease during the fiscal year was primarily due to a decrease of $16.4 million in shareholder activism and acquisition-related fees and a decrease of $1.5 million in depreciation expense.
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.
Refer to Note 12 in Part II, Item 8 of this Annual Report on Form 10-K for a summary of the assumptions used to estimate the fair value of stock option and ESPP purchase rights.
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.
Current Period Highlights For the years ended January 31, 2023 and 2022, our revenue was $990.9 million and $874.3 million, respectively, representing year-over-year growth of 13%. As of January 31, 2023, our remaining performance obligations were $1.245 billion, representing a 16% increase from our remaining performance obligations of $1.071 billion as of January 31, 2022.
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.
The increase in sales and marketing expenses was partially offset by a decrease of $2.0 million in data center and customer support costs to support our free users and a decrease of $1.9 million in marketing expenses. Sales and marketing expenses as a percentage of revenue decreased 100 basis points year-over-year.
Additionally, there were increases of $2.9 million in marketing expenses, driven by increased costs related to marketing events, and $0.6 million in commission expenses. Sales and marketing expenses as a percentage of revenue increased 20 basis points year-over-year.
For the year ended January 31, 2023, our non-GAAP free cash flow was $238.4 million, an increase of 40% from non-GAAP free cash flow of $170.2 million for the year ended January 31, 2022. 49 Continuous Innovation During the fiscal year ended January 31, 2023, we launched several new products and product enhancements including: • Box Canvas (Public beta) – a Box-native visual collaboration and whiteboarding tool.
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.
Removed
With our Software-as-a-Service (SaaS) platform, users can collaborate on content both internally and with external parties, automate content-driven business processes, develop custom applications, and implement data protection, security and compliance features to comply with legal and regulatory requirements, internal policies and industry standards and regulations.

… 94 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+1 added−0 removed1 unchanged
Biggest changeFor the years ended January 31, 2023 and 2022, we incurred $3.4 million and $3.7 million, respectively, in foreign currency exchange losses. For the year ended January 31, 2021, we incurred foreign currency exchange gains of $2.5 million.
Biggest changeFor 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.
A hypothetical change in interest rates of 100 basis points after January 31, 2023 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.
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.
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 expense, net on our condensed 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 interest and other income (expense), net on our consolidated statements of operations.
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, 2023, our interest rate swap had a notional value of $30.0 million.
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.
We 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 November 2017 Facility.
We 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.
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 LIBOR.
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).
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 may do so in the future. 66
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
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 $461.8 million as of January 31, 2023. Our cash and cash equivalents and short-term investments primarily consist of overnight cash deposits, money market funds, and U.S. treasury 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 $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.
As of January 31, 2023, we had total debt outstanding with a carrying amount of $30.0 million which approximates fair value. The revolving loans accrue interest at the London Interbank Offered Rate ("LIBOR") (based on one, three, or six-month interest periods) plus a margin ranging from 1.15% to 1.65%.
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%.
For the year ended January 31, 2023, total revenue was negatively impacted by approximately 390 basis points, compared to the corresponding prior period. For the year ended January 31, 2023, total cost of revenue and operating expenses were favorably impacted by approximately 130 basis points, compared to the corresponding prior period.
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.
Added
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.

Other BOX 10-K year-over-year comparisons