John

John asked about the performance of Box's federal vertical following its FedRAMP High authorization, including pipeline strength and any impact from the recent government shutdown on late-stage deals. He also questioned whether the return to seat growth is primarily driven by macroeconomic recovery or AI-enabled workflows, and how seat dynamics are expected to evolve into the next fiscal year.

Answer

CFO Dylan Smith explained that FedRAMP High is crucial for complex government deals, enhancing Box's ability to serve DoD customers, and noted good sales momentum and pipeline build, with the federal business currently healthy despite minor deal timing shifts from the shutdown. CEO Aaron Levie attributed seat growth primarily to new use cases and expansions enabled by Enterprise Advanced and AI capabilities, rather than macro recovery, and expressed expectations for continued improvement in net retention rates and seat trends over time.