John

John, on behalf of Brent Thill, asked CEO Tom Conrad to review the biggest changes implemented during his first year as CEO and outline key initiatives for the upcoming year. He also requested additional geographic color from CFO Saori Casey regarding the performance disparity between the Americas and international markets.

Answer

CEO Tom Conrad reflected on a year focused on improving core experiences like performance, reliability, and customer service, aiming to win back customer advocacy. He outlined future initiatives centered on returning to durable growth and structural profitability through five compounding dimensions: product innovation, customer advocacy, marketing excellence, geographic expansion, and tapping into emerging external trends, with new product introductions planned for the second half of the year. CFO Saori Casey added that Americas showed slight growth as the largest market, while growth markets continued to outpace others. She noted strong plug-ins revenue, led by Era 100, across all geographies and share gains in home theater in Americas and EMEA, despite difficult comps from prior year channel fills.

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.