Box ends fiscal 2022 with narrowed losses and revenue growth as multi-product deals ramp up

While 2021 was a year that saw Box distracted by activist shareholder battles, the firm has continued to make progress in terms of powering revenue growth and narrowing losses.

The collaboration vendor yesterday reported a Q4 net loss of $4.3 million on revenue of $233.4 million. For the full year fiscal 2022, losses narrowed to $41.5 million on revenue of $874.3 million.  Other stats of note:

• Net retention rate in Q4 was 111%, up from 102% year-on-year and up from 109% in Q3.
• There were 128 deals over $100,000 and nine deals over $1 million, up from 121 and four respectively.
• For the full fiscal year, $100,000-plus deals grew 25% year-on-year.
• There are now 1,420 customers paying more than $100,000 annually,, up 17% year-on-year.
• There are 119 customers paying more than $1 million annually, up 20% year-on-year.
• There were 83 multi-product suite deals in Q4 over $100,000, up 51% year-on-year.
• For the full fiscal year, Suite deals over $100,000 were up 110% year-on-year.

Those multi-product deals are of particular note, as Phil Wainewright previously observed. Box CEO Aaron Levie cited a couple of examples of customers which have added to their original investments to tap into the expanded product offering:

A US-based financial services company expanded their use of Box with a new three-year enterprise license agreement and moved to Enterprise Plus, enabling Box Sign access company-wide and they will be standardizing on Box Sign as their e-signature solution, which will help cut costs. And since they're already using Box, it will allow for easier change management…In global marketing, an agency, who has been a Box customer since 2013, moved to Enterprise Plus in Q4 with plans to use Box Sign in their HR department for employee onboarding, contract renewals and to manage employee policies and contracts in a hybrid work environment.

As suggested by those examples, much of this adoption is being driven by the introduction of the Enterprise Plus pricing and packing option. Levie said:

A major bio-tech company that has been a Box customer since 2015 expanded its use of Box with a six-figure Enterprise Plus upgrade. This deal represents a shift at the customer to use Box for regulated content and higher-value use cases as we become a more strategic partner for them.  The increased value and simplicity of Enterprise Plus was critical to Box being prioritized with the decision-makers and various teams of the company.

The Department of the US Federal government expanded its use of Box with a seven-figure Enterprise Plus deal, enabling them to provision Box to all service members, requiring up-to-date training and the ability to manage mission-critical content from anywhere.

And a global financial services group moved to Enterprise Plus and a six-figure expansion. Box will be central to their banking ecosystem and will be used alongside Salesforce as the primary content management platform. They also plan to use Box for merger and acquisitions, external collaboration and client onboarding.

The future of work

Wider changed workplace dynamics also come into play and it all comes back to the business centricity of content, argued Levie:

The dynamics around COVID forced a broad digital shift overnight and accelerated the necessity for the cloud to become the foundation of all work. In this new digital-first era, employees need to be able to work from anywhere, every business process that interacts with a customer or partner is going fully digital and companies need to ensure their most important information is kept safe and secure. At the center of all of this work is our most important content.

Content is how a movie studio creates and distributes blockbuster hit to consumers, to life sciences companies discover and produce new vaccines, help consumer product companies design and invent their next breakthrough product and how banks securely onboard and collaborate with clients.

In short, content is our customers' business. Yet most enterprises are dealing with fragmented, unsecured, complex and overly costly systems to manage this content. And these systems are only growing over time as new use cases emerge around e-signature, workflow automation, collaboration, content publishing, business insights and more.

My take

As Phil noted back in December, this is a long game that’s being played out. Box has fleshed out its product offerings well and there’s clearly momentum behind them. For fiscal 2023, expect much focus on expanding out its Content Cloud as well as a core focus on getting Box Sign into the hands of all the existing Box customers, the latter being something that Levie says his team is spending “the majority of our energy on” right now.

Onwards!