Box (BOX) Q1 2017 Earnings Call

Box (BOX) CEO Aaron Levie said they’re continuing to add customers at a terrific pace but they’re also choosing to stay 

“We had strong customer momentum adding more than 5000 new customers in Q1, our largest number of new customers in a quarter. We also had wins and expansions with leading companies like Airbnb, GEICO, Whirlpool and Wyndham Hotels and Resorts. We now have more than 62,000 total paying customers.  In addition, we continue to improve our already best-in-class customer retention with our customer churn rate improving to just below 3%. These metrics showcase how valuable and essential Box is to our growing global customer base.”

They’re often storing users data on IBM and Amazon Web Services servers 

“In April, we launched Box Zones which for the first time will enable our customers to store their Box data in regions outside of the US beginning with Europe and Asia. We’ve been working on the architecture for Box Zones for over two years which allows us to leverage public cloud providers like IBM Cloud and Amazon Web Services to meet our international customers’ data residency requirements while minimizing CapEx investments.  Storing data in-region addresses many data residency and compliance concerns for global companies, enabling Box to serve previously unreachable enterprises for the very first time.”

Box (BOX) CEO Aaron Levie said they’re often selling some of their services through partners such as Cognizant & IBM

“To further drive growth and utilization of Box platform in Q1 we announced the partnership with Cognizant naming them as a preferred systems integrator. Cognizant’s expertise in key verticals will provide an opportunity to develop and deliver more industry solutions for healthcare, life sciences, financial services and retail. We also work with IBM as they launch their IBM MobileFirst for iOS Expert Seller app built on the Box platform. IBM Expert Seller is both used and sold by the IBM Global sales force offering seamless management of sales and marketing collateral to help sales team securely access their content and make the most of every interaction they have with clients and prospects. Given our partnerships with both IBM and Apple we expect their joint MobileFirst program to be a strong user of Box platform moving forward with several other apps in the pipeline.”

Box (BOX) CEO Aaron Levie highlighted security as a competitive advantage

“Finally, we’re the uncontested leader in security. We provide robust administrative controls, watermarking, data loss prevention, customer managed encryption keys, document retention and compliance. Because of these unmatched capabilities we’re uniquely positioned to work with the world’s leading financial institutions, engineering companies, life sciences firms, healthcare providers and governments.”

Box (BOX) CFO Dylan Smith said he’s hoping to be cash flow positive by January 2017

“We’re committed to becoming free cash flow positive in our fourth quarter ending January 2017 and to remain free cash flow positive on an annual basis thereafter.”

Large user base but less than one fifth are paying for the service

“So we have 46 million users and about 13% of those users are now paying.”