Box (BOX) CEO Aaron Levie

Box (BOX) CEO Aaron Levie on why Fortune 500 companies are slow to innovate and adapt

“There’s a lot of things in a Fortune 500 company’s value network or partnership relationships that prevent them from being innovative.  For example, if your suppliers are also behind technologically than fundamentally, you have to go work with a whole new set of suppliers which would disrupt long standing relationships that you’ve had for a very long time.  In the case of Ford or GM, if what you normally do is sell through a dealership network and the future of on-demand transportation or autonomous cars has nothing to do with dealership networks, than fundamentally you’re going to have disrupt your own distribution channels.  And because of the way incentives are designed, you have a lot of organizations that don’t want to disrupt any of their channels.”

 

 

Source: Fortune Interview July 12, 2016 https://www.youtube.com/watch?v=_TQ2-TbEKmg

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.”

 

 

 

Box (BOX) Earnings Call Transcript 4Q 2015

Box (BOX) CEO Aaron Levie said company’s continue to shift to the cloud to enhance productivity

“Enterprise IT is experiencing an once-in-a-lifetime shift to the cloud. And as businesses everywhere make this transition, they are increasingly recognizing the value of Box’s enterprise content management platform and our ability to make their organizations more collaborative, productive and secure.”

Continuing to gain momentum of their cloud products amongst the Fortune 500

“More than 3,000 new customers chose Box in Q4. We now have over 57,000 total paying customers.  We had major wins and expansions with leading companies like AIG, Bain Capital, Campbell Soup Company, The GAP, Genentech, The Home Depot, Intuit, Unilever and USAA.  Our growing list of new Fortune 500 customers is proof that we are broadening our reach as more and more organizations recognize the need for digitization, security and collaboration for their business processes.”

Company is benefitting from companies rationalizing and streamlining their corporate IT environment

“Our opportunity at Box is massive. Companies in every industry are going digital, adopting new mobile work styles and reimagining their business processes. To be successful in this transition, enterprises need new platforms and a new approach to IT. We believe that in this future, content need to be centralized and secured in a platform that underlies all the applications that a company’s employees, partners and customers use on a daily basis.”

Increased partnership efforts with IBM

“With IBM, we continue to enhance our go-to-market efforts with a couple of our largest customer wins in the quarter, driven by this partnership. Based on overwhelmingly positive interest from customers and prospects for the joint solutions we brought to market to-date and the many to come in the future, we extended the duration of our partnership agreement and gained additional sales commitments from IBM.”

Seeing good growth amongst a variety of sectors

So we are seeing the traction across multiple industries. So I don’t think we’re at a stage where we have the heavy concentration emerging in any particular industry. One of our bigger deals in the quarter was with a major real estate commercial and residential real estate organization. Another deal was with a legal technology company, the quarter prior our biggest deal was with a large financial services firm, so essentially any business that is trying to digitize its collaboration and sharing of content to its customers or to its partners is a very relevant potential customer of our Platform.

Box 2Q15 Earnings Call Notes

First, let’s start with customer momentum. This quarter, we’re excited to announce that we now have more than 50,000 paying customers, including more than 52% of the Fortune 500 and 28% of the Global 2000. We closed 33 deals over $100,000 compared to 21 a year ago and we closed 4 deals over $500,000 compared to 3 a year ago.

I’m also thrilled to announce that IBM is now a Box customer. IBM’s IT leadership is world class and we’re excited to be working with them. When fully rolled out, this will be one of our largest deployments to date.

In fact, this summer Box was named not only as the leader in Gartner’s Magic Quadrant for Enterprise File Sync and Share, but also, and perhaps more importantly, we received the highest score for strategy and vision in Forrester’s ECM Business Content Services Wave.

Now let’s take a look at gross margin. As you’ll remember from our last earnings call, we noted that we expected gross margin to decrease slightly over the course of this year. Non-GAAP gross margin came in at 75.3%, compared to 76.8% in the prior quarter.

IBM’s obviously the leader in a lot of the systems that power enterprises, including enterprise content management and a lot of the technology that goes into that like workflow, eDiscovery, case management, more than just the sort of basic management of files and sharing files. So what we found with IBM was that our strengths were actually incredibly complementary. At Box, we’re 100% focused on building incredibly great end user experience to be able to share and collaborate around content in the cloud. IBM being incredibly great at the sort of depth of capabilities around working with content at scale and in enterprise and how you secure and manage it.