M+E Connections

Continued strong customer adoption of Box Relay, Box Shield and the bundled Suite offering helped Box top estimates for its fourth quarter (ended Jan. 31).

“Strong demand” for Box’s “more advanced capabilities such as Box Shield and Box Relay drove further Suite adoption, including a record 45 percent attach rate for Suite, as well as a 60 percent attach rate for Box Shield in our six-figure deals,” Aaron Levie, the company’s CEO, told analysts in an earnings call March 2.

“Over 100,000 customers now rely on Box to power secure content management in collaboration in the cloud,” he said.

During Q4, Box “closed wins and expansions with leading organizations” including Pan-American Life Insurance Group, Twilio, UPS and a Japanese manufacturing company he didn’t identify by name that “moved to Box to address their need for [a] content platform to facilitate remote work as well as integrate with applications such as SAP, Salesforce and Google Workspace,” he noted.

After dramatically improving the company’s overall balance between growth and profitability in fiscal year 2021, the “next chapter for Box” is to “continue building on our leadership position and transform how enterprises work in a digital age,” according to Levie.

“To accelerate this strategy, just last month, we acquired SignRequest, a leading cloud-based electronic signature company, to develop Box Sign, our new e-signature capability that will be natively embedded” in the Box platform, he said.

“Every day, more and more transactions are moving from paper-based manual workflows to the cloud,” he explained, adding: “E-signature is already a multi-billion dollar market and it’s still in the earliest days with digital transaction just beginning to become critical in every industry. When we surveyed hundreds of our customers in 2020, e-signature was the most-requested new Box capability.”

There are a huge number of use cases that he said Box Sign will address for the company’s customers. “For example, legal teams will be able to create and finalize contracts within Box, from drafting and co-editing to signing and retaining the agreement with Box Governance,” he said, adding: “HR teams will be able to initiate and complete offer letters using Box Relay together with Box Sign. Sales teams can initiate digital customer contracts for signature right from Salesforce and compliance teams will be able to retain and protect executed agreements while securing sensitive content with Box Shield.”

Box Sign is expected to be generally available this summer, he said, noting it will be integrated in Box’s existing subscription plans, with “additional levels of functionality being available in our enterprise plans and Suite offerings,” he said.

“We want to ensure all of our customers have access to the value of Box Sign, while also enabling us to monetize the higher-end signature use cases that leverage advanced functionality” and application programming interfaces (APIs), he explained. Adding e-signature is a “significant step in building up the complete Content Cloud,” he added.

Box Q4 revenue grew 8% from a year earlier to $198.9 million. Revenue for fiscal 2021 increased 11% to $770.8 million.

The company closed 121 deals worth more than $100,000 in Q4, up from 112 a year earlier, closed 21 deals over $500,000 vs. 14 a year ago and four $1 million deals, in line with a year ago, according to Dylan Smith, Box CFO.

“Our success in cross-selling our product portfolio is driving higher value use cases across our largest customers, improving the average contract value of our six-figure deals in both Q4 and the full year,” Smith told analysts.

The company’s “land and expand strategy is generating momentum in large customer growth,” he went on to say. “We now have 1,216 customers paying more than $100,000 annually, up 10 percent year-over-year, and 99 $1 million customers, up 24 percent year-over-year.”