M+E Daily

New products, including the Box Shield security offering that Box announced at its recent BoxWorks conference, stand to be among the “key growth drivers” for the company, according to CFO Dylan Smith.

The company is seeing about a 30-40% uplift in revenue from add-on products that customers are increasingly opting to pay for in addition to its core cloud content management service, he said Aug. 30 at the Box Financial Analyst Day event in San Francisco.

Box Shield, which the company says will provide “intelligent security for the digital age,” offers features including anomaly detection and a content firewall and will be made available to customers in beta later this year, Box said.

So far, Box Governance – which provides users with enhanced protection for sensitive content, among other features — “has really been leading the charge” among the company’s existing add-on products, Smith told attendees.

The higher new product attach rates are driving higher annual contract values (ACVs), he noted, adding the company plans to continue introducing new add-on products.

“Every dollar of new annual recurring revenue that we bring in will ultimately generate more than $9 of value over a 10-year period with today’s customer economics,” he projected.

Additional Box growth drivers he cited were deeper customer engagements that will come via solutions including artificial intelligence (AI), expanded strategic partnerships and international expansion.

The growth drivers are helping Box make “strong progress” on its path to deliver more than $1 billion in revenue by its fiscal year 2022, he said.

“We expect international growth to outpace growth in North America at least for the next several years to come,” he told attendees.

Noting Box was poised for more international growth, COO Stephanie Carullo said Japan was faring especially well for Box. “Japan continues to go from strength to strength,” she said.

Box is also “seeing some pretty solid adoption” in the Europe, Middle East and Africa (EMEA) region but, “in some regions, we still have some work to do” there, according to the company. Non-U.S. markets now account for 24% of total Box revenue, the company said.

Meanwhile, the company’s $100,000-plus deals grew 29% in the first half of its current (2019) fiscal year, Carullo said.

Pointing to Box’s ‘evolution to solution selling,” she said the “four key pillars to reaccelerating growth” are ACV, retention, reach and efficiency.

Kicking off the Analyst Day, Alice Kousoum Lopatto, head of investor relations, pointed out that when she joined Box in late 2014, the company had only one main product. But Box had an “ambitious vision” that included enabling enterprises to “work more productively and securely in the cloud on any device,” she said. It’s nearly doubled its customers to about 87,000 since then, is now offering seven products, and has entered into several major strategic partnerships, she said. Those partnerships include pacts with IBM and Microsoft.

Pointing out once again that digital transformation is impacting every business today, CEO Aaron Levie told attendees: “We’re seeing a fundamental transformation in the digital employee experience,” a space it’s been in since it started about 13 years ago. Box is increasingly “being embedded into more of the modern business processes” of customers, he said.

Later this year, Box will start enabling customers to “pull in AI services and really extract insights and data from the information that they’re working with,” he said.