Hello, thank you for standing by, and welcome to the Box, Inc. First Quarter Fiscal 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star one on your telephone keypad. I would now like to turn the conference over to Cynthia Hiponia, Vice President, Investor Relations. You may begin. Good afternoon, and welcome to Box's First Quarter Fiscal 2025 Earnings Conference Call. I'm Cynthia Hiponia, Vice President, Investor Relations. On the call today, we have Aaron Levie, Box Co-founder and CEO, and Dylan Smith, Box Co-founder and CFO. Following our prepared remarks, we will take your questions. Today's call is being webcast and will also be available for replay on our investor relations website. Our webcast will be audio only. However, supplemental slides are now available for download from our website. We'll also post a highlight of today's call on the X platform at the handle, @BoxIncIR. On this call, we'll be making forward-looking statements, including our second quarter and full-year 2025 financial guidance, and our expectations regarding our financial performance for fiscal 2025 in future periods, including our free cash flow, gross margins, operating margins, operating leverage, future profitability, net retention rates, remaining performance obligations, revenue and billings, and the impact of foreign currency exchange rates, and our expectations regarding the size of our market opportunity, our planned investments, future product offerings, and growth strategies, our ability to achieve our revenue, operating margins, and other operating model targets, the timing and market adoption of and benefits from our new products, pricing models and partnerships, our ability to address enterprise challenges and deliver cost savings for our customers, the impact of the macro environment on our business and operating results, and our capital allocation strategies, including potential repurchase of our common stock. These statements reflect our best judgment based on factors currently known to us, and actual events or results may differ materially. Please refer to our earnings press release filed today and the risk factors in the documents we file with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, for information on risks and uncertainties that may cause actual results to differ materially from statements made on this earnings call. These forward-looking statements are being made as of today, May 28, 2024, and we disclaim any obligation to update or revise them should they change or cease to be up to date. In addition, during today's call, we will discuss our non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, our GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results in our earnings press release and in the related supplemental slides, which can be found on the investor relations page of our website. Unless otherwise indicated, all references to financial measures are on a non-GAAP basis. With that, let me turn the call over to Aaron. Thank you, Cynthia, and thanks everyone for joining us today. We are pleased to have delivered first quarter operating results above our guidance. This includes revenue growth of 5% year-over-year and 8% on a constant currency basis, in addition to a strong focus on profitability, which resulted in operating margins of 27%, up 400 basis points from a year ago. While we continued to experience headwinds in FX that are reflected in our updated guidance, we were overall pleased with execution in the quarter. As we shared in our last earnings call, we are in a new chapter for Box, one that is driven by AI transformation. We saw this in Q1, which was defined by continued AI momentum, with customers choosing Box as a platform to enable intelligent ways of working. Demand for Box AI and our upcoming more advanced capabilities continues to grow. Since we rolled out Box AI to Enterprise Plus customers last year, we have seen an increasing number of customers upgrade to Enterprise Plus in order to gain access to Box AI. In fact, we saw a meaningful increase in wins by revenue in Q1, where Box AI was central to the win than in Q4. Customer examples in Q1 include a commercial real estate firm that upgraded to Enterprise Plus for access to Box AI, along with additional security and eSign functionality. They will be using Box AI to identify patterns across client leases, in addition to client analysis and generating marketing content. A leading global commerce company that moved to Enterprise Plus to gain access to Box AI and Box Hubs, as they are looking to bring content together in a central location and extract the value from their unstructured content with enterprise-grade security controls that Box provides. Over the past quarter, we've hosted Box AI Connect events across major cities in the U.S. and Europe, and I've had a chance to meet with hundreds of IT leaders and business executives from some of our top prospects and existing clients. What stands out to me is how significant of an opportunity these leaders believe they have around new ways of working with their content and the power of AI. All of the insights necessary to create better business decisions and smoother business processes are living inside of an enterprise's content. It's the key data points inside of contracts that help businesses close new deals, the assets that create a major new ad campaign.... The manufacturing and R&D files that enables the next breakthrough product to ship on time, and the financial documents that help close the books smoothly. Yet, for as important as all of this unstructured data is, and it makes up 90% of our corporate information, we've never been able to fully extract all of the value from it. We can't ask questions easily and pull insights from this content. We can't synthesize, summarize, or calculate against it, and only in limited situations, and often with massive investments in labor and intensive processes, have we been able to automate workflows around it. But this is all changing. With the latest breakthroughs in AI, we can finally tap into the full value of our content by extracting insights from it and letting anyone ask questions of this data. We can structure the data within our content to automate our content-centric business processes, and we can better protect our most important information. But we can't do this with traditional fragmented approaches to managing content. Not only are legacy ECM, document management, and collaboration systems too complex and costly to maintain and often insecure, it's also nearly impossible to leverage AI against all of these silos. This will lead to a continued disruption of the traditional enterprise content management landscape. This is the opportunity that is driving our strategy and that Box is uniquely positioned to accelerate. We are leading the era of intelligent content management, and our Q1 wins and momentum highlight the sheer size and potential of this opportunity. Our Intelligent Content Cloud delivers the most secure way to power collaboration, workflow automation, and content intelligence in a single platform, and we've been building towards this vision for several years. To deliver the full value of content in the AI-enabled era of work and business processes, we are focused on four areas of innovation. Starting with workflow and collaboration, with the beta release of AI-enabled Box Hubs in mid-May, we are transforming how companies can distribute content through an organization. Box Hubs provides a new lens into all of the content that customers collaborate on in Box, with intelligent portals that simplify curation, organization, and publishing, no matter the file type or where it lives in Box. This means you can put the right content into the right teammate's hands when they need it most. With Box AI for Hubs in beta, also rolling out to Enterprise Plus customers, viewers can ask questions across multiple documents curated in the hub and tap into insights from their data with AI to get answers in seconds. Importantly, this provides enterprises an instant way to deliver retrieval-augmented generation use cases in AI around large groups of content that can be instantly enabled with no code. With Box AI, customers will soon be able to extract metadata from a large number of document and content types within their enterprise. Once you have metadata on content, you can automate almost any workflow in the enterprise, from invoice processing and contract management to digital asset management and clinical trial management. This is why we acquired Crooze back in December, and we are working aggressively to natively integrate Crooze's no-code application, building, and metadata features into Box to support powering content-centric workflows on Box. We'll share more around how these technologies are coming together throughout FY 2025. Across security and compliance, we are working to expand Box Shield features for advanced data security, introduce a new native archiving solution later this year, and accomplish critical compliance levels like FedRAMP High to expand our use cases in the federal government. We are also doubling down on our open platform to support deeper integrations with Salesforce, Slack, Microsoft Teams, Microsoft Copilot, IBM's technologies, and our customers' custom-built applications. To further highlight the power of our platform, at ServiceNow's Knowledge 2024 keynote, ServiceNow highlighted Box as a content repository to demonstrate the value of their Now Assist AI product. Going forward, Box is well-positioned to be the platform for providing unstructured data to SaaS and AI providers. Finally, we are working to deliver the most advanced AI within Box with the Box AI Platform. The Box AI Platform is a critical abstraction layer that securely connects leading AI models to content in Box. Our secret sauce is a set of AI services that we've built out for developers and our Box first-party apps, such as retrieval-augmented generation, processing documents for vector embeddings, tool use for AI agents to use within Box, model-agnostic AI management, and more. Instead of enterprises maintaining many disparate backend systems to bring AI to their content, the Box AI Platform handles all of this for them seamlessly while respecting the inherent security and content access permissions within Box. Importantly, a core part of our platform is that we can quickly bring the power of any AI model to Box content. For instance, we already have GPT-4o working within Box Hubs internally just a week after its release. In Q1, we announced a new integration with Microsoft Azure OpenAI, which brought together Box and Microsoft's enterprise-grade standards for security, privacy, and compliance to AI. Also in Q1, as part of Box's technology partnership with NVIDIA, with NVIDIA's newly launched NIM microservices, Box can more easily leverage various AI models and capabilities within Box AI to improve how our customers can unleash the value of their unstructured content. Now, switching gears to go-to-market. As we outlined in our March Financial Analyst Day, we are focused on leveraging our go-to-market engine to bring the full value of Box to all of our customers. We continued to see the successful adoption of Enterprise Plus, our multi-product offering that brings the full value of the Box Intelligent Content Cloud to our customers. In Q1, Enterprise Plus continued to be well over 90% of our suite sales in large deals, with suites now comprising 85% of our deals over $100,000 in Q1. We saw solid suites attach rates in large deals across all geographies. Our Q1 customer expansions and new wins with Enterprise Plus include a global pharmaceutical and medical device company, who purchased Box with a six-figure Enterprise Plus deal for their core ECM platform. They will leverage Box for records management, moving off legacy technology to modernize their content strategy. This will allow them to centralize important records, HR, and customer service data in Box, while also meeting GxP compliance for auditable records. A leading broadcast company in Japan that signed an Enterprise Plus upsell to build a secure content platform to prevent unexpected information leaks and to prevent ransomware attacks with Shield. To bring the full value of our platform to our customers, this year, we have expanded our demand gen efforts. We are continuing our global AI Connect events and other CIO events. We are introducing all new offerings throughout this year to help our customers modernize their ECM environment within Box, and we are driving larger deals with customers and powering more workflows in partnership with key system integrators. For instance, in Q1, we saw a number of key wins with large customers across critical focus industries with the help and support of key partners. We are at a major moment as an industry. With AI, the role of unstructured data in enterprises has exploded, and Box is at the center of this movement within the most important businesses and organizations in the world. Of course, what drives our success is not only our strategy and our platform, but the work our Boxers do globally. I'm proud that Box was recently recognized by Fortune Magazine as the number 18 in the 100 Best Companies to Work For in 2024, up from number 27 a year ago. Our mission at Box is to power how the world works together, and as a company, we will look back on this as a defining period for how work was shaped for decades to come. With that, let me hand it off to Dylan. Thanks, Aaron. Good afternoon, everyone, and thank you for joining us today. Q1 was a strong quarter for Box as we once again delivered on our key financial priorities to drive long-term profitable growth, accelerating revenue growth in constant currency, expanding operating margins, and executing a disciplined capital allocation strategy to optimize shareholder returns. In Q1, we delivered revenue of $265 million, up 5% year-over-year, and 8% in constant currency. This was above the high end of our guidance, driven by strong bookings linearity. We now have approximately 1,800 total customers paying us more than $100,000 annually. Our Q1 Suites attach rate in large deals was 85%, a new high watermark, and up significantly from 69% a year ago. Suites customers now account for 56% of our revenue, a strong improvement from 47% in Q1 of last year. As Aaron mentioned, we're seeing strong demand for Box AI and our more advanced capabilities, which has been a key catalyst for this accelerating Suites adoption. We ended Q1 with remaining performance obligations, or RPO, of $1.2 billion, a 3% year-over-year increase, or 8% in constant currency. We expect to recognize roughly 60% of our RPO over the next twelve months. Q1 billings of $190 million were down 1% year-over-year and up 5% year-over-year in constant currency. Q1 billings were in line with our expectations when adjusting for an FX headwind that was 250 basis points higher than we had anticipated in our guidance. Our net retention rate for Q1 was 101%, consistent with last quarter's results. Our annualized full churn rate remains strong and stable at 3%, demonstrating continued product stickiness with our customers. We continue to anticipate exiting FY 2025 with a net retention rate at or slightly above this level.... Q1 gross margin came in at 80.2%, up 230 basis points year-over-year, and above our guidance of roughly 79%, and represents the first time we've reported 80% gross margins. As we continue to realize the efficiencies of running our infrastructure fully in the public cloud, we expect to deliver additional gross margin expansion over time. Q1 gross profit of $212 million was up 8% year-over-year, exceeding our revenue growth rate by 300 basis points. In Q1, we delivered operating income of $70 million, up 23% year-over-year, once again demonstrating our commitment to generating leverage across the business. Q1 operating margin of 26.6% was up 380 basis points year-over-year, despite absorbing an FX headwind of roughly 150 basis points. Our disciplined approach to expense management is continuing to generate additional leverage in our operating model. As a result, we delivered EPS of $0.39 in Q1, up $0.07 year-over-year, and well above the high end of our guidance of $0.36. This result includes a negative impact from FX of approximately $0.04. I'll now turn to our cash flow and balance sheet. In Q1, we had exceptionally strong free cash flow generation of $123 million, up 14% year-over-year. We generated cash flow from operations of $131 million, a 5% increase from Q1 of last year. Let's now turn to our capital allocation strategy. We ended the quarter with $567 million in cash, cash equivalents, restricted cash, and short-term investments. In Q1, we repurchased approximately 1.4 million shares for approximately $37 million. As of April 30, 2024, we had approximately $126 million of remaining buyback capacity under our current share repurchase plan. We remain committed to opportunistically returning capital to our shareholders through our ongoing stock repurchase program. With that, let me now turn to our Q2 and full-year guidance. As a reminder, approximately one-third of our revenue is generated outside of the US, with roughly 60% of our international revenue coming from Japan. Since we last provided guidance, the US dollar has strengthened versus the yen, and the following guidance includes the expected impact of FX headwinds, assuming current exchange rates. Additionally, we expect the non-cash deferred tax expenses that we discussed last quarter to represent an impact of roughly $0.01 to GAAP and non-GAAP EPS in Q2, and $0.05 for the full-year. For the second quarter of fiscal 2025, we expect Q2 revenue to be in the range of $268 million-$270 million, representing 3% year-over-year growth or 6% growth on a constant currency basis. We anticipate our Q2 billings growth rate to be in the low to mid-single digit range. This includes an expected headwind from FX of approximately 50 basis points. We expect our Q2 gross margin to be roughly flat sequentially, representing a year-over-year improvement of more than 300 basis points. We expect our Q2 non-GAAP operating margin to be approximately 27%, which includes an expected negative impact of approximately 200 basis points due to FX. This represents a 220 basis point improvement year-over-year, and a 420 basis point improvement in constant currency. We expect our Q2 non-GAAP EPS to be in the range of $0.40-$0.41, a 12% year-over-year increase at the high end of this range, even as we absorb the non-cash deferred tax expenses I mentioned earlier. Weighted average diluted shares are expected to be approximately 148 million. For the full fiscal year, ending January 31, 2025, we anticipate revenue in the range of $1.075 billion-$1.08 billion, representing approximately 4% year-over-year growth and 7% growth in constant currency at the high end of this range. On a constant currency basis, this represents a $3 million increase versus our prior guidance. This includes an expected headwind from FX of roughly 250 basis points, 80 basis points higher than our previous expectations, representing an incremental $8 million headwind. We expect our FY 2025 billings growth rate to be in the low single digit range as compared with our previous guidance of roughly in line with revenue growth of approximately 4% on an as-reported basis. This change is driven by an incremental FX headwind, which we now expect to have a negative impact of approximately 150 basis points to billings growth. We expect our FY 2025 gross margin to be roughly 80%, representing a year-over-year improvement of 260 basis points. We continue to expect our FY 2025 non-GAAP operating margin to be approximately 27%, representing a 230 basis point improvement year-over-year. We expect FX to have a negative impact on operating margin of roughly 160 basis points. This guidance is in line with our previous guidance, despite an expected incremental headwind from FX of approximately 50 basis points. We are raising our EPS expectations for the full-year due to our ability to generate additional leverage across the business, as well as an improvement in our expected below-the-line income and expenses. We now expect FY 2025 non-GAAP EPS to be in the range of $1.54-$1.58, representing an 8% increase at the high end of this range versus $1.46 in the prior-year. This includes the $0.05 impact from deferred tax expenses that I noted previously, as well as an expected FX headwind of $0.15, which is $0.05 higher than our previous expectations. Weighted average diluted shares are expected to be approximately 150 million. We are embarking on an exciting new chapter as a company, driven by years of investment and innovation in building out our Intelligent Content Cloud. Our differentiated product capabilities will enable us to power AI-driven business processes around workflow, automation, and enterprise content. As we prepare for the upcoming launch of a new plan offering later this year, we'll be fueling our go-to-market engine through the targeted growth initiatives that Aaron outlined. With a disciplined financial strategy in place, we've built a strong foundation to deliver long-term profitable growth. With that, Aaron and I will be happy to take your questions. Operator? Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you wish to withdraw your question, simply press star one again. If you are called upon to ask your question, please ensure that your phone is not on mute. Your first question comes from the line of Brian Peterson. Your line is open. Well, hey, guys, thanks for taking the questions. And so starting off with AI, it sounds like that's really resonating. I'm curious, do you feel like there's any targeted verticals where there's more interest there? I know you mentioned real estate, but I'm curious how broad that is. Any discussion on how people are thinking about budgets for that? Would love to get the color there. Yeah. So, I would say right now we're seeing it across, you know, basically every vertical that we see. I think there's verticals where, over the medium and long term stand to gain, you know, on a relative basis, you know, maybe more than others. If you look at things like financial services, life sciences, federal government, you know, categories that typically are very document and content-centric verticals, where AI can begin to unlock, you know, way more around, being able to answer questions from data or automate workflows. So we have seen a high degree of resonance in our conversations in those verticals. But in terms of, you know, where we saw, Enterprise Plus upgrades in the quarter, it was really across the board. So I would say, you know, in every vertical that we serve, we saw, you know, strong upsells for Box AI. And then in terms of your budget question, feel free to build on it more, but I would say, you know, in. You know, for right now, because especially it's the capabilities are being unlocked within the Enterprise Plus plan, it's still largely coming out of IT budget. It's coming out of, you know, often the spend that we're helping displace from legacy systems. I think over time, if we maybe fast-forward a year or two from now, I could see that, that the budget, you know, increases when you look at line of business, that we'll be able to drive more efficiency because of AI, that we're only in the earliest days of what that looks like. But certainly, as AI really drives workflow automation and more business process transformation, I think you'll see even increased budget that opens up for AI use cases around content. That's great color, Aaron. And, you know, it's great to see you guys raise the revenue outlook in constant currency. I'm curious, anything that you'd call out in terms of the demand environment or deal cycles as the quarter progressed? Thanks, guys. Yeah. So, you know, as I think we've noted in the past couple of quarters, you know, we, we are starting to see, you know, some degree of stabilization. Again, that's different from any kind of inflection point, that, that sort of, you know, you know, looking like we're out of the, the woods on the macro front. But, but sort of the lack of increase of headwinds, I, I think has been notable in the past couple of quarters. We had strong performance, especially in our U.S. enterprise business and Federal. In addition to the U.S. enterprise business, I think we're still seeing some degree of pressure on the SMB segment, but, but when we look at the business overall, you know, on balance, we're happy with the, the performance in Q1. We certainly look forward to driving more growth throughout the year. Thanks, Aaron. Yeah, thanks. Your next question comes from the line of Pinjalim Bora. Your line is open. Oh, great. Congrats on the quarter, guys. Thanks for taking the question. Again, on AI, Aaron, what have you seen so far with respect to kind of the volume of queries made by users within the Box Hubs for AI? I know it's early, but any color would be helpful. Those volume of queries that you're seeing, are those tracking to your expectations so far? And the flip side of that is, how has that fared versus the cost side of the equation on the gross margin side? ... Yeah, so as you note, Hubs has literally been around for, I think, maybe a week and a half, in terms of it being in beta. We're just getting the early data in. We're reviewing kinda initial customer use cases and scenarios right now. Hubs already is driving about a quarter or so of our total AI queries. So kind of right out of the gate, it's been, you know, strong in terms of it's one of the kind of immediate use cases that customers adopt, just because it's such a huge unlock to be able to ask questions of any amount of content. You know, as we've noted, both in our keynotes and a little bit on this earnings call, the use cases are quite vast because really there hasn't been another product at real commercial scale, where you can collect your sales materials and create a sales hub that anybody can ask questions within. An HR portal with all your HR documentation that anyone can ask questions in. You know, similarly in product and engineering or equity research, in financial services. I was with a CEO of an investment bank just about a month and a half ago, and, you know, this was a breakthrough product for him because instantly now he can enable any new employee in the firm to have as much knowledge access as somebody that's been at the firm for, you know, a decade or two. And that's basically what we're able to now do with our content: this content really becomes the kind of digital memory of an organization that anyone can tap into. So just this ability to instantaneously make all of your employees as knowledgeable as your most experienced employee is transformational. And so the Hubs use case is gonna really be a massive unlock for enabling that in every one of our customers, and we think will certainly contribute to more Enterprise Plus upgrades and more volume. And I think you asked something on the kind of gross margin. Did I catch that? Or the cost side, did you mention that? Yes. Yeah. So as I think we've mentioned, you know, we expect to be able to maintain our gross margin levels, even with the addition of AI, really driven by the fact that, you know, as customers are in these higher tier plans, we tend to see higher gross margin in those higher tier plans, in the first place. And then for a lot of the extremely high-volume use cases, things like metadata extraction, or being able to run a workflow that generates a lot of AI usage, that will be volume-based and not included in the Enterprise Plus plan or other plans. And so in those cases, customers will just be paying us for the volume, and we'll ensure that we're driving the appropriate kind of margin structure that delivers, you know, our margin goals on that front. Yep, understood. One quick follow-up for Dylan. Dylan, seems like the linearity in the quarter was a little bit better. What drove that? Are you, are you doing something different to drive that, and could that be sustainable? Yeah, I wouldn't say that we did anything significantly different. I think just a lot of energy and momentum, you know, heading into the first quarter with some of the product capabilities that we talked about. So really a continuation of some of the Q4 execution and demand around Enterprise Plus driven by everything Aaron's been talking about. So we did see, you know, certainly a stronger than we'd even expected to see start to the quarter, which led to that revenue upside that we mentioned. So certainly something we'd like to repeat every quarter, but wouldn't say that there is anything, you know, significantly different that we did this time around. I would just point to, you know, really compelling, you know, kinda products and demand for that, as well as sales execution. Got it. Thank you very much. Your next question comes from the line of George Kurosawa. Your line is open. Hi, thanks for taking the question. I'm on for for Steve Enders. You know, you talked about... I just wanna ask about kinda your competition with legacy ECM providers. You know, you talked about AI as kind of helping further augment your relative value proposition. Have you seen any change so far in kind of win rates there, or maybe the number of opportunities? Yeah. So, we are seeing definitely directionally an increase in ECM, both full takeouts, as well as expansion deals of customers. You know, when we look at the Crooze acquisition, that opens up a number of new ECM use cases for us. So, this is a trend that is definitely moving in a positive direction. And then throughout this year, as we have the more natively integrated Crooze offering, our metadata extraction capabilities with AI, and we roll that all together, you know, in some of our higher tier package, you know, packages that we're anticipating, I think you'll see even further momentum on taking out legacy ECM systems. But I would call out that this is becoming an increasing trend in the quarter and certainly in the past few quarters. And AI just represents, you know, I think, you know, another catalyst for customers to rethink their content management environments. And, you know, certainly there's a very good chance it'll be the defining catalyst, just because, again, if you look at having millions and millions of documents in a legacy content store, it's gonna be near impossible to really take advantage of that data in an AI-ready way, just architecturally, you know, given the complexity there. So we think this is a huge breakthrough for us to use AI to really catalyze even further movement of ECM to modern systems. Awesome, that's great to hear. And then a follow-up. You know, you called out a few of your, you know, partnerships, and you look at your partner ecosystem, that have maybe been deepened or enhanced by kind of you know, this renewed focus on AI, maybe you can just talk about how that's kind of shifted your, you know, your, your thinking on, on the, you know, the partner ecosystem and where you've seen kind of the biggest needle move. Yeah. So maybe I'll just share two categories. I actually, you know, realistically, there's probably three categories, but so the first is just the models, the AI models themselves represent, you know, fantastic partner opportunities for us. And, you know, right now there's a number of leading AI model providers that are delivering these foundation models. And we, you know, due to our open architecture and model-agnostic approach, you know, we anticipate partnering with effectively all of them and then letting our customers really kind of choose which AI model works best for them. But by extension, by working and having an open platform, it means that we have, you know, certainly more incentive for those model providers to, you know, grow with us in accounts. And so we think this represents, you know, great new opportunities to work with the Googles of the world, the Amazons of the world, the IBMs of the world, and others, as they need to get their models in front of customers for really mission-critical workloads. So that's, that's kind of one partner category. Another partner category is, if you think about all of the AI products that that you hear about in terms of of whether they are these sort of assistant use cases or copilot use cases, all of these AI assistants and SaaS applications really thrive by having access to data in a sort of AI-ready or very easily usable way. And so we have one of the leading platforms for managing a significant portion of corporate data that is incredibly mission-critical and very useful within the context of AI, and we can connect into these AI products, you know, relatively seamlessly. You know, again, certainly way, way more seamlessly than any kind of legacy architecture or infrastructure. And so that was the example of, you know, ServiceNow, where Box was highlighted, you know, in their demo as a content platform that you connect into to ask questions of within their Assist product. We similarly have expanded our partnership with Microsoft and Microsoft Copilot to be a content platform that connects to Copilot. And you can just kind of go down the list of really any kind of software product that talks to data or needs access to data. Box represents a really, you know, secure, scalable platform to connect into those AI systems. And then finally, this is also opening up really a number of use cases around system integrators or other types of partners that can plug us in as a sort of piece of the architecture for having an AI-ready document management or unstructured data platform. And, you know, this is really where we can embed our AI capabilities more deeply in a set of products. So, for instance, you know, we've had conversations with a leading vertical SaaS provider, where, you know, Box and metadata extraction, you know, using AI, becomes a very relevant and increasingly important component, for their platform capabilities. So that's sort of the B2B2C or B2B2B type environment where, you know, through another SaaS platform, our technology will be embedded because it really gives them a leg up in AI document processing. So those are a few of the categories that we're spending time on from a partnership standpoint. Each of which is, you know, almost nearly net new in terms of use cases for customers or growth opportunities for us. So we're organized against those, those opportunities right now, and I think over the next couple of, you know, quarters and then certainly years, you'll see a lot of, continued traction on that front. Awesome colour. Thanks for taking the questions. Yeah, thanks. Your next question comes from the line of Josh Baer. Your line is open. Great, thanks for the question. One for Aaron and a quick one for Dylan. Aaron, I've followed your insights around the cost of AI, the cost of units of work, and the potential for AI agents. What are we gonna see from Box in that respect? You know, how does Box fit into this AI agent future of work? Yeah. So, as you, as you-- you can probably tell, I'm unbelievably excited about, about, this, this prospect. I'll keep it at a relatively high level because there's obviously still announcements to come in this space. But when you think about, you know, when you use AI within the Box AI platform, we have created an abstraction layer that effectively talks to an AI model, connects that, in-- to content in Box, and that model, we give it a set of prompts and instructions that it follows, and then effectively tools that within our platform, that that AI model can interact with. You know, one of the tools is being able to do vector embeddings. Another tool is being able to do effectively this sort of enhanced enterprise RAG service that we've created. So if you think about the AI model has a set of tools, it has a prompt and set of instructions, and that all gets abstracted in something that the user doesn't have to, you know, worry about any of that complexity. They are just talking to effectively what is an AI agent that does a specific task like summarize a document or ask a question within a hub or extract metadata. Where this gets extremely powerful is, as AI models continue to advance, as our AI platform capabilities continue to advance, you'll be able to deploy, you know, effectively these AI agent experiences across really any use case around your content that maybe a human otherwise would go and do. So, you know, today everybody has workflows where a human reads a contract, and they pull out the metadata from that contract, and then they route the contract to, you know, someone in their organization, or a human looks at a digital asset and labels that digital asset for some kind of digital asset management process. So within the Box AI Platform, you'll effectively have AI agents go and do those things for you. And we're building out the tooling to let you organize and manage, and effectively, you know, administrate all of that AI labor, as it were, you know, within the Box environment, and then tie that to business processes and workflows within Box. So our mental model at Box is to kind of take any work today that we do with content, and basically be able to have AI go and do that work. And we are building all of this scaffolding, abstraction layer, and platform services to make that possible. And where that becomes extremely, you know, exciting for us is if you think about that 90% of corporate data that is unstructured or that is content, the vast majority of that data today is not tied to an automated business process, is not data that you can kind of look into or ask questions of, is not necessarily sort of secured in the best way possible, from, from an advanced, you know, highly contextualized, you know, standpoint. And in the future, AI is gonna let you go and do those things. And so we are going to open up, you know, a wide number of use cases that today we don't have automation in the enterprise to go and solve. You know, where the traditional kind of RPA or IDP process was just too labor-intensive, or too complex to go and deploy across every department in your organization. That's what we're, what we see as the potential for AI. So, basically, when a customer thinks content and they think AI, that is what our Intelligent Content Cloud is gonna be delivering for them, is that end-to-end platform set of capabilities to deploy AI against their content securely. So does that answer the question? Yeah, perfect. Cool. Really interesting. Thanks. And then, Dylan, just one, clarification. Really appreciate the details on the FY 2025 revenue guidance change and, like, breaking out that, on a constant currency basis, the guidance increased by $3 million, just with all the moving parts. What about for the billings guidance as far as the change in constant currency or any change for FY 2025? Yeah. So really, you know, our expectations are consistent with our initial guidance on a constant currency basis. So there, as we had kinda talked about, you know, roughly in line with what our reported revenue growth expectations were at the time of about 4%. From a constant currency standpoint, that's still what we expect, but on an as-reported basis, you know, now expecting that to land in the low single-digit range because of that kind of incremental and new 150 basis point headwind that's coming from FX. Okay, got it. Thank you. Mm-hmm. Your next question comes from the line of George Iwanyc. Your line is open. Thank you for taking my question. Aaron, I'll start with you, and maybe in the context of Box AI and Box Hubs, but, you know, you're seeing this Suites momentum. Can you give us some perspective on how that's driving other products like Box Relay and Box Sign, and the adoption, you know, really broadly across the Box platform? Yeah. So in general, you know, every time, obviously, our Enterprise Plus plan gets purchased, that opens up a number of new use cases and value propositions for customers, our advanced eSign capabilities, our most advanced version of Relay. And so we are certainly seeing that open up, you know, more value and more stickiness for customers. Q1, we had some notable wins. You know, for instance, in the sign space, major pharmaceutical company that will be adopting Box Sign for their validation processes, a major automotive company that will be using Box Sign for kinda critical customer transactions. So again, our whole vision is really when you know implement Box as an Intelligent Content Cloud, you get that entire life cycle of content from the moment you create and ingest data to that final kind of transaction, to then governing the content, all of that is in one streamlined experience. And so whether you come in because of workflow, or collaboration, or e-signature, or AI, you know, our job is to make sure that you're seeing the full value of the platform overall. And AI, again, just represents a major catalyst for customers to really think about the role of content in their organization, in their enterprise. Are they getting as much value from it as is now possible? And, Dylan, one question for you. Again, maybe expanding on your comments related to, you know, investing in demand generation. Can you give us kind of a how you're investing, where you're investing, what kind of focus you're putting on the sales organization and marketing organization? Sure. So really, you know, it kinda comes back to a lot of the programs and kind of growth initiatives that Aaron highlighted in his prepared remarks. So I would call it, you know, kind of a combination of really doubling down on and scaling some of the demand gen, both you know, kind of programs that are, you know, kind of online spend, to a lot of those CIO-focused field events that have been working really well for us over the past couple of quarters. So now and especially with, you know, all the exciting kind of newer products that we have coming out, you know, seeing really strong interest and demand from customers there. So that's one category, is kind of straight demand gen. Also, investing in building out that partner ecosystem that we talked about, so especially with SIs and just kinda strengthening our overall reach through some of those channels. And then, you know, at the same time, we will be, you know, kind of growing our sales force as well, commensurate with the demand that we're seeing, and to set us up for that, you know, kind of growth, and kind of laying the foundation so we're ready as we do have the new products to be able to take advantage of that opportunity. So that's kind of the high-level categories that we've really focused on this year. Thank you. Your next question comes from the line of Rishi Jaluria. Your line is open. Oh, wonderful. Thanks, guys, so much for taking my question. I have two specifically on the workforce. Number one, you know, I know you've talked for, for years about wanting to do more hiring outside of the US, especially in Poland. Maybe can you give us an update on that kind of global workforce strategy, and what, what percentage of your workforce is actually outside the US at this point? And then maybe alongside that, SBC is now taking near 20% of revenue. It's growing faster than revenue. I know there's puts and takes to how that is measured, but maybe walk us through why that's the case. I understand you're buying back shares and it's more than offsetting dilution, but I guess I'm not sure that issuing a lot of stock instead of cash, and then buying back stock with cash is necessarily the right strategy, instead of shifting more of the compensation away from stock into cash. Maybe just help us understand both of those as it relates to your workforce. Thanks. Sure. So on the first one, you know, been really, really pleased by the results that we've seen, in terms of our, workforce and location strategy, most notably in, in Poland, where, you know, we ended this past year, with more than 300, employees on the ground there. So a little more than 10%, of our workforce, and kind of moving quickly, into the teams. And that includes, more than 30%, of our engineering team. So that's where the primary focus has been, where we're hiring the significant majority of kind of the R&D hires that we're making in Poland, but also a lot of our G&A functions, for example, as well, and expect that to continue to increase the percentage of the overall mix over time. And then as it relates to the stock-based compensation, would note that, you know, maybe just a couple of things. First of all, we actually even with, you know, and kind of independent of the robust share repurchase program that we have in place, that's been bringing down total shares outstanding over time. At the same time, for you know, a couple of years running now, we've also reduced the overall equity burn rate. So we are actually issuing fewer net shares on a year-on-year basis. The reason that SBC has not you know, kind of yet followed that same path is kind of combination of you know, we have seen very, very strong retention, so low attrition and largely comes down to a higher share price. So it's a little bit more of a lagging indicator of the overall equity practices that we've put into place the last couple of years. But just like we've seen in our burn rate and total shares outstanding, we would expect stock-based compensation as a percentage of revenue to follow that same trend and come down over time as well. All right. Wonderful. Thank you so much. Sure. This concludes the question and answer session. I will turn the call to Cynthia for closing remarks. Great. Thank you everyone for joining us today, and we look forward to updating you again on our next earnings call. This concludes today's conference. Thank you for joining. You may now disconnect your lines.