BOX 10-K & 10-Q changes, risk factors and insider trading

If we do not compete effectively, our customers do not renew their subscriptions or expand their use of our services, or if we are unable to attract new customers or expand deployments with existing customers to our higher-tiered SuitesEnterprise Advanced plan or at rates that are consistent with our expectations, or if the market for cloud-based enterprise services declines or develops more slowly than we expect, our business could be adversely affected.

The market for cloud content management services is fragmented, rapidly evolving and highly competitive, with relatively low barriers to entry for certain applications and services. Many of our competitors and potential competitors are larger and have greater brand recognition, longer operating histories, and significantly greater resources than we do. Our primary competitors in the enterprise content management market include Microsoft (SharePoint) and OpenText (Documentum). In the enterprise file sync and share market, our primary competitors include Microsoft (OneDrive), Google (Drive) and, to a lesser extent, Dropbox. We also compete with companies in the e-signature, content collaboration, workflow automation, artificial intelligence, and security and governance markets. With the introduction of new technologies and market entrants, we expect competition to intensify in the future and our primary competitors may change. For example, disruptive technologies such as generative AI may fundamentally alter the market for our services in unpredictable ways, including reduced customer demand and increased costs of doing business. If we fail to compete effectively, our business will be harmed. Some of our competitors offer their products or services at lower prices or for free as part of a broader bundled product sale or enterprise license arrangement, which has placed pricing pressure on our business. If we are unable to achieve our target pricing levels, our operating results will be negatively impacted. For us to compete effectively, we need to introduce new products and services in a timely and cost-effective manner, meet customer expectations and needs at prices that customers are willing to pay, and continue to enhance the features and functionalities of our intelligent content management platform. In addition, pricing pressures and increased competition could result in reduced sales, lower margins, losses or the failure of our services to achieve or maintain widespread market acceptance, any of which could harm our business.

Many of our competitors are able to devote greater resources to the development, promotion and sale of their products or services.services, Inincluding addition,larger many of our competitors have established marketing relationshipssales and majorcustomer support teams and broader distribution agreementsrelationships with channel partners, consultants, system integratorsintegrators, and resellers. Competitors may offer products or services at lower prices or with greater depth than our services. Our competitors may be able to respond more quickly and effectively to new or changing opportunities, technologies, standards or customer requirements. Furthermore, some potential customers, particularly large enterprises, may elect to develop their own internal solutions. ForTo anyremain ofcompetitive, thesewe reasons,must continue to invest in product development, go-to-market capabilities and technology upgrades, and we may notneed to allocate significant resources to address rapid technological change and frequent new product introductions. If we are unable to make these investments or otherwise compete effectively, our business and operating results could be able to compete successfully against our competitors.harmed.

Our net retention rate may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our services, the effectiveness of our customer support services, the performance of our partners and resellers, our pricing, the prices of competing products or services, mergers and acquisitions affecting our customer base, our ability to successfully integrate new or acquired technology into our products, our ability to execute on our product roadmap, our customers’ budgets and spending levels, and the effects of global economic conditions, especially if challenging macroeconomic conditions continue. If our customers do not renew their subscriptions, renew them on less favorable terms, purchase fewer seats, or fail to purchase new product offerings, our revenue may decline, and we may not realize improved operating results from our customer base. Our future success depends on our customers’ adoption of our intelligent content management platform and purchase of our higher-tiered Suites plan, including our recently-announced Enterprise Advanced plan.

If we are unable to attract new customerscustomers, or expand deployments with existing customers, at rates that are consistent with our expectations, our future revenue and operating results could be adversely impacted.

To improve our operating results and continue growing our business, it is important that we continue to attract new customers and expand deploymentdeployments of our solutions and products with existing customers. To the extent we are successful in increasing our customer base, we could incur increased losses because costs associated with new customers are generally incurred up front, while revenue is recognized ratably over the term of our subscription services. Alternatively, to the extent we are unsuccessful in increasing our customer base, we could also incur increased losses as costs associated with marketing programs and new products intended to attract new customers would not be offset by incremental revenue and cash flow. Changes in economic conditions may financially impact our existing and prospective customers and cause them to delay or reduce their technology spending, which may adversely affect our ability to attract new customers. For example, our business continues to be impacted by pressure from customers’ lower headcount growth and greater budget scrutiny on IT decisions. All of these factors could negatively impact our future revenue and operating results.

Our business depends on the overall demand for cloud content management services and on the economic health of our current and prospective customers. The United States (U.S.) and other key international economies have experienced cyclical downturns from time to time that have resulted in a significant weakening of the economy, more limited availability of credit, a reduction in business confidence and activity, and other difficulties that may affect the industries to which we sell our services. An economic downturn, recession, or uncertainty about economic conditions, including volatility in the credit, equity and foreign exchange markets, inflation, rising interest rates, tariffs, potential U.S. sovereign default, bank failures and financial instability, supply chain disruptions, poor liquidity, reduced corporate profitability, unemployment trends, the adverse effects of pandemics and geopolitical issues, such as the ongoing Russia-Ukraine conflict and the conflictconflicts in the Middle East, could cause customers to delay or reduce their information technology spending. This has in the past and may in the future result in reduced sales, longer sales cycles, reduced renewal rates, slower adoption of new technologies, and increased price competition. These conditions can arise suddenly and the full impact can be difficult to predict. Any of these events would likely have an adverse effect on our business, operating results and financial position. We continue to face challenges from customers scrutinizing deals more closely due to the economic environment. In addition, there can be no assurance that enterprise content management and collaboration spending levels will increase following any recovery.

Our industry is marked by rapid technological developments and new and enhanced applications and services. If we are unable to enhance our existing services or offer new services that achieve market acceptance or keep pace with rapid technological developments, our business could be adversely affected. The success of any new services or enhancements to our existing services, such as Box AI, Box Apps, Box Automate, Box Extract, Box Shield Pro, Box Hubs, Box Doc Gen and Box Forms, depends on several factors, including their timely completion, introduction and market acceptance. We also may experience business or economic disruptions that could adversely affect the productivity of our employees and result in delays in our product development process. We maintain a hybrid workforce (with a mix of employees working from offices and others working remotely), which may lead to disruptions and decreased productivity that could result in delays in our product development process. Failure in this regard may significantly impair our revenue growth and our future financial results. Our product development efforts could also be impacted by our workforce location strategy as we hire an increasing number of our employees in international locations, such as Poland. In addition, because our services are designed to operate on a variety of systems, we must continuously modify and enhance our services to keep pace with changes in internet-related hardware, mobile operating systems, and other software, communication, browser and database technologies. We may not be successful in developing these modifications and enhancements or bringing them to market in a timely fashion, which may negatively impact our customer renewal rates, limit the market for our solutions, or impair our ability to attract new customers. Furthermore, modifications to existing platforms or technologies will increase our research and development expenses. Any failure of our services to operate effectively with existing or future network platforms and technologies could reduce the demand for our services, result in customer dissatisfaction and adversely affect our business.

Issues relating to the use of new and evolving technologies such as generative AI powered by large language models and machine learning that we integrate into our product offerings may cause us to experience brand or reputational harm, competitive harm, legal liability, new or enhanced governmental or regulatory scrutiny, and to incur additional costs to resolve such issues. As with many innovations, AI presents risks and challenges that could undermine or slow its adoption, and therefore harm our business. For example, perceived or actual technical, legal, compliance, privacy, security, ethical or other issues relating to the use of AI, including risks related to accuracy, bias, toxicity, privacy and security, data provenance, and the adequacy of AI development, deployment, content labeling and governance, may cause public confidence in AI to be undermined, which could slow our customers’ adoption of our products and services that use AI. AI technologies, including generative AI, may produce outputs that appear correct but are factually inaccurate or flawed, and customers or others may rely on such outputs to their detriment, which could expose us to reputational harm, competitive harm, and/or legal liability. Generative AI may also produce content that includes copyrighted or other protected material, and if we or our customers use such content or rights holders seek to enforce their rights, we may be exposed to claims and associated costs. In addition, litigation or government regulation related to the use of AI may also adversely impact our and others’ abilities to develop and offer products that use AI, as well as increase the cost and complexity of doing so. For example, in May 2024, the European Council formally adopted the AI Act (the “EU AI Act”), which imposes significant obligations related to the use of AI systems and is anticipated to impact the entire AI ecosystem in the European Union. Additionally, as the EU AI Act is implemented, subsequent guidance, standards and regulations, as well as regulatory bodies within respective member states are expected, which may present unforeseen risks and related challenges. In January 2025, President Trump issued an Executive Order on AI that rescinded former President Biden’s Executive order on AI, and announced efforts to invest in AI infrastructure and innovation. In July 2025, the U.S. federal government released a policy roadmap and set of initiatives referred to as America’s AI Action Plan. With this shift in AI policy at the federal level, it is unclear the extent to which this may present opportunities or risks to Box in the adoption of AI, including integrating with AI systems developed outside the U.S. that may be, for example, more cost effective. Conversely, at the state level, Californiastates such as Arkansas, California, Colorado, Illinois, Maryland, Montana, New York, and ColoradoTexas have enacted several AI-specific bills covering the deployment and regulation of AI technology, which may impact Box. Developing, testing, and deploying third-party AI systems may also increase the cost profile of our product offerings due to the nature of the computing costs involved in such systems, which could impact our margins and adversely affect our business and operating results. Our business may be disrupted if any of the third-party AI services we use become unavailable due to extended outages or interruptions or becauseif they are no longer available on commercially reasonable terms or prices. Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in our product development efforts.

We sell to government customers, which can be highly competitive, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. Government certification requirements may change, or we may lose one or more government certifications, and in doing so restrict our ability to sell into the government sector or maintain existing government customers until we attain revised certifications. Government demand and payment for our products and services are affected by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our solutions. Moreover, recentan extended federal government shutdown, ongoing efforts to reduce U.S. federal spending,spending and to make the federal government operate more efficiently, an extended federal government shutdown resulting from budgetary decisions, a prolonged continuing resolution, breach of the federal debt ceiling, or potential U.S. sovereign default may limit or delay federal government spending on our solutions and adversely affect our revenue. For example, prior government shutdowns have caused some federal customers to delay purchases of our solutions. Government entities may also have statutory, contractual or other legal rights to terminate contracts with us for convenience or due to a default, and any such termination may adversely affect our future operating results.

A key element of our growth strategy is to expand our international operations and develop a worldwide customer base. In addition, we have opened, and may continue to open, international offices and hire employees to work at these offices in order to gain access to additional talent. We have continued to migrate a larger portion of our development to lower cost regions, and have entered into a long-term operating lease in Polandregions to support our growth. Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic, geographic, social, and political risks that differ from those in the United States.U.S. Because of significant differences between international and U.S. markets, we may not succeed in creating demand for our services outside of the United StatesU.S. or in effectively selling our services in all of the international markets we enter. In addition, we will face challenges in doing business internationally that could adversely affect our business, including:

differing labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United StatesU.S.;

weaker protection for intellectual property and other legal rights than in the United StatesU.S. and practical difficulties in enforcing intellectual property and other rights outside of the United StatesU.S.;

adverse tax consequences; and unstable regional, economic, social and political conditions, such as the Russia-Ukraine conflict and the conflictconflicts in the Middle East.

We sell our services and incur operating expenses in various currencies. Therefore, fluctuationsFluctuations in the relative value of the U.S. dollar and foreign currencies, particularly the Japanese Yen, and to a lesser extent, the British poundPound, the Euro, and the Euro,Polish Zloty, have in the past and may in the future negatively impact our operating results. For example, the Japanese Yen has experienced a decline in value vis-à-vis the U.S. dollar, which negatively affected our results of operations during the year ended January 31, 2025 and could continue to negatively impact our results of operations in future periods. We currently primarily manage our exchange rate risk by maintaining offsetting foreign currency assets and liabilities and byliabilities, minimizing non-U.S. dollar cash balances, and through our foreign currency hedging programs that we began implementing hedging programs in fiscal year 2025 to further mitigate the risk of exchange rate fluctuations.2025. Such practices may not ultimately be available and/or effective at mitigating the foreign currency risk to which we are exposed. If we are unsuccessful in detecting material exposures in a timely manner, any hedging strategies we deploy are not effective, or there are no hedging strategies available for certain exposures that are prudent given the associated risks and the potential mitigation of the underlying exposure achieved, our operating results or financial position could be negatively affected in the future.

general economic, industry and market conditions, including those caused by the Russia-Ukraine conflict and the conflictconflicts in the Middle East, and as a result of inflation, fluctuations in foreign currency exchange rates, rising interest rates, tariffs, or bank failures and financial instability;

We cannot guarantee that any security measures that we or third parties on which we rely have implemented will be completely effective against current or future security threats, or that our systems and networks or those of such third parties have not been breached or otherwise compromised, or that they and any software in our or their supply chains do not contain bugs, vulnerabilities, or compromised code that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us or our products or services. Given that our customers manage significant amounts of sensitive and proprietary information on our platform, and many of our customers are in heavily regulated industries where there may be a greater concentration of sensitive and proprietary data, our reputation and market position are particularly sensitive to impacts from actual or perceived security breaches or incidents, security vulnerabilities, or concerns regarding security. If our security measures or those of third parties on which we rely are or are believed to be inadequate or breached or otherwise compromised as a result of third-party action, employee negligence, error or malfeasance, product defects, social engineering techniques, improper user configuration or otherwise, and this results in, or is believed to result in, unauthorized access to or disclosure, modification, misuse, loss, corruption, unavailability, or destruction of our data or our customers’ data, or any other disruption of the confidentiality, integrity or availability of our data or our customers’ data, we could incur significant liability to various parties, including our customers and individuals or organizations whose information is stored by our customers, and our business, reputation or competitive position may be harmed. Techniques used to obtain unauthorized access to, or to sabotage, systems or networks, are constantly evolving and generally are not recognized until launched against a target. Therefore, we may be unable to anticipate these techniques, react in a timely manner, or implement adequate preventive measures, and we may face delays in our detection or remediation of, or other responses to, security breaches and other security-related incidents or vulnerabilities. We have observed increased levels of sophistication in the types of techniques, including social engineering techniques, that malicious third parties may use in an attempt to gain access to our or our users’ data. Due to the Russia-Ukraine conflict and the conflictconflicts in the Middle East, or other areas of geopolitical tension around the world, we and the third parties on which we rely are vulnerable to a heightened risk of cybersecurity attacks, social engineering attacks, viruses, malware, ransomware, hacking or similar breaches and incidents from nation-state and affiliated actors, including attacks that could materially disrupt our supply chain and our systems, operations and platform. Additionally, many of our personnel and personnel of the third parties on which we rely work remotely at least part of the time, which imposes additional risks to our business, including increased risk of industrial espionage, theft of assets, phishing, and other cybersecurity attacks, and inadvertent or unauthorized access to or dissemination of sensitive, proprietary, or confidential information. We also expect to incur significant costs in our ongoing efforts to detect and prevent security breaches and other security-related incidents, and in the event of actual or perceived security breaches or other security-related incidents. Additionally, our service providers and other third parties on which we rely may suffer, or be perceived to suffer, data security breaches or other incidents that may compromise data stored or processed for us that may give rise to any of the foregoing.

Users can use our services to store identifying information or information that otherwise is considered personal information. Federal, state and foreign government bodies and agencies have adopted or are considering adopting laws and regulations regarding the collection, use and disclosure of personal information obtained from consumers, businesses and other individuals and entities. Data protection, privacy, consumer protection, cybersecurity and other laws and regulations, particularly in Europe, are often more restrictive than those in the United States.U.S. The costs of compliance with, and other burdens imposed by, such laws, policies and regulations that apply to our business or our customers’ businesses may limit the use and adoption of our services and reduce overall demand for them.

These laws and regulations, which may be enforceable by private parties and/or governmental entities, are constantly evolving and can be subject to significant change. A number of existing data protection and privacy laws,laws and regulations, as well as new laws and regulations coming into effect and/or proposals pending before federal, state and foreign legislative and regulatory bodies could affect our business. For example, the European Union’s General Data Protection Regulation (GDPR) imposes significant obligations on companies regarding the handling of personal data and provides for penalties for noncompliance of up to the greater of 20 million Euros or four percent of a company’s global revenue. Further, local data protection authorities in Europe may adopt regulations and/or guidance more stringent than the GDPR, which may impose additional compliance costs or other burdens that impact our business. Additionally, developments relating to cross-border data transfer may result in the European Commission (EC), European Data Protection Board and/or other regulators applying differing standards for, and requiring ad hoc verification of, transfers of personal data across borders, including transfers from the European Economic Area (EEA), Switzerland, or the United Kingdom (U.K.) to the U.S. For example, revised standard contractual clauses were published by regulators in EEA, Switzerland and the U.K., which we adopted in our data processing addenda. However, we cannot guarantee that our relevant policies and measures will ensure compliance due to possible fluctuations in these laws and regulations and related frameworks and their interpretation and enforcement. Moreover, European governments and the U.S. government have cooperated to adopt the EU-U.S. Data Privacy Framework, U.K.-U.S.the U.K. extension to the EU-U.S. Data BridgePrivacy Framework and Swiss-U.S. Data Privacy Framework (together, the “Data Privacy Framework”), replacing the EU-U.S. Privacy Shield Framework. While the Data Privacy Framework could benefit the industry as a whole, and we presently maintain self-certification under the Data Privacy Framework, maintaining compliance with the Data Privacy Framework could result in additional costs. The EU-U.S. Data Privacy Framework has also already faced legal challenges, and more generally, the Data Privacy Framework may be subject to future reviews, and subject to suspension, amendment, repeal, or limitations.

The U.K. made targeted amendments to its data protection regime in the U.K. Data (Use and Access) Act, effective June 19, 2025. Furthermore, additional or modified guidance regarding, or changes to, U.K. cross border data transfers and/or overall U.K. data protection laws and/or guidance could occur,occur. whichAny of these may require us to change our policies, practices and engage in additional contractual negotiations. Such legislative and regulatory changes may result in increased costs of compliance and limitations on our customers and us.

In 2018, the State of California enacted the California Consumer Privacy Act (CCPA), which became operative on January 1, 2020. The CCPA requires covered companies to, among other things, provide new disclosures to California consumers and afford such consumers new abilities to opt-out of certain sales of personal information. Additionally, the California Privacy Rights Act (CPRA) was approved by California voters in November 2020 and amended and expanded the CCPA. The CPRA’s substantive provisions became effective on January 1, 2023, and the newly formed California Privacy Protection Agency beganhas itsadopted rulemakingregulations processimplementing tothe adopt proposed regulations, with an enforcement date of March 29, 2024.CPRA. Our CPRA compliance efforts are subject to change and may result in continued uncertainty and require additional costs and expenses to ensure readiness, compliance and decrease risks. Further, other states have been considering, and in some cases enacting, laws relating to privacy and cybersecurity, many of which are comprehensive privacy statutes imposing obligations similar to the CCPA and CPRA. For example, laws enacted in Colorado, Connecticut, Delaware, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah, and Virginia are currently effective, and laws enacted in Maryland, Minnesota, and Tennessee are set to go into effect before the end of 2025. Additionally, laws enacted in Indiana, Kentucky and Rhode Island will become effective in 2026.effective. Other U.S. states are anticipated to follow suit. Other states have also enacted privacy laws relating to particular subject matter, such as Washington's enactment of the My Health, My Data Act, which includes a private right of action. The U.S. Department of Justice has also issued regulations restricting, and imposing obligations in connection with, certain transfers of sensitive personal information. Efforts to comply with these laws and regulations and related fluctuations in laws and regulations relating to privacy and cybersecurity at the federal, state and local levels may impact readiness and compliance, along with the potential to incur additional costs. We cannot fully predict the impact of these laws and regulations and other proposed federal and state laws and regulations relating to privacy and cybersecurity on our business or operations, but they may require us to modify our data processing practices and policies and incur substantial costs and expenses in an effort to comply.

We also expect laws, regulations, industry standardsstandards, and other obligations worldwide relating to privacy, data protection, and cybersecurity to continue to evolve, and that there will continue to be new, modified, and re-interpreted laws, regulations, standards, and other obligations in these areas. For example, the Network and Information Security Directive II (NIS2), adopted in 2023, aims to enhance cybersecurity across critical infrastructure and essential services in the European Union. It expands on the 2016 NIS Directive and broadens its scope to include additional sectors while enforcing stricter governance and accountability requirements. NIS2 requires all 27 EU member states to have issued implementing legislation by October 2024; however, some EU member states have not finalized their respective legislation and guidance. Additionally, the Digital Operational Resilience Act (DORA), which became effective in January 2025, establishes a universal framework for managing and mitigating information and communication technology risk that applies to entities in the financial sector and their third-party cloud service providers, such as Box. Under DORA, third-party cloud service providers can face significant penalties for non-compliance, including fines of up to $5 million euros for violations. However, the specific impact and effects of these new and evolving laws and regulations are uncertain and subject to change over time as they are implemented. As a result, we cannot yet determine the impact such future laws, regulations and standards, or amendments to or re-interpretations of, existing laws and regulations, industry standards, or other obligations may have on us or our business. Moreover, these existing and proposed laws, regulations, standards, and other actual or asserted obligations can be difficult and costly to comply with, delay or impede the development or adoption of our products and services, reduce the overall demand for our products and services, increase our operating costs, require modifications to our policies, practices, or products or services, require significant management time and attention, and slow the pace at which we close (or prevent us from closing) sales transactions. Additionally, any actual or alleged noncompliance with these laws, regulations, standards, or other actual or asserted obligations could result in negative publicity and subject us to investigations and other proceedings by regulatory authorities, claims, demands, and litigation by private entities, or other requested remedies or demands, including demands that we modify or cease existing business practices, and expose us to significant fines, penalties and other damages and liabilities. In addition to the possibility of fines, proceedings, demands, claims, and litigation, we may find it necessary or appropriate to fundamentally change our business activities and practices, including the establishment of in-region data storage or other data processing operations, or modify or cease offering certain products or services, any of which could have an adverse effect on our business. We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new offerings and features could be limited.

We currently store and process our customers’ information in third-party cloud computing and hosting facilities inside and outside of the UnitedU.S. States.Following Asmigration we have recently migratedof our storage and processing operations to cloud computing and hosting facilities operated by third parties, our service has become more susceptible to interruptions or delays that are out of our direct control. These third parties are vulnerable to operational and technological disruptions, including from cyber-attacks and security breaches and incidents, which may negatively impact our ability to provide services to our customers and operate our business. Similarly, as part of our disaster recovery arrangements, our production environment and all of our customers’ data is typically replicated on third-party storage platforms located inside and outside of the United States.U.S. These facilities may be located in areas prone to natural disasters and may experience events such as earthquakes, floods, fires, power loss, telecommunications failures and similar events. They may also be subject to break-ins, sabotage, intentional acts of vandalism, cyber-attacks and similar misconduct, including by state-sponsored or otherwise well-funded actors. Any damage to, or lack of availability or failure of, our systems generally, or those of the third-party cloud computing and hosting providers, could result in interruptions in our service, which may reduce our revenue, cause us to issue credits or pay penalties, cause customers to terminate their subscriptions and adversely affect our renewal rate and our ability to attract new customers. We may only have limited remedies against third-party providers in the event of any service disruptions. In addition, we may not have adequate insurance coverage to compensate for losses from a major interruption. Our business will also be harmed if our customers and potential customers believe our service is unreliable. Despite precautions taken by these third-party providers, the occurrence of disasters, security issues (including an act of terrorism or an armed conflict), certain geopolitical events, labor or trade disputes, or pandemics, could lead to a decision to close the facilities without adequate notice or other unanticipated problems that result in lengthy interruptions in our service or cause us to not comply with certification requirements. Even with the disaster recovery arrangements, we have never performed a full live failover of our services and, in an actual disaster, we could learn our recovery arrangements are not sufficient to address all possible scenarios and our service could be interrupted for a longer period than expected. We have encountered issues in the past that have caused Box services to be temporarily unavailable that resulted in our issuing service credits to some of our customers, and we cannot assure you that we will not experience interruptions or delays in our service in the future. If third parties are unable to perform services for us because of service interruptions or extended outages, or because those services are no longer available on commercially reasonable terms, our expenses could increase and our customers’ use of our products could be impaired until equivalent services, if available, are identified, obtained and implemented, all of which could adversely affect our business.

To grow our business and to expand our reach in the market, we expect to be more dependent on our relationships with third parties, such as alliance partners, resellers, distributors, system integrators and developers. For example, we have entered into agreements with partners such as Adobe, Apple, Carahsoft, Cisco, Cloudflare,CrowdStrike, Google, Guidewire, IBM, Macnica, Microsoft, Mitsui Knowledge Industry, Okta, Oracle-Netsuite,Oracle-NetSuite, Palo Alto Networks, Salesforce, ServiceNow, Slack, USDM, ZoomWorkday, and ZscalerZoom to market, resell, or integrate with our services. Identifying partners and resellers, and negotiating and documenting relationships with them, requires significant time and resources.

In addition, while the long-term effects of climate change on the global economy and the technology industry in particular are unclear, we recognize that there are inherent climate related risks wherever business is conducted. Any of our primary locations may be vulnerable to the adverse effects of climate change. For example, our California corporate offices have historically experienced, and are projected to continue to experience, physical climate change risks, including drought and water scarcity, warmer temperatures, rising sea levels, wildfires and air quality impacts and power shut-offs associated with wildfire prevention. Climate-related events, including the increasing frequency of extreme weather events and their impact on critical infrastructure in the United StatesU.S. and elsewhere, have the potential to disrupt our business, our third-party suppliers, and/or the business of our customers, and may cause us to experience higher attrition, losses and additional costs to maintain and resume operations. Transitional climate change risks may subject us to increased regulations, reporting requirements, standards, or expectations regarding the environmental impacts of our business and untimely or inaccurate disclosure could adversely affect our reputation, business or financial performance.

Our future success depends upon our continued ability to identify, hire, develop, motivate and retain highly skilled personnel, representing diverse backgrounds, experiences, and skill sets, including senior management, software engineers, designers, product managers, sales representatives, and customer supportsales representatives. Identifying, recruiting, training and integrating qualified individuals will require significant time, expense and attention. In addition to hiring new employees, we must continue to focus on retaining our best employees, and fostering a diverse and inclusive work environment that enables all of our employees to prosper. Competition for highly skilled personnel is intense, particularly in the San Francisco Bay Area, where our headquarters is located. We may need to invest significant amounts of cash and equity to attract new employees and retain existing employees, and we may never realize returns on these investments. Moreover, our ability to attract and hire personnel may be materially adversely affected by changes to immigration laws or the availability of work visas.visas, including recent changes to the H1-B visa program, could adversely affect our ability to attract, hire, and retain qualified personnel. Furthermore, as some of our employees work remotely from geographic areas across the globe and more of our employees work remotely on a permanent basis, we may need to reallocate our investment of resources and closely monitor a variety of local regulations and requirements, and we may experience unpredictability in our expenses and employee work culture. If we are not able to effectively add and retain employees, or if our employees do not perform to the standards we expect of them, our ability to achieve our strategic objectives will be adversely impacted, and our business will be harmed.

We have acquired, and may in the future acquire, other companies, employee teams, or technologies to complement or expand our services and grow our business. For example, in December 2023, we acquired Crooze Corporation, a provider of no-code enterprise content management applications built on the Box platform, and in August 2024, we acquired the intelligent document processing technology of Alphamoon. We may not be able to successfully complete or integrate identified acquisitions. Moreover, we may not successfully evaluate or utilize the acquired technology or personnel, or accurately forecast the financial impact of an acquisition. The risks we face in connection with acquisitions include:

We believe that our culture has been and will continue to be a key contributor to our success. We expect to continue to hire additional employees as we expand our business. As our organization expands globally and as employees’ workplace expectations develop, we may find it increasingly difficult to maintain the beneficial aspects of our corporate culture globally. These difficulties may be further amplified by our decision to maintain a hybrid workforce. If we do not continue to develop our company culture or maintain our core values as we grow and evolve both in the United StatesU.S. and abroad, we may be unable to foster the innovation, creativity and teamwork we believe we need to support our growth.

On occasion, we may need additional financing for a variety of reasons, including servicing our liabilities, operating or growing our business, responding to business opportunities, undertaking acquisitions, funding stock repurchases, satisfying our dividend or share redemption obligations of our Series A Convertible Preferred Stock, or repaying and/or settling conversions of our 1.50% convertible senior notes due September 15, 2029 (the “2029 Convertible Notes”) or our 0.00% convertible senior notes due January 15, 2026 (the “2026 Convertible Notes” and together with the 2029 Convertible Notes, the “Convertible Notes”).

For example, in September 2024, we issued $460.0 million aggregate principal amount of 2029 Convertible Notes, and in January 2021, we issued $345.0 million aggregate principal amount of 2026 Convertible Notes. We may require additional capital to satisfy our obligations to pay cash upon conversion or at maturity of the 2029 Convertible Notes or to repurchase the 2029 Convertible Notes in the event of a fundamental change. Additionally, in May 2021, we issued and sold 500,000 shares of our Series A Convertible Preferred Stock for an aggregate purchase price of $500 million. Our ability to refinance or obtain additional financing, if and when required, will depend on investor and lender demand, our operating performance, the condition of the capital markets and other factors. We cannot guarantee that additional financing will be available to us on favorable terms when required, or at all. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our Class A common stock, and our existing stockholders may experience dilution. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support the operation or growth of our business could be significantly impaired and our operating results may be harmed. Rising interest rates may reduce our access to equity-linked or debt capital and increase our cost of borrowings, which could adversely impact our business, operating results and financial position.

Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.U.S.

Generally accepted accounting principles in the United StatesU.S. are subject to interpretation by the Financial Accounting Standards Board (FASB), the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change. These or other changes in accounting principles could adversely affect our financial results. Any difficulties in implementing these pronouncements could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in us.

Our future effective tax rates and results from operations could be unfavorably affected by changes in the tax rates in jurisdictions where our income is earned, by changes to limitations on our utilization of net operating losses, or by changes in the tax rules and regulations in the jurisdictions in which we do business. For example, on July 4, 2025, the U.S. enacted federal tax legislation commonly referred to as the One Big Beautiful Bill Act (OBBBA). This legislation extends and modifies provisions from the 2017 Tax Cuts and Jobs Act ofand 2017introduces eliminatednew tax measures affecting both businesses and individuals. We are continuing to evaluate the optionlong-term toimplications deductof researchthis andlegislation developmenton expenditures currently and instead required taxpayers to capitalize and amortize them over five or fifteen years beginning in our fiscal year 2023.us. The Inflation Reduction Act of 2022 also imposed a 1% excise tax on certain repurchases of stock and a 15% alternative minimum tax on adjusted financial statement income.

Further, in 2021, the Organization for Economic Cooperation and Development (OECD) introduced a framework, referred to as Pillar Two, which contemplates a global minimum effective tax rate of 15%. In December 31, 2023, Pillar Two was implemented by the Council of the European Union and its member states. Similar directives under Pillar Two are already adopted or expected to be adopted by taxing authorities in other countries where we do business, including the U.K. The OECD and participating jurisdictions have recently agreed to a “side-by-side” solution that would exempt U.S.-parented multinational businesses from certain provisions of Pillar Two for fiscal years beginning on or after January 1, 2026. We have evaluated the impact of Pillarthe Twoside-by-side solution to our financial position and concluded it to be not material. We will continue to monitor OECD-related developments to Pillarthe Twoside-by-side solution in countries where we do business. These enactments or amendments could adversely affect our tax rate and ultimately result in a negative impact on our operating results and cash flows.

Changes in tariffs, sanctions, international treaties, export/import laws and other trade restrictions or trade disputes may delay the introduction and sale of our services in international markets, prevent our customers with international operations from deploying our services or, in some cases, prevent the export or import of our services to certain countries, governments, persons or entities altogether. Any change in export or import regulations, economic sanctions or related laws, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our services, or in our decreased ability to export or sell our services to existing or potential customers with international operations. Any decrease in the use of our servicesservices, or limitationlimitations on our ability to export or sell our servicesservices, or increased costs resulting from changes in tariffs or other trade restrictions, would likely adversely affect our business, financial condition and operating results.

Our bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders or employees.

Section 22 of the Securities Act of 1933 establishes concurrent jurisdiction for federal and state courts over Securities Act claims. Accordingly, both state and federal courts have jurisdiction to hear such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United StatesU.S. will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act against any person in connection with an offering of our securities.

We repurchase shares of our Class A common stock in open market transactions from time to time pursuant to publicly announced stock repurchase program approved by our Board of Directors. During fiscal year 2026, we repurchased 9.7 million shares for a total amount of $292.9 million and during fiscal year 2025, we repurchased 7.6 million shares for a total amount of $211.5 million and during fiscal year 2024, we repurchased 6.6 million shares for a total amount of $177.0 million. Any share repurchases remain subject to the circumstances in place at that time, including prevailing market prices, and we are not obligated to repurchase a specified number or dollar value of shares. As a result, there can be no guarantee around the timing or volume of our share repurchases or that we will have adequate cash flow to fund any repurchases. In addition, as part of the Inflation Reduction Act signed into law in August 2022, the United StatesU.S. implemented a 1% excise tax on the value of certain stock repurchases by publicly traded companies. This tax could increase the costs to us of any share repurchases. The stock repurchase program could affect the price of our Class A common stock, increase volatility and diminish our cash reserves. Our repurchase program may be suspended or terminated at any time and, even if fully implemented, may not enhance long-term stockholder value.

As of January 31, 2025,2026, we had outstanding debt, including an aggregate principal amount of (i) $460.0 million issued under the 2029 Convertible Notes and (ii) $205.0 million issued under the 2026 Convertible Notes. During specified periods, the 2029 Convertible Notes are convertible at the option of the holders under certain conditions or upon occurrence of certain events as described in Note 9, Part II, Item 8 of thisour Annual Report on Form 10-K.10-K for the year ended January 31, 2025. If one or more holders of the 2029 Convertible Notes elect to convert their notes, we are required to settle the principal of the 2029 Convertible Notes in cash upon any conversion of such notes, which could adversely affect our liquidity. In addition, even if holders of the 2029 Convertible Notes do not elect to convert their Convertible Notes,notes, we may be required under applicable accounting standards to reclassify the carrying value of the 2029 Convertible Notes as current, rather than long-term, if any of the conditions to the convertibility of the 2029 Convertible Notes are satisfied. This reclassification could materially reduce our reported working capital.

Holders of the 2029 Convertible Notes also have the right to require us to repurchase all or a portion of their Convertible Notesnotes upon the occurrence of a fundamental change (as defined in the indenture governing the applicable2029 Convertible Notes) at a repurchase price equal to 100% of the principal amount of the 2029 Convertible Notes to be repurchased, plus accrued and unpaid special interest, if any. If the 2029 Convertible Notes have not previously been converted or repurchased, we will be required to repay the outstanding principal amount of the 2029 Convertible Notes, plus accrued and unpaid special interest, if any, in cash at maturity. The 2026 Convertible Notes and the 2029 Convertible Notes are scheduled to mature on January 15, 2026 and September 15, 2029, respectively.2029.

Our ability to make required cash payments in connection with conversions of the 2029 Convertible Notes, repurchase the 2029 Convertible Notes in the event of a fundamental change, or to repay or refinance the 2029 Convertible Notes will depend on market conditions and our past and expected future performance, which is subject to economic, financial, competitive, and other factors beyond our control. We also may not use the cash proceeds we raised through the issuance of the 2029 Convertible Notes in an optimally productive and profitable manner. Since inception, our business has generated net losses, and while we were profitable in fiscal years 2025,2026, 20242025 and 2023,2024, we may incur significant losses in the future and may not maintain profitability on a consistent basis. As a result, we may not have enough available cash or be able to obtain financing, or financing at acceptable terms, at the time we are required to repurchase or repay the 2029 Convertible Notes or pay cash with respect to 2029 Convertible Notes being converted.

In addition, our ability to repurchase or pay cash upon conversion or at maturity of the 2029 Convertible Notes may be limited by law or regulatory authority. Our ability to service our debt also depends on the operating results of our subsidiaries and upon the ability of such subsidiaries to provide us with cash generated by the subsidiaries. Any dividends, loans or other distributions to us from our subsidiaries may be subject to legal, contractual or other restrictions and are subject to other business and tax considerations. Our failure to repurchase 2029 Convertible Notes following a fundamental change or to pay cash upon conversion or at maturity of the 2029 Convertible Notes as required by the applicable indenture would constitute a default under such indenture. A default under the indenturesindenture or the fundamental change itself could also lead to a default under our senior credit facility, our other outstanding indebtedness, or agreements governing our future indebtedness and could have a material adverse effect on our business, results of operations, and financial condition. If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2029 Convertible Notes or to pay cash upon conversion or at maturity of the 2029 Convertible Notes.

The capped call transactions we entered into in connection with the issuance of the 2029 Convertible Notes may affect the value of our Class A common stock.

In connection with the issuance of eachthe series of the2029 Convertible Notes, we entered into capped call transactions with various counterparties (the “2029 Capped Calls”). The 2029 Capped Calls cover, subject to customary adjustments, the number of shares of our Class A common stock initially underlying the applicable series of2029 Convertible Notes. The 2029 Capped Calls are expected generally to reduce or offset the potential dilution to our Class A common stock upon any conversion of the applicable series of2029 Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price.

From time to time, the counterparties to the 2029 Capped Calls or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our Class A common stock and/or purchasing or selling our Class A common stock or other securities of ours in secondary market transactions prior to the maturity of the applicable series of2029 Convertible Notes. This activity could also cause or prevent an increase or a decrease in the market price of our Class A common stock.

We are subject to counterparty risk with respect to the 2029 Capped Calls.

The counterparties to the 2029 Capped Calls that we entered into are financial institutions, and we will be subject to the risk that one or more of the counterparties may default or otherwise fail to perform, or may exercise certain rights to terminate, their obligations under the 2029 Capped Calls. Our exposure to the credit risk of the counterparties will not be secured by any collateral.

Global economic conditions have in the past resulted in the actual or perceived failure or financial difficulties of many financial institutions. If a counterparty to one or more 2029 Capped Calls becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at the time under such transaction. Our exposure will depend on many factors but, generally, our exposure will increase if the market price or the volatility of our Class A common stock increases. In addition, upon a default or other failure to perform, or a termination of obligations, by a counterparty, the counterparty may fail to deliver the consideration required to be delivered to us under the 2029 Capped Calls and we may experience more dilution than we currently anticipate with respect to our Class A common stock. We can provide no assurances as to the financial stability or viability of the counterparties.

The holders of Series A Convertible Preferred Stock are entitled to vote on an as-converted to Class A common stock basis and have rights to approve certain actions. Additionally, KKR may exercise influence over us through their ability to designate a member of our Board of Directors.

In May 2021, we issued 500,000 shares of our Series A Convertible Preferred Stock to a group of investors led by KKR & Co. Inc. (“KKR,” and such group of investors, thecollectively “InvestorsKKR”). The holders of our Series A Convertible Preferred Stock are generally entitled to vote with the holders of our Class A common stock on all matters submitted for a vote of holders of shares of Class A common stock (voting together with the holders of shares of Class A common stock as one class) on an as-converted basis.

Pursuant to that certain Investment Agreement dated April 7, 2021, by and among Box, Inc. and Powell Investors III L.P., KKR-Milton Credit Holdings L.P., KKR-NYC Credit C L.P., Tailored Opportunistic Credit Fund, and CPS Holdings (US) L.P. (the “Investment Agreement”), KKR hashad the right to designate one candidate for nomination for election to our Board of Directors for so long as KKR and its permitted transferees maintainmaintained a minimum aggregate holdings of our stock as described in further detail in the Investment Agreement.Agreement; Notwithstandinghowever, KKR has waived its rights to designate or nominate an Investor Designee (as defined in the factInvestment that all directors are subjectAgreement) to fiduciarythe dutiesBoard pursuant to us and to applicable law, the interestsInvestment of the KKR director designee may differ from the interests of our security holders as a whole or of our other directors.Agreement.

With our SaaS platform, userscustomers can work with their content as they need – from secure external collaboration and workspaces to e-signature processes and content workflows – improving employee productivity and accelerating business processes. IT teams can establish a space for compliant content management, and developers can easily create customized portals for white-labeled content collaboration. Administrators have a wide range of security, data protection, and compliance features they can activate to help meet legal and regulatory requirements, internal policies, and industry standards. The Box ICM platform enables a broad range of high-value business use cases and integrates with more than 1,500 leading business applications. With hundreds of file formats and media types supported, Box is compatible with multiple application environments, operating systems, and devices – ensuring that workers can securely access their critical business content whenever and wherever they need it.

We offer our solution to our customers as a subscription-based service, with subscription fees based on the requirements of our customers, including the number of users and functionality deployed. The majorityduration of our contracts with customers subscribe to our service through one-year contracts, although we also offer our services for terms rangingranges from one month to three years or more.more, Weand we typically invoice our customers at the beginning of the term, in annual, multi-year, annual, quarterly or monthly installments. We recognize revenue as we satisfy our performance obligations. Accordingly, due to our subscription model, we recognize revenue for our subscription services ratably over the term of the contract.

For the years ended January 31, 20252026 and 2024,2025, our revenue was $1.090$1.18 billion and $1.038$1.09 billion, respectively, representing year-over-year growth of 5%,8%, or 7% growth on a constant currency basis. As of January 31, 2025,2026, our remaining performance obligations were $1.466$1.71 billion, representing a 12%17% increase from our remaining performance obligations of $1.305$1.47 billion as of January 31, 2024,2025, or 14%16% growth on a constant currency basis. For the year ended January 31, 2025,2026, our gross profit was $862.0$932.6 million, and our gross margin was 79.1%,79.2%, compared to our gross profit of $777.1$862.0 million and our gross margin of 74.9%79.1% for the year ended January 31, 2024.2025. For the year ended January 31, 2025,2026, our operating income was $83.2 million and our operating margin was 7.1%, compared to our operating income of $79.6 million and our operating margin was 7.3%, compared to our operating income of $50.8 million and our operating margin of 4.9%7.3% for the year ended January 31, 2024.2025. For the year ended January 31, 2025,2026, our net cash provided by operating activities was $332.3$356.5 million, ana 7% increase offrom 4% fromour net cash provided by operating activities of $318.7$332.3 million for the year ended January 31, 2024.2025. For the year ended January 31, 2025,2026, our non-GAAP free cash flow was $304.6$312.9 million, ana 3% increase offrom 13% fromour non-GAAP free cash flow of $269.0$304.6 million for the year ended January 31, 2024.2025.

Box AI for Metadata,Extract, our solution that automatessimplifies the process of metadata extraction andacross reducesthe manualenterprise workwith usingAI Box AI.agents.

Box Archive, our solution that will provideprovides advanced data preservation with long-term content storage. Box Archive is expected to be generally available in the first half of fiscal year 2026.

Our overall performance depends in part on worldwide economic and geopolitical conditions and their impact on customer behavior. Economic conditions, including impacts from inflation, higher interest rates, tariffs, slower growth, the stronger dollar versus foreign currencies, particularly the Japanese Yen, government shutdowns, reductions in U.S. federal spending, the ongoing Russia-Ukraine conflict and the ongoing conflictconflicts in the Middle East, and other changes in economic conditions, may adversely affect our results of operations and financial performance. During the year ended January 31, 2025, in addition to headwinds from foreign exchange rate trends, we continued to see an impact from additional customer scrutiny being placed on larger deals and lower seat expansion rates due to the challenging macroeconomic environment. As a result, we have experienced, and may continue to experience, increasedexperience customer churn and delayed sales cycles, as well as customers and prospective customers reducing budgets for services that we offer. While we believe IT budgets have tightened and some larger deals have required more scrutiny across verticals and geographies, we also believe we are well-positioned to execute through these dynamic times as Box's ICM platform enables enterprises to streamline their businesses, drive up productivity, reduce risk, and lower costs.

Remaining performance obligations (RPO) represent, at a point in time, contracted revenue that has not yet been recognized. RPO consists of deferred revenue and backlog. Backlog is defined as non-cancellable contracts deemed certain to be invoiced and recognized as revenue in future periods. Future invoicing is determined to be certain when we have an executed non-cancellable contract or a significant penalty is due upon cancellation. Short-term RPO consists of the portion that is expected to be recognized within the next 12 months. While Box believes RPO is a leading indicator of revenue as it represents sales activity not yet recognized in revenue, it is not necessarily indicative of future revenue growth as it is influenced by several factors, including seasonality, contract renewal timing, average contract terms and foreign currency exchange rates. Box monitors RPO to manage the business and evaluate performance.

RPO as of January 31, 20252026 was $1.466$1.71 billion, an increase of 17% from January 31, 2025. As of January 31, 2026, short-term RPO was $913.7 million, an increase of 12% from January 31, 2024.2025, and long-term RPO was $797.0 million, an increase of 22% from January 31, 2025. The increase in RPO was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites.Suites, Thethe increasetiming inof RPOcustomer-driven wasrenewals, alsolonger drivenaverage bycontract terms, and the addition of new customers and the timing of customer-driven renewals.customers. RPO growth was favorably impacted by 160approximately 70 basis points fromdue unfavorableto fluctuations in foreign currency exchange rates.

Billings represent our revenue plus the changes in deferred revenue and contract assets in the period. Billings we record in any particular period primarily reflect subscription renewals and expansion within existing customers plus sales to new customers, and represent amounts invoiced for all of our products and professional services. We typically invoice our customers at the beginning of the term, in annual, multi-year, annual, quarterly or monthly installments. If the customer negotiates to pay the full subscription amount at the beginning of the period, the total subscription amount for the entire term will be reflected in billings. If the customer negotiates to be invoiced annually or more frequently, only the amount billed for such period will be included in billings.

Billings for the year ended January 31, 20252026 were $1.110$1.22 billion, an increase of 5%10% from the year ended January 31, 2024.2025. The increase in billings was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites, the addition of new customers, and the timing of customer-driven renewals. Billings growth was favorably impacted by 110approximately 170 basis points fromdue unfavorableto fluctuations in foreign currency exchange rates.

We define non-GAAP free cash flow as cash flows from operating activities less net capital expenditures (purchases of property and equipment less proceeds from sales of property and equipment), principal payments of finance lease liabilities, capitalized internal-use software costs, and other items that did not or are not expected to require cash settlement and that management considers to be outside of our core business.

Non-GAAP free cash flow for the year ended January 31, 20252026 was $304.6$312.9 million, representing an increase of 13%3% from the year ended January 31, 2024.2025. The increase in non-GAAP free cash flow was primarily driven by the increase in cash flows from operating activities and the reduction in payments of finance lease liabilities due to our migration to the public cloud from our collocated data centerscenters, partially offset by a decrease in proceeds from sales of property and theequipment, an increase in capitalized software costs, and an increase in purchases of property and equipment. The year-over-year changes in cash flows from operating activities,activities which isare described in more detail under Liquidity and Capital Resources below. The increase was partially offset by an increase in capitalized internal-use software costs.

We recognize revenue as we satisfy our performance obligations. Accordingly, due to our subscription model, we recognize revenue for our subscription and premier services ratably over the contract term. WeThe duration of our contracts with customers ranges from one to three years or more, and we typically invoice our customers at the beginning of the term, in annual, multi-year, annual, quarterly or monthly installments. Our subscription and premier services contracts are typically non-cancellable and do not contain refund-type provisions. The majority of our customers subscribe to our service through one-year contracts, although we also offer our services for terms ranging between one month to three years or more.

Our cost of revenue consists primarily of costs related to providing our subscription services to our paying customers, including employee compensation and related expenses for data center operations, customer support and professional services personnel, public cloud hosting costs, depreciation of servers and equipment, security services and other tools, as well as amortization expense associated with acquired technology and capitalized internallysoftware developed software.development. We allocate overhead such as rent,facilities, information technology costs and employee benefit costs to all departments based on headcount. As such, general overhead expenses are reflected in cost of revenue and each of the operating expense categories set forth below.

Interest expense consists primarily of interest charges for our line of credit and convertible senior notes, interest expense related to finance leases, and the amortization of issuance costs offor our convertible senior notes.

Other Expense,Income (Expense), Net

Other expense,income (expense), net consists primarily of gains and losses from foreign currency transactions and otherforeign incomecurrency andforward expense.contracts Othernot expense,designated netas consistscash primarilyflow of induced conversion expense related to our 2026 Convertible Notes.hedges.

(Benefit from) Provision for Income Taxes (Benefit from) provision for income taxes consists primarily of stateU.S. and foreign income taxes payable and, as applicable, changes in our deferred taxes, related valuation allowance positions and uncertain tax positions.

The $52.4$87.1 million, or 5%,8%, increase in revenue during the year ended January 31, 20252026 was primarily driven by seat growthgrowth, net of churn in existing customers,customers and continued strong attach rates of our multi-product Suites offerings, particularly Enterprise Plus,Plus and strongEnterprise growth in Japan. For the year ended January 31, 2025, our Suites attach rate was 85% in deals over $100,000, an increase from 78% for the year ended January 31, 2024.Advanced. The increase was partiallyalso offsetimpacted by the weakeningstrengthening of foreign currency exchange rates, which negativelypositively impacted our revenue growth rate by 210approximately 80 basis points, and customers partially churning their deployment with Box.points.

The $32.5$16.5 million, or 12%,7%, decreaseincrease in cost of revenue during the year ended January 31, 20252026 was primarily due to decreasesa $13.7 million increase in amortization of $27.3capitalized software, a $7.9 million increase in public cloud infrastructure costs, and a decrease of $4.5 million in depreciationgains expenserelated andto $20.1the millionsale in bandwidth andof data center related expenseassets due to the completion of our migration to the public cloud from our collocated data centers. Additionally,This thereincrease was anpartially increaseoffset by a decrease of $4.3 million in gains related to the sale of data center assets and decreases of $1.1 million in consulting services, $1.0$4.8 million in subscription software contract expense,expense and $0.9decreases of $4.1 million in workforcebandwidth reorganizationand costs,data whichcenter wererelated incurredexpense inand the prior year. This decrease was partially offset by an increase of $25.0$1.3 million in publiccontractor cloudrelated infrastructurecosts costs,due drivento bythe completion of our migration to the public cloud from our collocated data centers. Cost of revenue as a percentage of revenue decreased 420approximately 10 basis points year-over-year.

The $16.1$29.7 million, or 6%,11%, increase in research and development expense during the year ended January 31, 20252026 was primarily due to increases of $15.5$18.4 million and $11.1$6.6 million in employee related costs and stock-based compensation expense, respectively, driven by a 22%5% increase in headcount. The increased employee headcount and related costs are primarily driven by the growth in lower cost regions. ThisAdditionally, we had increases of $4.8 million in workforce reorganization expenses, $4.7 million in subscription software contract expense, $3.3 million in office related costs, and $2.5 million in public cloud infrastructure costs. The increase was partially offset by an increase of $12.1$10.6 million in capitalized internally developed software costs. Research and development expenses as a percentage of revenue remainedincreased flatapproximately 100 basis points year-over-year.

The $31.5$23.8 million, or 9%,6%, increase in sales and marketing expense during the year ended January 31, 20252026 was primarily due to increases of $13.0$10.6 million and $9.7$1.4 million in employee related costs and stock-based compensation expense, respectively, driven by a 7%5% increase in headcount, $3.1 million in workforce reorganization expenses, and $9.6$2.0 million in subscription software contract expense. Additionally, we had increases of $1.9 million in office related costs, $1.8 million in commission expenses, $1.7 million in consulting services, and $1.6 million in marketing expenses, driven by increased costs related to marketing events.expenses. Sales and marketing expenses as a percentage of revenue increaseddecreased approximately 100 basis points year-over-year.

The $8.4$13.5 million, or 7%,10%, increase in general and administrative expense during the year ended January 31, 20252026 was primarily due to increases of $4.8$6.3 million and $3.3$3.4 million in stock-based compensation expense and employee related costs and stock-based compensation expense,costs, respectively, driven by a 9%4% increase in headcount. Additionally, we had increases of $1.3 million in workforce reorganization expenses, $1.0 million in subscription software contract expense, and $1.0 million in litigation expense. General and administrative expense as a percentage of revenue increasedremained 100 basis pointsflat year-over-year.

The $5.0$1.0 million increase during the year ended January 31, 20252026 was primarily due to an increase of $5.0 million in interest income on cash and cash equivalents and short-term investments due to higher average cash and short-term investment balances.balances, partially offset by lower interest rates on our investments.

The $2.2$4.6 million increase during the year ended January 31, 20252026 was primarily due to an increase of $2.9$5.4 million in interest expense related to the Convertible Notes, particularly the 2029 Convertible Notes, which bear interest at a rate of 1.50% per year.year Thiscompared increaseto wasthe partially0.00% offsetconvertible bynotes athat decrease of $0.8 millionmatured in interest2026 expense(the related"2026 toConvertible ourNotes" financeand leases.together with the 2029 Convertible Notes, the "Convertible Notes").

Other Expense,Income (Expense), Net

The $9.1$13.6 million increase in other expense, net during the year ended January 31, 20252026 was primarily due to the convertible debt inducement expense of $10.1 million.million Thisrecognized during the year ended January 31, 2025 and an increase was partially offset by a decrease of $1.4$3.1 million in net foreign currency losses.gains.

(Benefit from) Provision for Income Taxes

In January 2021, we issued $345.0 million aggregate principal amount of 0.00% convertible senior notes due January 15, 2026. In September 2024, using proceeds from the issuance of the 2029 Convertible Notes, we entered into separate and privately negotiated transactions with certain holders of the 2026 Convertible Notes to repurchase $140.0 million aggregate principal amount of the 2026 Convertible Notes. Upon maturity in 2026, we settled in full the $205.0 million outstanding principal amount in cash.

In June 2023, we entered into an amended and restated secured credit agreement (the "“June 2023 Facility"”) and in December 2024, we entered into Amendment No. 1 to the June 2023 Facility to provide for a $150.0$75.0 million revolving loan facility with a $45.0 million sublimit for the issuance of letters of credit. In September 2024, we paid down our $30.0 million debt outstanding and had no outstanding debt asAs of January 31, 2025. In December 2024,2026, we enteredhad intono Amendmentdebt No.outstanding 1 toon the June 2023 Facility to decrease the revolving commitments from $150.0 million to $75.0 million and maintain the $45.0 million letter of credit sublimit.Facility.

Our Board of Directors has authorized a share repurchase plan to opportunistically repurchase shares of our outstanding Class A common stock in open market transactions. On December 2, 2025, we announced that our Board of Directors authorized a $150 million expansion of the share repurchase plan. During the year ended January 31, 2025,2026, we repurchased 7.69.7 million shares at a weighted average price of $27.90$30.35 per share for a total amount of $211.5$292.9 million. As of January 31, 2025,2026, $52.0$59.2 million remained authorized and available for additional repurchases.

To improve our operating results, it is important that our customers renew their subscriptions with us when their existing subscription term expires. We cannot assure you that customers will renew their subscriptions upon expiration at the same or higher level of service, for the same number of seats or for the same duration of time, if at all. Our net retention rate has fluctuated from period to period and it may decrease again in the future if our customers do not renew their subscriptions with us or decrease their use of our services. Our net retention rate was approximately 105%106% and 102%103% as of AprilJuly 30,31, 2026 and 2025, respectively.

Issues relating to the use of new and evolving technologiestechnologies, such asincluding generative AIAI, poweredautonomous byagentic AI, large language modelsmodels, and machine learning—whether that we integrateintegrated into our customer-facing product offerings or deployed internally across our software development, business operations, and administrative functions—may cause us to experience operational disruptions, brand or reputational harm, competitive harm, legal liability, new or enhanced governmental or regulatory scrutiny, and to incur additional costs to resolve such issues. As with many innovations, AI presents risks and challenges that could undermine or slow its adoption, and therefore harm our business. For example, perceived or actual technical, legal, compliance, privacy, security, ethical or other issues relating to the use of AI, including risks related to accuracy, bias, toxicity, privacy and security, data provenance, and the adequacy of AI development, deployment, content labeling and governance, may cause public confidence in AI to be undermined, which could slow our customers’ adoption of our products and services that use AI. AI technologies, including generative AI, may produce outputs that appear correct but are factually inaccurate or flawed, and customers or others may rely on such outputs to their detriment, which could expose us to reputational harm, competitive harm, and/or legal liability. Generative AI may also produce content that includes copyrighted or other protected material, and if we or our customers use such content or rights holders seek to enforce their rights, we may be exposed to claims and associated costs. In addition, litigation or government regulation related to the use of AI may also adversely impact our and others’ abilities to develop and offer products that use AI, as well as increase the cost and complexity of doing so. For example, in May 2024, the European Council adopted the AI Act (the “EU AI Act”), which imposes significant obligations related to the use of AI systems and is anticipated to impact the entire AI ecosystem in the European Union. Additionally, as the EU AI Act is implemented, subsequent guidance, standards and regulations, as well as regulatory bodies within respective member states are expected, which may present unforeseen risks and related challenges. In January 2025, President Trump issued an Executive Order on AI along with various additional measures that rescindedfollowed, formerincluding Presidentadditional Biden’s Executive order on AI,assessments and/or announcedrestrictions effortsthat tocould investimpact inor constrain our AI infrastructureproduct and innovation. In July 2025, the U.S. federal government released a policy roadmap and set of initiatives referred to as America’s AI Action Plan.offerings. With this shift in AI policy at the federal level, it is unclear the extent to which this may present opportunities or risks to Box in the adoption of AI, including integrating with AI systems developed outside the U.S. that may be, for example, more cost effective. Conversely, at the state level, states such as Arkansas, California, Colorado, Illinois, Maryland, Montana, New York, and Texas have enacted several AI-specific bills covering the deployment and regulation of AI technology, which may impact Box. Developing, testing, deploying and deployingmaintaining third-party AI systems may also increase the cost profile of our product offerings dueand toour theoperational nature of theand computing costs involved in such systems,expenses, which could impact our margins and adversely affect our business and operating results. Our business may be disrupted if any of the third-party AI services we use become unavailable due to extended outages or interruptions or if they are no longer available on commercially reasonable terms or prices. Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in our product development efforts.

We continuously evaluate our short- and long-term cloud-based server capacity requirements to ensure adequate capacity for new and existing customers while minimizing unnecessary excess capacity costs. If we overestimate the demand for our cloud content management services and therefore secure excess cloud-based server capacity, our operating margins could be reduced. If we underestimate our cloud-based server capacity requirements or if we are unable to meet our contractual minimum commitments, we may not be able to service the expanding needs of customers and may be required to limit new customer acquisition or provide credits or refunds to existing customers, which would impair our revenue growth and harm our operating results. We outsource a substantial majority of our cloud hosting to Google Cloud Platform (GCP), which hosts our products and platform. Industry-wide supply constraints—including shortages or extended lead times for high-performance AI processors, memory components, and optical networking hardware, as well as data center power delivery and utility capacity bottlenecks—have intensified competition for hosting and compute resources. To the extent we do not effectively address capacity constraints, either through GCP or alternative providers of cloud hosting, or other risks are realized that may result in interruptions, delays and outages in service and availability of our products and/or services, our business and operating results may be adversely affected. Furthermore, regardless of our ability to appropriately manage our cloud-based server capacity requirements, only a small percentage of our customers currently use Box to organize all of their internal files, and an increase in the number of organizations, in particular large businesses and enterprises, that use our service as a larger component of their content storage requirements, could result in lower gross and operating margins or otherwise have an adverse impact on our financial condition and operating results.

We repurchase shares of our Class A common stock in open market transactions from time to time pursuant to publicly announced stock repurchase program approved by our Board of Directors. During fiscal year 2026, we repurchased 9.7 million shares for a total amount of $292.9 million and during fiscal year 2025, we repurchased 7.6 million shares for a total amount of $211.5 million. For the threesix months ended AprilJuly 30,31, 2026, we repurchased 4.87.4 million shares for a total amount of $114.4$180.7 million. Any share repurchases remain subject to the circumstances in place at that time, including prevailing market prices, and we are not obligated to repurchase a specified number or dollar value of shares. As a result, there can be no guarantee around the timing or volume of our share repurchases or that we will have adequate cash flow to fund any repurchases. In addition, as part of the Inflation Reduction Act signed into law in August 2022, the U.S. implemented a 1% excise tax on the value of certain stock repurchases by publicly traded companies. This tax could increase the costs to us of any share repurchases. The stock repurchase program could affect the price of our Class A common stock, increase volatility and diminish our cash reserves. Our repurchase program may be suspended or terminated at any time and, even if fully implemented, may not enhance long-term stockholder value.

As of AprilJuly 30,31, 2026, we had outstanding debt, including an aggregate principal amount of $460.0 million issued under the 2029 Convertible Notes. During specified periods, the 2029 Convertible Notes are convertible at the option of the holders under certain conditions or upon occurrence of certain events as described in Note 9, Part II, Item 8 of our Annual Report on Form 10-K for the year ended January 31, 2026. If one or more holders of the 2029 Convertible Notes elect to convert their notes, we are required to settle the principal of the 2029 Convertible Notes in cash upon any conversion of such notes, which could adversely affect our liquidity. In addition, even if holders of the 2029 Convertible Notes do not elect to convert their notes, we may be required under applicable accounting standards to reclassify the carrying value of the 2029 Convertible Notes as current, rather than long-term, if any of the conditions to the convertibility of the 2029 Convertible Notes are satisfied. This reclassification could materially reduce our reported working capital.

Pursuant to that certain Investment Agreement dated April 7, 2021, by and among Box, Inc. and Powell Investors III L.P., KKR-Milton Credit Holdings L.P., KKR-NYC Credit C L.P., Tailored Opportunistic Credit Fund, and CPS Holdings (US) L.P. (the “Investment Agreement”), KKR had the right to designate one candidate for nomination for election to our Board of Directors and preemptive rights to participate in certain future offering of securities of Box for so long as KKR and its permitted transferees maintained a minimum aggregate holdings of our stock as described in further detail in the Investment Agreement; however, KKR has waived both its rights to designate or nominate an Investor Designee (as defined in the Investment Agreement) to the Board and its preemptive rights pursuant to the Investment Agreement.

The issuance of shares of our Series A Convertible Preferred Stock reduces the relative voting power of holders of our Class A common stock, and the conversion of those shares into shares of our Class A common stock wouldhas dilutein the past diluted, and may further dilute, the ownership of Class A common stockholders and may adversely affect the market price of our Class A common stock.

The holders of our Series A Convertible Preferred Stock are entitled to vote, on an as-converted basis, together with holders of our Class A common stock on all matters submitted to a vote of the holders of our Class A common stock, which reduces the relative voting power of the holders of our Class A common stock. In addition, the conversion of our Series A Convertible Preferred Stock into Class A common stock wouldhas dilutein the past diluted, and may further dilute, the ownership interest of existing holders of our Class A common stock, and any conversion of the Series A Convertible Preferred Stock would increaseincreases the number of shares of our Class A common stock available for public trading, which could adversely affect prevailing market prices of our Class A common stock.

We continue to innovate by expanding our core services and offerings. In AprilJune 2026, we announced the expansion of Box Zones to 10 regions worldwide, adding Israel, Singapore, and Switzerland as new regions and enhancing Canada and France with in-region compute, enabling global enterprises to better meet data residency requirements. In July 2026, we announced the launch of Box agent security and governance, a suite of security capabilities that protect enterprise content from the risks introduced by AI agents that connect from third-party platforms like Claude, ChatGPT, Microsoft Copilot, and Gemini through the Box Model Context Protocol (MCP) Server or APIs. In addition, we recently announced the general availability of the new Box Agent that leverages the latest advanced reasoning models to securely search company files, analyze and synthesize critical data, and generate new content – all while respecting Box’s enterprise-grade security, governance, and permissions controls. We also recently announced the general availability of Box Automate, our content-focused agentic workflow automation solution built natively in Box to orchestrate work across agents and teams.

For the three months ended AprilJuly 30,31, 2026 and 2025, our revenue was $305.9$321.1 million and $276.3$294.0 million, respectively, representing year-over-year growth of 11%,9%, or 10%11% growth on a constant currency basis. As of AprilJuly 30,31, 2026, our remaining performance obligations were $1.6$1.7 billion, representing a 12%an increase of 15% from our remaining performance obligations of $1.5 billion as of AprilJuly 30,31, 2025, or 16%17% growth on a constant currency basis. For the three months ended AprilJuly 30,31, 2026, our gross profit was $243.2$254.0 million and our gross margin was 79.5%,79.1%, compared to our gross profit of $215.6$232.5 million and our gross margin of 78.0%79.1% for the three months ended AprilJuly 30,31, 2025. For the three months ended AprilJuly 30,31, 2026, our operating income was $27.4$32.6 million and our operating margin was 9.0%,10.2%, compared to our operating income of $6.3$20.6 million and our operating margin of 2.3%7.0% for the three months ended AprilJuly 30,31, 2025. For the three months ended AprilJuly 30,31, 2026, our net cash provided by operating activities was $140.2$70.8 million, a 10%an increase of 54% from our net cash provided by operating activities of $127.1$46.0 million for the three months ended AprilJuly 30,31, 2025. For the three months ended AprilJuly 30,31, 2026, our non-GAAP free cash flow was $127.7$59.7 million, an 8%increase increaseof 67% from our non-GAAP free cash flow of $118.3$35.7 million for the three months ended AprilJuly 30,31, 2025.

RPO as of AprilJuly 30,31, 2026 was $1.6$1.7 billion, an increase of 12%15% from AprilJuly 30,31, 2025. As of AprilJuly 30,31, 2026, short-term RPO was $880.2$904.7 million, an increase of 8%11% from AprilJuly 30,31, 2025, and long-term RPO was $761.7$787.0 million, an increase of 16%18% from AprilJuly 30,31, 2025. The increase in RPO was driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites, the timing of customer-driven renewals, longer average contract terms, and the addition of new customers. RPO growth was unfavorably impacted by approximately 470290 basis points due to fluctuations in foreign currency exchange rates.

Billings for the three and six months ended AprilJuly 30,31, 2026 were $255.4$309.5 million and $564.9 million, respectively, representing an increase of 5%17% from the three months ended AprilJuly 30,31, 2025 and an increase of 11% from the six months ended July 31, 2025. The increase in billings was primarily driven by expansion within existing customers as they broadened their deployment of our product offerings and the conversion to multi-product Suites, the addition of new customers, and the timing of customer-driven renewals. Billings growth was unfavorablyalso impacted by approximately 790 basis points due to fluctuations in foreign currency exchange rates. For the three months ended July 31, 2026, billings growth was favorably impacted by approximately 100 basis points and for the six months ended July 31, 2026, billings growth was unfavorably impacted by approximately 320 basis points.

Non-GAAPThe increase in non-GAAP free cash flow for the three months ended AprilJuly 30,31, 2026 was $127.7primarily million,driven representingby an increase ofin 8%cash flows from theoperating threeactivities monthsand endeda Aprildecrease 30,in 2025.purchases of property and equipment, partially offset by an increase in capitalized software costs. The increase in non-GAAP free cash flow for the six months ended July 31, 2026 was primarily driven by thean increase in cash flows from operating activities, partially offset by an increase in capitalized software costs and an increase in purchases of property and equipment.costs. The year-over-year changes in cash flows from operating activities for the three and six months ended July 31, 2026 are described in more detail under Liquidity and Capital Resources below.

Our net retention rate was 105%106% and 102%103% as of AprilJuly 30,31, 2026 and 2025, respectively. Our net retention rate continueshas improved due to becontinued impactedcustomer byadoption heightenedof budgetour scrutiny,products, puttingparticularly pressureour onmulti-product seat expansion within existing customersSuites and increasedAI-enabled partial customer churn.products. As our customers purchase add-on products or our bundled plans, we tend to realize significantly higher average contract values and stronger net retention rates as compared to customers who only purchase our core product. We believe our go-to-market efforts to deliver a solution selling strategy and our investments in product, customer success, and Box Consulting, including our Box Shuttle migration offering, are significant factors in our customer retention results. As we penetrate customer accounts, we expect our net retention rate to remain above 100% for the foreseeable future.

Comparison of the Three and Six Months Ended AprilJuly 30,31, 2026 and 2025

The $29.7$27.1 million, or 11%,9%, increaseand $56.8 million, or 10%, increases in revenue for the three and six months ended AprilJuly 30,31, 20262026, wasrespectively, were primarily driven by seat growth, net of churn in existing customers and continued strong attach rates of our multi-product Suites offerings, particularly Enterprise Plus and Enterprise Advanced. The increaseincreases waswere alsopartially impactedoffset by the strengtheningweakening of foreign currency exchange rates, which positivelynegatively impacted our revenue growth raterates by approximately 170 basis points and 60 basis points.points for the three and six months ended July 31, 2026, respectively.

The $2.1$5.7 million, or 3%,9%, increase in cost of revenue for the three months ended AprilJuly 30,31, 2026 was primarily due to increases of $4.0$3.7 million in amortization of capitalized software and $0.7$3.2 million in subscriptionpublic softwarecloud contractinfrastructure expense.costs. This increase was partially offset by decreases of $1.2 million in public cloud infrastructure costs, $0.8 million in workforce reorganization expenses, and $0.7 million in acquired intangible assets amortization.amortization, $0.3 million in contractors and consulting services, and $0.2 million in stock-based compensation expense. Cost of revenue as a percentage of revenue decreasedremained by approximately 150 basis pointsflat year-over-year.

The $3.6$6.7 million, or 5%,9%, increase in research and development expense for the three months ended AprilJuly 30,31, 2026 was primarily due to increases of $4.6$5.5 million and $1.8$1.4 million in employee related costs and stock-based compensation expense, respectively, driven by a 4%6% increase in headcount. The increased employee headcount and related costs are primarily driven by the growth in lower cost regions. Additionally, we had increases of $1.5$2.0 million in subscriptionenterprise software contract expense,expenses, $1.5 million in office related costs, and $1.3 million in public cloud infrastructure costs, and $1.4 million in office related costs. The increase was partially offset by a decrease of $3.6 million in workforce reorganization expenses, an increase of $2.8 million inhigher capitalized internally developed software costs,costs of $4.0 million and a decreasedecreases of $0.7$0.6 million in contractors and consulting services.services and $0.4 million in workforce reorganization expenses. Research and development expenses as a percentage of revenue decreasedremained by approximately 100 basis pointsflat year-over-year.

The $2.8$4.5 million, or 3%,4%, increase in sales and marketing expense for the three months ended AprilJuly 30,31, 2026 was primarily due to increases of $4.4$4.0 million and $0.9$0.6 million in employee related costs and stock-based compensation expense, respectively, driven by a 7%5% increase in headcount, and an increase of $0.3 million in commission expenses. This increase was partially offset by decreases of $2.1 million in workforce reorganization expenses and $0.8 million in contractors and consulting services.headcount. Sales and marketing expenses as a percentage of revenue decreased by approximately 300150 basis points year-over-year.

ForThe $1.8 million, or 5%, decrease in general and administrative expense for the three months ended AprilJuly 30,31, 2026,2026 generalwas primarily due to decreases of $1.5 million in stock-based compensation expense and administrative$0.6 expensemillion remainedin relativelyworkforce flat.reorganization expenses. This decrease was partially offset by an increase of $0.6 million in contractors and consulting services. General and administrative expense as a percentage of revenue decreased by approximately 100160 basis points year-over-year due to the increase in revenue.year-over-year.

The $3.7$3.9 million decreaseand $7.6 million decreases for the three and six months ended AprilJuly 30,31, 2026, wasrespectively, were primarily due to a decreasedecreases in interest income on cash and cash equivalents and short-term investments. ThisThese decreasedecreases waswere driven by lower average cash and short-term investment balances, primarily resulting from the settlement of convertible notes in January 2026 and repurchases of common stock, along with lower interest rates on our investments.

The $0.3 million decreaseand $0.6 million decreases for the three and six months ended AprilJuly 30,31, 2026, wasrespectively, were primarily due to a decreasedecreases in amortization of convertible debt issuance costs due to the maturity of convertible notes in January 2026.

The $3.3$0.3 million decreaseand $3.6 million decreases for the three and six months ended AprilJuly 30,31, 20262026, wasrespectively, were primarily due anto increaseincreases of $3.4$0.3 million and $3.7 million, respectively, in net foreign currency losses.

The $4.8$2.3 million increaseand $7.2 million increases for the three and six months ended AprilJuly 30,31, 20262026, wasrespectively, were primarily due to increased profitability and a change from tax windfalls to tax shortfalls on stock-based compensation.compensation, partially offset by lower U.S. tax on foreign earnings.

As of AprilJuly 30,31, 2026, we had cash and cash equivalents, restricted cash, and short-term investments of $478.6$445.6 million. During the threesix months ended AprilJuly 30,31, 2026, we generated operating cash flow of $140.2$211.0 million. Since our inception, we have financed our operations primarily through equity financing, cash generated from operations and debt financing. We believe our existing cash, cash equivalents, and short-term investments, together with our credit facility, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months and beyond. Our long-term capital requirements will depend on many factors including our growth rate, subscription renewal activity, billing frequency, public cloud obligations, repayment or refinancing of our debt obligations, settlement of our convertible senior notes and convertible preferred stock, the timing and extent of spending to support development efforts, the expansion of international activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of our services. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all.

For the threesix months ended AprilJuly 30,31, 2026 and 2025, our cash flows were as follows (in thousands):

The $13.1$38.0 million increase in net cash provided by operating activities for the threesix months ended AprilJuly 30,31, 2026 compared to the threesix months ended AprilJuly 30,31, 2025 was primarily due to aan $15.2increase of $22.8 million increase in non-cash items and aan $9.5increase of $15.3 million increase in net income, partially offset by an $11.6 million decrease in net cash provided from changes in operating assets and liabilities.income.

The $15.2$22.8 million increase in non-cash items was primarily due to ana $8.1$7.9 million decreaseincrease in unrealized loss from foreign currency remeasurement, a $5.0$4.6 million increase in deferred income tax benefit,expense, a $2.4$4.6 million increase in depreciation and amortization expense driven by an increase in amortization of capitalized software, a $2.5 million increase in losses from foreign currency forward contracts not designated as cash flow hedges, and a $1.4$2.0 million increase in stock-based compensation expense driven by an increase in headcount. The increase was partially offset by a $2.2 million decrease in gains from foreign currency forward contracts not designated as cash flow hedges.

The $11.6 million decreaseincrease in net cash provided fromby operating activities was further adjusted by a $0.1 million increase in net cash outflows due to changes in our operating assets and liabilitiesliabilities, which was primarily due to a $13.0 million change in accounts payables and accruals due to timing of payments and an $8.3$8.5 million change in other assets due to the timing of prepayments.prepayments, Thea decrease$5.4 wasmillion change in deferred commissions resulting from capitalization of incremental commissions paid to our sales force, and a $1.9 million change in operating lease liabilities due to recurring lease payments. These changes were partially offset by an $11.6 million change in deferred revenue due to the timing of revenue recognition and a $10.5$3.9 million change in accounts receivable due to timing of our cash collections.

The $4.2$1.3 million decreaseincrease in net cash used in investing activities for the threesix months ended AprilJuly 30,31, 2026 compared to the threesix months ended AprilJuly 30,31, 2025 was primarily due to a $6.2 million decrease driven by the timing of purchases of short-term investments, partially offset by a $1.4$4.3 million increase in capitalized software costs driven by increased projectsprojects, andpartially offset by a $1.0$1.5 million increasedecrease in purchases of short-term investments driven by the timing, a $0.8 million decrease in purchases of property and equipment, net of sale proceeds,proceeds driven by build outs forreduced office spaces.space build out expenses, and a $0.7 million increase in maturities of short-term investments.

The $64.1$89.4 million increase in net cash used in financing activities for the threesix months ended AprilJuly 30,31, 2026 compared to the threesix months ended AprilJuly 30,31, 2025 was primarily due to a $66.7$96.1 million increase in repurchases of our common stock, partially offset by a $4.4$10.5 million decrease in employee payroll taxes paid related to net share settlement of stock awards.awards driven by our stock price on the date of vest.

In June 2023, we entered into an amended and restated secured credit agreement and in December 2024, we entered into Amendment No. 1 to the June 2023 Facility to provide for a $75.0 million revolving loan facility with a $45.0 million sublimit for the issuance of letters of credit. As of AprilJuly 30,31, 2026, we had no debt outstanding on the June 2023 Facility.

Our Board of Directors has authorized a share repurchase plan to opportunistically repurchase shares of our outstanding Class A common stock in open market transactions. On March 19, 2026, we announced that our Board of Directors authorized a $500 million expansion of the share repurchase plan. During the three months ended AprilJuly 30,31, 2026, we repurchased 4.82.6 million shares at a weighted average price of $23.74$25.84 per share for a total amount of $114.4$66.4 million. During the six months ended July 31, 2026, we repurchased 7.4 million shares at a weighted average price of $24.47 per share for a total amount of $180.7 million. As of AprilJuly 30,31, 2026, approximately $445$378 million remained authorized and available for additional repurchases.

Through AprilJuly 30,31, 2026, we did not have any relationships with unconsolidated entities that have, or are reasonably likely to have, a material effect on our financial statements.

Our principal commitments consist of (i) obligations under operating leases for office spaces, (ii) purchase obligations not recognized on the condensed consolidated balance sheet as of AprilJuly 30,31, 2026, which relate primarily to public cloud hosting services and IT software and support services, and (iii) debt, including obligations under our June 2023 Facility and 2029 Convertible Notes. For more information regarding our obligations for leases, purchase agreements, and debt, refer to Notes 5, 6, and 7, respectively, in Part I, Item 1. Financial Statements.

There have been no material changes to our critical accounting estimates during the threesix months ended AprilJuly 30,31, 2026 from those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended January 31, 2026.