Box, Inc. (BOX) Earnings Call Transcript & Summary

Cynthia Hiponia, Vice President of Box Investor Relations. Thanks for joining us today at BoxWorks '21, our investor webcast focusing on our product strategy. We look forward to a broader discussion on our strategy and financials during our spring Analyst Day, which is targeted for March 2022. This presentation contains forward-looking statements that involve risks, uncertainties and assumptions. Additionally, there are a significant number of factors that could cause actual results to differ materially from statements made in this presentation. Further information on these and other factors that could affect forward-looking statements we make in this presentation can be found in the documents that we file with the U.S. Securities and Exchange Commission. Finally, please note that any reference to guidance is as of August 25, 2021, our 2Q earnings release and call. With that, I'll turn the call over to Aaron Levie, Box CEO and Co-Founder.

Thanks, Cynthia, and I appreciate everybody taking the time today. We have had the biggest BoxWorks we've ever done, especially in a virtual environment. We've had thousands of attendees throughout the day. And we are now live streaming the event continuously to customers, and we will be getting, again, tens of thousands of more views on our keynotes and major product updates. What we wanted to do was actually a double-click session for investors on our product strategy, some of the big announcements that we've made at BoxWorks thus far, and some of the areas that you're going to see us put even more investment behind as we really go and drive our content cloud strategy. So I'm excited to welcome our product leadership -- a few members of the product leadership team today that will be diving into some of these major investment areas so you have a sense of where we are building up the content cloud. We have Diego, our new Chief Product Officer. Incredibly excited to have Diego join from Adobe just a couple of months ago. We have Alok who leads our security and enterprise protection products and capabilities. And Burke, who's our Vice President of Applications and Integrations. They will be going through much of our strategy around workflow, e-signature and other areas of investment. So we're, again, very excited for all of the announcements that we've made today. We actually had a private session with CIOs yesterday where we got an early preview of much of this innovation, and the feedback has been unbelievable from customers and the excitement for where the product strategy and road map is going. At Box, as you've heard us talk about, we are fundamentally at an inflection point to drive greater growth and profitability. We are going after a $55 billion market that is only increasing in size as we add additional TAMs in the form of Box Sign and other markets that we plan to enter. We are building the leading content cloud that powers critical workflows across the entire enterprise, and you're going to hear a lot more about that from Diego and team about our product strategy to deliver against that. We're driving a very efficient and repeatable go-to-market engine to go after our 100,000-plus customers, driving seat expansion, price per seat expansion, and net retention rate improvements through greater stickiness of the application as well as additional logo growth through very efficient customer acquisition and our land-and-expand model. And then finally, we are committed to achieving a Rule of 40 by FY '24, and we're going to do that by driving both greater growth and profitability levels from here. So first, before we dive into some of the major product updates from BoxWorks today, we want to go into a little bit about what are the changes happening in the workplace that are propelling our growth and propelling our strategy going forward. When we started Box in 2005, we had a very simple mission. We wanted to make it easy and secure to access and share files from anywhere. And back then, there were actually relatively limited tailwinds in terms of changing the ways that we work together. We had the introduction of BlackBerries. Internet speeds were getting a little bit faster. Browsers were getting a little bit more performant. But this is still in the very early days of the web and cloud computing in general. Fast forward to today, we're all working from mobile devices. We're working from lots of new locations. The power of cloud computing is only getting more intense in what you can actually offer in the cloud. And there's billions of knowledge workers globally that ultimately need modern technology to do their jobs. And so if we fast forward to today, we're incredibly excited about the ability to go impact how over 100,000 customers work all around the world, and we serve over 67% of the Fortune 500. And what I get so excited about and what I think the big opportunity is for Box going forward is really just the range of customer sizes that we serve and the range of industries that we serve. So we get to work with everything from fast-growing companies like Spotify or Airbnb that are scaling all around the world, to some of the world's largest organizations like Amazon or IBM or Cisco or many other large technology companies as they continue to go and dominate their respective parts of the industry. But we also get to work with organizations across life sciences, health care, financial services and so many other industries that are driving mission-critical work in the cloud. And what all of these companies have in common and what are broadly our entire customer base has in common is that everyone is dealing with an all-new way that they want to work and they have to work given the pandemic and many of the other underlying digital transformation trends that have been happening. The first mega trend is the fact that we're now working from anywhere. We are working in a much more distributed fashion. We need to be able to work on any device in any location at any time. And technology has to change to be able to shape this new way of working. The second big mega trend, and we've seen this in the pandemic for the companies that were able to survive or thrive, is we need digital-first experiences with our customers, our partners and our employees and across our supply chain. This is especially important in content, where you've seen us invest very aggressively in areas where we can expand our entry into these digital workflows and digital experiences with Box Sign, Box Relay and other major areas. And then finally, you can't go a single day without reading in some headline about a ransomware attack or some new threat that is emerging or a data privacy issue or a regulation that's going to emerge in the Internet. And this is fundamentally shaping how companies work with their data, how they secure their information, how they protect it. And you will see a lot of announcements from earlier today around where we're taking Box Shield, Box Governance and major innovation as well, and Alok will dive into that in just a few moments. So if you think about it, work is more distributed, businesses have to go digital, and data security and compliance are driving so much transformation in the cloud. And at the heart of all this is how companies work with their content. If you think about a life sciences organization that now has to do clinical drug research in a distributed fashion, fundamentally, what are they moving around in that trial process? They're moving around content. They're moving around data sets, spreadsheets, research information. They have to be able to protect this content securely. They have to be able to go and work with the FDA. And so the ability to accelerate clinical drug trial processes in a distributed fashion fundamentally revolves around content. Or take a financial services organization that wants to be able to onboard their clients in a digital-first fashion. All of the invoices, all of the documents, all of the financial records that they have to work with, fundamentally, that's about content. And how a financial services organization can secure that content or streamline those workflows is what is going to determine whether they can serve their customers effectively or not in the digital age. Or take media and entertainment. And at BoxWorks, we were excited to hear from both the CIO of MGM, the lead of technology at Lionsgate Media and the CEO of WarnerMedia. So 3 different media organizations, all of which revolve around content, all of which have had to work in a distributed fashion and have had to drive digital-first transformation for their businesses. And those businesses fundamentally need to be able to secure and protect their intellectual property as it gets shared across teams and all around the world, and that all revolves around content. So when we think about the market, content is our customers' business. Businesses run on content, whether you're a bank, a life sciences company, a health care provider, a government agency. Whether it's sharing and collaborating with employees, whether it's driving workflows and onboarding customers, whether it's collaborating across the supply chain with partners, content is at the center of these workflows. And for far too long, and certainly, the pandemic has even further driven evidence of this, we know that we need a new approach to content management in the cloud. Back in the '90s, we had network file shares and on-premise storage. In the 2000s, we had a lot of innovation around document management systems and enterprise content management systems. These technologies were incredibly powerful for the enterprise, but they left some room for work on the end user front. That's when we saw the enterprise file sync and share space emerge with products that Box obviously grew up with, like Dropbox and others. But that was never the vision for the company. What we wanted to build was the leading enterprise content management platform in the cloud, and that is really the next evolution of this market and the opportunity for Box going forward. What companies are dealing with today is massive fragmentation of content. They have content across network file shares, across document management systems, across security technologies, across collaboration tools and e-signature vendors and even publishing technology as well. And the reason that we've had to have all of this investment in technology is because there was never a single platform that could solve the full life cycle of that content workflow. This led to fragmented content where lines of business and end users are -- end up being slowed down in the work that they're doing. It ends up being a massive drain in productivity. It creates security vulnerabilities and risks because we don't know where our information lives at any given time. And it means that IT departments have to spend way too much on technology expenses instead of being able to put those dollars to work in innovation and accelerating their businesses. And so that's where the Box Content Cloud comes in. We are powering the entire life cycle of content in a single integrated platform. From the moment you ingest content to when you secure and protect it, to collaborate in real time or automate workflows around it, to getting an e-signature or publishing that content, to getting content analytics and telemetry on your data or governing that information, and then finally, extending it via our APIs. And in just a few moments, Diego is going to walk through some of the amazing innovation we've had over the past year and some of our philosophies around this innovation going forward. But we've been building out the leading content cloud to power the complete life cycle of content in a single platform. And what's exciting is that as we go and continue to build out the content cloud, we are addressing larger and larger market opportunities. So we've talked about our TAM in the past, that's including the content collaboration space and data security and compliance and traditional file storage as it moves to the cloud as well as ECM. Well, each of these markets, in their own respect, are growing, and we're going to ensure that we can go and disrupt this broader ecosystem. But we're also getting into adjacent markets like e-signature that's expected to be a $4 billion market by calendar 2024. And if you think about it, we're still in the very early stages of the e-signature market even, and Burke will talk in a few moments about what that opportunity looks like. But with the content cloud and with our lead position in content management, you're going to see us continue to build out and extend into additional categories that make sense to be in the content life cycle. That will enter us into larger TAMs as well as faster-growing TAMs, in many cases, compared to the traditional enterprise content management market. So as we add up those TAMs and as we continue to drive further into high-growth markets, we are very, very confident with our long-term plan of driving that accelerated growth and profitability. So to go after this $55 billion-plus market, we are building the leading content cloud to power critical workflows across the entire enterprise. So if you think about our platform, which is to power that full life cycle of content in a single multi-tenant SaaS architecture, we want to power critical workflows across the entire enterprise. This could be marketing teams that want to be able to drive digital asset management; sales teams that want to enable client collaboration or sales enablement; operations teams that are driving field operations or supply chain collaboration; R&D teams that want to be able to do product design, development and R&D documentation; HR teams that have to onboard employees and train employees across their organization; finance teams that need virtual data rooms or be able to automate their planning workflows. All of these business processes are both mission-critical and rely on content, and this is fundamentally the power of having a content cloud in the enterprise. And what's incredibly exciting is that we're bringing the power of that content cloud to again more customers than ever before and across every single industry. So at BoxWorks, we've been doubling down on our innovation. Over the past 1.5 years, at the start of the pandemic, we stepped back and we said, "What kind of product updates, what kind of innovation are we going to deliver to the market in this new world of working in a hybrid fashion, where digital workflows matter more than ever before, and data security and compliance is going to be at the forefront of every single tech trend?" So we are investing in 3 major areas of innovation. The first is on seamless collaboration and workflow to empower how people work; the second is how we can protect content with frictionless security and compliance; and finally, the investments in our open platform so we can integrate across any application that our customers want to use. And with that, I'm incredibly excited to introduce Diego to all of our investors and analysts. Diego is our Chief Product Officer, and he's going to walk through a little bit about what we've been building at Box over the past year with, again, a little bit of a message for what's to come and our strategy overall. So Diego, over to you.

Thank you, Aaron. Thank you very much to all of you for being here with us today. I'm thrilled to be here at my first BoxWorks as a Boxer, and I'm so impressed with everything the team has achieved this year. One of my life mottos is the best is yet to come. So I can assure you that this is the case with Box. You'll see a ton of exciting announcements from us today, all centered on helping people work together no matter where they are. We have an extraordinary opportunity ahead of us, and I'm honored to be part of it. Rethinking work is not a onetime exercise, it is a mindset; a mandate to continually question, reevaluate and revise our product strategy. So we're dedicated to helping our customers be successful, not just now but also in the future. And the way we will do that is with the content cloud. It's one integrated platform for managing all of your content no matter where it was created, how it's being used. It saves you money by eliminating the need for a litany of costly single-purpose point solutions, and it gives you a consistent approach to security and compliance for all of your content within and beyond Box. You'll see these themes borne out of every one of our products from e-signatures to security. With the content cloud, you know that your most important information is always safe, accessible and ready to create business value. So with that in mind, let's take a look at what we have delivered this year. I'm grateful to the entire Box team for their incredible dedication and hard work. Our goal this year was to help customers complete the content journey in Box, and we made incredible strides. To help users get content into Box, we introduced the all-new Box channel with new self-service tooling to help them start it immediately -- get started immediately. And we enhanced Box Mobile -- the Box Mobile app with embedded audio recording and document scanning with OCR so uploads are instantly searchable. We also launched file request API for creating and managing file requests at scale. Now when it comes to protecting content, we launched device trust endpoint protection to make it easier to secure content no matter where it's being accessed. And we enabled new malware detection and alerts with Box Shield to help better protect against ransomware and other malware attacks. We also enhanced our classification capabilities with our classification in Box Shield to automatically classify content based on predicted PII, custom terms and file type. And we also expanded our integration with Microsoft Information Protection, so users can import MIP sensitivity labels and apply them as classification labels in Box. Now let's switch to how customers work with their content and collaborate within Box. One of the benefits of the Box Content Cloud is that it enables enterprises to collaborate on across any file type. All Box users now have the ability to preview and annotate Adobe-created cloud files as well, so it's easier than ever to collaborate on creative concepts and designs. This builds on the idea of multiplicity of file formats and applications that we support, including various Autodesk file formats, Microsoft Office, Google Docs and many more. We also enhanced annotations so customers can give feedback on any file type with either text or free-form markups. And we have continued to build out Box Notes as a resource for content creation and sharing so users can work securely with anyone in real time. We also help people work smarter by automating repetitive tasks with Box Relay, our no-code workflow solution. This year, we made Relay workflows more flexible and extensible so users can share, scale and connect their workflows across teams and apps. And we also launched Box Sign, our new natively integrated e-signature tool. Delivering integrated e-signatures was the #1 ask from Box customers, and we are laser-focused on continuing to build out the Box Sign product experience to power a wide range of use cases. You'll hear more about that in just a minute. Further ways to publish content within Box is another top priority and top ask from our users. So we're working on new ways to help them organize, curate and share content in Box and beyond. Knowing how their content performs is also an essential step to making it more effective and useful. Over the past year, we've released several new reporting and insights tools for Box admins. And also for end users, we have some exciting new features to show you today. How companies choose to retain their content is increasingly important, especially when it comes to complying with regulatory standards. This year, we introduced event-based retention so retention policies can be applied in response to business events like a project end date or an employee departure. We also released a new legal hold API to make it easy to apply legal holds across platforms. Finally, our vision of the content cloud extends beyond what happens in Box. Our platform APIs and developer tools help users connect their content across users, apps and platforms so they can extend the power of the content cloud into their business. This year, we made it even easier to connect with Box for Google Workspace Essentials, a new offering that allows customers to get the best of Google with Box as the underlying content system of record. We also enhanced our Webex, Zoom and Microsoft Teams integrations to make it even easier for teams to work together from anywhere. And we've deepened our integrations with Microsoft, including the Box connector for Microsoft Graph and Box Shield support for MIP. We're continuing to innovate in each one of these areas. We're focused also on the future of collaboration across the entire content journey with tons of new features designed to help teams work securely and from anywhere. We're continuing our investments in integrations and interpretability so that Box works even more seamlessly with the rest of your tech stack. We're further developing AI-based advances in content security with deep scanning capabilities to prevent the spread of ransomware and other malicious attacks. And also, we have a range of new tools to give IT admins and the users better visibility, control and insights so they can manage content more effectively. I'm so proud to work with a team that is truly reimagining work. Here at Box, we share a passion for helping our customers succeed in this new world. And today, after we have announced a number of new product updates on our collaboration workflow at BoxWorks, I would like to now hand it over to Burke to double-click and tell you more about a couple of the bigger announcements of the day. Burke, over to you.

Thank you, Diego, and hello, everyone. I'm super excited to talk to you all about a few of our key BoxWorks announcements today. As companies and organizations around the world continue their digital transformation, there is significantly more digital content that needs to be secured, shared and accessed across devices and locations. Box is leading our customers' transition to digital work, and one of the newest ways we're doing that is with electronic signatures. And despite unprecedented growth in electronic signature adoption, only 1/3 of companies have moved from paper-based to digital signatures. And even those that have often have not deployed e-signature wall-to-wall for all use cases within their organizations and they face some other key challenges, one of the first here being stand-alone e-signature tools fragment the content and user experience, making critical files harder to find, manage and protect. They also introduced security; and compliance gaps, issues you won't find with an integrated enterprise content platform. And finally, they can be really expensive, especially for a tool that only does one thing. In July, we released Box Sign, secure seamless e-signatures right where our customers' content lives, and integrated e-signatures has been the #1 request of our customers. With Box Sign, every document signed is stored and managed securely in the content cloud with the same enterprise-grade security, privacy and compliance Box is known for. And most powerfully, Box business and enterprise customers get unlimited web-based signatures at no additional cost with additional higher-tier functionality that customers can upgrade into as well as monetizable APIs for customers who want to embed Box Sign into their custom applications. Box Sign is currently in the hands of select customers and is already being used to power e-signature workflows in many different industries and regions. All of our U.S. and Canadian customers on business plans and above -- go back -- will -- sorry, will receive access to Box Sign tomorrow, October 7, with a wider global rollout starting in November. And with Box Sign, every document you send or sign is stored and managed in the Box Content Cloud so it's easy to find, manage and protect. Native e-signatures in Box come with seamless sender experiences, including reasonable templates, flexible routing and recipient permissions for all your e-sign flows, and a smooth signing experience across desktop and mobile devices. Box Sign also helps you connect e-signature workflows to the rest of the content cloud, including Box Shield, Box Governance and Box Relay. We've also deepened our integration with Salesforce. With Box Sign, you can send documents for signature directly from Salesforce. You can also auto populate documents from Box with stored data in Salesforce without having to leave the Salesforce app. It's all part of our current Box for Salesforce managed package, no separate workflows required. And in support of our strategy to connect every app, we have a robust Box Sign API that can be used to power e-signatures and custom applications, includes web hooks for automated signature flows as well as STK support across multiple platforms. Box Sign inherits the industry-leading security and compliance profile of the Box platform, and we'll be adding additional layers of security with SMS-based signer verification as well as password protection for documents sent for signature. We'll also be adding support for more than 15 languages, all leading up to our global rollout to enable digital transactions worldwide. Box Sign is a key component to our overall content cloud strategy. It's one of our top priorities, and you can expect to see a ton more innovation from us in this space. With the launch of Box Sign, we're starting with a bang and the best is yet to come. Another important piece of our vision to help people work better together is Box Relay, our popular no-code workflow automation tool. With Relay, anyone can build and scale simple content-based business processes. Box Relay takes the manual work out of repetitive workflows. And we've seen incredible momentum amongst our customers. According to Forrester, customers who use Box Relay save an average of 150,000 hours over 3 years, which adds up to about $3.5 million in savings. And our top 20 Relay customers are super users, with an average of 600 active workflows being used to automate processes across the organization. Earlier this year, we made Relay available to more customers, starting with business plans and above so more users can take advantage of this time-saving tools. Digitizing workflows is constantly evolving, so we're continuing to invest and add functionality to make Relay workflows more powerful. Here are some of the recent additions to Relay that we've released over the last year or announced this week at BoxWorks, and I'll touch on just a couple of them real quick. Scheduled workflows. This allows users to schedule a Box Relay process to kick off on a regular cadence, and/or maybe workflow trigger API so you can trigger a Box Relay workflow from an external system or application, again, supporting our strategy to connect all of our customers' apps. In addition to Box Sign and Relay, we've also announced a number of other collaboration enhancements at BoxWorks, including an all-new Box Notes, some exciting capture and scan features in our mobile apps and a whole lot more. Box Notes is our native cloud-based, real-time collaboration solution. It's being used across our customer base for all kinds of use cases, such as knowledge sharing or knowledge management, product documentation, project management, collaboration with external partners or internal reporting or et cetera. You kind of get the drift there. There are so many use cases where this becomes critical in our users' workflow. And as the shape of work continues to change and evolve into a much more distributed hybrid environment, we're continuing to invest in Box Notes to ensure it continues to be a very powerful solution to help our customers excel in this changing landscape that is the future of how work gets done. So thank you. As you can see, there's a lot going on in the collaboration space at Box. Now let me hand it over to Alok to talk about security and compliance.

Okay. Thanks, Burke, and thank you all for being here with us today. As you know, the Box Content Cloud was designed from the beginning with the enterprise-grade security in mind, and we have continually prioritized a frictionless experience by building guardrails and best-of-breed partner integrations and security. But as more sensitive data move to the cloud, security teams face new challenges. The average cost of a data breach in 2021 was the highest in the last 17 years, and we are seeing the rising impact of these trends. Our customers need peace of mind that their sensitive data will be safe as users work with their content in the cloud. However, IT teams and end users across small, medium and large enterprises are dissatisfied with existing security approaches. And the reason is that the traditional security models were not built for the way we work today. In simple terms, the traditional options are bolt-on approaches that impede user productivity and require a lot of care and feeding. Here are the top challenges that customers have shared with us regarding traditional security approaches: First, because of how people work today, traditional approaches lack in-line data leakage prevention. Secondly, because of bolt-on model, the end user experience is broken, impeding user productivity. And lastly, the response actions and workflows, like automated restriction of download for malware or enabling policy exceptions are broken. So the bottom line is that our customers need frictionless security to enable the way people work today. To that effect, we reimagined advanced security for the content cloud. First, we are leveraging machine learning and contextual information about an enterprise to deliver adaptive controls and anomaly detection capabilities. And second, we are placing security controls right around the content to deliver seamless user experience. With these considerations, 2 years ago, we launched Box Shield, our advanced security offering. Since then, it's our fastest-growing add-on product. Box Shield delivers frictionless security experience through smart access controls and intelligent threat detection. With Shield Smart Access, customers can classify their content at scale and prevent accident and leakage through granular security controls. And now, let's talk about threat detection. With that, we actually help security teams identify suspicious user behaviors and protect organizations from malware, and we know our strategy is working. In the past year alone, we have seen incredible adoption of Box Shield. Our customers are seeing the benefit of our continued innovation in this space. For example, one biotech firm used Box Shied anomalous download detection to prevent a departing employee from extenuating sensitive content. Another major technology firm switched to Box Shield from a traditional DLP solution and experienced a significant reduction in accidental leakage of sensitive IP. Securing compliance solutions from Box, including Box Shield, are better together with our solutions -- we talk with solutions from our partners. Our goal is to help our customers maximize the value of their existing security investments. For example, Shield alerts can be easily integrated with some solutions like Splunk or IBM Curator. But there's always more we can do. Because if you look at the first and second quarter of this year alone, the number of ransomware attacks have surged nearly 300%. Not surprisingly, the ransomware costs are expected to reach a whopping $265 billion by 2031, according to Cybersecurity Ventures. Clearly, ransomware has become a critical threat to national and economic security with the new security -- with new story every few weeks about a major corporation being hacked. Today, we did a major announcement in this area. I'm super excited to share that and talk about it. We announced built-in deep learning-based malware detection in Box Shield so customers can contain the spread of malware before it becomes a data breach or a significant loss of business continuity. Now let's say, you are working with a business partner on a project, and an external user uploads 3 files in a shared folder. With this new release, we are now providing 2 layers of malware protection. In addition to wire scan that uses external threat intelligence databases, we now have added deep scan that analyzes the content within the file using deep learning technology. This will help our customers identify more sophisticated malware. In this case, one file is a malware. So unlike normal files, the download of the malicious content is prevented automatically while the users can still preview or view their content online. Lastly, IT teams automatically receive an alert with details on the potential threat so they can take an informed decision about how to proceed and investigate. So the key question is how is Shield's malware direction different? Most organizations are deploying bolt-on malware detection solutions that have latencies and create friction for users when the content is quarantined, especially when it's a false positive. With Box Shield, users can still preview the file to cure their curiosity, while the system automatically prevents the download of the file to contain the spread of the malware. End user curiosity and eagerness, as we all know, is the reason why e-mail continues to be the most common method of spreading malware. Now with the ability to preview shared link in Box, combined with native malware detection in Shield, organizations are far more protected than ever before. Along with malware detection, it's important to identify suspicious user behaviors that can lead to leakage of data. Shield today provides a library of machine learning-based and correlation-based anomaly detection rules, including anomalous downward behavior detection and suspicious user session detection. As part of our continued investment in Box Shield, we are working hard to deliver further improvements to these machine learning base rules. We're enhancing the MLL bottoms, and we are adding additional richer context so that the alerts can help our customers and the security analysts even more to investigate the threat. But threat detection is only half the story. Shield Smart Access helps to automatically classified our content, such as clinical trial data containing PII, CAD files containing manufacturing design or movie script for an unreleased movie. You can set DLP policies and manage access to your most sensitive content internally and externally. Now let's take a deeper look. Box Shield supports manual, order-based, workflow-driven and fully automated classification of your content. No other solutions out in the market today provides these options out of the box. Once the content is classified, one or more native security controls can be applied at scale. Let's say the file is classified as internal, you may want to restrict a share link to company only and limit external collaboration to approved partner remains. Now in contrast, if the file is classified as confidential, you may want to apply additional security controls. We are seeing strong usage of Shield auto-classification capabilities. Based on customer feedback in the recent months, we have innovated in this area, and we have released a couple of features that I want to talk about today. First, we have added auto classification for additional PII information types, including Canadian PII. Second, we now offer auto classification based on file type so you can protect your intellectual property in addition to regulated data. Third, we have added support for classifying historical content whenever a user views, shares or downloads the content. So unlike other options in the market today, with Shield, customers don't need to wait until all their content is classified and scanned by a DLP solution, which could take multiple months or quarters, keeping them exposed to security risks. So these are some of the highlights of the innovation that we have shipped in the recent times, including the announcement of malware deep scan in Box Shield. With that, I would like to thank you for listening, and I'll pass it to Diego to walk us through additional updates.

Thank you so much to both Burke for the exciting updates on workflow and collaboration and to Alok for the great updates on security and compliance. In addition to those 2 pillars, the third key pillar of our strategy includes the growth and acceleration of our platform through the integration of enterprise applications. One way we do that is by connecting the tools our customers rely on to get work done. With more than 200 apps in the average enterprise, the key to great software is how well it integrates with the rest of your stack. This has been our vision from the start: a single content platform, deeply integrated with every other enterprise software tool. So no matter what work gets done, you can manage it all in one place. Now we couldn't achieve this without the network of more than 1,500 incredible partners who share our vision. Now when it comes to office productivity tools, Microsoft is one of the leaders that has defined modern productivity for the workplace and is continually reimagining it for a changing world. That is why Box has built integrations across the Microsoft 365 portfolio so that our users have access to their Box content across all the Microsoft apps they use. Today, we have some exciting enhancements to announce across our most popular integrations with Microsoft. I recently had the chance to chat with Kirk Koenigsbauer, CVP and COO of Microsoft Experiences and Devices Group. Kirk has been at Microsoft for nearly 30 years in a variety of product and marketing roles. He helped launch Office 365, Microsoft 365 and Teams. Currently, he's among the leaders behind Viva, Microsoft's new employee experience platform. We talked a bit about the recent enhancements to our integrations and how they support customers with hybrid work. So let's take a look.

[indiscernible] be able to participate. And I just want to start by saying Box is such a great example of an enterprise class, a big SaaS company that's leveraging the power of Microsoft Cloud and all the solutions that we're offering to be able to extend your solutions and provide great value to customers. We've got a lot of global customers using Box and Microsoft together. So it's really constantly extending our partnership together in an announcement today. I'd also like to say, I think it's a particularly relevant time in this new era of hybrid work that we're in, the last 18 months has all been about work from home. This next 12 to 18 months is all going to be about hybrid. And so we're creating more complexity and complications for our employees, and these solutions really help in that perspective.

And to enable greater choice for IT and a more streamlined user experience, we're incredibly excited to announce the following updates to a couple of our Box for Microsoft Office and Teams integrations. First, we will be enhancing our Box for Microsoft Office integration by delivering the ability to author in real time in the office desktop and mobile apps with all contents saved to Box. This will be available in Q1 of next year. Second, our Box for Teams integration will allow customers to dip on to Box as a storage option in Microsoft Teams. This is expected to be generally available even sooner at the end of 2021. And together, these 2 enhancements will enable organizations to use Box as the content cloud in both Office and Teams.

Yes. It's great to have these on our road map that comes into our customers. And broadly speaking, we're super committed in Microsoft interoperability and supporting customers in regards to the platform or infrastructure devices they're on. And it's important that folks have the choice, have the flexibility that they need to be able to deliver on these nascent and collaborative solutions. And again, these are the kind of solutions that are going to be super, super important for people over the coming months as we start to navigate this new hybrid world that we're all in.

Exactly. And now with our latest enhancements, our [ joint ] customers like Nationwide, Grandfields and Flex can use Box for Microsoft to co-author documents in real time with their teammates using Microsoft Office desktop and mobile apps with all changes saved to Box as well as share and collaborate on in Microsoft Teams using Box as [indiscernible] within Teams.

Yes. This is great. And again, I just want to thank you and everyone on the Box team for the partnership here. It's been I think a couple of years now that we've been working quite closely together on a bunch of these integration scenarios across Office and Teams and management, security and so forth. And I just want to say you guys have done a fantastic job of really pushing the platform, making it better for not just your solutions, but really for the whole industry all up. And so we're just very looking forward to getting these solutions into the market, and again, partnering over the coming months and years.

Yes. We are also looking forward to getting these updates in the hands of customers. If you're interested in getting early access to these features, please contact your Box account team. We are excited and super thankful about this. Working together with you, Kirk, your team, and thank you for this amazing servicing partnership and for joining us today.

Great. Thank you.

As you can see, we've got some really exciting stuff in store. Thanks again to Kirk and to Microsoft for the incredible partnership. But we know that every company's software mix is unique. So at Box, we have always made it a point to integrate with as many different tools as possible. I'm happy to share some additional developments designed to help companies take an integrated approach to collaboration and productivity next. First, we're thrilled to announce today that we're working on a new integration that enables Box to be the content layer in Slack so that any file you share in Slack or in progress work you want to revisit can be seamlessly stored and managed within Box and the Box Content Cloud. This summer, we also launched the new Box app for Zoom, which lets you directly access Box from within Zoom to provide a more seamless experience between the 2 platforms. With the new Box app for Zoom, you can browse, preview and share your Box files from Zoom whether or not you are in an active meeting. And when you are in a meeting, you can select a Box file to present to all attendees just with one click. As always, Box's enterprise-grade security, compliance and governance is applied to Box content that you access from Zoom as well. We have also made some exciting improvements to our integration with Salesforce so it's easier than ever to collaborate securely across the content cloud and your CRM. In addition to adding Box Sign functionality to our Box for Salesforce integration, we have also refreshed the admin UI to simplify the configuration process so that sales teams can be up and running on the integration sooner. Again, this is all part of the latest Box for Salesforce app in the Salesforce AppExchange. We also know that connecting our customers' business isn't limited to the apps you already use. It's also about giving you the flexibility to customize and extend the content cloud with our SDKs, developer tools and open APIs. Box Platform is our -- one of our most successful products. With billions of monthly API calls, we are powering incredible business results at companies like Morgan Stanley, which has built a custom wealth management portal to enable financial advisers to securely share documents with clients; or to the town of Cary in North Carolina, which built a bespoke platform to connect projects and services across more than 1,000 employees and dozens of departments and functional work groups. From new APIs for file request and Box Sign to new diagnostic and management tools for developers, we're continually finding new ways to help users collaborate securely across platforms. And of course, you can expect a lot more from us on the platform and integrations front in the coming months. These are the main very exciting highlights that we have presented this morning at BoxWorks. I will now hand it over back to Aaron to close the presentation.

Thanks, Diego, and thanks again to Alok and Burke for amazing innovation in your respective areas. And again, just as a reminder, what we just went through was a small amount of the total innovation that we delivered at BoxWorks, but certainly some of the more relevant areas in terms of TAM expansion and continuing to expand the full value of the Box Content Cloud. So thanks again to the Box product team, and Diego will also be around in just a few moments for Q&A with investors and analysts. So with our overall content cloud strategy and with that product strategy in mind, we have also been simultaneously evolving our go-to-market motion to be able to bring the full power of the content cloud to all of our customers. And so I just wanted to share a couple of brief updates that we have talked about recently, but again, within the context of our product strategy so everyone has a good sense of how we're rolling out our -- the full power of the content cloud to our customer base. So as a reminder, we have over 100,000 customers on the platform, and our go-to-market model is really about driving greater expansion within that installed base. And when you think about all of the innovation that we just delivered at BoxWorks, across Box Shield, Box Relay, Box Sign, our platform APIs, we want to make sure we can get that innovation in the hands of all of our customers. And so a couple of years ago, we introduced our first bundled plans that brought together the full power of our add-on products, and those were our initial suites that we released. And in working with customers and learning about the use case that they had and which suites were performing extremely well within the customer base, we wanted to take that even further. And so we have an all-new bundled plan called Enterprise Plus, and this is the full product suite all in a single addition. It has our core enterprise plan, Box Shield, Box Governance, Box Relay, Platform API calls, Box Sign with advanced functionality, large file uploads up to 150 gigabytes per file, and enhanced consulting support and credits, as well as now, 20 terabytes of included content migration with Box Shuttle. So this is now the most powerful plan within the Box lineup, and we're really excited about getting this in front of all of our customers to drive further adoption and being able to grow in, again, a continued fashion within our customer base. And the reaction we've already seen from our Enterprise Plus customers has been amazing to see. So as a reminder, we introduced this at the tail end of Q2, but we're really excited to be able to share updates in Q3 and beyond about how Enterprise Plus is being adopted from our customers. Which brings us to our expansion opportunity, and we've talked about this multiple times. If you look at within our existing installed base of 100,000 customers, we still have 7x the number of seats available to go sell than the number that we've already sold already. And so we have massive expansion opportunity within today's logo base and within today's installed base of customers. And that's obviously the power of the Enterprise Plus plan and being able to drive wider adoption of Box overall within these customers. And then when you expand out even further and you look at all of the international geographies that we already serve and the segments that we already serve, we have a 40x opportunity in terms of the total potential of seats and logos that we can go and serve. So there's considerable end-user and seat population both within the existing installed base and within our addressable market in the segments that we already serve today. And so our go-to-market model is really built on landing customers through an efficient acquisition engine; being able to drive greater adoption of our product through product-led growth initiatives, digital acquisition and engagement initiatives, customer support and success and consulting initiatives; being able to drive product expansion and customer expansion through the sale of Suites and now our Enterprise Plus plan; and then being able to drive greater customer retention and stickiness over time through embedded workflows inside of our customers and making our customers wildly successful. So we have 3 key parts of that strategy that then translate into our long-term financial goals. We want to continue to drive seat growth by going wider within customers with the content cloud. So a lot of the features that we implement, things like Box Sign, our collaboration capabilities like Box Notes, are really about going wider, as wide as possible within our installed base, to be able to capture more seats. We then drive higher price per seat through our add-on products and now our bundled plans and Enterprise Plus. And that's going to continue to drive customers up our pricing tiers over time to be able to add more value to their box accounts. And then again, through greater adoption and greater stickiness, we're going to improve our net retention rate by both improving retention and that customer expansion that we've seen, again, recently with these higher-tier plans. So our go-to-market motion is now -- for the past couple of years, we've continued to incrementally evolve it and make sure that we've iterated to land on the motion that we currently have, and we are seeing tremendous success from this motion. Just in Q2, in our last reported fiscal quarter, we did 106% net retention. And so this is up pretty considerably from the past couple of quarters. We also grew our big deals, our $100,000-plus deals, by 28% from the first half of this year compared to the first half of last year. So customers are continuing to expand their accounts. They're driving larger deals with Box. We are also seeing the makeup of those deals really be driven by our multiproduct sales motion. So our shift to multiproduct selling is fundamentally working. 2 years ago, our attach rate on our multiproduct bundles was 10% within our $100,000-plus deals. And in the last quarter, in Q2, that attach rate was 73% of those $100,000-plus deals, including one of our bundled plans and product suites. And we see that when customers adopt our multiple product capabilities and become a core plus customer, as we call them, we see a considerably higher net retention rate, higher gross margin and overall larger average contract values from those customers because they're fundamentally betting on Box as a more strategic platform that they're investing in. So we see, again, greater customer lengths and deal sizes as a result of customers continuing to expand into our multiproduct plan. So we're really excited about that, and that is what's so core to our strategy and our business model. And we're also seeing this show up in our sales productivity rates. So again, if you think about that land-and-expand motion, it is so much driven now by being able to go into the installed base, be able to bring the full power of the content cloud to our customers and through multiproduct suites, which drive average contract value up and larger deals, we are seeing greater rep productivity as well as due to our focus on the key sales segments and key sales regions where we know that there's the greatest amount of upside. So across enterprise, commercial and then our blended average, over the past 2 years, we have seen significant improvements in our sales productivity rates. And again, we think that's, again, significant evidence of this improvement in the go-to-market motion and the sale of the full suite to our customer base. Which then brings us to our financial model and some of the longer-term targets that we've talked about previously to Wall Street. We are focused on driving both greater growth and profitability to ultimately achieve Rule of 40 by FY '24. In the last quarter, as updated on our last quarter's guidance, we guided up Q3 revenue to 12% year-over-year growth. So an uplift from the past couple of quarters. And we've considered -- and we've consistently been able to beat and raise on our targets in the past 2 quarters, driving a re-inflection in our top line growth, ultimately being able to also drive up our full year guidance as well on the top line. At the same time, we've been driving significant improvements in our bottom line and operating margin efforts. So 2 years ago, we were about 1% in operating margin. And as of our last quarter's guidance, we expect to do, again, around mid-19% in operating margin as our target for the year. And we've been driving this through a workforce strategy that is focused on expanding, in some cases, in lower-cost regions where we get more efficiency for our dollars; being able to have really, really disciplined expenses across our workforce; improving gross margins by moving more to the public cloud, and we expect more upside from that area over time; as well as optimizing our infrastructure. And with the addition of add-on products like Shield and Sign and other features, these tend to be much higher-gross-margin products and capabilities than our core product. And so you're going to see more accretion to the gross margin line as more of our customers are paying a higher price per seat with a greater gross margin benefit from those product capabilities. And then overall, also driving increased operational rigor. And so this is making sure that we are putting the majority of our investment dollars into the highest-productivity areas of the business, whether that's in our product road map or current sales regions or demand gen programs. But overall, just way greater operational discipline across the business to drive that bottom line performance. And this is why we've been able to exceed our target last year on a Rule of 40 basis, so delivering 26% combination of revenue growth plus free cash flow margin. As of the last quarter's earnings call, we called out a 32% target for this year on revenue growth plus free cash flow margin. And then next year, in FY '24, we've called out 35% and 40%, respectively, for those 2 fiscal years in that combined metric. So we are both delivering on greater growth rates and greater profitability going forward, and we're incredibly excited to again be able to have many quarters of evidence of being able to drive these results now. And you can really see it just even within our Q2 results. So while there's some seasonality in our free cash flow margin due to customer billings, if you look at the rest of the core items, you see that we're already entering into our target growth rate that we've talked about of 12% to 16%. Our gross margins have continued to improve as we again benefit from higher revenue rates and the move to the public cloud and driving down infrastructure costs. We've had dramatic improvements in sales and marketing, and we are still investing in R&D at a very, we think, important level because of the amount of innovation that we're seeing. And so as we expand into Poland, we'll be able to get more engineers into the organization in an efficient way. We're driving efficiency in G&A. And ultimately, you see that showing up and again, our operating margin in Q2, the results that we put up in the last quarter, and ultimately, how they can translate into our FY '24 targets. So we're extremely confident in our ability to hit these targets, and we're really excited about delivering against our strategy to make sure that, again, we drive reaccelerated growth and that bottom line performance. So with that, I want to open up for questions from any folks on the line. And again, really what we are super excited about is the product innovation, the content cloud strategy and a lot of the customer reaction that we've been seeing from that front.

Great. Thank you, Aaron. [Operator Instructions] So Aaron, a question here. Box Shield, when it was initially rolled out, was a separate add-on product. And we're seeing that Box Sign now looks bundled and Box Shield now looks bundled. Can you discuss the strategy here?

Yes. So when we only had 1 or 2 add-on products, it made a ton of sense to go to customers and have an incremental sales motion to purchase the Governance module or the Shield module, as an example. And we saw considerable success from that. As soon as we started adding a few other modules and add-on products, sometimes our Platform APIs, KeySafe, workflow with Relay, we ended up having customer conversations that we felt were both inefficient for us and the customer. We would have to go to multiple lines of business, get validation from each individual add-on product, when ultimately, what we want to be doing is having a customer conversation about the power of our platform. And so that really introduced our Suite strategy 2 years ago. These were our initial bundled offers that we were able to bring to the customer base. And as we have continued to innovate, both on Shield as well as with new add-on products like Box Sign, we want to now take all the lessons of that bundling strategy and make sure that we can continue to turbocharge our growth. And that's why Sign is both included in our base plans, but there's higher-tier functionality that's available in Enterprise Plus that will encourage customers that have more advanced use cases to be able to upsell into that higher-tier plan. So we are both going for the greatest amount of seat adoption and stickiness at the end user level as well as multiple ways to monetize and move customers up to that higher-tier plan with E Plus. And we're super excited to see, again, the early reaction from customers on that front.

Great. Another question we have is, can you speak to market demand and whether or not you think, just based on the trends of increasing customers looking to increase productivity of their distributed workforces, is this going to cause a pull-forward of demand or a step function higher level of demand?

Well, I would still point to the demand levels that we've talked about and certainly our revenue targets that we've already put out there. But qualitatively, I think what you're seeing is customers are -- last year, they were in triage mode. They were dealing with difficult circumstances around cost reductions, macro environment changes. We saw some customers had furloughs or had to reduce spend in certain areas. As we come into this year, in Q4, as an example, and as we got into the first couple of quarters of this year, we started to see the demand environment begin to change. Customers were having much longer-term perspectives on their IT strategy. They're starting to think about the role of content within their architectures and within their long-term IT strategies. And that's obviously what allowed us to both deliver on higher than our initial revenue targets as well as, I think, great billings results and deferred revenue that we -- that you've seen in the past couple of quarters. So we do see demand increasing. And I would certainly call out our current revenue targets as hopefully evidence of our conviction around that.

Thank you. Another question, any metrics you can put around the scale and growth of your integrations with third-party applications, such as growth in the number of API calls?

Yes. So I'll maybe just give a couple of the high-level numbers and then, Diego, if you want to also talk about some of the philosophy because you and I have spent a lot of time on that over the past couple of months. Our API volume is one of the fastest-growing parts of Box, and that is both our customers building integrations with Box as well as third-party applications like Slack, Office 365 and other tools. So we're just seeing, again, a tremendous volume scale, billions and billions of API calls at an increasingly higher growing rate. And it's just due to the fact that you have more innovation than ever before happening in software, more point-to-point integrations as well as more software that our customers want to work with. And Diego, I don't know if you want have maybe some of the philosophy on how we think about partnerships and our integration strategy overall.

Yes. Thank you. Overall, the idea is to basically connect with anything that is best-of-breed that is really helping in enterprise. So we're looking for which are the applications that are most appreciated and necessary and just work with all of them. We maintain the neutrality and agnosticism in that sense where we're busy to work with everybody that is valued in the enterprise. And many times, we integrate, but also we offer the APIs to enable third parties to build their own integrations through our developer platform. So the philosophy is integrate with best-of-breed, work with everybody and also enable third parties to work with us as well.

Great. Thank you. Next question is, what is driving the improvements in sales reps, especially in the commercial segment? Is this driven by virtual selling? Or are there other drivers?

Yes. I think you're seeing -- certainly, there is some efficiency overall in our ability to reach customers all around the world. I've been a personal kind of beneficiary of this. You'll have -- in one part of the day, you'll be talking to customers in Japan, later in the day, in Australia, then in New York, and you just would never have been able to do that before. So there is some efficiency in the sales motion that we definitely appreciate. But overall, I think it's actually just the maturing of our repeatable go-to-market model. We have had a land-and-expand model that we've invested in. Folks will remember 2 years ago, we had Mark Wayland come to speak to investors and talk about the initial investments we are making in land and expand, and Mark has just been doubling down with Steph on that strategy. So we are making sure that we are able to bring customers on quickly through a very repeatable sales motion, and then ensure that customers are seeing the full power of our content cloud platform in the form of bundled plans that ultimately drive up, again, average contract value much higher, which make that sales motion much more productive, much more profitable both for the rep and for the customer to get more value from Box.

Great. And a follow-up to that, on recent sales productivity gains. Can you touch on really the sales force training on near-term hiring plans and the like?

Yes. So as Dylan has pointed out in prior earnings calls, we intend to grow the sales force this year to ensure that we are -- because of the rate that we're seeing sales productivity improvements, we now want to make sure that we're able to invest and double down in areas where we're seeing high productivity payback. And we're going to be very thoughtful on those investments and make sure that we're doing it in incremental fashion, in the highest productivity areas in the business, and Dylan's called out low teens percent growth this year, of that sales force head count. And then in terms of enabling those sellers, we are really focused on all of the training curriculum, making sure that there is an incredible amount of best practice sharing that happens throughout the business. We probably have actually benefited from the virtual environment in that front. Reps are able to communicate instantly to each other to get help on a deal or if they've seen some best practice from another part of the organization. But overall, we are very serious about training, enablement and all of the sort of operational rigor that goes into building a repeatable sales motion.

Great. And to stay in -- with the go-to-market vein, how should we think about the self-service channel and the opportunity to drive greater business from that channel?

I think we are going to continue to see growing demand on that digital channel. We have always been an end user land-and-expand model at the end-user side. So we want users to sign up, bring the software into the workplace, and then ultimately, connect the dots to the CIO and the IT organization. So that flywheel of that land-and-expand engine, of end user adoption and virality of the product, going into a sales motion that makes our more tops-down CIO sale, that's a super-efficient model. So the digital channel is fundamental to that. So you're going to see greater growth on certain demand-gen initiatives to bring customers into that digital channel. We think it's very complementary to our inside sales team and our field sales organization. So this is absolutely about balancing both of those universes, but we do want to make sure that we bring customers very effectively through the digital engine.

Can you talk about the strategy on the pricing differences between your bundled or Enterprise Plus plans at a customer that had an ELA in the past? Is that transition a potential headwind? Or do the incremental modules still make that a higher ARR commitment for the customer?

Yes. Interestingly, our ELA strategy previously has really been about seats. So we do have a ramp ELA program. And previously, we had ELA models that give customers access to whatever package they're electing to use, but across their entire enterprise. So every seat in their business is then able to use their product. So as we have introduced Suites or now Enterprise Plus, that is an incremental step-up from any ELA that a customer might have because it's not an ELA of unlimited access to any future functionality, it's an ELA for existing functionality that we had at that time. So we think it is going to be a tailwind even to have customers that are on ELAs to continue to expand with us. But I would actually note that it's a very, very small portion of customers today that are on ELAs. We do want to make sure that more of our customers are going wider with Box. We see that as significant upside in terms of revenue potential, but definitely not a headwind in terms of revenue contribution for many, many years to come.

Great. Question is, what inning are you in with your product suite strategy? And what other enhancements do you think you can make to drive greater adoption?

Yes. So I think we're in the early innings of the adoption side. So they've been out for 2 years but as you can imagine, a brand-new pricing and packaging model for a customer base can take a little bit of time to expand through the customer base. And so I think that's why you've seen such dramatic growth just even in the past couple of quarters of Suite adoption. So we're in the early innings of our entire customer base, buying into these bundled plans. But the sales motion is now fully -- has effectively fully matured and it has become really the default sales motion on our end. So now it's just really about going through the customer base and really getting that broader matriculation into our core plus plans over time. Maybe as it relates to the product strategy and the expansion of which capabilities and where we're going to be investing, I'll have Diego kind of build on how we see the content cloud today, areas we might be doubling down on and, at least philosophically, where we might expand in the future. Obviously, we're not going to reveal any major product updates beyond what we've announced today.

Yes. A couple of comments on that quickly. Collaboration is central, having security, compliance and governance across everything we build. So you will see everything we launch integrated with those areas that are staple for Box in general. But everything we launched, you'd basically see that value add. For example, launching Sign and having a differentiation, because it should be different from what others do because it has a governance and compliance and the work, for example, with Shield that others don't do in terms of electronic signatures. So that should be one of the areas that would differentiate Box from the rest. I've mentioned collaboration. You will see also workflow continue to accelerate and integrate with everything we do, not only with electronic signatures with -- but also with other collaboration components of the platform. So those will be some of the areas you will see happen. Another area perhaps also important is that we will always build everything with APIs available for developers to continue to accelerate and keep emphasizing the importance of the rich ecosystem of partners that we have. So back to the prior question earlier on today, everything we do in terms of expanding -- maintaining neutrality working with best-of-breed, but accelerating every value we release to developers alike.

And I think -- maybe just building on one more piece given the evolution of the model. I think what you're going to see is -- we're not going to point to sort of the rate of which we'll have these per year. But I think you will increasingly see us expand into areas where there's discrete spend from the customer, where we can fold in mission-critical functionality into Box, where there's substantial value for that customer of having that functionality in a single platform. So as you think about that content life cycle, there is multiple areas that represent opportunities, as Diego just mentioned. But even in Shield as an example, Shield starts to break into multiple security spaces where we think content security becomes, again, a really, really big differentiator for us over time. Ransomware is just one example of that. Equally, in data governance, you can see how data governance begins to sort of open up into areas like e-discovery integration support, being able to have archival of data in certain use cases. So over time, pillars of that content life cycle expand into additional addressable markets that we are at least studying and getting excited about as we think about what the full potential is of the content cloud. But again, we're going to spend our time with customers. We're going to listen to customers on what their use cases and demands really are, and then that will be certainly how we drive innovation over time.

One more thing to add. Content analytics is another important area that we really care about. So basically, the expansion on not only knowing what's in the content itself and do maybe the semantic side of it, but also the utilization of the content. So how often, how much, who has used the content and the tracking of all of that information, which is so important for many applications where you want to know who opened your sales quote or how many times your marketing materials have been visited or many other applications in terms of basically utilization of stats and analytics on the content, is also something we're investing in.

That's great. I mean I would say that I think this BoxWorks, we showcased so much innovation. We have a question here that asks about how we could accelerate operational efficiencies, and one area they're asking about is R&D. Could you move it quickly to lower-cost geographies? So any general comments there, Aaron?

Yes. I would say that you're going to see us leverage our location strategy to actually drive even more innovation while making sure that we have efficiency and leverage in the bottom line over time. And Dylan has certainly talked about, again, a lot of the initiatives that we're working on, on that front. But I think of our Poland Center of Excellence for engineering as a way to be able to expand the rate of innovation in the company while, again, driving additional operating margin leverage over time. But the real focus is how do we get more product out to customers in an efficient way. So our customers are really, really excited about us being able to deliver constant innovation to them. This is one of the reasons we can stand out as a best-of-breed platform. But we do want to make sure we do that with more efficiency at scale.

Great. And I think our last question is just going back to go-to-market, and any more room there to drive efficiencies and productivity in the sales motion?

I think -- as again we've talked about in prior earnings calls, I think you're going to see that productivity continue to come more from being able to grow ACVs, be able to drive the multiproduct selling into the customer base. Back to that question about what inning are we in with customers adopting Enterprise Plus or product suites. So we'd like to drive, obviously, further sales productivity through top line growth and then make sure that we're continuing to expand efficiently into key regions, segments and parts of the market over time. Even areas like our industry strategy is a great driver of both growth and sales productivity where as we double down into key verticals like financial services, life sciences, health care, federal government, this is an area where deals tend to be larger, where customers are really buying into our full platform strategy and where it makes sense to drive more innovation and investment and being able to serve those kinds of customers. So again, we want to both reaccelerate and drive that inflection of our growth rate while making sure we do so efficiently at scale. Awesome. So I think Cynthia mentioned that was the last question, but definitely appreciate the time and looking forward to seeing everybody throughout the coming quarter and beyond and at our next summit in March.