Box IPO

Prepared by - Dheeraj Vaidya, CFA, FRM

email - dheeraj@wallstreetmojo.com
websites:
www.wallstreetmojo.com

www.educorporatebridge.com

Assumptions
Important Assumptions
Core Financial Statements
Quarterly IS
Income Statement
Balance Sheet
Cash Flows
Supporting Financial Modeling Schedules
Debt
Working Capital
Depreciation Schedule
Amortization Schedule
Shareholder's Equity
Shares Oustanding
Valuations
DCF Valuation
Relative Valuation
Option Value

Box IPO
Assumptions

Financial Model Assumptions

Sales Growth (% yoy)
COGS as % of Sales
R&D as % of Sales
Sales and Marketing as % of Sales
General & Admin as % of Sales
Capital Expenditure as % of Sales
Minimum Cash Balance?

Dec-11

Jan-13
-24%
-49%
-169%
-43%
33%

100000

Jan-14
111%
-21%
-37%
-138%
-32%
20%

Jan-15
100%
-20%
-30%
-120%
-30%
5%

Jan-16
90%
-20%
-25%
-110%
-28%
5%

Jan-17
85%
-20%
-20%
-100%
-26%
5%

Jan-18
80%
-20%
-15%
-90%
-24%
5%

Jan-19
75%
-20%
-10%
-80%
-22%
5%

Box IPO
Quarterly Income Statement

($ in Million Except Per Share Amounts)

Revenue
Cost of revenue
Gross profit

Apr. 30,2012
2012
10,013
(2,355)
7,658

Operating expenses:
Research and development
Sales and marketing
General and administrative
Total operating expenses

(5,994)
(17,971)
(3,910)
(27,875)

Loss from operations (EBIT)

(20,217)

Remeasurement of redeemable convertible preferred stock warrant liability

Interest income (expense), net
Other income (expense), net

(222)
9

Loss before provision (benefit) for income taxes

Provision (benefit) for income taxes

(20,430)
3

Net loss
Accretion of redeemable convertible preferred stock

(20,433)

Net loss attributable to common stockholders

(20,433)

Net loss per share attributable to common stockholders, basic and diluted

(4)

Weighted-average shares used to compute net loss per share attributable to common 5,284
stockholders, basic and d
Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)
Diluted Wt average Shares
EBITDA
Revenue
(% yoy)

10,013

Cost of revenue
% sales

-2,355
-23.5%

Research and development

% sales
Sales and marketing
% sales
General and administrative
% sales

-5,994
-59.9%
-17,971
-179.5%
-3,910
-39.0%

Total operating expenses

% sales

-30,230
-301.9%

Loss from operations

-20,217
-201.9%

Effective Tax Rates

EBITDA

Quarter Ended
Jul. 31,2012 Oct. 31,2012
2012
2012

Jan. 31,2013
2013

Apr. 30,2013
2013

Jul. 31,2013
2013

Oct. 31,2013
2013

12,958
(3,164)
9,794

16,164
(4,484)
11,680

19,662
(4,277)
15,385

23,414
(4,561)
18,853

28,364
(5,907)
22,457

33,585
(7,172)
26,413

(6,663)
(22,363)
(5,385)
(34,411)

(7,993)
(27,934)
(8,447)
(44,374)

(8,346)
(30,953)
(7,687)
(46,986)

(9,439)
(33,936)
(8,261)
(51,636)

(10,965)
(41,416)
(10,010)
(62,391)

(12,090)
(48,822)
(11,386)
(72,298)

(24,617)

(32,694)

(31,601)

(32,783)

(39,934)

(45,885)

(1,529)
(347)
6

(81)
(614)
-

(117)
(581)
101

(693)
(548)
(9)

(1,607)
(716)
(73)

(3,583)
(1,979)
111

(26,487)
-

(33,389)
8

(32,198)
48

(34,033)
6

(42,330)
(2,575)

(51,336)
55

(26,487)

(33,397)

(32,246)

(34,039)

(39,755)

(51,391)

(26,487)

(33,397)

(32,246)

(34,039)

(39,755)

(51,391)

(4)

(3)

(10,170)

(8,548)

(4)
6,099

7,684

d (unaudited)

11,341
(2)
8,294

12,958

16,164

19,662
21.6%

23,414
19.1%

28,364
21.1%

33,585
18.4%

-3,164
-24.4%

-4,484
-27.7%

-4,277
-21.8%

-4,561
-19.5%

-5,907
-20.8%

-7,172
-21.4%

-6,663
-51.4%
-22,363
-172.6%
-5,385
-41.6%

-7,993
-49.4%
-27,934
-172.8%
-8,447
-52.3%

-8,346
-42.4%
-30,953
-157.4%
-7,687
-39.1%

-9,439
-40.3%
-33,936
-144.9%
-8,261
-35.3%

-10,965
-38.7%
-41,416
-146.0%
-10,010
-35.3%

-12,090
-36.0%
-48,822
-145.4%
-11,386
-33.9%

-37,575
-290.0%

-48,858
-302.3%

-51,263
-260.7%

-56,197
-240.0%

-68,298
-240.8%

-79,470
-236.6%

-24,617
-190.0%

-32,694
-202.3%

-31,601
-160.7%

-32,783
-140.0%

-39,934
-140.8%

-45,885
-136.6%

0.0%

6.1%

-0.1%

Jan. 31,2014
2014
38,829
(8,334)
30,495

(13,473)
(47,014)
(10,186)
(70,673)
(40,178)
(2,594)
(462)
(55)
(43,289)
83
(43,372)

(43,372)

9,579
38,829
15.6%
-8,334
-21.5%

-13,473
-34.7%
-47,014
-121.1%
-10,186
-26.2%
-79,007
-203.5%
-40,178
-103.5%
-0.2%

Box IPO
Annual Income Statement
Historicals
($ in Million Except Per Share Amounts)

Dec-11

Jan-13

Jan-14

Revenue
Cost of revenue
Gross profit

21,084
(6,873)
14,211

58,797
(14,280)
44,517

124,192
(25,974)
98,218

(14,396)
(36,189)
(13,480)
(64,065)

(28,996)
(99,221)
(25,429)
(153,646)

(45,967)
(171,188)
(39,843)
(256,998)

(5,339)
(4,139)

(12,804)
(10,388)

(21,417)
(17,586)

(49,854)

(109,129)

(158,780)

Remeasurement of redeemable convertible preferred stock (356)

warrant liability
(1,727)
Interest income (expense), net
(109)
(1,764)
Other income (expense), net
49
116

(8,477)
(3,705)
(26)

Operating expenses:
Research and development
Sales and marketing
General and administrative
Total operating expenses
Per Month Operating Expense
Per Month Operating Expense (ex R&D)

Loss from operations (EBIT)

Loss before provision (benefit) for income taxes

Provision (benefit) for income taxes
Net loss
Accretion of redeemable convertible preferred stock

(50,270)
1
(50,271)
(80)

(112,504)
59
(112,563)
(226)

(170,988)
(2,431)
(168,557)
(341)

Net loss attributable to common stockholders

(50,351)

(112,789)

(168,898)

21,084

58,797
178.9%

124,192
111.2%

(6,873)
-32.6%
(14,396)
-68.3%
(36,189)

(14,280)
-24.3%
(28,996)
-49.3%
(99,221)

(25,974)
-20.9%
(45,967)
-37.0%
(171,188)

EBITDA
Growth Analysis and Drivers
Revenue
(% yoy)
Cost of revenue
% sales
Research and development
% sales
Sales and marketing

% sales
General and administrative
% sales

-171.6%
(13,480)
-63.9%

-168.8%
(25,429)
-43.2%

-137.8%
(39,843)
-32.1%

Total operating expenses

% sales

(70,938)
-336.5%

(167,926)
-285.6%

(282,972)
-227.9%

Loss from operations

% sales

(49,854)
-236.5%

(109,129)
-185.6%

(158,780)
-127.9%

Effective Tax Rates

1.4%

Billing and Deferred Revenues

Revenue
Deferred Revenue, end of period
Less: deferred revenue, Beginning of period
Billings
Billing Growth
Deferred Revenue as % of Billing

21,084
12,921
(3,614)
30,391
177.0%

58,797
40,099
(13,169)
85,727
182.1%

124,192
90,072
(40,099)
174,165
103.2%

43%

47%

52%

Forecasts
Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

248,384
(49,677)
198,707

471,930
(94,386)
377,544

873,070
(174,614)
698,456

1,571,526
(314,305)
1,257,220

2,750,170
(550,034)
2,200,136

(74,515)
(298,061)
(74,515)
(447,091)

(117,982)
(519,123)
(132,140)
(769,245)

(174,614)
(873,070)
(226,998)
(1,274,682)

(235,729)
(1,414,373)
(377,166)
(2,027,268)

(275,017)
(2,200,136)
(605,037)
(3,080,190)

(37,258)
(31,048)

(64,104)
(54,272)

(106,223)
(91,672)

(168,939)
(149,295)

(256,683)
(233,764)

(248,384)

(391,702)

(576,226)

(770,048)

(880,054)

10,766

23,512

35,448

(1,986)

1,352

(250,370)
(250,370)

(390,350)
0
(390,350)

(565,460)
0
(565,460)

(746,535)
0
(746,535)

(844,606)
(844,606)

(250,370)

(390,350)

(565,460)

(746,535)

(844,606)

(218,620)

(354,364)

(526,469)

(695,518)

(805,524)

248,384
100.0%

471,930
90.0%

873,070
85.0%

1,571,526
80.0%

2,750,170
75.0%

(49,677)
-20.0%
(74,515)
-30.0%
(298,061)

(94,386)
-20.0%
(117,982)
-25.0%
(519,123)

(174,614)
-20.0%
(174,614)
-20.0%
(873,070)

(314,305)
-20.0%
(235,729)
-15.0%
(1,414,373)

(550,034)
-20.0%
(275,017)
-10.0%
(2,200,136)

-120.0%
(74,515)
-30.0%

-110.0%
(132,140)
-28.0%

-100.0%
(226,998)
-26.0%

-90.0%
(377,166)
-24.0%

-80.0%
(605,037)
-22.0%

(496,768)
-200.0%

(863,631)
-183.0%

(1,449,296)
-166.0%

(2,341,573)
-149.0%

(3,630,224)
-132.0%

(248,384)
-100.0%

(391,702)
-83.0%

(576,226)
-66.0%

(770,048)
-49.0%

(880,054)
-32.0%

30.0%

30.0%

30.0%

30.0%

30.0%

248,384
193,492
(90,072)
351,804
102.0%

471,930
340,312
(193,492)
618,749
75.9%

873,070
651,148
(340,312)
1,183,906
91.3%

1,571,526
1,124,906
(651,148)
2,045,283
72.8%

2,750,170
1,986,434
(1,124,906)
3,611,698
76.6%

55%

55%

55%

55%

55%

Box IPO
Annual Balance Sheet
Jan-13
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable
Prepaid expenses and other current assets
Deferred commissions
Total current assets
Property and equipment, net
Intangible assets, net
Goodwill
Other long-term assets
Total assets

127,625
17,218
8,177
8,959
161,979
29,949
830
0
3,034
195,792

LIABILITIES
Current liabilities:
Accounts payable
Accrued compensation and benefits
Accrued expenses and other current liabilities
Deferred revenue
Deferred rent
Debt
Total current liabilities

11,906
3,899
1,628
38,275
504
968
57,180

Debt, non-current (Revolving Credit)

Deferred revenue, non-current
Redeemable convertible preferred stock warrant liability, non-current
Deferred rent, non-current
Other long-term liabilities

30,060
1,824
2,869
5,125
491

Total liabilities

97,549

Redeemable convertible preferred stock:

Stockholders (deficit) equity:
Class A and Class B Common stock
Additional paid-in capital
Treasury stock (see Note 10)
Accumulated other comprehensive income
Accumulated deficit

281,899

1
10,129
-1,177

0
-192,609

Total stockholders (deficit) equity

Total liabilities + Shareholder's Equity

Check

-183,656
195,792
-

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

108,851
42,669
7,776
7,152
166,448

206,118
85,063
14,903
13,661
319,746

100,000
161,620
28,316
25,956
315,892

100,000
298,996
52,384
48,019
499,400

100,000
538,194
94,292
86,434
818,919

100,000
941,839
165,010
151,259
1,358,108

41,385
6,567
8,081
12,948

26,823
6,268
8,081
12,948

15,770
5,940
8,081
12,948

10,585
9,387
8,081
12,948

14,786
17,090
8,081
12,948

77,918
30,687
8,081
12,948

235,429

373,866

358,631

540,401

871,824

1,487,743

12,405
16,098
14,161
78,282
1,213
122,159

24,498
29,806
12,419
193,492
2,235
262,451

46,546
56,632
23,596
340,312
4,247
182,489
653,823

86,111
104,768
43,653
651,148
7,858
523,771
1,417,310

155,000
188,583
78,576
1,124,906
14,144
934,061
2,495,269

271,250
330,020
137,508
1,986,434
24,752
1,205,830
3,955,794

34,000
11,790
0
4,086
1,343

32,514
11,790
0
4086
1343

16,257
11,790
0
4086
1343

0
11,790
0
4086
1343

0
11,790
0
4086
1343

0
11,790
0
4086
1343

173,378

312,184

687,299

1,434,529

2,512,488

3,973,013

0
9
424,370
-1,177

15
-361166

62,051
235,429

61,681
373,866

-328,669
358,631

-894,129
540,401

-1,640,664
871,824
-

-2,485,270
1,487,743
-

Box IPO
Annual Cash Flows
Dec-11
Jan-13
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
(50,271)
(112,563)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
2,838
8,616
Stock-based compensation expense
6,222
7,536
Amortization of deferred commissions
1,688
7,028
Remeasurement of redeemable convertible preferred stock warrant
356 liability 1,727
Release of deferred tax valuation allowance
Other
214
628
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable
(4,102)
(11,499)
Deferred commissions
(3,108)
(14,027)
Prepaid expenses and other assets
(7,478)
(2,028)
Accounts payable
3,546
2,046
Accrued expenses and other liabilities
3,048
2,100
Deferred rent
3,467
1,755
Deferred revenue
9,307
26,930
Net cash used in operating activities
(34,273)
(81,751)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities
(35,814)
Proceeds from maturity of marketable securities
12,000
Purchases of property and equipment
(13,467)
Investments in non-marketable equity securities
Acquisition, net of cash acquired and purchases of intangible(1,012)
assets
Net cash provided by (used in) investing activities
(38,293)
Cash Flow available for Financing Activities

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

(168,557)

(250,370)

(390,350)

(565,460)

(746,535)

(844,606)

17,867
11,749
13,500
8,477
(2,590)
212

29,764

37,337

49,757

74,530

74,530

(25,157)
(13,999)
(3,792)
(3,177)
24,055
(330)
49,973
(91,769)

(42,394)
(6,509)
(7,127)
12,093
11,966
1,022
115,210

(76,557)
(12,295)
(13,413)
22,048
38,003
2,012
146,820

(137,377)
(22,063)
(24,068)
39,565
68,194
3,610
310,836

(239,197)
(38,415)
(41,907)
68,889
118,737
6,286
473,757

(403,645)
(64,825)
(70,719)
116,250
200,370
10,608
861,528

(136,344)

(246,395)

(277,006)

(323,856)

(120,510)

(12,419)

(23,596)

(43,653)

(78,576)

(137,508)

20,000
(19,499)
(125)
(62)
314

(24,424)
(7,761)
(32,185)

(81,437)
(6,786)

(123,954)
(10,330)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from borrowings, net of borrowing costs
10,972
20,353
32,744
Principal payments on borrowings
(341)
(577)
(30,971)
Proceeds from issuance of redeemable convertible preferred91,968
stock, net of issuance
150,780 costs 99,944
Proceeds from exercise of redeemable convertible preferred stock
- warrants 1,033
IPO Proceeds
Proceeds from exercise of stock options
250
2,241
3,003
Payments of deferred offering costs
(588)
Net cash provided by (used in) financing activities
102,849
172,797
105,165
Effect of exchange rate changes on cash and cash equivalents
15

(2,484)

(2,360)

(4,365)

(7,858)

(13,751)

(14,903)

(25,956)

(48,019)

(86,434)

(151,259)

(151,247)

(272,351)

(325,025)

(410,289)

(271,769)

(1,486)

182,489
(16,257)

341,282
(16,257)

410,289
-

271,769
-

248,514

166,232

325,025

410,289

271,769

250,000

Net increase (decrease) in cash and cash equivalents

30,283

91,360

(18,774)

97,267

(106,118)

(0)

(0)

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

8,569
38,852

36,265
127,625

127,625
108,851

108,851
206,118

206,118
100,000

100,000
100,000

100,000
100,000

100,000
100,000

Box IPO
Debt Schedule
Dec-11

Jan-13

Jan-14

Cash Flow Available for Financing Activities

Proceeds from/ (Repurchase of) Equity
+ Beginning Cash Balance
- Minimum Cash Balance
Cash Available for Debt Repayment
Long Term Debt Issuance
Long Term Debt (Repayments)
Cash Available for Revolving Credit Facility

Jan-15
(151,246.6)
250,000.0
108,851.0
(100,000.0)
107,604.4
(1,486.0)
106,118.4

Additional Revolving Credit Facility

Beginning Balance
Discretionary (Paydown)/ Borrowings
Ending Balance

Revolving Credit Facility (commited payments)

Beginning Balance
Issuance
(Repayment/ Amortization)
Ending Balance

34,000.0

34,000.0

(1,486.0)
32,514.0

Interest Expense Calculation

1) Revolving Credit Facility

3.5%
-

Interest Expense (Revolving Credit)

2) Revolving Credit Facility (committed)

33,257
3.5%
1,164

Interest Expense
(1) + (2): Total Interest Expense

1,164

Cash Balances
Cash Balance
Average Cash Balance
Interest Earned

108,851

2%

206,118
157,485
3,150

Jan-16
(272,350.8)
206,118.4
(100,000.0)
(166,232.3)

Jan-17
(325,025.1)
100,000.0
(100,000.0)
(325,025.1)

Jan-18
(410,289.4)
100,000.0
(100,000.0)
(410,289.4)

Jan-19
(271,769.5)
100,000.0
(100,000.0)
(271,769.5)

(16,257.0)
(182,489.3)

(16,257.0)
(341,282.1)

(410,289.4)

(271,769.5)

182,489.3
182,489.3

182,489.3
341,282.1
523,771.5

523,771.5
410,289.4
934,060.9

32,514.0

16,257.0

(16,257.0)
16,257.0

(16,257.0)
-

91,245
3.5%
3,193.6

353,130
3.5%
12,359.6

728,916
3.5%
25,512.1

1,069,946
3.5%
37,448.1

24,386
5.0%
1,219

8,129
5.0%
406

5.0%
-

5.0%
-

934,060.9
271,769.5
1,205,830.4

4,413

12,766

25,512

37,448

100,000
153,059

100,000
100,000

100,000
100,000

100,000
100,000

3,061

2,000

2,000

2,000

Box IPO
Working Capital
Dec-11

Jan-13

Jan-14

58,797
14,280

124,192
25,974

Working Capital Balances

Accounts receivable
Prepaid expenses and other current assets
Deferred commissions
Total Non Cash Current Assets

17,218
8,177
8,959
34,354

42,669
7,776
7,152
57,597

Accounts payable
Accrued compensation and benefits
Accrued expenses and other current liabilities
Deferred revenue
Deferred rent
Total Non-Debt Current Liabilities

11,906
3,899
1,628
38,275
504
56,212

12,405
16,098
14,161
78,282
1,213
122,159

(21,858)

(64,562)

Net Sales
Cost of Sales

Net Working Capital/ (Deficit)

(Increase)/ Decrease in Working Capital

42,704

Purchases
Ratios & Assumptions
Accounts Receivable, net (Collection period in days)

107

125

Prepaid expenses and other current assets

% of Sales

8,177
13.9%

7,776
6.3%

Deferred commissions
% of Sales

8,959
15.2%

7,152
5.8%

304

174

Accounts payable (days)

Accrued compensation and benefits
% of COGS

3,899
27.3%

16,098
62.0%

Accrued expenses and other current liabilities

% of COGS

1,628
11.4%

14,161
54.5%

Deferred revenue
Deferred rent
% of COGS

38,275
504
3.5%

78,282
1,213
4.7%

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

248,384
49,677

471,930
94,386

873,070
174,614

1,571,526
314,305

2,750,170
550,034

85,063
14,903
13,661
113,627

161,620
28,316
25,956
215,892

298,996
52,384
48,019
399,400

538,194
94,292
86,434
718,919

941,839
165,010
151,259
1,258,108

24,498
29,806
12,419
193,492
2,235
262,451

46,546
56,632
23,596
340,312
4,247
471,334

86,111
104,768
43,653
651,148
7,858
893,539

155,000
188,583
78,576
1,124,906
14,144
1,561,208

271,250
330,020
137,508
1,986,434
24,752
2,749,964

(148,824)

(255,442)

(494,139)

(842,289)

84,262

106,618

238,697

348,150

649,566

125

125

125

125

125

(1,491,856)

14,903
6.0%

28,316
6.0%

52,384
6.0%

94,292
6.0%

165,010
6.0%

13,661
5.5%

25,956
5.5%

48,019
5.5%

86,434
5.5%

151,259
5.5%

180

180

180

180

180

29,806
60.0%

56,632
60.0%

104,768
60.0%

188,583
60.0%

330,020
60.0%

12,419
25.0%

23,596
25.0%

43,653
25.0%

78,576
25.0%

137,508
25.0%

Number of days assumption

365

193,492
2,235
4.5%

340,312
4,247
4.5%

651,148
7,858
4.5%

1,124,906
14,144
4.5%

1,986,434
24,752
4.5%

Box IPO
Consolidated Depreciation and Capex
Dec-11
Net Sales
Capital Expenditures
Capital Expenditures as % of Net Sales

Jan-13
58,797
19,499
33.2%

Beginning Net PP&E

Capital Expenditures
(Depreciation Expense)
(Asset Sales )
Ending Net PP&E

Jan-15
248,384
12,419
5.0%
41,385.0
12,419.2
(26,981.0)

41,385.0

26,823.2

below are gross amounts

Amount
Amount
22,254.0
49,168.0
3,086.0
5,792.0
3,427.0
4,388.0
7,483.0
9,486.0
7,031.0
1,763.0
43,281.0
70,597.0

PPE (Break-up for 2013)

Servers
Computer hardware and software
Furniture and fixtures
Leasehold improvements
Construction in progress
Total

Total Capex
Breakup
Servers
Computer hardware and software
Furniture and fixtures
Leasehold improvements
Construction in progress

Servers- Straight Line Method

Useful Life
Servers
Depreciation Expense (existing)

Jan-14
124,192
24,424
19.7%

8,649
1,019
772
1,669
310

3
49,168
16,389.3
Year Capex
Useful Life
2015 8649.4784
3.0
2016 16434.009
3.0
2017 30402.917
3.0
2018
54725.25
3.0

2,883.2

Depreciation (Servers)

19,272.5

Computer hardware and software

Useful Life
Computer hardware and software
Depreciation Expense (existing)

3
5,792.0
1,930.7

Year
2015
2016
2017
2018

Capex Useful Life

1,018.9
3.0
1,935.9
3.0
3,581.5
3.0
6,446.6
3.0

339.6

Total Depreciation (Computer hardware and software)

2,270.3

Furniture and fixtures

Useful Life
Furniture and fixtures
Depreciation Expense (existing)

1,462.7

3
4,388.0

Year
2015
2016
2017
2018

Capex Useful Life

771.9
3.0
1,466.7
3.0
2,713.3
3.0
4,884.0
3.0

Total Depreciation (Furniture and fixtures)

Leasehold improvements
Useful Life
Leasehold improvements
Depreciation Expense (existing)

1,720.0

3
9,486.0
3,162.0
Year
2015
2016
2017
2018

Capex Useful Life

1,668.7
3.0
3,170.6
3.0
5,865.6
3.0
10,558.2
3.0

Total Depreciation (Leasehold improvements)

Total Depreciation Expense

257.3

556.2

3,718.2
26,981.0

Jan-16
471,930
23,596
5.0%

Jan-17
873,070
43,653
5.0%

Jan-18
1,571,526
78,576
5.0%

Jan-19
2,750,170
137,508
5.0%

26,823.2
23,596.5
(34,650.1)

15,769.6
43,653.5
(48,837.9)

10,585.2
78,576.3
(74,375.9)

14,785.6
137,508.5
(74,375.9)

15,769.6

10,585.2

14,785.6

77,918.2

s amounts
Useful Life
3
3
3
3
NA

Proportion of Assets
69.6%
8.2%
6.2% Straight Line Method of Depreciation
13.4% Straight Line Method of Depreciation
2.5% Straight Line Method of Depreciation

16,434
1,936
1,467
3,171
589

30,403
3,581
2,713
5,866
1,090

54,725
6,447
4,884
10,558
1,962

95,769
11,282
8,547
18,477
3,434

16,389.3

16,389.3

16,389.3

16,389.3

2,883.2
5,478.0

2,883.2
5,478.0
10,134.3

2,883.2
5,478.0
10,134.3
18,241.7

2,883.2
5,478.0
10,134.3
18,241.7

24,750.5

34,884.8

53,126.6

53,126.6

1,930.7

1,930.7

1,930.7

1,930.7

339.6
645.3

339.6
645.3
1,193.8

339.6
645.3
1,193.8
2,148.9

339.6
645.3
1,193.8
2,148.9

2,915.6

4,109.4

6,258.3

6,258.3

1,462.7

1,462.7

1,462.7

1,462.7

257.3
488.9

257.3
488.9
904.4

257.3
488.9
904.4
1,628.0

257.3
488.9
904.4
1,628.0

2,208.9

3,113.3

4,741.3

4,741.3

3,162.0

3,162.0

3,162.0

3,162.0

556.2
1,056.9

556.2
1,056.9
1,955.2

556.2
1,056.9
1,955.2
3,519.4

556.2
1,056.9
1,955.2
3,519.4

4,775.1

6,730.3

10,249.7

10,249.7

34,650.1

48,837.9

74,375.9

74,375.9

Box IPO
Consolidated Amortization & Intangible
Dec-11
Net Sales
Additions to Intangibles
Additions to Intangibles as % of Net Sales
Beginning Net Intangibles
Additions to Intangibles
(Amortization Expense)
(Intangible Sales and write offs)
Ending Net Intangibles

Jan-13
58,797
-62.0
-0.1%

Jan-14
124,192
-7761.0
-6.2%

6,567.0

Jan-15
248,384
2483.8
1.0%

Jan-16
471,930
2359.6
0.5%

6,567.0
2,483.8
(2,783.0)

6,267.8
2,359.6
(2,687.0)

6,267.8

5,940.5

Jan-17
873,070
4365.3
0.5%

Jan-18
1,571,526
7857.6
0.5%

Jan-19
2,750,170
13750.8
0.5%

5,940.5
4,365.3
(919.0)

9,386.8
7,857.6
(154.0)

17,090.5
13,750.8
(154.0)

9,386.8

17,090.5

30,687.3

Box IPO
Consolidated Shareholder's Equity
Dec-11
Beginning Equity Balance
Net Income
Issuance/ (Repurchase) of Equity
Ending Equity Balance

Jan-13

Jan-14

Jan-15
62,051.0
(250,369.7)
250,000

62,051.0

61,681.3

Jan-16
61,681.3
(390,349.9)
(328,668.6)

Jan-17
(328,668.6)
(565,460.1)
(894,128.7)

Jan-18
(894,128.7)
(746,535.5)
(1,640,664.1)

Jan-19
(1,640,664.1)
(844,606.2)
(2,485,270.3)

Box IPO
Valuing Box Inc Options
Assumptions
Inputs for Black-Scholes Model
Enter the current stock price =
Enter the strike price on the option =
Enter the expiration of the option =
Enter the standard deviation in stock prices =
Enter the annualized dividend yield on stock =
Enter the treasury bond rate =
Enter the number of warrants (options) outstanding =
Enter the number of shares outstanding =

20
3.65
4.225
48.00% << page F-35; 48% - 57%
0.00%
2.70%
18,427
90,461

Calculation of Box Inc Option

Stock Price=
Strike Price=
Adjusted S =
Adjusted K =
Expiration (in years) =

20
3.65
19.4
3.65
4.225

Options Issued
Total Shares outstanding
T Bond Rate
Variance
Annualized dividend yield
Interest Rate

18427
90,461
2.70%
0.2304
0.00%
2.70%

d1 =
N (d1) =

2.2999
0.9893

d2 =
N (d2) =

1.3132
0.9054

Value per Box Inc option =

Value of all Box Inc options outstanding =

16.20
$298,534

Box IPO
Shares Oustanding Schedule
Common Shares
Current Structure
Class A
Class B
Class B
Class B
New Class B Shares Issed through IPO

90,193,539
225,300 issuable upon vesting
41,840 future issuable
<< put your number here
90,460,679
13.27

Options Data

Balance as of January 31, 2013

Options granted
Options exercised
Options forfeited/cancelled under 2006 Plan
Options forfeited/cancelled under 2011 Plan
Balance as of January 31, 2014
Vested and expected to vest as of January 31, 2014
Exercisable as of January 31, 2014

Shares Subject to
Outstanding Options
13,992,407
7,847,410
(2,267,540)
(189,936)
(955,266)
18,427,075
17,863,613
5,438,985

WeightedAverage Exercise
Price
1.84
6.16
1.32
0.73
3.77
3.65
3.62
1.57

Weighted-Average Remaining
Aggregate Intrinsic Value (in
Contractual Life (Years)
thousands)
8.69
38,954

8.45
8.44
7.49

191,809
186,436
67,947

Box IPO
DCF Valuations
Free Cash Flow Projections

Historicals

($ in Million Except Per Share Amounts)

Dec-11

Jan-13

EBIT

(49,854)

(109,129)

(49,854)
2,838
(14,479)

(109,129)
8,616
(19,561)

(61,495)

(120,074)

Free Cash Flow to Firm

EBIT x (1-t)
Add: Depreciation & amortization
Less: Capex
Add: Change in working capital
FCFF

NOLs
Cost of Capital
Infinite growth rate

15.0%
5%

Free cash flow to firm of explicit period (2015E to 2019E)

Dec-11
Cash Flows
NPV of explicit period

Terminal value @ perpetual growth (2019)

Terminal value as of 2019
NPV of terminal value

Jan-13

(958,307)

Dec-11

Jan-13

(1,603,785)

DCF Valuation Summary

DCF calculation as of
NPV of explicit period
NPV of terminal value
Enterprise Value
Net Debt
Equity value
Stock Option Value
Adjusted Equity Value
Share Price

2014
(958,307)
37.4%
(1,603,785)
62.6%
($2,562,092)
($74,851)
($2,487,241)
$298,534
($2,785,775)
(30.80) doesn't make sense due to negative FCFF

Sensitivity Analysis

growth

(30.80)
10%
8%
6%
5%
3%
1%

icals

Forecasts
Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

(158,780)

(248,384)

(391,702)

(576,226)

(770,048)

(880,054)

(156,523)
17,867
(32,185)
42,704
(128,137)

(248,384)
29,764
(14,903)
84,262
(149,261)

(391,702)
37,337
(25,956)
106,618
(273,702)

(576,226)
49,757
(48,019)
238,697
(335,791)

(770,048)
74,530
(86,434)
348,150
(433,801)

(880,054)
74,530
(151,259)
649,566
(307,218)

263,700

512,084

903,786

Jan-14

Jan-15
(149,261)

Jan-16
(273,702)

Jan-17
(335,791)

Jan-18
(433,801)

Jan-19
(307,218)

Jan-14

Jan-15
0

Jan-16
0

Jan-17
0

Jan-18
0

Jan-19
(3,225,785)

nse due to negative FCFF

WACC

1,480,012

2,250,059

3,130,113

12%
(30.8)
(30.8)
(30.8)
(30.8)
(30.8)
(30.8)

14%
(30.8)
(30.8)
(30.8)
(30.8)
(30.8)
(30.8)

15%
(30.8)
(30.8)
(30.8)
(30.8)
(30.8)
(30.8)

20%
(30.8)
(30.8)
(30.8)
(30.8)
(30.8)
(30.8)

25%
(30.8)
(30.8)
(30.8)
(30.8)
(30.8)
(30.8)

Box IPO
Relative Valuation
Company
Athenahealth
Bazaarvoice
Benefitfocus
BroadSoft
Concur Technologies
Constant Contact
Cornerstone OnDemand
Cvent
Dealertrack Technologies
Demandware
E2open
Fleetmatics Group
IntraLinks
Jive Software
LifeLock
LinkedIn
LivePerson
LogMeIn
Marin Software
Marketo
Medidata Solutions
NetSuite
Proofpoint
Qualys
Rally Software
RealPage
RingCentral
Salesforce
ServiceNow
SPS Commerce
Textura
The Ultimate Software Group
Veeva
Vocus
Wix
Workday
Xero

Ticker
ATHN
BV
BNFT
BSFT
CNQR
CTCT
CSOD
CVT
TRAK
DWRE
EOPN
FLTX
IL
JIVE
LOCK
LNKD
LPSN
LOGM
MRIN
MKTO
MDSO
N
PFPT
QLYS
RALY
RP
RNG
CRM
NOW
SPSC
TXTR
ULTI
VEEV
VOCS
WIX
WDAY
XRO

Price
MarketCap
$175.50
$7,095
$8.49
$653
$56.97
$1,551
$27.85
$842
$105.82
$6,352
$26.81
$878
$56.12
$3,244
$40.55
$1,892
$52.90
$2,978
$73.89
$2,913
$25.63
$784
$35.57
$1,416
$10.43
$639
$9.00
$702
$19.81
$2,016
$196.78
$25,527
$12.20
$750
$45.33
$1,201
$10.42
$364
$35.14
$1,645
$62.51
$3,497
$102.66
$8,288
$42.56
$1,894
$27.43
$1,040
$18.03
$440
$18.77
$1,520
$20.60
$1,489
$58.16
$37,603
$66.18
$10,824
$64.51
$1,100
$27.10
$733
$154.72
$4,664
$32.26
$4,768
$14.49
$327
$26.40
$1,261
$100.91
$20,789
$35.81
$4,502

EV
$7,254
$596
$1,473
$770
$6,161
$755
$3,154
$1,734
$3,016
$2,637
$776
$1,303
$629
$603
$1,843
$23,203
$658
$1,012
$266
$1,525
$3,486
$8,102
$1,797
$944
$345
$1,487
$1,408
$39,273
$10,604
$969
$658
$4,583
$4,480
$371
$1,159
$19,384
$4,455

$1,551
$4,545
$327
$37,603

$1,487
$4,402
$266
$39,273

Median
Mean
Low
High
Box Inc Valuations
EV/Revenue Implied
Box Revenue
EV
Debt
Cash
Equity Value
Price Per Share

Pessimistic
5.0x
248,384
1,241,920

2015
Base
Optimistic
7.1x
10.0x
248,384
248384
1,762,570 2,483,840

32,514
206,118
1,068,316

32,514
32,514
206,118
206,118
1,588,965 2,310,236

11.81

17.57

25.54

Note: All metrics are calendarized. Multiples >75x are considered not meaningful "NM".
source - www.bvp.com/cloud/comps, last updated on 15th March, 2014

Multiples
EV/Revenue
P/FCF EV/EBITDA
2014
2015
2014
2014
9.8x
7.9x
NM
54.4x
3.0x
2.6x
NM
NM
11.3x
9.0x
NM
NM
3.8x
3.3x
16.7x
15.8x
8.5x
6.8x
NM
53.0x
2.3x
2.1x
30.8x
15.2x
12.0x
8.6x
NM
NM
12.7x
10.1x
NA
NA
5.4x
4.7x
39.5x
22.1x
19.1x
14.2x
NM
NM
3.4x
2.8x
28.8x
11.2x
5.7x
4.6x
52.0x
20.2x
2.7x
2.5x
16.5x
15.6x
3.4x
2.8x
69.4x
NM
4.1x
3.5x
32.7x
39.7x
10.7x
7.8x
NM
44.3x
3.3x
2.8x
NM
29.0x
5.3x
4.5x
40.0x
29.6x
2.8x
2.3x
NM
NM
12.1x
9.4x
NM
NM
10.0x
8.7x
NM
39.4x
15.2x
11.8x
NM
NM
10.9x
8.4x
NM
NM
7.4x
6.2x
52.2x
45.6x
3.7x
3.0x
NM
NM
3.2x
2.8x
21.1x
13.1x
7.1x
5.5x
NM
NM
7.5x
6.1x
48.1x
43.8x
17.3x
12.0x
NM
NM
7.7x
6.3x
NM
64.0x
9.8x
6.5x
NM
NM
9.1x
7.4x
NM
40.8x
17.2x
13.8x
NM
NM
2.0x
1.9x
50.0x
12.2x
9.5x
7.0x
NM
NM
27.7x
19.1x
NM
NM
44.1x
23.7x
NM
NM
7.7x
9.5x
2.0x
44.1x

6.3x
7.1x
1.9x
23.7x

39.5x
38.3x
16.5x
69.4x

29.6x
32.0x
11.2x
64.0x

Revenue
2013
$592
$180
$103
$177
$579
$285
$186
$111
$479
$101
$176
$176
$229
$146
$368
$1,519
$178
$165
$77
$94
$276
$411
$133
$108
$74
$387
$158
$4,052
$420
$104
$42
$409
$205
$185
$79
$463
$52
$178
$364
$42
$4,052

% Revenue Growth
'13-'14
14-'15
26%
24%
10%
15%
26%
26%
15%
16%
25%
24%
13%
13%
42%
39%
24%
26%
17%
13%
36%
35%
29%
23%
29%
23%
3%
6%
23%
20%
21%
19%
43%
36%
13%
15%
15%
18%
22%
22%
33%
30%
26%
15%
30%
30%
25%
30%
19%
19%
25%
25%
19%
16%
26%
27%
29%
23%
46%
45%
20%
23%
62%
50%
23%
23%
27%
25%
3%
1%
55%
35%
51%
45%
94%
86%
25%
28%
3%
94%

23%
26%
1%
86%

Operating Metrics
% Margin
Gross
S&M
R&D
62%
25%
8%
67%
47%
21%
44%
35%
14%
81%
115%
22%
71%
41%
10%
72%
41%
15%
73%
62%
13%
74%
43%
9%
47%
35%
3%
75%
42%
19%
75%
32%
6%
75%
32%
6%
76%
62%
10%
67%
53%
34%
73%
44%
11%
87%
33%
26%
78%
32%
19%
90%
50%
18%
61%
55%
24%
61%
65%
32%
75%
22%
19%
71%
50%
17%
72%
52%
22%
77%
41%
22%
79%
52%
27%
65%
24%
15%
62%
NA
NA
80%
53%
14%
66%
40%
16%
70%
NA
NA
0%
NA
NA
60%
22%
18%
62%
NA
NA
82%
57%
7%
81%
NA
NA
63%
45%
38%
NA
NA
NA
72%
69%
0%
90%

43%
45%
22%
115%

17%
17%
3%
38%

FCF
9%
(28%)
(10%)
18%
4%
9%
5%
NA
12%
2%
11%
11%
13%
(7%)
17%
13%
3%
11%
(37%)
(30%)
12%
11%
4%
12%
(27%)
12%
(24%)
13%
3%
11%
(29%)
11%
16%
2%
(5%)
(12%)
(41%)
7%
(0%)
(41%)
18%

% Gross
Retention
NA
90%
NA
NA
95%
80%
93%
NA
85%
97%
97%
NA
85%
95%
NA
NA
81%
80%
81%
81%
NA
93%
85%
NA
85%
NA
NA
85%
97%
NA
NA
96%
NA
85%
NA
99%
NA
85%
89%
80%
99%