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 Dec-11 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Sales Growth (% yoy) 111% 100% 90% 85% 80% 75%
COGS as % of Sales -24% -21% -20% -20% -20% -20% -20%
R&D as % of Sales -49% -37% -30% -25% -20% -15% -10%
Sales and Marketing as % of Sales -169% -138% -120% -110% -100% -90% -80%
General & Admin as % of Sales -43% -32% -30% -28% -26% -24% -22%
Capital Expenditure as % of Sales 33% 20% 5% 5% 5% 5% 5%
Minimum Cash Balance? 100000
Box IPO
Quarterly Income Statement
Quarter Ended
Apr. 30,2012 Jul. 31,2012 Oct. 31,2012 Jan. 31,2013
($ in Million Except Per Share Amounts) 2012 2012 2012 2013

Revenue 10,013 12,958 16,164 19,662

Cost of revenue (2,355) (3,164) (4,484) (4,277)
Gross profit 7,658 9,794 11,680 15,385

Operating expenses:
Research and development (5,994) (6,663) (7,993) (8,346)
Sales and marketing (17,971) (22,363) (27,934) (30,953)
General and administrative (3,910) (5,385) (8,447) (7,687)
Total operating expenses (27,875) (34,411) (44,374) (46,986)

Loss from operations (EBIT) (20,217) (24,617) (32,694) (31,601)

Remeasurement of redeemable convertible preferred stock warrant liability - (1,529) (81) (117)
Interest income (expense), net (222) (347) (614) (581)
Other income (expense), net 9 6 - 101

Loss before provision (benefit) for income taxes (20,430) (26,487) (33,389) (32,198)
Provision (benefit) for income taxes 3 - 8 48

Net loss (20,433) (26,487) (33,397) (32,246)

Accretion of redeemable convertible preferred stock

Net loss attributable to common stockholders (20,433) (26,487) (33,397) (32,246)

Net loss per share attributable to common stockholders, basic and diluted (4) (4) (4)

Weighted-average shares used to compute net loss per share attributable t 5,284 6,099 7,684
Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)

Diluted Wt average Shares

EBITDA

Revenue 10,013 12,958 16,164 19,662

(% yoy) 21.6%

Cost of revenue -2,355 -3,164 -4,484 -4,277

% sales -23.5% -24.4% -27.7% -21.8%
Research and development -5,994 -6,663 -7,993 -8,346
% sales -59.9% -51.4% -49.4% -42.4%
Sales and marketing -17,971 -22,363 -27,934 -30,953
% sales -179.5% -172.6% -172.8% -157.4%
General and administrative -3,910 -5,385 -8,447 -7,687
% sales -39.0% -41.6% -52.3% -39.1%

Total operating expenses -30,230 -37,575 -48,858 -51,263

% sales -301.9% -290.0% -302.3% -260.7%

Loss from operations -20,217 -24,617 -32,694 -31,601

-201.9% -190.0% -202.3% -160.7%

Effective Tax Rates

EBITDA
Quarter Ended
Apr. 30,2013 Jul. 31,2013 Oct. 31,2013 Jan. 31,2014
2013 2013 2013 2014

23,414 28,364 33,585 38,829

(4,561) (5,907) (7,172) (8,334)
18,853 22,457 26,413 30,495

(9,439) (10,965) (12,090) (13,473)

(33,936) (41,416) (48,822) (47,014)
(8,261) (10,010) (11,386) (10,186)
(51,636) (62,391) (72,298) (70,673)

(32,783) (39,934) (45,885) (40,178)

(693) (1,607) (3,583) (2,594)

(548) (716) (1,979) (462)
(9) (73) 111 (55)

(34,033) (42,330) (51,336) (43,289)

6 (2,575) 55 83

(34,039) (39,755) (51,391) (43,372)

(34,039) (39,755) (51,391) (43,372)

(3)

11,341
 (2)

8,294

(10,170) (8,548) 9,579

23,414 28,364 33,585 38,829

19.1% 21.1% 18.4% 15.6%

-4,561 -5,907 -7,172 -8,334

-19.5% -20.8% -21.4% -21.5%
-9,439 -10,965 -12,090 -13,473
-40.3% -38.7% -36.0% -34.7%
-33,936 -41,416 -48,822 -47,014
-144.9% -146.0% -145.4% -121.1%
-8,261 -10,010 -11,386 -10,186
-35.3% -35.3% -33.9% -26.2%

-56,197 -68,298 -79,470 -79,007

-240.0% -240.8% -236.6% -203.5%

-32,783 -39,934 -45,885 -40,178

-140.0% -140.8% -136.6% -103.5%

0.0% 6.1% -0.1% -0.2%

Box IPO
Annual Income Statement
Historicals Forecasts
($ in Million Except Per Share Amounts) Dec-11 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

Revenue 21,084 58,797 124,192 248,384 471,930 873,070

Cost of revenue (6,873) (14,280) (25,974) (49,677) (94,386) (174,614)
Gross profit 14,211 44,517 98,218 198,707 377,544 698,456

Operating expenses:
Research and development (14,396) (28,996) (45,967) (74,515) (117,982) (174,614)
Sales and marketing (36,189) (99,221) (171,188) (298,061) (519,123) (873,070)
General and administrative (13,480) (25,429) (39,843) (74,515) (132,140) (226,998)
Total operating expenses (64,065) (153,646) (256,998) (447,091) (769,245) (1,274,682)

Per Month Operating Expense (5,339) (12,804) (21,417) (37,258) (64,104) (106,223)
Per Month Operating Expense (ex R&D) (4,139) (10,388) (17,586) (31,048) (54,272) (91,672)

Loss from operations (EBIT) (49,854) (109,129) (158,780) (248,384) (391,702) (576,226)

Remeasurement of redeemable convertible preferre (356) (1,727) (8,477)

Interest income (expense), net (109) (1,764) (3,705) Err:522 Err:522 Err:522
Other income (expense), net 49 116 (26)

Loss before provision (benefit) for income taxes (50,270) (112,504) (170,988) Err:522 Err:522 Err:522
Provision (benefit) for income taxes 1 59 (2,431) - 0 0
Net loss (50,271) (112,563) (168,557) Err:522 Err:522 Err:522
Accretion of redeemable convertible preferred st (80) (226) (341)

Net loss attributable to common stockholders (50,351) (112,789) (168,898) Err:522 Err:522 Err:522

EBITDA (218,620) (354,364) (526,469)

Growth Analysis and Drivers

Revenue 21,084 58,797 124,192 248,384 471,930 873,070

(% yoy) 178.9% 111.2% 100.0% 90.0% 85.0%

Cost of revenue (6,873) (14,280) (25,974) (49,677) (94,386) (174,614)

% sales -32.6% -24.3% -20.9% -20.0% -20.0% -20.0%
Research and development (14,396) (28,996) (45,967) (74,515) (117,982) (174,614)
% sales -68.3% -49.3% -37.0% -30.0% -25.0% -20.0%
Sales and marketing (36,189) (99,221) (171,188) (298,061) (519,123) (873,070)
% sales -171.6% -168.8% -137.8% -120.0% -110.0% -100.0%
General and administrative (13,480) (25,429) (39,843) (74,515) (132,140) (226,998)
% sales -63.9% -43.2% -32.1% -30.0% -28.0% -26.0%

Total operating expenses (70,938) (167,926) (282,972) (496,768) (863,631) (1,449,296)

% sales -336.5% -285.6% -227.9% -200.0% -183.0% -166.0%

Loss from operations (49,854) (109,129) (158,780) (248,384) (391,702) (576,226)

% sales -236.5% -185.6% -127.9% -100.0% -83.0% -66.0%

Effective Tax Rates 1.4% 30.0% 30.0% 30.0%

Billing and Deferred Revenues

Revenue 21,084 58,797 124,192 248,384 471,930 873,070

Deferred Revenue, end of period 12,921 40,099 90,072 Err:522 Err:522 Err:522
Less: deferred revenue, Beginning of period (3,614) (13,169) (40,099) (90,072) Err:522 Err:522
Billings 30,391 85,727 174,165 Err:522 Err:522 Err:522
Billing Growth 177.0% 182.1% 103.2% Err:522 Err:522 Err:522

Deferred Revenue as % of Billing 43% 47% 52% 55% 55% 55%

Forecasts
Jan-18 Jan-19

1,571,526 2,750,170
(314,305) (550,034)
1,257,220 2,200,136

(235,729) (275,017)
(1,414,373) (2,200,136)
(377,166) (605,037)
(2,027,268) (3,080,190)

(168,939) (256,683)
(149,295) (233,764)

(770,048) (880,054)

Err:522 Err:522

Err:522 Err:522
0 -
Err:522 Err:522

Err:522 Err:522

(695,518) (805,524)
1,571,526 2,750,170
80.0% 75.0%

(314,305) (550,034)
-20.0% -20.0%
(235,729) (275,017)
-15.0% -10.0%
(1,414,373) (2,200,136)
-90.0% -80.0%
(377,166) (605,037)
-24.0% -22.0%

(2,341,573) (3,630,224)
-149.0% -132.0%

(770,048) (880,054)
-49.0% -32.0%

30.0% 30.0%

1,571,526 2,750,170
Err:522 Err:522
Err:522 Err:522
Err:522 Err:522
Err:522 Err:522

55% 55%
Box IPO
Annual Balance Sheet
Jan-13

ASSETS
Current assets:
Cash and cash equivalents 127,625
Accounts receivable 17,218
Prepaid expenses and other current assets 8,177
Deferred commissions 8,959
Total current assets 161,979

Property and equipment, net 29,949

Intangible assets, net 830
Goodwill 0
Other long-term assets 3,034

Total assets 195,792

LIABILITIES
Current liabilities:
Accounts payable 11,906
Accrued compensation and benefits 3,899
Accrued expenses and other current liabilities 1,628
Deferred revenue 38,275
Deferred rent 504
Debt 968
Total current liabilities 57,180

Debt, non-current (Revolving Credit) 30,060

Deferred revenue, non-current 1,824
Redeemable convertible preferred stock warrant liability, non-current 2,869
Deferred rent, non-current 5,125
Other long-term liabilities 491

Total liabilities 97,549

Redeemable convertible preferred stock: 281,899

Stockholders’ (deficit) equity:
Class A and Class B Common stock 1
Additional paid-in capital 10,129
Treasury stock (see Note 10) -1,177
Accumulated other comprehensive income 0
Accumulated deficit -192,609
Total stockholders’ (deficit) equity -183,656
Total liabilities + Shareholder's Equity 195,792
Check -
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

108,851 Err:522 Err:522 Err:522 Err:522 Err:522

42,669 85,063 161,620 298,996 538,194 941,839
7,776 14,903 28,316 52,384 94,292 165,010
7,152 13,661 25,956 48,019 86,434 151,259
166,448 Err:522 Err:522 Err:522 Err:522 Err:522

41,385 26,823 15,770 10,585 14,786 77,918

6,567 6,268 5,940 9,387 17,090 30,687
8,081 8,081 8,081 8,081 8,081 8,081
12,948 12,948 12,948 12,948 12,948 12,948

235,429 Err:522 Err:522 Err:522 Err:522 Err:522

12,405 24,498 46,546 86,111 155,000 271,250

16,098 29,806 56,632 104,768 188,583 330,020
14,161 12,419 23,596 43,653 78,576 137,508
78,282 Err:522 Err:522 Err:522 Err:522 Err:522
1,213 2,235 4,247 7,858 14,144 24,752
Err:522 Err:522 Err:522 Err:522 Err:522
122,159 Err:522 Err:522 Err:522 Err:522 Err:522

34,000 32,514 16,257 0 0 0

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

173,378 Err:522 Err:522 Err:522 Err:522 Err:522

9
424,370
-1,177
15
-361166
62,051 Err:522 Err:522 Err:522 Err:522 Err:522
235,429 Err:522 Err:522 Err:522 Err:522 Err:522
- Err:522 Err:522 Err:522 Err:522 Err:522
Box IPO
Annual Cash Flows

Dec-11 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (50,271) (112,563) (168,557) Err:522 Err:522 Err:522 Err:522 Err:522
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 2,838 8,616 17,867 29,764 37,337 49,757 74,530 74,530
Stock-based compensation expense 6,222 7,536 11,749
Amortization of deferred commissions 1,688 7,028 13,500
Remeasurement of redeemable convertible preferred stock 356 1,727 8,477
Release of deferred tax valuation allowance (2,590)
Other 214 628 212
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable (4,102) (11,499) (25,157) (42,394) (76,557) (137,377) (239,197) (403,645)
Deferred commissions (3,108) (14,027) (13,999) (6,509) (12,295) (22,063) (38,415) (64,825)
Prepaid expenses and other assets (7,478) (2,028) (3,792) (7,127) (13,413) (24,068) (41,907) (70,719)
Accounts payable 3,546 2,046 (3,177) 12,093 22,048 39,565 68,889 116,250
Accrued expenses and other liabilities 3,048 2,100 24,055 11,966 38,003 68,194 118,737 200,370
Deferred rent 3,467 1,755 (330) 1,022 2,012 3,610 6,286 10,608
Deferred revenue 9,307 26,930 49,973 Err:522 Err:522 Err:522 Err:522 Err:522
Net cash used in operating activities (34,273) (81,751) (91,769) Err:522 Err:522 Err:522 Err:522 Err:522

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of marketable securities (35,814) - -
Proceeds from maturity of marketable securities 12,000 20,000 -
Purchases of property and equipment (13,467) (19,499) (24,424) (12,419) (23,596) (43,653) (78,576) (137,508)
Investments in non-marketable equity securities - (125) -
Acquisition, net of cash acquired and purchases of intangib (1,012) (62) (7,761) (2,484) (2,360) (4,365) (7,858) (13,751)
Net cash provided by (used in) investing activities (38,293) 314 (32,185) (14,903) (25,956) (48,019) (86,434) (151,259)

Cash Flow available for Financing Activities (81,437) (123,954) Err:522 Err:522 Err:522 Err:522 Err:522
(6,786) (10,330)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings, net of borrowing costs 10,972 20,353 32,744 Err:522 Err:522 Err:522 Err:522 Err:522
Principal payments on borrowings (341) (577) (30,971) (1,486) (16,257) (16,257) - -
Proceeds from issuance of redeemable convertible preferred 91,968 150,780 99,944
Proceeds from exercise of redeemable convertible preferr - - 1,033
IPO Proceeds 250,000
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 Err:522 Err:522 Err:522 Err:522 Err:522
Effect of exchange rate changes on cash and cash equivale - - 15

Net increase (decrease) in cash and cash equivalents 30,283 91,360 (18,774) Err:522 Err:522 Err:522 Err:522 Err:522

Cash and cash equivalents, beginning of period 8,569 36,265 127,625 108,851 Err:522 Err:522 Err:522 Err:522
Cash and cash equivalents, end of period 38,852 127,625 108,851 Err:522 Err:522 Err:522 Err:522 Err:522
Box IPO
Debt Schedule
Dec-11 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Cash Flow Available for Financing Activities Err:522 Err:522 Err:522
Proceeds from/ (Repurchase of) Equity 250,000.0 - -
+ Beginning Cash Balance 108,851.0 Err:522 Err:522
- Minimum Cash Balance (100,000.0) (100,000.0) (100,000.0)
Cash Available for Debt Repayment Err:522 Err:522 Err:522
Long Term Debt Issuance
Long Term Debt (Repayments) (1,486.0) (16,257.0) (16,257.0)
Cash Available for Revolving Credit Facility Err:522 Err:522 Err:522

Additional Revolving Credit Facility

Beginning Balance - Err:522 Err:522
Discretionary (Paydown)/ Borrowings Err:522 Err:522 Err:522
Ending Balance - Err:522 Err:522 Err:522

Revolving Credit Facility (commited payments)

Beginning Balance 34,000.0 32,514.0 16,257.0
Issuance
(Repayment/ Amortization) (1,486.0) (16,257.0) (16,257.0)
Ending Balance 34,000.0 32,514.0 16,257.0 -

Interest Expense Calculation

1) Revolving Credit Facility Err:522 Err:522 Err:522

3.5% 3.5% 3.5%
Interest Expense (Revolving Credit) Err:522 Err:522 Err:522

2) Revolving Credit Facility (committed) 33,257 24,386 8,129

3.5% 5.0% 5.0%
Interest Expense 1,164 1,219 406

(1) + (2): Total Interest Expense Err:522 Err:522 Err:522

Cash Balances

Cash Balance 108,851 Err:522 Err:522 Err:522

Average Cash Balance Err:522 Err:522 Err:522

Interest Earned 2% Err:522 Err:522 Err:522

 Jan-18 Jan-19
Err:522 Err:522
- -
Err:522 Err:522
(100,000.0) (100,000.0)
Err:522 Err:522

- -
Err:522 Err:522

Err:522 Err:522
Err:522 Err:522
Err:522 Err:522

- -

- -
- -

Err:522 Err:522
3.5% 3.5%
Err:522 Err:522

- -
5.0% 5.0%
- -

Err:522 Err:522
Err:522 Err:522
Err:522 Err:522

Err:522 Err:522
Box IPO
Working Capital

Dec-11 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

Net Sales 58,797 124,192 248,384 471,930 873,070
Cost of Sales 14,280 25,974 49,677 94,386 174,614

Working Capital Balances

Accounts receivable 17,218 42,669 85,063 161,620 298,996
Prepaid expenses and other current assets 8,177 7,776 14,903 28,316 52,384
Deferred commissions 8,959 7,152 13,661 25,956 48,019
Total Non Cash Current Assets 34,354 57,597 113,627 215,892 399,400

Accounts payable 11,906 12,405 24,498 46,546 86,111

Accrued compensation and benefits 3,899 16,098 29,806 56,632 104,768
Accrued expenses and other current liabilities 1,628 14,161 12,419 23,596 43,653
Deferred revenue 38,275 78,282 Err:522 Err:522 Err:522
Deferred rent 504 1,213 2,235 4,247 7,858
Total Non-Debt Current Liabilities 56,212 122,159 Err:522 Err:522 Err:522

Net Working Capital/ (Deficit) (21,858) (64,562) Err:522 Err:522 Err:522

(Increase)/ Decrease in Working Capital 42,704 Err:522 Err:522 Err:522

Purchases

Ratios & Assumptions

Accounts Receivable, net (Collection period in days) 107 125 125 125 125

Prepaid expenses and other current assets 8,177 7,776 14,903 28,316 52,384
% of Sales 13.9% 6.3% 6.0% 6.0% 6.0%
Deferred commissions 8,959 7,152 13,661 25,956 48,019
% of Sales 15.2% 5.8% 5.5% 5.5% 5.5%

Accounts payable (days) 304 174 180 180 180

Accrued compensation and benefits 3,899 16,098 29,806 56,632 104,768

% of COGS 27.3% 62.0% 60.0% 60.0% 60.0%

Accrued expenses and other current liabilities 1,628 14,161 12,419 23,596 43,653
% of COGS 11.4% 54.5% 25.0% 25.0% 25.0%

Deferred revenue 38,275 78,282 Err:522 Err:522 Err:522

Deferred rent 504 1,213 2,235 4,247 7,858

% of COGS 3.5% 4.7% 4.5% 4.5% 4.5%
 Jan-18 Jan-19
1,571,526 2,750,170
314,305 550,034

538,194 941,839 Number of 365

94,292 165,010
86,434 151,259
718,919 1,258,108

155,000 271,250
188,583 330,020
78,576 137,508
Err:522 Err:522
14,144 24,752
Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

125 125

94,292 165,010
6.0% 6.0%
 86,434 151,259
5.5% 5.5%

180 180

188,583 330,020
60.0% 60.0%

78,576 137,508
25.0% 25.0%

Err:522 Err:522

14,144 24,752
4.5% 4.5%
Box IPO
Consolidated Depreciation and Capex

Dec-11 Jan-13 Jan-14 Jan-15

Net Sales 58,797 124,192 248,384
Capital Expenditures 19,499 24,424 12,419
Capital Expenditures as % of Net Sales 33.2% 19.7% 5.0%

Beginning Net PP&E 41,385.0

Capital Expenditures 12,419.2
(Depreciation Expense) (26,981.0)
(Asset Sales )
Ending Net PP&E 41,385.0 26,823.2

below are gross amounts

PPE (Break-up for 2013) Amount Amount
Servers 22,254.0 49,168.0
Computer hardware and software 3,086.0 5,792.0
Furniture and fixtures 3,427.0 4,388.0
Leasehold improvements 7,483.0 9,486.0
Construction in progress 7,031.0 1,763.0
Total 43,281.0 70,597.0

Total Capex
Breakup
Servers 8,649
Computer hardware and software 1,019
Furniture and fixtures 772
Leasehold improvements 1,669
Construction in progress 310

Servers- Straight Line Method

Useful Life 3
Servers 49,168
Depreciation Expense (existing) 16,389.3

Year Capex Useful Life

2015 8,649 3.0 2,883.2
2016 16,434 3.0
2017 30,403 3.0
2018 54,725 3.0
Depreciation (Servers) 19,272.5

Computer hardware and software

Useful Life 3
Computer hardware and software 5,792.0
Depreciation Expense (existing) 1,930.7

Year Capex Useful Life

2015 1,018.9 3.0 339.6
2016 1,935.9 3.0
2017 3,581.5 3.0
2018 6,446.6 3.0

Total Depreciation (Computer hardware and software) 2,270.3

Furniture and fixtures

Useful Life 3
Furniture and fixtures 4,388.0
Depreciation Expense (existing) 1,462.7

Year Capex Useful Life

2015 771.9 3.0 257.3
2016 1,466.7 3.0
2017 2,713.3 3.0
2018 4,884.0 3.0

Total Depreciation (Furniture and fixtures) 1,720.0

Leasehold improvements
Useful Life 3
Leasehold improvements 9,486.0
Depreciation Expense (existing) 3,162.0

Year Capex Useful Life

2015 1,668.7 3.0 556.2
2016 3,170.6 3.0
2017 5,865.6 3.0
2018 10,558.2 3.0

Total Depreciation (Leasehold improvements) 3,718.2

Total Depreciation Expense 26,981.0

 Jan-16 Jan-17 Jan-18 Jan-19
471,930 873,070 1,571,526 2,750,170
23,596 43,653 78,576 137,508
5.0% 5.0% 5.0% 5.0%

26,823.2 15,769.6 10,585.2 14,785.6

23,596.5 43,653.5 78,576.3 137,508.5
(34,650.1) (48,837.9) (74,375.9) (74,375.9)

15,769.6 10,585.2 14,785.6 77,918.2

ss amounts
Useful Life Proportion of Assets
3 69.6%
3 8.2%
3 6.2% Straight Line Method of Depreciation
3 13.4% Straight Line Method of Depreciation
NA 2.5% Straight Line Method of Depreciation

16,434 30,403 54,725 95,769

1,936 3,581 6,447 11,282
1,467 2,713 4,884 8,547
3,171 5,866 10,558 18,477
589 1,090 1,962 3,434

16,389.3 16,389.3 16,389.3 16,389.3

2,883.2 2,883.2 2,883.2 2,883.2

5,478.0 5,478.0 5,478.0 5,478.0
10,134.3 10,134.3 10,134.3
18,241.7 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

339.6 339.6 339.6 339.6

645.3 645.3 645.3 645.3
1,193.8 1,193.8 1,193.8
2,148.9 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

257.3 257.3 257.3 257.3

488.9 488.9 488.9 488.9
904.4 904.4 904.4
1,628.0 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

556.2 556.2 556.2 556.2

1,056.9 1,056.9 1,056.9 1,056.9
1,955.2 1,955.2 1,955.2
3,519.4 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
0
Dec-11 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Net Sales 58,797 124,192 248,384 471,930 873,070 1,571,526 2,750,170
Additions to Intangibles -62.0 -7761.0 2483.8 2359.6 4365.3 7857.6 13750.8
Additions to Intangibles as % of Net Sales -0.1% -6.2% 1.0% 0.5% 0.5% 0.5% 0.5%

Beginning Net Intangibles 6,567.0 6,267.8 5,940.5 9,386.8 17,090.5

Additions to Intangibles 2,483.8 2,359.6 4,365.3 7,857.6 13,750.8
(Amortization Expense) (2,783.0) (2,687.0) (919.0) (154.0) (154.0)
(Intangible Sales and write offs)
Ending Net Intangibles 6,567.0 6,267.8 5,940.5 9,386.8 17,090.5 30,687.3
Box IPO
Consolidated Shareholder's Equity
WallstreetMojo
Dec-11 Jan-13 Jan-14 Jan-15 - Assuming a
Beginning Equity Balance 62,051.0 successful IPO
Net Income Err:522
Issuance/ (Repurchase) of Equity 250,000
Ending Equity Balance 62,051.0 Err:522
WallstreetMojo
- Jan-16
Assuming a Jan-17 Jan-18 Jan-19
Err:522 IPO
successful Err:522 Err:522 Err:522
Err:522 Err:522 Err:522 Err:522
- - - -
Err:522 Err:522 Err:522 Err:522
Box IPO
Valuing Box Inc Options
Assumptions
Inputs for Black-Scholes Model
Enter the current stock price = 20
Enter the strike price on the option = 3.65
Enter the expiration of the option = 4.225
Enter the standard deviation in stock prices = 48.00% << page F-35; 48% - 57%
Enter the annualized dividend yield on stock = 0.00%
Enter the treasury bond rate = 2.70%
Enter the number of warrants (options) outstanding = 18,427
Enter the number of shares outstanding = 90,461

Calculation of Box Inc Option

Stock Price= 20
Strike Price= 3.65
Adjusted S = Err:522
Adjusted K = 3.65
Expiration (in years) = 4.225

Options Issued 18427

Total Shares outstanding 90,461
T Bond Rate 2.70%
Variance 0.2304
Annualized dividend yield 0.00%
Interest Rate 2.70%

d1 = Err:522
N (d1) = Err:522

d2 = Err:522
N (d2) = Err:522

Value per Box Inc option = Err:522

Value of all Box Inc options outstanding = Err:522

Box IPO
Shares Oustanding Schedule
Common Shares

Current Structure
Class A -
Class B 90,193,539
Class B 225,300 issuable upon vesting
Class B 41,840 future issuable
New Class B Shares Issed through IPO << put your number here
90,460,679 13.27

Options Data Weighted-

Shares Subject to Average Exercise Weighted-Average Remaining
   Outstanding Options Price Contractual Life (Years)
Balance as of January 31, 2013 13,992,407 1.84 8.69
Options granted 7,847,410 6.16
Options exercised (2,267,540) 1.32
Options forfeited/cancelled under 2006 Plan (189,936) 0.73
Options forfeited/cancelled under 2011 Plan (955,266) 3.77
Balance as of January 31, 2014 18,427,075 3.65 8.45
Vested and expected to vest as of January 31, 2014 17,863,613 3.62 8.44
Exercisable as of January 31, 2014 5,438,985 1.57 7.49
Aggregate Intrinsic Value
(in thousands)
38,954

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)

Free Cash Flow to Firm
EBIT x (1-t) (49,854) (109,129)
Add: Depreciation & amortization 2,838 8,616
Less: Capex (14,479) (19,561)
Add: Change in working capital
FCFF (61,495) (120,074)

NOLs

Cost of Capital 15.0%

Infinite growth rate 5%

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

Dec-11 Jan-13
Cash Flows
NPV of explicit period Err:522

Terminal value @ perpetual growth (2019) Dec-11 Jan-13

Terminal value as of 2019
NPV of terminal value Err:522

DCF Valuation Summary

DCF calculation as of 2014

NPV of explicit period Err:522 Err:522
NPV of terminal value Err:522 Err:522
Enterprise Value Err:522
Net Debt ($74,851)
Equity value Err:522
Stock Option Value Err:522
Adjusted Equity Value Err:522
Share Price Err:522 doesn't make sense due to negative FCFF

Sensitivity Analysis

Err:522
10%
8%
growth

6%
growth
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) (248,384) (391,702) (576,226) (770,048) (880,054)

17,867 29,764 37,337 49,757 74,530 74,530
(32,185) (14,903) (25,956) (48,019) (86,434) (151,259)
42,704 Err:522 Err:522 Err:522 Err:522 Err:522
(128,137) Err:522 Err:522 Err:522 Err:522 Err:522

263,700 512,084 903,786 1,480,012 2,250,059 3,130,113

Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Err:522 Err:522 Err:522 Err:522 Err:522

Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

0 0 0 0 Err:522

ense due to negative FCFF

WACC
12% 14% 15% 20% 25%
(30.8) (30.8) (30.8) (30.8) (30.8)
(30.8) (30.8) (30.8) (30.8) (30.8)
(30.8) (30.8) (30.8) (30.8) (30.8)
(30.8) (30.8) (30.8) (30.8) (30.8)
(30.8) (30.8) (30.8) (30.8) (30.8)
(30.8) (30.8) (30.8) (30.8) (30.8)
Box IPO
Relative Valuation
Multiples Operating Metrics
EV/Revenue P/FCF EV/EBITDA Revenue % Revenue Growth % Margin % Gross
Company Ticker Price MarketCap EV 2014 2015 2014 2014 2013 '13-'14 14-'15 Gross S&M R&D FCF Retention
Athenahealth ATHN $175.50 $7,095 $7,254 9.8x 7.9x NM 54.4x $592 26% 24% 62% 25% 8% 9% NA
Bazaarvoice BV $8.49 $653 $596 3.0x 2.6x NM NM $180 10% 15% 67% 47% 21% (28%) 90%
Benefitfocus BNFT $56.97 $1,551 $1,473 11.3x 9.0x NM NM $103 26% 26% 44% 35% 14% (10%) NA
BroadSoft BSFT $27.85 $842 $770 3.8x 3.3x 16.7x 15.8x $177 15% 16% 81% 115% 22% 18% NA
Concur Technologies CNQR $105.82 $6,352 $6,161 8.5x 6.8x NM 53.0x $579 25% 24% 71% 41% 10% 4% 95%
Constant Contact CTCT $26.81 $878 $755 2.3x 2.1x 30.8x 15.2x $285 13% 13% 72% 41% 15% 9% 80%
Cornerstone OnDemand CSOD $56.12 $3,244 $3,154 12.0x 8.6x NM NM $186 42% 39% 73% 62% 13% 5% 93%
Cvent CVT $40.55 $1,892 $1,734 12.7x 10.1x NA NA $111 24% 26% 74% 43% 9% NA NA
Dealertrack Technologies TRAK $52.90 $2,978 $3,016 5.4x 4.7x 39.5x 22.1x $479 17% 13% 47% 35% 3% 12% 85%
Demandware DWRE $73.89 $2,913 $2,637 19.1x 14.2x NM NM $101 36% 35% 75% 42% 19% 2% 97%
E2open EOPN $25.63 $784 $776 3.4x 2.8x 28.8x 11.2x $176 29% 23% 75% 32% 6% 11% 97%
Fleetmatics Group FLTX $35.57 $1,416 $1,303 5.7x 4.6x 52.0x 20.2x $176 29% 23% 75% 32% 6% 11% NA
IntraLinks IL $10.43 $639 $629 2.7x 2.5x 16.5x 15.6x $229 3% 6% 76% 62% 10% 13% 85%
Jive Software JIVE $9.00 $702 $603 3.4x 2.8x 69.4x NM $146 23% 20% 67% 53% 34% (7%) 95%
LifeLock LOCK $19.81 $2,016 $1,843 4.1x 3.5x 32.7x 39.7x $368 21% 19% 73% 44% 11% 17% NA
LinkedIn LNKD $196.78 $25,527 $23,203 10.7x 7.8x NM 44.3x $1,519 43% 36% 87% 33% 26% 13% NA
LivePerson LPSN $12.20 $750 $658 3.3x 2.8x NM 29.0x $178 13% 15% 78% 32% 19% 3% 81%
LogMeIn LOGM $45.33 $1,201 $1,012 5.3x 4.5x 40.0x 29.6x $165 15% 18% 90% 50% 18% 11% 80%
Marin Software MRIN $10.42 $364 $266 2.8x 2.3x NM NM $77 22% 22% 61% 55% 24% (37%) 81%
Marketo MKTO $35.14 $1,645 $1,525 12.1x 9.4x NM NM $94 33% 30% 61% 65% 32% (30%) 81%
Medidata Solutions MDSO $62.51 $3,497 $3,486 10.0x 8.7x NM 39.4x $276 26% 15% 75% 22% 19% 12% NA
NetSuite N $102.66 $8,288 $8,102 15.2x 11.8x NM NM $411 30% 30% 71% 50% 17% 11% 93%
Proofpoint PFPT $42.56 $1,894 $1,797 10.9x 8.4x NM NM $133 25% 30% 72% 52% 22% 4% 85%
Qualys QLYS $27.43 $1,040 $944 7.4x 6.2x 52.2x 45.6x $108 19% 19% 77% 41% 22% 12% NA
Rally Software RALY $18.03 $440 $345 3.7x 3.0x NM NM $74 25% 25% 79% 52% 27% (27%) 85%
RealPage RP $18.77 $1,520 $1,487 3.2x 2.8x 21.1x 13.1x $387 19% 16% 65% 24% 15% 12% NA
RingCentral RNG $20.60 $1,489 $1,408 7.1x 5.5x NM NM $158 26% 27% 62% NA NA (24%) NA
Salesforce CRM $58.16 $37,603 $39,273 7.5x 6.1x 48.1x 43.8x $4,052 29% 23% 80% 53% 14% 13% 85%
ServiceNow NOW $66.18 $10,824 $10,604 17.3x 12.0x NM NM $420 46% 45% 66% 40% 16% 3% 97%
SPS Commerce SPSC $64.51 $1,100 $969 7.7x 6.3x NM 64.0x $104 20% 23% 70% NA NA 11% NA
Textura TXTR $27.10 $733 $658 9.8x 6.5x NM NM $42 62% 50% 0% NA NA (29%) NA
The Ultimate Software Group ULTI $154.72 $4,664 $4,583 9.1x 7.4x NM 40.8x $409 23% 23% 60% 22% 18% 11% 96%
Veeva VEEV $32.26 $4,768 $4,480 17.2x 13.8x NM NM $205 27% 25% 62% NA NA 16% NA
Vocus VOCS $14.49 $327 $371 2.0x 1.9x 50.0x 12.2x $185 3% 1% 82% 57% 7% 2% 85%
Wix WIX $26.40 $1,261 $1,159 9.5x 7.0x NM NM $79 55% 35% 81% NA NA (5%) NA
Workday WDAY $100.91 $20,789 $19,384 27.7x 19.1x NM NM $463 51% 45% 63% 45% 38% (12%) 99%
Xero XRO $35.81 $4,502 $4,455 44.1x 23.7x NM NM $52 94% 86% NA NA NA (41%) NA

Median $1,551 $1,487 7.7x 6.3x 39.5x 29.6x $178 25% 23% 72% 43% 17% 7% 85%
Mean $4,545 $4,402 9.5x 7.1x 38.3x 32.0x $364 28% 26% 69% 45% 17% (0%) 89%
Low $327 $266 2.0x 1.9x 16.5x 11.2x $42 3% 1% 0% 22% 3% (41%) 80%
High $37,603 $39,273 44.1x 23.7x 69.4x 64.0x $4,052 94% 86% 90% 115% 38% 18% 99%

Box Inc Valuations 2015

Pessimistic Base Optimistic
EV/Revenue Implied 5.0x 7.1x 10.0x
Box Revenue 248,384 248,384 248,384
EV 1,241,920 1,762,570 2,483,840

Debt Err:522 Err:522 Err:522

Cash Err:522 Err:522 Err:522
Equity Value Err:522 Err:522 Err:522

Price Per Share Err:522 Err:522 Err:522

Note: All metrics are calendarized. Multiples >75x are considered not meaningful "NM".
source - www.bvp.com/cloud/comps, last updated on 15th March, 2014
 Sales Gross Margin FCF EBITDA Gross
2012 2013 2014 2015 2013 2013 2014 2013 2014 Retention S&M R&D
$422 $592 $744 $920 61.7% $55 $60 $110 $130 24.7% 8.0%
$148 $180 $197 $226 67.0% ($50) ($14) ($16) ($13) 90% 47.0% 21.3%
$82 $103 $130 $164 44.1% ($10) ($20) ($21) ($27) 34.6% 13.7%
$165 $177 $204 $236 80.9% $31 $50 $44 $53 115.3% 21.9%
$462 $579 $725 $899 71.0% $25 $22 $112 $120 95% 41.1% 10.4%
$252 $285 $321 $363 71.5% $24 $29 $46 $58 80% 41.4% 15.4%
$118 $186 $263 $365 73.1% $9 $24 $1 $13 93% 62.3% 12.6%
$83 $111 $137 $172 73.8% $18 $18 $13 $12 43.0% 9.1%
$389 $479 $562 $636 46.6% $59 $75 $117 $135 85% 35.3% 3.0%
$79 $101 $138 $186 74.5% $2 ($0) ($2) $5 97% 42.1% 19.0%
$127 $176 $228 $281 74.8% $19 $27 $55 $70 97% 32.3% 5.8%
$127 $176 $228 $281 74.8% $19 $27 $55 $70 32.3% 5.8%
$217 $229 $237 $251 76.0% $31 $39 $37 $41 85% 62.4% 9.7%
$114 $146 $179 $213 67.0% ($10) $10 ($21) ($14) 95% 53.0% 34.5%
$276 $368 $446 $531 72.7% $62 $62 $43 $51 44.5% 10.7%
$972 $1,519 $2,168 $2,958 87.3% $197 $299 $374 $577 33.4% 26.5%
$157 $178 $202 $231 77.5% $6 $8 $20 $26 81% 31.5% 19.1%
$139 $165 $190 $224 89.6% $18 $30 $32 $41 80% 50.4% 17.9%
$60 $77 $94 $114 61.3% ($28) ($29) ($26) ($24) 81% 54.8% 23.5%
$58 $94 $126 $163 61.3% ($28) ($17) ($31) ($24) 81% 64.7% 32.2%
$218 $276 $349 $403 74.6% $34 $50 $71 $89 21.9% 19.4%
$309 $411 $532 $689 70.9% $43 $68 $44 $47 93% 50.0% 17.1%
$106 $133 $165 $215 72.4% $5 $11 ($6) ($3) 85% 52.0% 21.9%
$91 $108 $128 $152 77.3% $13 $20 $18 $23 41.3% 22.1%
$57 $74 $93 $116 78.6% ($20) ($15) ($14) ($13) 85% 51.8% 26.6%
$322 $387 $460 $533 65.2% $47 $72 $91 $116 NA 23.9% 15.0%
$115 $158 $199 $254 61.8% ($39) ($33) ($23) ($21) NA NA
$3,050 $4,052 $5,210 $6,414 79.5% $546 $782 $657 $859 85% 52.9% 14.1%
$244 $420 $612 $887 65.8% $11 $45 $23 $63 97% 39.8% 16.1%
$77 $104 $125 $153 70.0% $11 $14 $13 $17 NA NA
$24 $42 $67 $101 0.0% ($12) ($4) ($12) ($5) NA NA
$332 $409 $503 $618 59.9% $46 $56 $90 $114 96% 21.8% 18.3%
$130 $205 $261 $325 61.7% $33 $46 $45 $51 NA NA
$171 $185 $190 $191 82.0% $3 $7 $24 $27 85% 57.3% 7.4%
$44 $79 $123 $165 81.2% ($4) ($10) ($17) ($22) NA NA
$274 $463 $701 $1,016 63.4% ($56) ($47) ($64) ($59) 99% 45.1% 37.5%
$28 $52 $101 $188 NA ($22) ($50) ($23) ($29) NA NA