Q4 2021 Boxed Inc Earnings Call

Good afternoon.

Good afternoon. Thank.

Thank you for attending today's Fox, Inc., 4th Quarter and Fiscal Year 2021 Earnings Conference Call. My name is Bethany, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to our host.

Thank you for attending todays box, Inc, fourth quarter and fiscal year 2021 earnings conference call. My name is Bethany and I will be your moderator for today's call all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end if you would like to ask a question.

Please press star one on your telephone keypad I would now like to pass the conference over to our host Anna Kate Heller from Investor Relations. Please go ahead.

Anna Kate Heller from Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us on box fourth quarter and fiscal year 2021 earnings conference call on the call today are J, Wang co founder and Chief Executive Officer, and Mark the mouth E Chief Financial Officer.

Good afternoon, and thank you for joining us on Box's fourth quarter and fiscal year 2021 earnings conference call. On the call today are Chae Huang, co-founder and chief executive officer, and Mark Zymowski, chief financial officer.

During the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These include expectations and assumptions regarding the company's future operations and financial performance. These statements are based on management's current expectations and involve risks and uncertainties that could differ materially from actual events and those described in these forward-looking statements.

During the course of this call management may make forward looking statements within the meaning of the federal Securities laws.

Hey, good expectations and assumptions regarding the company's future operations and financial performance. These statements are based on management's current expectations and involve risks and uncertainties that could differ materially from actual events and those described in these forward looking statements. Please refer to box reports filed from time to time with the Securities and Exchange Commission and express.

Please refer to boxed reports filed from time to time with the Securities and Exchange Commission and its press release issued today for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Management's remarks today will include non-GAAP or adjusted financial statements. Thank you.

<unk> issued today for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward looking statements made today.

Managements remarks today will include non-GAAP or adjusted financial measures reconciliations of GAAP results to non-GAAP financial measures are available in the earnings release.

Reconciliations of GAAP results to non-GAAP financial measures are available in the earnings release.

This call is being webcast an archived replay will also be available on box Investor Relations website, now I'd like to turn the call over to Chad.

This call is being webcast, and an archive of it will also be available on Vox Investor Relations website. Now I'd like to turn the call over to Chai.

Thanks, dedicated and hi, everyone I couldnt be more pleased to be speaking with you on our first earnings call as a public company as you'll soon hear we're proud to have delivered results in line with the forecast we released in October 2021.

Chai: Thanks, Etiquette, and hi, everyone. I couldn't be more pleased to be speaking with you on our first earnings call as a public company.

Chai: As your student here, we're proud to have delivered results in line with the forecast we released in October of 2021.

Chai: Before we get there though, I'm going to first spend time sharing the box story and tell you more about why we're so excited about what we've created.

Before we get there, though I'm going to first spend time sharing the box story and tell you more about why we're so excited about what we've created.

Chai: Following my remarks, Mark is going to discuss our Q4 financial results in greater detail, as well as provide our outlook for 2022. After that, we'll open that call up for questions.

Following my remarks, Mark is going to discuss our Q4 financial results in greater detail as well as provide our outlook for 2022.

After that well open the call up for questions.

Now for those who are familiar with our company first off welcome.

Mark Zymowski: Now, for those who aren't familiar with our company, first off, welcome.

<unk> is an e-commerce retailer and in ecommerce enabler and our mission is to help the world stock up through our technology and as Youll hear later without losing sight of our ESG mission.

Mark Zymowski: Box is an e-commerce retailer and an e-commerce enabler, and our mission is to help the world stock up through our technology, and as you'll hear later, without losing sight of our ESG mission.

So what does that mean practically speaking well it means that our business can be split into two primary operating segments.

Mark Zymowski: Well, it means that our business can be split into two primary operating sectors.

Mark Zymowski: First, we operate an e-commerce retail service that provides bulk groceries to both businesses and households.

First we operate in E Commerce retail service that provides bulk grocery both businesses and households back in 2013, we had a simple idea makes shopping for household essentials easy convenient and fun. So customers can focus their time and energy on things that really matter instead of spending their time traveling to and from traditional.

Mark Zymowski: Back in 2013, we had a simple idea. Make shopping for household essentials easy, convenient, and fun so customers can focus their time and energy on things that really matter instead of spending their time traveling to and from traditional brick and mortar wholesalers.

Brick and mortar wholesale club.

Mark Zymowski: From that initial concept in 2013, Box grew into the e-commerce technology company that we are today, with purpose-built proprietary storefront, analytics, data science, fulfillment, advertising, and even robotic technologies. Now, you might ask, why do you need to do this?

From that initial concept in 2013 bought through into the E. Commerce Technology company that we are today with purpose built proprietary storefront analytics data science fulfillment advertising and even robotic technology.

Now you might ask.

Why did you build all of that technology yourself.

The simple answer is that from those early days, we knew high average order value of that basket building would be important to our business.

Mark Zymowski: The simple answer is this, from those early days, we knew high average order values and basket building would be important to our business.

Mark Zymowski: Yes, she was. There wasn't a lot of compelling basket building e-commerce technology out there.

To us there wasn't a lot of compelling basket building ecommerce technology out there.

Mark Zymowski: So with technology being core to who we were as a founding team, we decided to solve many of those problems that.

So with technology being core to what we were at the accounting team, we decided to solve many of those problems.

Mark Zymowski: from the recommendation engine to the data models, all the way to how we handled packing a high amount of items that a.

From a recommendation engine to the data model all the way to how we handled packing a high amount of items in a box.

So that brings us to our second business segment, while we expect all of that technology I, just spoke about and allow others to enable their online businesses.

Mark Zymowski: So that brings us to our second business segment, where we extract all that technology I just spoke about and allow others to enable their online businesses. We call this our...

We called it our software and services business.

On this side of the house customers in need of an enterprise level E. Commerce platform can find an end to end solution built by actual e-commerce operator.

Mark Zymowski: On this side of the house, customers in need of an enterprise level e-commerce platform can find an end-to-end solution built by actual e-commerce operators.

Mark Zymowski: To put it simply, it's e-commerce technology built by e-commerce operators.

To put it simply if e-commerce technology built by E Commerce operators.

Okay. So we've discussed the two main business units that four box.

Mark Zymowski: Okay, so we've discussed the two main business units that Formbox is. So...

How does that all fit together well, what we've created a box over the last eight years can be visualized as a bundle.

Mark Zymowski: Well, what we've created at Fox over the last eight years can be visualized as a funnel.

Mark Zymowski: At the top of the funnel, customer traffic is driven by a need to stock up and save on bulky sensors.

At the top of the funnel customer traffic is driven by a need to stock up and save on bulk essentials.

Mark Zymowski: These customers aren't just looking for a single item or even a single bulk item. Rather, they're customers, many of whom live in rural areas and small towns, who are looking to stock up their pantry.

These customers aren't just looking for a single item or even a single bulk item rather their customers many of whom live in rural areas and small town.

We're looking to stock up their pantries.

It may not surprise you that this is a $100 billion online grocery market we're attacking.

Mark Zymowski: It may not surprise you that this is a $100 billion online grocery market we're attacking.

Mark Zymowski: and it's expected to grow at approximately 20% CAGR over the next five years, so almost 250 billion.

It is expected to grow at approximately 20% CAGR over the next five years to almost $250 billion.

It's also important to note right here at the top of the funnel that we not only serve as household consumers, but we're also servicing many small mid sized and fortune 500 businesses as well.

Mark Zymowski: It's also important to note right here at the top of the funnel that we not only service household consumers, but we're also servicing many small, midsize, and Fortune 500 businesses as well.

Mark Zymowski: In fact, our B2B customer segment was growing at a 50% CAGR from 2015 to 2019. And we believe we're well positioned to capture significant demand for businesses as they reopen their offices after two long years of remote and hybrid.

In fact, our <unk> customer segment with growing at a 50% CAGR from 2015 to 2019.

And we believe we're well positioned to capture significant demand for businesses as they reopen their offices after two long years of remote and hybrid work.

So we talked about who that customer is at the top of the funnel now the second step under that.

Mark Zymowski: So we talked about who that customer is at that top of the funnel. Now, the second step under that showcases and leverages the beauty.

Showcases and Leverages the beauty of the box experience.

The simplicity of the user friendly experience coupled with our data model allows our customers to browse and discover items with these yielding those important large order value as I mentioned before.

Mark Zymowski: The simplicity of the user friendly experience coupled with our data models allows our customers to browse and discover items with ease, yielding those important large order.

Our average fee to see consumers buying over $100 worth of goods and eight items come up in a single shop, while our average <unk> water is more than double that.

Mark Zymowski: Our average B2C consumer is buying over $100 worth of goods and eight items from us in a single shop, while our average B2B order is more than double.

And the next and third step of the funnel our technology continues to shine with.

Mark Zymowski: In the next and third step of the funnel, our technology continues to shine.

Mark Zymowski: We've built a proprietary cost-per-click programmatic ad platform that allows our suppliers and partners to bid on web and app placements that drive real return on ad.

We built a proprietary cost per click programmatic AD platform that allows our suppliers and partners have been on web and App placement that drive real return on Ad spend.

Mark Zymowski: These clients can set up their accounts with a budget of their own choosing, then bid on the exact slots to deploy that budget and see the resulting return on ad spend in real-time, providing a fully closed-loop advertising attribution.

Can stop the account with a budget of their own choosing.

<unk> bid on the exact what's deployed that budget and see the resulting return on AD spend in real time, providing a fully closed loop advertising attribution model.

Mark Zymowski: We've received great feedback as it's allowed our partners to spend high-impact ad dollars at the point of customer conversion. And we see meaningful runway to increase this high-margin business as a percentage of total revenue over the next several years.

We've received great feedback as it allows our partners to spend high impact AD dollars at <unk>.

Point of customer conversion, and we see meaningful runway to increase as high margin business as a percentage of total revenue over the next several years.

Mark Zymowski: For Step 4 of the funnel, in adjacent categories like health and beauty care, pets,

We're set for the bundle in adjacent categories like health and beauty care pad baby home inorganic or pocket was also open to third party sellers now.

Mark Zymowski: baby, home and organic. Our platform is also open to third party sellers.

Mark Zymowski: We're currently selling approximately 1,000 items through those third-party sellers, which we expect to continue to expand throughout 2022 and beyond.

We're currently selling approximately a thousand items through those third party sellers, which we expect to continue to expand throughout 2022 and beyond.

Mark Zymowski: These sellers have access to our loyal box customer base, and in turn, our customers are provided a deeper, broader, and richer assortment of products that could translate into larger baskets and greater wallet share over time.

These sellers have access to our loyal customer base and in turn our customers have provided a deeper broader and Richard assortment of products that could translate into larger basket and greater wallet share overtime.

Mark Zymowski: It's important to mention that because product curation is a core part of our identity, we will continue to create from only high-quality and trusted sellers, differentiating us from other e-commerce marketplace platforms. Our intention has never been to be the everything store.

It is important to mention that because product curation is a core part of our identity. We will continue to create from only high quality and trusted sellers differentiating us from other e-commerce marketplace platform.

Our intention has never been to be the everything store, but we do strive to be the everything you need to stock up store.

Lastly for <unk> five as a bundle because the majority of what we sell our consumables, our AI models learn and predict when a customer might run out of a particular product, which allows us to send a message to our customers to say hey come back and shop off again.

Mark Zymowski: Lastly, for step five of the funnel, because the majority of what we sell are consumables, our AI models learn and predict when a customer might run out of a particular product, which allows us to send a message to our customers to say, hey, come back and shop off.

Mark Zymowski: The customer exits the funnel and returns right back at the very top.

The customer exits the bundle and returns right back at the very top again.

This bundle that I just walked you through is powered by our proprietary end to end technology from the first click all the way to the automation robotics in our newest fulfillment centers.

Mark Zymowski: This funnel that I just walked you through is powered by our proprietary end-to-end technology from the first click all the way to the automation robotics in our newest fulfillment centers. Yes? Yes.

Yes, we build our own robots.

We believe this end to end capabilities truly rare and a notable differentiator in the market today, allowing us to be more nimble flexible and react to both macroeconomic and industry wide and business specific trends in real time.

Mark Zymowski: We believe this end-to-end capability is truly rare and a notable differentiator in the market today, allowing us to be more nimble, flexible, and react to both macroeconomic, industry-wide, and business-specific trends in real time. As such, we've extracted that

As such we've extracted that technology brother for US, we think there's significant value in licensing our technology to others across the globe and we've begun to do so through our unique enterprise grade software and services offering.

Mark Zymowski: We think there's significant value in licensing our technology to others across the globe. And we've begun to do so through our unique enterprise-grade software and services office.

So is that retail customer that I mentioned before exits to bundle and reentered it at the top the technology also exit the bundle is improved through our projects with our software and services customers and is then also then re injected at the top.

Mark Zymowski: So as that retail customer that I mentioned before exits the funnel and reenters at the top.

Mark Zymowski: The technology also exits the funnel, is improved through our projects with our software and services customers, and is then also then re-injected at the top.

To put it plainly as we get smarter better and faster in the main funnel those advances inure to the benefit of our software and services clients.

Mark Zymowski: To put it plainly, as we get smarter, better, and faster in the main funnel, those advances inure to the benefit of our software and services clients.

As that technology becomes more robust with software and services client work. The main funnel that box retail customers go through also gets better through those learning the new feature.

Mark Zymowski: As that technology becomes more robust with software and services client work, the main funnel that box retail customers go through also gets better through those learning the new features. This forms a truly.

This forms a truly symbiotic relationship.

Now that we've had the chance to properly introduce our business to you I'd like to highlight just a few exciting developments.

Speaker Change: Now that we've had the chance to properly introduce our business to you, I'd like to highlight just a few exciting developments.

Speaker Change: In February 2021, we executed our first enterprise software licensing agreement with Eon, one of the largest retailers in Asia.

In February 2021, we executed our first enterprise software licensing agreement with E. On one of the largest retailers in Asia.

Like the Tempur Yum was already using Boston proprietary E Commerce technology in over 40 locations.

Speaker Change: By September , EM was already using Boston's proprietary e-commerce technology in over 40 locations.

Speaker Change: to power in-store pickup and on-demand grocery e-commerce.

Its in store pick up and on demand grocery e-commerce offering.

We're currently in discussions to expand the partnership into other Asian markets with which we believe shows the enterprise level power and sophistication of the platform we built.

Speaker Change: We're currently in discussions to expand the partnership into other Asian markets with EON, which we believe shows the enterprise-level power and sophistication of the platform we built.

We look forward to executing our growth strategy is to expand that relationship in the coming months and years.

Speaker Change: We look forward to executing our growth strategy to expand that relationship in the coming months and years.

Speaker Change: We also recently announced an exciting expansion of our relationship with Google Cloud as a tremendous partner to support continued long-term growth of our software and services.

We also recently announced an exciting expansion of our relationship with Google Cloud is a tremendous partner to support continued long term growth of our software and services business.

Speaker Change: In the retail business, our boxed-up loyalty program continues to be a compelling growth opportunity. In the retail business, our boxed-up loyalty program continues to be a compelling growth

In the retail business, our box up loyalty program continues to be a compelling growth opportunity.

Speaker Change: In 2021, compared to an average B2C customer, boxed up members ordered 2.2 times as frequently and spent approximately 215% more per customer, demonstrating the sickness.

In 2021 compared to an average BDC customer boxed up members ordered two two times as frequently.

And spent approximately 215% more per customer demonstrating the stickiness of that customer base.

During the fourth quarter of 2021, we also completed our first acquisition Max delivery one of New York's first on demand grocery delivery services.

Speaker Change: During the fourth quarter of 2021, we also completed our first acquisition, Max Delivery, one of New York's first on-demand grocery delivery services.

Speaker Change: The Acquisition broadens our capabilities in fresh grocery and dark store fulfillment.

The acquisition broadens, our capabilities of fresh grocery and dark store fulfillment.

Speaker Change: Max Delivery will also become a client of our software and services business, adopting our proprietary commerce technology to help enable scalability of its operations and expansion into additional markets.

Max deliveries will also become a client of our software and services business adopting our proprietary ecommerce technology to help enable scalability of its operations and expansion into additional markets.

Speaker Change: As we speak today, we're already integrating the max delivery operations and team into the box family.

As we speak today, we're already integrating the Mac delivery operations and team into the box family.

Speaker Change: As of January , Max Delivery customers are already able to purchase Printed String products, which is our high-quality private brand, through the Max Delivery platform.

As of January Max delivery customers already April to purchase Princess drink products, which is our high quality private brand through the Mac delivery platform. We're also actively pursuing and negotiating additional sites for the geographic expansion of the Mack delivery offering.

Speaker Change: We're also actively pursuing and negotiating additional sites for the geographic expansion of the max delivery offer.

Speaker Change: Now with all that said, I'm proud that we've executed on all this without losing sight of our ESG.

Now with all that said I'm proud that we've executed in all of this without losing sight of our ESG mission.

Speaker Change: We've always taken care of our team members, even back in the days when it seemed contrarian.

Always taking care of our team members even back in the days when it seem contrarian to do so.

Speaker Change: Amongst other benefits, we subsidize life-changing events and provide our front-line team with an emergency fund to cover some of the unexpected costs that life throws at them. We've also

Among other benefits, we subsidize life changing events and provide our frontline team with an emergency button to cover some of the unexpected cost that life throws at them.

We've also taken a stand on the <unk> with.

Speaker Change: We discount feminine care products when, in our view, an unfair tax is levied.

With discount feminine care products when in our view and unfair taxes levied products like tampons and pads or necessity not luxury items and as such we believe they should be treated as necessity from a tax perspective will.

Speaker Change: Products like tampons and pads are necessities, not luxury items, and as such, we believe they should be treated as necessities from a tax perspective.

We will then shouldn't have to pay more for a product simply because it's literally pink or specifically marketed towards them.

Speaker Change: Women shouldn't have to pay more for a product simply because it's literally pink or specifically marketed towards them.

And lastly, we take care of the environment, we do so through a focus on large orders and shipping those large orders in a few boxes as possible.

Speaker Change: We do so through our focus on large orders and shipping those large orders in as few boxes as possible.

Speaker Change: Further, the proceeds from our recycling program in our fulfillment centers go back to our team members to fund some of those many benefit things.

Further the proceeds from our recycling program in our fulfillment centers go back to our team members to fund some of the many benefits to enjoy.

Speaker Change: Doing good benefits everyone at Box.

Doing good benefit everyone at box.

Yes, she is in our DNA.

Speaker Change: These principles are not just talking points for us. They're not just posters we hang on the wall. It is a point of pride for all.

Principles are not just talking points for us they're not just posters, we hang on the wall. It is a point of pride for all of us here at box.

As I wrap up and as you can probably tell I didn't do all of this by myself.

Speaker Change: As I wrap up, and as you can probably tell, I didn't do all of this by myself.

Speaker Change: We have a world-class team at Bosch who is laser-focused on maximizing both sides of our business through that symbiotic funnel that I just walked through.

We have a world class team of thought with laser focus on maximizing both sides of our business through that symbiotic bundle that I just walked you through.

Speaker Change: Now, as a public company, we'll continue to drive additional B2B and B2C growth, enhance loyalty programs, and invest in our unique high-margin software and services system.

Now as a public company, we will continue to drive additional beta being BDC growth enhance loyalty programs and invest in our unique high margin software and services business.

It probably goes without saying, but I am very excited about what is to come in the years ahead.

Speaker Change: probably goes without saying, but I'm very excited about what is to come in the years ahead.

It's been my pleasure to give you an overview of what we do here at the company.

Speaker Change: It's been my pleasure to give you an overview of what we do here at the company. And with that, let me hand it over to Mark. Thank you so much, Jay.

And with that let me hand, it over to Mark.

Thank you so much.

Good afternoon, everyone and welcome to our first earnings call.

Mark Zymowski: We're so excited to be presenting the box results to our shareholders and to the investment community for the first time.

So excited to be presenting the bos results to our shareholders and to the investment community for the first time.

Mark Zymowski: After all the effort that was put into preparing to become a public company over the last year, I'm beyond proud of the Vox team and the results we were able to deliver for 2020.

After all the effort that was put into preparing to become a public company over the last year and beyond proud of the box game and the results we were able to deliver for 2021.

I will start off by reviewing our financial results for the fourth quarter.

Mark Zymowski: I will start off by reviewing our financial results for the fourth quarter.

Net revenue was 45 million, an increase of $1 8 million compared to the prior year period.

Mark Zymowski: Net revenue was $45 million, an increase of $1.8 million compared to the prior year period.

Mark Zymowski: The increase was due to an increase in software and services revenue, which we see as a significant growth opportunity for us as we look forward.

The increase was due to an increase in software and services revenue, which we see as a significant growth opportunity for us as we look forward.

Retail net revenue was $39 7 million.

Mark Zymowski: Retail net revenue was $39.7 million, a decrease of $3.5 million compared to the prior year period.

A decrease of $3 5 million compared to the prior year period.

Our year over year trends here continue to be impacted by tough comps, resulting from COVID-19 related customer behavior.

Mark Zymowski: Our year-over-year trends here continue to be impacted by tough comps resulting from COVID-related customer behavior, as we saw strength in the B2C active user count and organic new customer acquisitions throughout 2020.

As we saw strength in the BDC active user counts and organic new customer acquisition throughout 2020.

Mark Zymowski: With that said, we're really encouraged by our underlying customer engagement.

With that said, we're really encouraged by our underlying customer engagement trends with fourth quarter that retail revenue per active customer of $266, which was up 14% year over year and up 26% since the fourth quarter of 2019 looking at it on a three year comparable basis.

Mark Zymowski: with fourth quarter net retail revenue per active customer of $266, which was up 14% year-over-year and up 26% since the fourth quarter of 2019, looking at it on a two-year comparable basis.

With all the volatility across our P&C and <unk> customer bases over the last 24 months related to Covid in the near term.

Mark Zymowski: With all the volatility across our B2C and B2B customer bases over the last 24 months related to COVID, in the near term,

Mark Zymowski: For our retail business, we are focused on quarter-over-quarter growth.

For our retail business, we are focused on a quarter over quarter growth.

Mark Zymowski: Those trends are especially important for us as we scale and maintain more consistent, higher levels of marketing investment throughout 2021.

Those trends are especially important for us as we scale and maintain more consistent and higher levels of marketing investment throughout 2022.

In the fourth quarter of 2021, we spent $7 3 million on advertising and we expect to scale those investments further into Q1 and over the course of this year.

Mark Zymowski: In the fourth quarter of 2021, we spent $7.3 million on advertising, and we expect to scale those investments further into Q1 and over the course of this year.

While the full benefits of our increased marketing investments are expected to be realized over the long term, we have already begun to see improvements in our retail net revenue compared to the third quarter of 2021 with fourth quarter results, increasing $1 6 million over the third quarter.

Mark Zymowski: While the full benefits of our increased marketing investments are expected to be realized over the long term, we've already begun to see improvements in our retail net revenue compared to the third quarter of 2021, with fourth quarter results increasing $1.6 million over the third quarter.

Finally in our retail segment, we are pleased that BW customer demand is strengthening once again as our customers return to office after seven quarters of Covid related variability.

Mark Zymowski: Finally, in our retail segment, we are pleased that B2B customer demand is strengthening once again as our customers return to office after seven quarters of COVID-related variability.

Notably BW customer of Emt increased 59% in the fourth quarter of 2021 compared to the prior periods and that trend has continued in the quarter to date period this year as well.

Mark Zymowski: Notably, B2B customer DMV increased 59% in the fourth quarter of 2021 compared to the prior period. And that trend has continued in the quarter-to-date period this year as well. The return of B2B.

The return on <unk> is exciting for us for a host of reasons as.

Mark Zymowski: As a reminder, compared to our B2C customer, on average, our B2B customer spends more than two times more per order and is a stickier and more profitable customer as well.

As a reminder, compared to our BDC customer on average our BTB customer spent more than two times more per order and as a stickier and more profitable customer as well.

Mark Zymowski: The re-emergence of the B2B customer base will help support continued improvement across our retail KPIs go forward.

The reemergence of the <unk> customer base will help support continued improvement across our retail Kpis go forward.

As Jay discussed earlier, we are extremely pleased with the launch of our software and services business in 2021, which generated $5 3 million in net revenue in the fourth quarter and $20 3 million in net revenue in the fiscal year 2021.

Mark Zymowski: As Che discussed earlier, we are extremely pleased with the launch of our software and services business in 2021, which generated $5.3 million in net revenue in the fourth quarter and $20.3 million in net revenue in the fiscal year 2021.

This is an incredible testament to the power of the underlying technology platform that we've built over the last nine years and is proof of our ability to begin monetizing it.

Mark Zymowski: This is an incredible testament to the power of the underlying technology platform that was built over the last nine years, and is proof of our ability

Mark Zymowski: Not surprisingly, the pandemic has accelerated the urgency of e-commerce for retailers across the globe. And we believe we are well positioned to help support that e-commerce enablement and continued optimization.

Not surprisingly the pandemic has accelerated the urgency of e-commerce for retailers across the globe and we believe we are well positioned to help support that e-commerce enabled manner and continued optimization.

During 2021, we continued our track record of strong gross profit growth and margin expansion and are pleased with the ongoing trajectory we are seeing.

Mark Zymowski: During 2021, we continued our track record of strong gross profit growth and margin expansion and are pleased with the ongoing

Mark Zymowski: Gross profit of 9.2 million in the fourth quarter increased by 3.1 million, or 50% versus the prior year period, and gross margin was 20.3%, a 625 basis point increase from 14.1% in the prior year period.

Gross profit of $9 2 million in the fourth quarter increased by $3 1 million or 50% versus the prior year period and gross margin was 23% a 625 basis point increase from 14, 1% in the prior year period.

For the full year gross profit of $31 9 million increased $6 million or 23, 1% versus fiscal year 2020, with gross margin expansion of 414 basis points.

Mark Zymowski: For the full year, gross profit of $31.9 million increased $6 million, or 23.1% versus fiscal year 2020, with gross margin expansion of $414 billion.

Mark Zymowski: The margin expansion resulted from the increase of net revenue mix from the higher margin software and services sector.

The margin expansion resulted from the increase of net revenue mix from the higher margin software and service et cetera.

It is worth noting that changes in our revenue mix between retail and software and services will yield some variability in gross margins on a quarter to quarter basis, but overall, we anticipate meaningful further expansion as we scale and look forward.

Mark Zymowski: It is worth noting that changes in our revenue mix between retail and software and services will yield some variability and gross margins on a quarter to quarter basis, but overall we anticipate meaningful further expansion as we scale and look forward.

Mark Zymowski: Our fourth quarter net loss was $38.9 million, compared to the loss of $7.3 million in the prior year period, which was primarily due to one-time transaction costs associated with our business combination, as well as some non-cash expenses resulting from a change in the fair value of our warrants and other derivative liabilities.

Our fourth quarter net loss was $38 9 million compared to a loss of $7 3 million in the prior year period, which was primarily due to onetime transaction costs associated with our business combination as well as some noncash expenses, resulting from a change in the fair value of our warrants and other derivative liabilities.

Adjusted EBITDA was a loss of $13 2 million compared to a loss of $6 2 million in the prior year period, primarily due to increases in advertising expenses as well as public company related investments, including staff insurance costs and professional services.

Mark Zymowski: Adjusted EBITDA was a loss of $13.2 million compared to a loss of $6.2 million in the prior year period, primarily due to those increases in advertising expenses as well as public company-related investments, including staff, insurance costs, and professional services.

Mark Zymowski: We are pleased with the continued upward trajectory of our average order value.

We are pleased with the continued upward trajectory of our average order values with fourth quarter <unk> of $131, an increase of $13 or 11, 5% compared to the prior year period.

Mark Zymowski: fourth quarter AOV of $131, an increase of $13 or 11.5% compared to the prior year period.

For the full year results <unk> with $122 up $14 or 12, 7% from 2020, and a $28 or 29, 3% on a two year basis since 2019.

Mark Zymowski: For the full year results, AOV was $122, up $14.00 or 12.7% from 2020, and up $28.00 or 29.3% on a two-year basis since 2019.

There are several factors helping support these increases.

Mark Zymowski: First, our units for order increased 8% year over year, the result of ongoing technology and personalization improvements, and the continued expansion of our product assortment.

Our units per order increased 8% year over year. The result of the ongoing technology and personalization improvements and the continued expansion of our product assortment.

Further, especially in the fourth quarter, we began seeing an increasing mix of BW customer orders, which has <unk> more than double that of our BDC customer orders as I mentioned earlier.

Mark Zymowski: Further, especially in the fourth quarter, we began seeing an increasing mix of B2B customer orders, which have AOBs more than double that of our B2C customer orders, as I mentioned earlier.

Mark Zymowski: Finally, we implemented some price increases over the course of the year in reaction to industry-wide inflationary pressures we saw across the grocery supply chain.

Finally, we implemented some price increases over the course of the year and reaction to industry wide inflationary pressures, we saw across the grocery supply chain.

So turning to the balance sheet for a moment.

Mark Zymowski: We had a cash balance of 105 million at the end of the fourth quarter, which will help support the increased investments in marketing, research and development, and software and services going into 2022.

We had a cash balance of $105 million at the end of the fourth quarter, which will help support the increased investments in marketing research and development and software and services going into 2022.

Mark Zymowski: In addition, we have $60.1 million on the balance sheet in the form of a forward purchase receivable, which we hope to be able to collect on over the coming quarter.

In addition, we had $60 1 million on the balance sheet in the form of a forward purchase receivable, which we hope to be able to collect on over the coming quarters.

Our total debt principal was $132 5 million of which $87 5 million is related to convertible debt.

Mark Zymowski: Our total debt principal was $132.5 million, of which $87.5 million is related to convertible debt.

Mark Zymowski: And as of March 1st, 2022, we had 68.9 million in fully diluted shares out.

And as of March one 2022, we had $68 9 million and fully diluted shares outstanding.

Mark Zymowski: Now let's discuss our outlooks for the full year of 2022.

Now, let's discuss our outlook for the full year of 2022.

We're expecting net revenue in the range of 220 to 245 million with adjusted EBITDA loss in the range of 70 to 80 million.

Mark Zymowski: We're expecting net revenue in the range of $220 to $245 million, with adjusted EBITDA loss in the range of $70 to $80 million.

We see significant growth opportunities across both our business segments with a few key focus areas.

Mark Zymowski: We see significant growth opportunities across both our business segments with a few key.

Mark Zymowski: For retail, we are continuing to broaden our product assortment through onboarding additional third-party sellers, which will support ongoing AOV increases and improve our conversion rates on the platform.

Or retail, we're continuing to broaden our product assortment through Onboarding additional third party sellers, which will support ongoing annual rate increases and improve our conversion rates on the platform.

On that front, we are in the process with some key technology integration such as ship station and channel advisor, which will enable us to onboard vendors and scale, our third party marketplace business more rapidly.

Mark Zymowski: On that front, we are in the process with some key technology integrations, such as shift station and channel advisor, which will enable us to onboard vendors and scale our third party marketplace business more rapidly.

We're also focused on increasing and maintaining a consistent level of marketing investment to improve our brand awareness and to support customer acquisition and long term.

Mark Zymowski: We're also focused on increasing and maintaining a consistent level of marketing investment to improve our brand awareness and to support customer acquisition long term.

As part of that effort in the last week or so you've launched new creative content across our linear and streaming video channels, which is quite exciting for us.

Mark Zymowski: As part of that effort, in the last week or so, we launched new creative content across our linear and streaming video channels, which is quite exciting for us.

Further with the acquisition of Max delivery, we have significantly broadened our assortment offering to our customers.

Mark Zymowski: Further, with the acquisition of Max Delivery, we've significantly broadened our assortment offering to our customers.

Mark Zymowski: and will look to expand their model to additional markets in 2022.

And we will look to expand their model to additional markets in 2022.

And finally as I noted previously we're very pleased by the trends, we're seeing for BW drug after seven quarters of variability. We're capitalizing on this return to work shifts by deploying more dedicated sales and marketing efforts toward me to be in focusing on the industry verticals, where we had excellent traction.

Mark Zymowski: And finally, as I noted previously, we're very pleased by the trends we're seeing for B2B growth after seven quarters of variability. We're capitalizing on this return to work shift by deploying more dedicated sales and marketing efforts toward B2B and focusing on the industry verticals where we've had excellent traction to date.

Turning to the software and services business for 2022, we are encouraged by a strong pipeline of potential enterprise opportunities as well as the prospect of further expansion within the $80 billion.

Mark Zymowski: Turning to the software and services business for 2022, we are encouraged by a strong pipeline of potential enterprise.

Mark Zymowski: as well as the prospects of further expansion within the $80 billion EON ecosystem.

Cisco.

We are also investing in our scalability and efficiency capabilities. So that we are prepared to broadly implement our software and services offerings worldwide.

Mark Zymowski: We are also investing in our scalability and efficiency capabilities so that we are prepared to broadly implement our software and services offerings worldwide.

To provide some general guidance around the quarterly trajectory of our business as I mentioned earlier, we are focused on delivering quarter over quarter growth throughout 2022.

Mark Zymowski: provide some general guidance around the quarterly trajectory of our business. As I mentioned earlier, we are focused on delivering quarter-over-quarter growth throughout 2020.

Mark Zymowski: As we ramp up our investments, the full benefits of those increases will be realized over a longer time period.

As we ramp up our investments the full benefits of those increases will be realized over a longer time period.

Mark Zymowski: And further, we're anticipating B2B customer demand to improve throughout the course of the year as more and more employees return to work after operating in remote work environments throughout COVID.

Further we're anticipating <unk> customer demand to improve throughout the course of the year as more and more employees return to work after operating in remote work environments throughout program.

Mark Zymowski: As such, we anticipate the second-half growth trend will outpace our first-half growth when comparing things on a year-over-year basis.

As such we anticipate the second half growth trends will outpace our first half growth when comparing things on a year over year basis.

Mark Zymowski: 2022 is an exciting year for us. We're in a position to invest across sales, marketing, technology, and our administrative functions, all of which will be key to achieving our approximately 25 to 40% top-line growth outlook.

2022 is an exciting year for us.

In a position to invest across sales marketing technology, and our administrative functions all of which will be key to achieving our approximately 25% to 40% topline growth.

Mark Zymowski: We are committed and highly motivated to help scale bots for long-term.

We are committed and highly motivated to help scale box for long term success.

Finally, I want to thank the entire box organization for helping deliver a truly monumental 2021 and I look forward to beginning this next journey together.

Mark Zymowski: Finally, I want to thank the entire Box organization for helping deliver a truly monumental 2021, and I look forward to beginning this next journey together.

Mark Zymowski: With that, let me turn the call back over to Che for some final remarks.

With that let me turn the call back over to Jay for some final remarks.

Thanks, Mark in Big moments like these when we're embarking on another incredible chapter for box I always go back to thinking about our team.

Che: In big moments like these, when we're embarking on another incredible chapter for Box, I always go back to thinking about our

Che: This team managed through a go public process during COVID, during the Delta and Omicron variants, during a litany of other events, and yet they delivered.

This team managed through a go public process during COVID-19 during the Delta and omicron variance during a litany of other events and yet they delivered.

Che: We would not be a public company without them. We would not have been able to close an acquisition during that process without them. We would not have been able to have such a strong launch of our software and services business without them.

We would not be a public company without them, we would not have been able to close an acquisition during that process without them. We would not have been able to have such a strong launch of our software and services business without them and to those listening in from our facilities. We would not have been able to service our customers with value coming in each and every day.

Che: And to those listening in from our facilities, we would not have been able to service our customers without you coming in each and every day through this pandemic.

Through this pandemic.

Che: There is no other group of hardworking people that I would have wanted to enter this unprecedented time.

There is no other group of hard working people that I would have wanted to enter this unprecedented time with.

Che: And for that, I want to thank each and every one of you for executing on all that we've discussed today.

And for that I want to thank each and every one of you for executing on all of that we've discussed today.

So with that we're now available to take your questions operator.

Che: So with that, we're now available to take your questions. Operator?

Thank you.

Che: If you would like to ask a question, please press star 1 on your telephone keypad. If for any reason you would like to remove that question, please press star followed by 2. Again, to ask a question, please press star 1. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question.

If you would like to ask a question. Please press star one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by two again to ask a question. Please press star one as a reminder, if you're using a speaker phone. Please remember to pick up your handset before asking your question.

Che: We will pause here briefly as questions are registered.

I'll pause here briefly ask questions are registered.

Our first question comes from the line of Tom Forte with D. A Davidson. Please go ahead.

Speaker Change: Our first question comes from the line of Tom Forte with D.A. Davidson. Please go ahead.

Great. Thanks for taking my questions I have one question and one follow up so you had amazed.

Tom Forte: Great. Thanks for taking my questions. I have one question and one follow-up. So you had amazing performance at the gross margin line in the fourth quarter and you've talked about a number of initiatives you have to continue to materially increase your gross margin over time. How should we think about your gross margin in 2022 and what additional initiatives you're going to run in 22 that you didn't do in 21 to increase your gross margin?

Amazing performance at the gross margin line in the fourth quarter.

And you've talked about a number of initiatives you have to continuing to materially increase your gross margin over time.

Should we think about your gross margin in 2022.

And what additional initiatives you're going to run at 22 that you didn't do in 'twenty one to increase your gross margins.

Hey, Tom Thanks, So much it's Mark I'll go ahead and take that one.

Tom Forte: Hey, Tom. Thanks so much. It's Mark. I'll go ahead and take that one.

Mark Zymowski: So I think as we think about 2022 as a whole, we do expect our gross profit growth to outpace our overall revenue growth. So we will see continued margin expansion as we've been delivering on every year, really since its inception. So we're really excited about the prospects for gross profit growth over the next 12 months.

As we think about 2022 as a whole we do expect our gross profit growth to outpace our overall revenue growth. So we will see continued margin expansion as we've been delivering on every year really since inception.

So we're really excited about the prospects for gross profit growth over the next 12 months.

Mark Zymowski: When we think about the key initiatives that will help us get there. Number one, just scaling the business and continuing to drive more volume through the platform.

When we think about the key initiatives that will help us get there.

Number one.

Just scaling the business and continuing to drive more volume through the platform. As we've noted that's really going to help us negotiate better costing with our vendors drive more of them to advertise on our platform and ultimately drive more trading rebates from that from those suppliers themselves. Now in addition to that because we are expanding our.

Mark Zymowski: As we've noted, that's really going to help us negotiate better costing with our vendors, drive more of them to advertise on the platform, and ultimately drive more trade and rebates from those suppliers.

Mark Zymowski: Now, in addition to that, because we're expanding our product disturbance and doing so through our third party marketplace offering, continuing to scale that over the course of the year is also going to help deliver some of that margin improvement on the retail.

Assortment and doing so through our third party marketplace offering continuing to scale that over the course of the year is also going to help deliver some of that margin improvement on the retail business.

Mark Zymowski: As a reminder, that third-party marketplace business is very important for us, both from an AOB perspective, broadening this doorman, a retention perspective, but also a margin perspective, as it delivers really high margin revenues without us having to take on the inventory within our facilities themselves.

As a reminder, that third party marketplace business very important for us both from an <unk> perspective, broadening assortment our attention perspective, but also a margin perspective, and then deliver it as really a high margin.

Revenues without us having to take on the inventory within our facilities ourselves.

Mark Zymowski: Third and foremost, you know, we're really, really focused on, you know, obviously the return of B2B, and that's something that we didn't have the benefit of, you know, looking at 2021 results.

34 dose.

Really really focus on obviously the return of BBB and Thats something that we didn't have the benefit of <unk>.

Looking at 2021 results as BTB comes back as a reminder, those <unk> are much much stronger than our BDC customer base and as a result of that the profitability of that that customer segment is much stronger as well so as the order mix from our <unk> customers increases obviously, the blended arpus will increase but that will also drive <unk>.

Mark Zymowski: As B2B comes back, as a reminder, those AOVs are much, much stronger than our B2C customer base. And as a result of that, the profitability of that customer segment is much stronger as well. So as the order mix from our B2B customers increases, obviously the blended AOVs will increase, but that will also drive margin to the bottom.

So the bottom line.

Thank you for that Mark so for my follow up.

Mark Zymowski: From my follow-up on your software business.

Just a quick one on your software business.

$20 million of revenue from zero in year. One can you talk about your pipeline for new business and how you're working on growing the business.

Mark Zymowski: twenty million a revenue from zero in your one uh... can you talk about your uh... pipeline for new business and how you're working on growing the business uh... in other geographies beyond asia beyond your relationship with AON thanks

In other geographies beyond Asia beyond your relationship.

Thanks.

Speaker Change: Yeah, so I can take that one, Tom. So it's great to have you on the line in our first earnings call. So thank you very much for the question. As you can probably tell, we're really excited about software and services. And as you just mentioned, from $0 to $20 million in our first year of business, it's something that we're really proud about. But where do we go from here? So when you look at the pipeline today, of course, there's continued...

Yes, so I can take that one Tom so it's great to have you on the line in our first earnings call. So thank you very much for the question.

As you can probably tell we're really excited about software and services.

Just mentioned from zero dollars to.

The $20 million in our brokerage business, it's something that we're really proud about but where do we go from here. So when you look at the pipeline today of course Theres continued.

Work being done with our first client, but when it comes to Malaysia, but on top of that as you are probably just heard from.

Speaker Change: work being done with our first client when it comes to E.ON in Malaysia. But on top of that, as you probably just heard from the remarks, we're also actively discussing other regions when it comes to E.ON, more specifically within Southeast Asia.

The remark. We're also actively discussing other regions when it comes to eat.

More specifically within southeast Asia.

Potentially Vietnam.

Speaker Change: potentially Vietnam. Outside of that, there's a whole world that has seen the digital shift go from a nice to have to a neat to have. And so you've probably kept up with the news that we've also signed, of course.

Part of that there's a whole world.

That has been as the digital shift to go from a nice to have to a need to have and so you probably kept up with the news that we have also signed a.

Of course.

Speaker Change: non-binding MOUs, but MOUs or an MOU in the Middle East as well with a Middle Eastern group. So for us, we think the pipeline is strong, and we're confident we can continue to deliver really, really strong results on the software and services side of the business. And as you could tell from our performance last year, a very critical component for gross margin and overall excitement at the company.

Non binding Mou, but mou or an mou in the middle east as well, but the middle East or group. So for US. We think the pipeline is strong and we're confident that we can continue to deliver really really strong results on our software and software and services side of the business and as you could tell from our performance last year, a very critical component.

For gross margin and overall excitement at the company.

Thank you Mark.

Thank you Mr <unk>.

Speaker Change: The next question comes from the line of Marvin Fong with BPIG. Please go ahead.

The next question comes from the line of Marvin Fong with <unk>. Please go ahead.

Marvin Fong: Good afternoon. Thanks so much for taking my questions. Congratulations on your first call.

Hi, good afternoon. Thanks, so much for taking my questions. Congratulations on your first call.

<unk>.

Marvin Fong: I would like to drill down a little further, I guess, on the software business stuff. You know, I apologize if I missed it, but in terms of your guidance, what are you embedding in terms of...

I would like to drill down a little further I guess on the software business. So you know.

Apologize if I missed it but you know in terms of your guidance you know what what are you embedding in terms of.

Marvin Fong: growth in the software segment. And as we think about that revenue component, how much of that is sort of like implementation fees?

Growth in the software segment and as we think about that revenue component.

How much of that is sort of like implementation fees.

Marvin Fong: versus like royalty stream type revenue, if you could just maybe give us a broad level breakdown, that'd be very helpful. And then I have a follow up.

Versus like royalty stream type revenue if you could just maybe give us a broad level breakdown that'd be very helpful. And then I have a follow up.

Okay.

Hey, Marvin I'll take that one as well thanks, so much for the question.

Speaker Change: Hey Marvin, I'll take that one as well. Thanks so much for the question and yeah, for being on the line. So when we look at 2022, you know, we're not guiding specifically to retail versus software and services.

Yes for being on the line. So when we look at 2022, we're not guiding specifically to retail versus software and services on the revenue line itself, but what I will say is that as we scale that business over time, we're very focused on.

Speaker Change: on the revenue line itself. But what I will say is that, you know, as we scale that business over time, you know, we're very focused on, you know, moving more and more of that revenue stream toward a sort of recurring software license and SaaS related revenue. So you're gonna see that continue to build throughout the building of that business itself.

Moving more and more of that revenue stream toward its sort of recurring software license and SaaS related revenue. So youre going to see that continue to build throughout the building of that business itself.

Speaker Change: Um, and going into next year, I would expect to see, you know, a higher portion, um, of, of that revenue stream to be software related compared to, uh, this past year as well. So, you know, we're, we're not necessarily guiding to the exact breakdown of those revenue streams.

And going into next year, I would expect to see a higher portion.

All of that revenue stream to be software related compared to this past year as well. So we're not necessarily guiding to the exact breakdown of those revenue streams, but certainly we're very focused on making that a strong recurring revenue base as we move forward.

Speaker Change: But certainly we're very focused on making that a strong recurring revenue base as we move forward.

Great and my second question, just maybe too.

Speaker Change: And my second question, just maybe to double click on B2B, it's great to see that revenue coming back up 59%, as you said. I'm just curious, are you able to kind of distinguish between like regions of the country that are more closer to full reopening than others? Just curious if maybe those areas are much higher than 59% and maybe a sneak peek at the type of growth you guys can deliver going forward, assuming COVID rolls back here as we all know.

Double click on <unk>, it's great to see that revenue coming back up 59% as he said I'm. Just curious you know we are you able to kind of distinguish between like regions of the country that are more closer to full reopening than others. Just curious if maybe.

Those areas are much higher than 59% and maybe a sneak peek at the type of growth do you guys can deliver going forward assuming no.

All of it rolls back here as we all hope it does.

Thanks, Robert I'll I'll take that one as well I think you know.

Speaker Change: Thanks, Marvin. I'll take that one as well. I think, you know, it's not that we've necessarily seen any specific region where we're seeing outsized growth compared to, you know, a different region. But what I would say is that, you know, a large portion of our B2B customer base, due to the way sort of that we initially, you know, brought the organic growth in that segment upward,

It's not that we've necessarily seen any specific region, where we're seeing outsized growth compared to a different region, but what I would say is that.

A large portion of our <unk> customer base due to the way it sort of that we initially brought the organic growth in that segment upward.

Speaker Change: is really based in the sort of urban dense areas, right? So, you know, some of your coastal cities, New York, obviously, San Francisco Bay Area, you know, a lot of that revenue stream has been technology focused, education focused.

Based on the sort of urban dense areas right. So.

Some of your coastal cities, New York, Obviously, San Francisco Bay area, a lot of that revenue stream has been technology focused education.

And specific verticals that tend to be in some of these more urban areas and so obviously that had a huge hit to us when we look back at Q1 going to Q2 of 2020, but the good thing is that you have that sort of segment has been a little bit more delayed when we think about the regional breakdown compared to maybe the middle of it.

Speaker Change: And, you know, specific verticals that tend to be in some of these more urban areas. And so, you know, obviously that had a huge hit to us, you know, when we look back at Q1 going to Q2 of 2020. But the good thing is that, you know, that sort of segment has been a little bit more delayed when we think about the regional breakdown compared to maybe the middle of the country where, you know, a larger portion of our B2C customer base sits.

Country, where a larger portion of our <unk> customer base.

So I actually think in a way we've lagged the overall U S. In terms of return to office would've looked like.

Speaker Change: So I actually think, you know, in a way we've lagged what the overall U.S. in terms of return to office would have looked like, just due to the fact that we are sort of more urban centers on the BDC side of the house.

Due to the fact that we are sort of more urban centers on the BDC side of the house specifically.

Great. Thanks, Marc and if you wouldn't mind, maybe just one last question.

Speaker Change: Great. Thanks, Mark. And if you wouldn't mind, maybe just one last question.

Speaker Change: Just macro level, maybe for you, Che, just, you know, obviously the consumer is getting a little pinched here. Inflation is pretty rampant. You know, it seemed to play into, you know, a good value-oriented site such as yourselves and also with your...

Just macro level, maybe for you Jay.

Obviously, the consumer is getting a little pinched here inflation is pretty rampant seem to play into it.

Good.

Value oriented sites, such as yourselves and also with Europe .

Yeah, Great private label just curious what your thoughts are you is this.

Che: your great private label. Just curious what your thoughts are. Is this a backdrop that favors you guys and what type of levers can you pull to maybe take advantage of broader inflation?

A background backdrop that favors you guys and what type of levers can you pull to maybe take advantage of.

Broader inflation.

Yes.

Speaker Change: Yeah, thank you, Marvin. So when it comes to inflation, of course, everyone's seeing it across the entire industry and across the entire economy. We do feel like, to your point before, that it could be a tailwind for us as a business, because as folks begin to feel the pinch in their wallets, probably one of the first things that they'll think about is how do I save money on essentials and filling up my pocket?

Thank you Marvin so when it comes to inflation of course everyone's seeing it across the entire industry and across the entire economy.

We do feel like to your point before that could be a tailwind for us as a business.

Because as both begin to feel the pinch of their wallet, probably one of the first thing that I would think about it how do I save money on essentials.

And filling out my pantry.

Marvin Fong: Well, for now, many, many decades in America, probably one of the easiest ways to do so is to buy in bulk. And so when they look at buying in bulk, if they still want that convenience and that experience, then we are one of the few players out there that specialize in online bulk delivery. So we do feel like it could end up being a tailwind for us throughout 2022 and beyond. Of course, we're very mindful of where inflation is going, but we do think, again, it could be a tailwind for us, as you mentioned. Great.

For now many many decades in America, probably one of the easiest way to do so is to buy in bulk and so when they look at buying in bulk if they still want that convenience and that experience and we are one of the few players out there that specialize in online bulk delivery. So we do feel like it could end up being a tailwind for us throughout 2022 and beyond.

Of course, we're very mindful of where inflation is going but we do think again it could be a tailwind for us that you mentioned.

Great. Thanks, so much thanks Shane.

Thank you Mr. Huang.

Our next question comes from the line of Brian Fitzgerald with Wells Fargo. Please go ahead.

Speaker Change: Our next question comes from the line of Ryan Fitzgerald with Wells Fargo. Please go ahead.

Thank you. Thanks, guys are we wanted to ask you about the ESG story. Thank you for the color and we know those highlights really resonate with well with investors.

Ryan Fitzgerald: Thank you. Thanks, guys. We wanted to ask about the ESG story. Thank you for the color, and we know those highlights really resonate well with investors. I'm just wondering if you could talk a little bit about how you communicate that to customers and potential customers and how that might be resonating with younger customer cohorts, especially. And then I got a couple more. Thanks.

Just wondering if you could talk a little bit about how you communicate that to customers and potential customers and how that might be resonating with.

Younger customer cohorts, especially and then I've got a couple more.

Hey, guys. Thanks for dialing in and that is a really great question I'm really glad you asked it because as you probably heard.

Speaker Change: Hey, thanks for dialing in. And that is a really great question. I'm really glad you asked it because as you probably heard, ESG is not something that we're checking the box on just because it's become a really salient in the mind of big investors. When you look at the history of box, it's been core to our DNA for many, many, many years now, not just in terms of press releases, but in terms of actual action.

ESG is not something.

We're checking the box on just because it's become really Stanley in the mind, the big Investor When you look at the history of <unk>.

It's been core to our DNA.

For many many many years now.

Not just in terms of press releases, but in terms of actual action.

Speaker Change: I do think that younger shopper, as they begin to, I guess, come of age when it comes to shopping for their own consumer packaged goods, for their own groceries.

I do think.

That younger shopper as they've begun begin to I guess come of age when it comes to shopping for their own consumer packaged goods for their own groceries.

Speaker Change: What we're seeing is that that consumer, that younger consumer, is more conscious about how they spend their money and they're beginning to vote with their wallet. So ESG is certainly in that top bracket of things that they consider as they spend their money.

What we're seeing is that that consumer that younger consumer is more conscious about how they spend their money and theyre beginning to vote with their wallet. So ESG is certainly.

In that top bracket or things that they consider as they spend their money.

Speaker Change: So when it comes to our track record, if you look us up online, I like to say anecdotally, you know, almost half of what comes up is how we do business versus what we do.

So when it comes to our track record if you look it up online.

I say anecdotally you know almost half of what comes up is how we do business versus what we do and I think that will be good because again to your credit.

Speaker Change: And I think that will be good because, again, to your credit and to what you said before, we do feel like that will resonate in an increasing degree with that younger crowd.

And to what you said before we do feel like that will resonate in an increasing degree.

With that younger consumer.

Speaker Change: I do think, and this is totally anecdotal, that when you look at how we're progressing across the country when it comes to ESG, we're probably several years behind even some of the other continents around the world, where some of the other continents, it is top of mind for that consumer. It is one of the most salient things when they think about a team that they root for or a place where they shop at.

I do think and this is totally anecdotal that when you look at how we are progressing across the country. When it comes to ESG, we're probably several years behind even some of the other continents around the world where some of the other continent. It is top of mind for that consumer. It is one of the most salient Dave when you think about when they think about a team that they report or a place.

They shop that perhaps we're not there yet in terms of being the number one driver in the U S.

Speaker Change: Perhaps we're not there yet in terms of being the number one driver in the U.S. But certainly, I think we'll see us going up that podium over the coming quarters.

But certainly I think we will see us going up that podium over the coming quarters and years.

Great. Thanks, and then.

Speaker Change: Great. Thanks, Shay. And then maybe a two-part question as you.

Maybe a two part question as yet.

Shay: As you think about software and services and the opportunity it presents today, just wondering if you could first give us a sense of how you're stacking up against maybe some other competitors who may also be offering to operate facilities on behalf of their retail partner.

Think about software and services and the opportunity. It presents today just wondering if you could first gives a sense of how you are stacking up against.

Maybe some other competitors, who may also be offering to operate facilities on behalf of their retail partners second part of the question is with the rise of Ultra pass local delivery is that causing any of your customers.

Shay: Second part of the question is, with the rise of ultra-fast local delivery, is that causing any of your customer prospects

Customer prospects to rethink how they want to go to market, whether it's from a dedicated e-commerce facilities or are.

Shay: rethink how they want to go to market, whether it's from a dedicated e-commerce.

Shay: or they want to focus on maybe a more labor-intensive delivery from a store model to prioritize delivery speeds, anything you can opine about with, you know, how you are positioned, how the competition is positioned with this rising, you know, battlefront of ultra-fast local delivery.

Or they want to focus on maybe a more labor intensive delivery from the store model.

Prioritize delivery speeds, but anything you can opine about with.

How you are positioned now the competition is position with this rising battlefront.

Ultra perhaps local delivery.

Speaker Change: Yeah, it's a great question. I mean, the market is dynamic and it's evolving. So what we feel like, you know, the way we feel like we have an advantage is very simple. When we go into these meetings, we tell folks that, hey, we're not just here selling software. We're e-commerce operators selling e-commerce technology that we've used and proven ourselves.

Yes, it's a great question I mean, the market is dynamic and it's evolving.

So what we feel like.

The way we feel like we have an advantage is very simple when we go into these meetings, we tell folks that hey, we're not just here selling software where e-commerce operators selling e-commerce technology that we've used and proven ourselves.

Speaker Change: So right off the bat, I think that brings us a lot of credibility to other operators to say, hey, we're not just out here just thinking about what you might be going through. We're going through that same exact fight ourselves, just on the other side of the ocean.

So right off the bat I think that brings us a lot of credibility to other operators that say hey, we're not just out you're just thinking about what you might be going through we're going through that same exact like ourselves just on the other side of the ocean and.

Speaker Change: And so when you think about end-to-end technology capabilities built by operators.

And so when you think about end to end.

A separate technology capability built by operator.

Speaker Change: you start to really get few and far between in terms of who else is in those RFPs, especially when we're going at the ultra enterprise. You look at Eon, Eon is an $83 billion company, one of the largest in Asia, the largest in Japan. You know, they're probably not gonna use an off-the-shelf software that, you know, both you and I could use by the end of the day to begin an e-commerce.

You'll start to really get you a bar between in terms of who else is in those rfps, especially what we are going at the ultra enterprise Youll look at Jan Jan is at $83 billion company one of the largest in Asia the largest in Japan.

They are probably not going to use an off the shelf software that both.

You and I could use by the end of the day to begin an e-commerce site.

Speaker Change: So they're going to look at the ultra enterprise, and when they want to speak with someone that has the same technology built by the trials and tribulations that, you know, we've also gone through throughout the years, their choices become very, very slim. And I think that's why we landed that contract. And I think that's why we're very confident in the roadmap.

We're going to look at the ultra enterprise and when they want to speak with the one that has the same technology built by the trials and tribulations that we've also gone through throughout the year. There are choices become very very slim and I think that's why we landed that contract and I think that's why we're very confident in the roadmap.

Speaker Change: The second part of your question is also very salient today. So, you know, anywhere in New York City or some of the other major cities across the US, you're gonna see them blanketed by these ultra-quick delivery services.

The second part of your question is also very failure today, so anywhere in New York City or some of the other major cities across the U S youre going to see them blanketed by these ultra quick delivery services.

Speaker Change: But anecdotally, what we've heard is that the economics just aren't as sharp when it comes to small basket deliveries in 15 minutes or less. And so you're starting to see that shake out right here in New York. We've had a few go under even just in the last.

But anecdotally what we've heard is that the economics just aren't as sharp when it comes to small basket deliveries in 15 minutes or less and so youre starting to see that shakeout break here in New York, We've had a few go under even just in the last few weeks.

Speaker Change: You know, with that said, though, it is a great service for consumers. And so, it's the reason why we feel very thankful that we completed the Max Delivery acquisition when we did, because that allows us more capabilities, more know-how when it comes to not only dark store fulfillment, but also fresh groceries. And so, you can think over time, as we begin to usurp that know-how, as we learn by osmosis, that will promulgate into our technology stack and inure to the benefits of our software and services.

That said, though it is a great service for consumers.

And so it's the reason why we feel very.

April that we completed the <unk> acquisition, when we did because that allows us more capabilities more knowhow when it comes to not only dark store fulfillment, but also fresh grocery and so you can think over time as we begin to serve that knowhow and we learned by utmost that that will promulgate into our technology stack and inure to the benefit.

Of our software and services clients. So that's why we think of it as a symbiotic bundle I discussed before or a flywheel.

Speaker Change: So that's why we think of it as that symbiotic funnel I discussed before, or a flyweed.

Got it very clear maybe a.

Speaker Change: Got it. Very clear. Maybe a quick follow-up to those last two questions on kind of SKU counts. When you look at Amazon with Whole Foods, you know, one to two-hour grocery, 170,000 SKUs in 5,000 cities. Then you look at GoPuff and DoorDash, you know, 4,000 to 5,000 SKUs in 600 cities. Is there...

A quick follow up to that those last two questions on.

Kind of SKU counts when you look at.

Amazon with whole foods, you know one to two hour grocery 170000, Skus in 5000 cities and you look at go pub and door dash.

Yeah.

Four to five.

Skus in 600 cities is there do you need to be that broad is there are you thinking more about with Max delivery, you know a smaller subset of.

Speaker Change: Do you need to be that broad? Are you thinking more about, with max delivery, a smaller subset of that broader assortment and maybe a fresher assortment that you can extend into your core customers? Any thoughts on how you want to?

That broader assortment.

And maybe a fresher assortment that you can extend into your core customers.

Any thoughts on how you want to.

Speaker Change: an optimal skew count for that ultrafast local delivery.

And optimal SKU count for for that ultrafast local delivery.

Yeah, I can definitely take that question.

Speaker Change: Yeah, I can definitely take that question as well, Fitz. So when you look at the BoxCore business today, we have about 2,000 plus items for sale. It's been about that number for the last several years. But as you've probably heard from Mark's remarks, Marketplace, you know, we've added 1,000 unique SKUs sold on the Marketplace just in 2021 alone. So we're certainly offering a broader assortment to that BoxCore customer.

Well I think so.

When you look at the box core business today, we have about 2000 plus items for sale, it's been about that number for the last several years.

But as you probably heard remarks remarks marketplace. We've added 1000 unique skus sold on the marketplace. Just in 2021 alone. So we're certainly offering a broader assortment to that box or customer now the other side of the field on the other goalpost you have Max delivery.

Ryan Fitzgerald: Now the other side of the field, on the other goalpost, you have max delivery. Part of the reason why we did the max delivery acquisition is because we think the ethos when it comes to maximizing basket values is very aligned, so max delivery has very high basket values just like us, but also driven because of the fact that they have fresh groceries and assortment that lingers more around $10,000.

Part of the reason why we did the maxillary acquisitions, because we think the ethos when it comes to maximizing basket values is very aligned so Mac delivery had very high basket values, just like us, but also driven because of the because of the fact that they have fresh groceries and assortment that lingers more around 10000 skus.

Ryan Fitzgerald: And so that's where you see the goalposts today. And so you're definitely gonna see some cross-pollination of that. So we'll, over time, you can imagine, begin to sell more and more fresh or offer fresh foods to more and more Boxscore customers. And in reverse, already today, if you go on max delivery, you can buy Prince and Spring product in bulk today, our private brand. And so that's gonna come together over time. But today, that's where the goalposts are. So 10,000 with max delivery.

And so that's why you see the goalpost today and so you are definitely going to see some cross pollination of that so we will over time, you can imagine begin to sell more and more fresh ore offer fresh foods, the more and more core customers and in reverse already today. If you go on Mac delivery you can buy printed in spring product in bulk today, our private brand.

So that's going to come together over time, but today, that's where the goalposts are so 10000 with Mac delivery 2500.

Speaker Change: 2,500 with box. And so everywhere in between is where I think the data science and the customer feedback is going to lead us. Awesome. Thanks, Shay. Thanks, Mark.

With box and so everywhere in between.

I think the data science and the customer feedback has been a leader.

Thanks, Jay Thanks, Mark I appreciate it.

Thank you.

Thank you Mr Fitzgerald.

Speaker Change: There are no additional questions waiting at this time. I would like to pass the conference back over to Chae Wang for any closing remarks.

There are no additional questions waiting at this time I would like to pass the conference back over to Jay.

<unk> for any closing remarks.

Awesome. Thank you very much.

Chae Wang: Awesome. Thank you very much. And, you know, thank you very much for the questions. We enjoyed them all. This is our first earnings call. So hopefully everyone out there enjoyed dialing in as well. So, you know, first, obviously, thank you for all your participation. You know, I want to thank our customers.

Thank you very much for the questions. We enjoyed them. All this is our first earnings call. So hopefully everyone out there enjoying dialing in as well. So first obviously thank you for all your participation what I think our customers choose our team members our board our investors and the people who supported us throughout this entire journey.

Chae Wang: She's our team members, our board, our investors, and the people who have supported us throughout this entire journey. You know, it's been enormously gratifying, you can imagine, to lead Fox through this journey. But we're absolutely thrilled about what we've created so far. With that said, though, as you can imagine, through our excitement, both from me and Mark and our entire team, we're confident that the best is yet to come.

It's been enormously gratifying you can imagine to lead <unk> through this journey.

But we're absolutely thrilled about what we've created so far.

With that said, though as you can imagine through our excitement both from me and Mark and our entire team. We are confident that the best and Jessica. Thank you.

<unk>.

That concludes the box, Inc, fourth quarter and fiscal year 2021 earnings call I Hope you all enjoy the rest of your day you may now disconnect your lines.

Speaker Change: That concludes the Boxed Inc. 4th Quarter and Fiscal Year 2021 Earnings Call. I hope you all enjoy the rest of your day. You may now disconnect your lines.

Speaker Change: you

Okay.

Yes.

Okay.

Yes.