Brian Peterson: Thanks, Aaron.
Aaron Levie: Thank you.
Operator: Your next question comes from the line of Arlene of Citi.
Unidentified Analyst: Hi. Can you hear me okay?
Aaron Levie: Yes.
Dylan Smith: Yes.
Unidentified Analyst: This is George. I’m on for Steve. I wanted to ask about the renewal commentary that drove some of the billings upside. Maybe you could just talk a little bit about what drove that change in customer behavior?
Aaron Levie: Sure. So in Q3, as is always the case, especially given the catalyst of being able to move into Suites, we saw a stronger than typical volume of early renewals. So customers that had been set to renew largely in Q4 and then in some cases in future periods, where often in conjunction with the upsell, to move into product capabilities they early renewed their contract in Q3, which pulled forward some of those billings and contributed to the strength that we saw in the quarter.
Unidentified Analyst: Got it. That makes sense. And then one quick follow-up on the expansion. I think you mentioned you expect some segments to see some headcount reductions and some budgetary pressure. Maybe if you could just fill in a little bit on where you’re expecting to see those impacts.
Dylan Smith: Sure. So I wouldn’t necessarily say a specific segment per se, but more down to specific customers, who had been more impacted by the economic environment and especially in those types of companies, where they’re reducing headcount, more cyclical businesses, or seeing increased budget scrutiny. We just wanted to be prudent as we do expect that some of those certain types of customers will be seeing lower seat expansion as we go forward. But again, I would emphasize that, overall, the economics and momentum of the business are quite strong across the different segments that we serve, and our full churn rate, which is indicative of the kind of stickiness value that our customers are getting out of the platform has remained very strong at 3% on an annualized basis.
Unidentified Analyst: Got it. Thanks for taking the questions.
Operator: Your next question comes from the line of Josh Baer of Morgan Stanley.
Josh Baer: Great. Thanks for the question. And congrats Aaron and Dylan on a nice quarter in a tough environment. I wanted to ask about that, the macro. If you look back to 2020, COVID, you saw real headwinds and decelerating growth. So far, it’s been different with relatively stable net retention rates, and you just posted 20% constant currency billings and RPO growth. Obviously, the macro backdrops are very different, but I was hoping you could talk a little bit about the differences at Box. You’re positioning today versus a couple of years ago and really wondering how the maturation of Suites and Enterprise Plus has really helped or if it’s helped in this environment. Thanks.
Aaron Levie: Yes. No, I appreciate it. Obviously, the company is just extremely different in the past couple of years and something that we’re super proud of and happy about, both on the bottom line performance. But as you call out on the top line, the product portfolio and positioning we have. If I look back two or three years ago, which obviously kind of fed into the pipeline and deals that we would have been doing in 2020, we were a very advanced secure content management and collaboration technology and platform, but that was really just the foundation capabilities for what we now deliver today, which is powering increasingly the full life cycle of content. So getting into e-signature as an example, doubling down in areas like workflow automation, something like Box Shield was actually less than a year old when the kind of pandemic hit, which meant there was kind of less momentum on some of that security story and strategy.
And so, today, Shield being a much more advanced data security platform capability for our customers, the advancements we’ve done in data governance. And so, when you kind of add up all of those capabilities and the value proposition, we just look like a very, very different platform to our customers. We can retire spend on other infrastructure that they might otherwise have to go spend on. We can go deeper in the business processes of the organization and then ultimately, obviously, keep our customers secure from very rampant and dynamic threats that are out there. So that’s on the product kind of capabilities, and then our road map, I think, just continues to reflect that. And then conversely on the kind of pricing and packaging, we’ve made it just much more attractive and much easier for our customers to leverage those capabilities.
So again, similarly, right when the pandemic hit in 2020, we had only the very initial couple of quarters of Suites. And so, that hadn’t really been kind of baked into our sales and go-to-market motion. Enterprise Plus has really kind of turbocharged our Suites push. Obviously, you can see that’s the majority of those large deal Suites that we’re now doing already, and we continue to see that rolling out across the customer base. So the product road map, the pricing, the packaging and positioning for our customers and really just going after these high-value use cases that companies have around content management. I think that is what has put us in a very different position. And then taking a step back and just looking at the overall makeup of the business, we’ve obviously driven very significant operating leverage in the company.
I think that has really allowed us to be much more focused, drive greater execution. And so that’s also paying dividends as well.
