BOX INC Income Taxes Disclosure

Note 13. Income Taxes

We assess the realizability of deferred tax assets by considering whether it is more likely than not that some portion or all the deferred tax assets will not be realized. As a result, we continue to maintain a valuation allowance against our California deferred tax assets to the extent they are not offset by liabilities from uncertain tax positions.

During the year ended January 31, 2026, the valuation allowance increased by $38.1 million, primarily due to the increase in our California research and development tax credits. During the year ended January 31, 2025, the valuation allowance decreased by $202.2 million.

Provisions enacted in the 2017 Tax Cuts and Jobs Act related to the capitalization for tax purposes of R&E expenditures became effective for tax years beginning after December 31, 2021. For the years ended January 31, 2023 through January 31, 2025, we capitalized and amortized R&E expenditures over five years for domestic research and 15 years for international research rather than expensing these costs as incurred. On July 4, 2025, OBBBA was enacted, which includes provisions for the immediate expensing of domestic R&E costs. As a result, we immediately expensed domestic R&E costs incurred in the current year. Additionally, our ability to immediately expense domestic-incurred R&E costs as reinstated by OBBBA resulted in a reduction in the U.S. taxation of profits derived from our foreign operations, which benefited our effective tax rate. We recorded a net deferred tax asset of $64.0 million and $90.2 million, respectively, related to the capitalization requirement during the years ended January 31, 2026 and 2025.

As of January 31, 2026, we had federal, state, and foreign net operating loss carryforwards of $111.1 million, $462.6 million and $239.9 million, respectively, available to offset future taxable income. The federal net operating loss carryforwards generated prior to fiscal year 2019 will expire at various dates beginning in 2037, if not utilized. We have federal net operating loss carryforwards of $119.2 million, which can be carried forward indefinitely. The state net operating loss carryforwards will expire at various dates beginning in 2027, if not utilized. The foreign net operating loss carryforwards do not expire. In addition, as of January 31, 2026, we had federal and state research and development tax credit carryforwards of $93.3 million and $79.8 million, respectively. The federal research and development tax credit carryforwards will expire beginning in 2027, if not utilized. The state research and development tax credit carryforwards do not expire.

Utilization of the federal and state net operating loss may be subject to substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. We completed a Section 382 ownership change analysis through fiscal year 2026 tax periods, which concluded that our net operating losses are not permanently limited. Subsequent ownership changes may further affect the limitation in future years but we do not expect that the annual limitations will significantly impact our ability to utilize net operating loss or tax credit carryforward.

We evaluate tax positions for recognition using a more-likely-than-not recognition threshold, and those tax positions eligible for recognition are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon the effective settlement with a taxing authority that has full knowledge of all relevant information. We believe that we have provided adequate reserves for our income tax uncertainties in all open tax years.

As of January 31, 2026, the balance of unrecognized tax benefits was $66.5 million of which $38.1 million, if recognized, would affect the effective tax rate and $28.4 million would result in an adjustment to deferred tax assets with corresponding adjustments to the valuation allowance. As of January 31, 2025, the balance of unrecognized tax benefits was $132.6 million, of which $69.1 million, if recognized, would affect the effective tax rate and $63.5 million would result in an adjustment to deferred tax assets with corresponding adjustments to the valuation allowance. The gross unrecognized tax benefits, if recognized, would not materially affect the effective tax rate as of January 31, 2024.

In the year ended January 31, 2026, we recognized a $48.4 million net benefit from adjusting our federal R&D credits carryforwards and related UTP.

Our policy is to classify interest and penalties associated with uncertain tax positions, if any, as a component of our income tax provision. Interest and penalties were not significant during the years ended January 31, 2026, 2025 and 2024.

We file tax returns in the U.S. for federal, California, and other states. All tax years remain open to examination for both federal and state purposes as a result of our net operating loss and credit carryforwards. We file tax returns in the U.K. and other foreign jurisdictions in which we operate. Tax years ending on January 31, 2022 and onwards remain open to examination for the U.K. Certain tax years remain open to examination under the statute of limitations of the respective countries in which our other foreign subsidiaries are located.

The amount of cash paid for income taxes, net of refunds received, for the years ended January 31, 2025 and 2024 was $13.6 million and $8.5 million, respectively.