Hi, everyone. I'm Alice Lopatto , Head of Investor Relations. Welcome to the virtual edition of our investor breakout session. We hope you've been staying safe and healthy, and we appreciate you taking the time to connect with us once again. We've had a great day hosting BoxWorks Digital for our customers and partners, and we hope you had a chance to tune into some of the keynotes and breakout sessions. If you haven't, rest assured that we'll have many sessions available on demand in the next day for you to check out at a later time. For this session, we'll spend the next hour and a half with Aaron Levie, our Co-Founder and CEO, who will provide an overview of our product innovation, our market opportunity, and our go-to-market strategy.
Dylan Smith, our Co-Founder and CFO, will provide a deep dive into our financial model and how we're driving profitable growth. At the end of the presentations, we encourage you to participate in our Q&A session. Before we begin, here is the safe harbor for today's comments. During the course of today's presentation, we will be making forward-looking statements regarding our expected financial performance and future products and services. Please refer to the risk factors of documents we file with the SEC, including our most recent quarterly report on Form 10-Q, for information on risks and uncertainties that may cause actual results to differ materially from those set forth in the forward-looking statements we make today. In addition, during today's presentation, we will discuss non-GAAP financial measures.
These non-GAAP financial measures should be considered in addition to, but not as a substitute for or in isolation from, our GAAP results. We will post today's presentation on the IR section of our website at the conclusion of the event. With that out of the way, I'd like to go ahead and hand it over to Aaron. Aaron?
Awesome. Thanks, Alice. Really good to be here with everybody today. Hope you had a chance to tune in to some of our product updates and keynote, as well as our panels with Chuck Robbins, Arvind Krishna, and the CEOs of Slack, Zoom, and Okta. We're really excited about where we're taking our platform and the product strategy going forward. There's four big areas that we want to talk about today at the investor and analyst update. The first is that we're going after a really big market opportunity. I'll dive into a little bit about what that opportunity looks like and why that's only increased in significance recently.
The second is where we're going with our product strategy and how we're continuing to drive rapid innovation on our platform to make sure that we can address all of the use cases of our customers as they move content to the cloud. Third, I'll briefly go over some of the go-to-market updates around our very repeatable land and expand go-to-market engine. Finally, Dylan will cover how we're driving profitable growth both this year and going forward and what that long-term model looks like. As we've shared on the last earnings call, we now have reached over 100,000 customers, and we're in 69% of the Fortune 500. We're incredibly excited about the traction that we've been able to see, especially recently, but certainly over the past few years.
Whether it's some of the world's largest technology companies like Amazon, Cisco, IBM, Airbnb, and many other technology disruptors leveraging Box, to some of the world's largest industrial players like General Electric, we are fundamentally powering how the world works together in these organizations. I think what all of these companies have in common, and so many more out there, is that work is fundamentally changing. We've long believed that the future of work is going to look very, very different than what the past looks like. COVID has only accelerated this transformation in businesses. We're going from a world where work used to be about going into the office, nine-to-five based schedules with office-based work, and now we're moving toward much more agile work where you can work from anywhere.
Where the office and the work-from-anywhere ability sort of bridges with a hybrid and digital workplace strategy. We're moving from a world where we focus on collaborating mostly with just people inside of our business, to a world where we're collaborating externally with colleagues inside and outside of the organization, contractors, partners, freelancers, vendors that we need to be able to share with. We have to be able to bridge the digital gaps between our organization and the other companies that we partner with. We're moving from manual paper-based processes to digital automated workflows, legacy siloed systems, to really simple, intuitive applications. Finally, the data security model of the enterprise is also fundamentally changing. We can no longer secure data just in the premises of our organization, wrapping security around a data center.
We fundamentally have to secure data as it flows inside and outside of our organizations as content goes out to partners and customers and contractors. What we've seen is that certainly the past six months, within this COVID-19 environment, these trends have only accelerated. Fundamentally, we don't believe that there's any going back to the way that we used to work. Where we believe this is all going is that at the center of how we work and at the center of what the future of work looks like, the ability to secure and manage and organize and structure and make use of your content remains incredibly important. At the center of really this future of work strategy, companies have to make sure that they understand what's in their information, how it's being shared, who it's being shared with, the workflows around their content, and much more.
At the center of every business process is fundamentally content. If you think about banking, whether you're doing client onboarding and you need banking data and financial records, in life sciences, as you're collaborating on new research, and we work with many of our customers that are actually working on research around COVID-19, the amount of testing and research that goes into content and documents and spreadsheets is obviously enormous. In media and entertainment, the movie scripts and marketing campaigns and digital assets. In retail, all of the campaigns and all of the retail store information. In the tech industry, the product designs, the technical PRDs, and so much more. All of this is the content that moves through an organization that allows companies to get their work done, to be able to serve their customers, to be able to streamline their business operations.
The challenge is that working with this content is very difficult in many organizations, today's technology, especially the technology that's been carried forward from the past, is really holding companies back. It's not allowing companies to modernize the way that they work. If you think about how we used to work and how we want to be able to work in the future, content management and document management technology is really disabling companies from being able to actually go and drive this new way of working. In our category in particular, there's sort of two large categories that we think about when we think about content management. First is sort of the legacy enterprise content management systems. These are products like OpenText and Documentum and some of these legacy content management environments. These were certainly modern at one point, but today they lack external sharing capabilities.
They don't tie to modern productivity tools. They can't be accessed remotely very easily. You have to VPN into them. What that led to was really this growth of personal storage and sharing tools. The challenge with these technologies is they lack security controls, reporting, data governance. They don't tie to business processes. They can't tie to line of business systems very easily, and they're unable to automate workflows across the enterprise, because they're really about my content as a user. They're not about the business process that information is tied to. When we look at this landscape, we see a massive problem. You have legacy systems that don't work for modern workflows, and you have modern tools, but they're just really positioned for the user, and they don't tie to our business processes.
What this has led to is a high degree of fragmentation across the enterprise. When you think about most enterprises, and when we go to talk to our customers, whether they're small, medium, or really large enterprises, what we tend to find is that there's just fragmentation of data everywhere. You've got network file shares, you have content management systems, you have personal sharing tools, and if that wasn't enough, what ended up happening is we then saw a growth of communication and productivity systems. Amazing products like Teams and Zoom and Slack, but each of these have the risk of creating more fragmentation of our content. When you have line of business applications, like all of the cloud platforms that we're now seeing implemented in the enterprise. ServiceNow, delivering amazing workflows inside of organizations. We had Bill McDermott at our CIO event.
We had Chuck Robbins just earlier today at BoxWorks talking about where Webex is going and the future of work. Each of these applications has the risk of creating more silos of data. So we have to fundamentally solve this problem. Now is really the time where that comes into play. What we're seeing is this massive growth in sensitive content moving to the cloud. We are seeing all new ways of working beginning to emerge, and people are working from more applications than ever before. The era of data silos and content silos no longer works. It creates too much cost, it slows down the business, and it creates significant security and compliance vulnerabilities for organizations. We need a different way to think about content, and that's obviously what we're building at Box.
We need one platform for secure content management, workflow, and collaboration all in one place. Instead of having disparate technologies and tools that bring together just components of this, that then lead to customers having this sort of array of solutions, we need to be able to have one platform that can solve these problems. That's what we've been building out at Box now for 15 years, and where we're actually seeing the innovation just continue to accelerate on the capabilities that we're delivering. At the foundation of Box is really our platform. This is things like storage and file and folder management, collaboration, metadata capabilities, workflow with Box Relay, and that's backed by a level of data security that is unmatched by the rest of the market.
The ability to have encryption key management, the ability to have data loss prevention policies with Box Shield or automatic threat detection so you can discover anomalies about how content is shared in your organization, or data governance and document retention. All of this is in the core of our platform, and this is really how we've differentiated Box now for many years. What we're enabling is all new ways to work with your content that is in the Box platform. We're delivering all new innovations for end users through our Box applications and our first-party experiences. We're enabling new integration points with all of our third-party partners, whether it's Office 365, Zoom, Webex, G Suite and many others. We have custom integrations with various line of business systems and other applications that our customers are developing.
These can be a custom customer portal, they could be a mobile application for field operations, it could be a wealth management portal in investment banking. Ultimately what you're seeing is the ability to store content once in one central repository, get rid of those fragmented systems, then make that content accessible to end users through partner applications and through Box first-party applications, then ultimately on out to custom applications that are built by the enterprise. That's really where we've been innovating on our platform. What this is leading to is just incredible outcomes that we're seeing from customers both pre and post-COVID. At Nike, it's really about being able to reduce the risk of data leaks and loss of information in a very collaborative R&D and marketing set of processes.
At Disney and Pixar, it's about being able to collaborate internally and externally with employees to be able to provide secure content access from anywhere. At GE, it's about enabling 300,000 employees to be able to work from a variety of applications by being able to store their content once and access it from things like Office 365, Salesforce and many other technologies. What has been so incredibly exciting for us at Box is, right at the start of COVID, amidst obviously such an incredibly challenging backdrop of the healthcare crisis, economic challenges, we saw so many customers come to us and say, "Hey, Box is fundamental to our operations right now.
We're able to run our business in a secure way, and with the level of resilience that we need to be able to stay secure and to be able to be operational in this environment. That was incredibly great to hear. When we look at our product strategy, when we look at the innovation we're driving, we see that our product strategy is really delivering on an ever-growing market that we're now able to go and capture. When we started the business, really all we could go after was just basic data storage and data sharing. Over the past few years, we've been able to expand our total addressable market to include the ECM market.
A lot of the traditional enterprise content management use cases, we've been able to now go after more of the data security spend around GRC software spend and data security, like data loss prevention, and threat detection. Of course, we can now address more content collaboration use cases. As you want to be able to share and collaborate around content in an enterprise, we power those use cases. We're going after a $55 billion market with a best-of-breed platform, with a singular cloud architecture, with no legacy, technical debt, or software on one data model and one platform that we're really seeing the benefits from. That benefit is being seen by across the industry. Whether it's Gartner or Forrester or IDC, we're seen as the leader in content management, and continuing to drive more and more leadership in this market, going forward.
We're very excited about that set of positions. We've been methodically building out our CCM platform over time. While we started really in that enterprise file sync and share space that we helped create as a category, the evolution has really been to be able to provide broad-based cloud content management for customers. Like clockwork, every year or two, we've been delivering more and more advanced capabilities on top of our foundation platform, Box KeySafe, going back many years, and Box Governance, and then we introduced our platform APIs that we could help monetize, data residency with Box Zones, GxP validation for the life sciences industry. Just last year, we were able to deliver both Box Shield and Box Relay to solve advanced data security, compliance, and workflow automation capabilities. We're now bringing together the bulk of this value proposition with our suites.
Instead of going to customers and really thinking about it as a one-off conversations with our customers of buying each individual add-on product, we're now starting to pull together the full platform of capabilities with our suite strategy, which we'll certainly get into in a little bit. We've been methodically building out our CCM platform, and as we've gone along that strategy, we've been able to increase the total addressable market, and adjustable market from being able to service that market over time. The pie has only been able to get bigger as we're expanding. There are three big areas that we're going to be investing in. If you were able to tune into BoxWorks earlier today, you'll have heard about these big updates. The first is on frictionless security and compliance. The second is on seamless internal and external collaboration and workflow.
Finally, our mission of being integrated with all of your applications. We have a very long-term vision for where we're going with our product strategy. In security and compliance, it's about being able to apply precision-based controls to content, be able to detect any threats around that content. If there's unusual activity happening on content, you can imagine inside of financial services, if there's any type of unusual activity happening on banking data, or financial records, you want to be able to alert the security team to that. Being able to have threat detection built natively into Box, and then smart compliance. Can we actually make it so when content is in Box, you're automatically compliant with whatever industry regulation you face, whether that's GDPR, CCPA, GxP, HIPAA? We're building in more and more smart compliance solutions into our platform.
The second big area is really around workflow automation and how we help our customers collaborate. We want to make sure that, first of all, as more data comes into Box, you can instantly find and organize that information. We see that the growth of content in the world is growing exponentially, and we want to make sure that we've got the best search, the best organization, the best content management capabilities for that. You need to be able to collaborate in real time, both with people inside and outside of the enterprise, and then be able to automate repetitive work, whether that's client onboarding, digital asset review and approval, contract management, all of those types of use cases from a workflow standpoint. That's really just a start. Those are the core capabilities built into Box.
Now we have to be able to take content in those use cases and plug them into all the applications that our customers are using. That's really where our platform strategy and our API strategy comes into play, where Box gets integrated into all of the applications with one content layer for all of their SaaS products, unified integrations experiences that they can build on top of, and then really world-class developer tools to make developing on Box incredibly seamless. At BoxWorks, we're incredibly excited to update across all three of these dimensions. I'm just going to preview a few of these things offline. You can look at our press release or our product keynotes, to go into this in more detail. We made significant advancements to Box Shield and automated classification.
Part of this is some of the updates that we announced last month, as well as new features around exception handling and more advanced capabilities from an automated classification standpoint. We're going to be integrating with Microsoft Purview Information Protection. We know that customers want to be able to have multiple places where they have their security classification policies. We want to make sure that Box Shield can listen to those policies and make sure that their customers can keep their content secure in one place because of those policies. We also are continuing to further our partnership with IBM, integrating with QRadar from the IBM security organization. As customers have a SIEM environment where they want to see security alerts and events happening across their IT stack, Box will then integrate deeply into the QRadar environment to help protect our customers.
We're driving a lot of innovation on our core end-user experiences in collaboration and workflow. We launched an all-new version of Box this summer, and we are continuing to march along with more and more innovation. Better ways of getting to your files, more streamlined ways of being able to collaborate. This version is rolling out now to all customers in GA, and we're seeing pretty heavy adoption as customers are beginning to drive this new version of the product into their organization. We're really excited about where the all-new Box is going. We also are delivering all-new annotations capabilities. One of the big benefits of Box is that all of our features work across the vast majority of content types that you have stored in our system.
Instead of just being able to use one product to annotate on a PDF file or a Word file or an image asset or other content types in Box, you can collaborate, you can comment, you can annotate, and now you can have mobile annotations on nearly every file type. You can imagine things like digital asset reviews, contract review and approvals, being able to work on design files in an engineering environment in the defense industry. All of that collaboration now can happen more and more inside the Box environment, all done natively and seamlessly within our product. We are driving further innovation on our workflow automation capabilities. We don't want to just be the place where you're doing back-and-forth collaboration on files. We also want to streamline the workflow around that content.
Whether that's a new employee that's being onboarded into your company, a new partner that you're onboarding, a contract that has to be reviewed, digital assets that have to be reviewed, we have a workflow engine with Box Relay that now lets you drive all of that automation directly in our platform. This summer, we were able to release all new features like a built-in template library, and now we're expanding on those capabilities to advance these services for our customers. The ability to have custom templates, scheduled workflows, so you can run workflows on a regular basis, and a lot of extensibility options with our APIs and our platform. You can now build on top of the Box Relay platform capabilities. Finally, we want to make sure that we can integrate across all the applications in our customers' environments.
The really big way that we make that easy for customers is by letting them discover the applications that they can work with. We have an app gallery that we're launching early next year that will make it really, really easy to get access to all of the Box applications that we integrate with. We now have around 1,500 integrations. We want customers to be able to discover all those apps very seamlessly. We also made a significant set of updates, certainly this summer, but also more so coming this fall, around Box for Microsoft Teams. As customers are collaborating in platforms like Webex and Zoom and Teams and Slack, we're going to make sure that we have native integrations into all of those platforms to make it as seamless as possible to communicate, to collaborate on your content stored in Box from those applications.
We're excited to continue to drive the progress with both Teams, with Slack, Webex and Zoom going forward. Today we made some very compelling updates to our Microsoft Teams strategy. When you put all of that together, the ability to secure your content centrally, drive workflows on it, annotate on that content, extend it externally, and then make sure it's accessible from any application, there's literally an unlimited set of use cases that we're seeing from customers across every line of business and in every industry. More of these use cases take us into deeper and deeper parts of these business processes. Again, really going from just being about secure sharing and collaboration to now moving into the full content management of that organization and then ultimately into the workflows around their content.
If it's in sales, it's around being able to drive automated sales processes and enablement and better productivity in the sales team. In marketing, it's around digital asset review and approval and digital asset management. In R&D, it's about collaborating across the supply chain with your partners and the broader ecosystem. We're working to now power a broader set of use cases with our platform. I think the most exciting thing about Box right now in 2020, certainly amidst, again, a very complicated backdrop and certainly economic environment, is that really we are just getting started with our opportunity. When we look at where we are today and where the world is going, in many respects, we're now at the start of another step function of digital transformation going forward.
For Box directly, if we just look at our current paid seats within existing enterprises, we have 7x the opportunity of seats that we can go monetize from within our current install base as we drive more usage, more adoption, and more of the use cases that I just talked about. We have a lot of opportunity just within the install base, and then there's even greater opportunity when you expand from today's 100,000 customers and you look globally to all the customers that we can be serving. We're seeing more and more product traction on our CCM platform capabilities, so whether that's Relay or Shield or Governance. Dylan will go into some of that traction that we're seeing in a minute. Of course, again, we have multiple vectors of expansion from here.
When we think about the number of global digital workers, there's over one billion global digital workers, and even in the segments that we serve directly today, in the markets that we serve, there's hundreds of millions of digital workers that we can go after. Really just at the start of a significant wave of digital transformation that we're well positioned for. What we've been building out and certainly what we've really been trying to keep investors up to date on is how our go-to-market strategy has been evolving to make sure that we can actually capture this opportunity. Our go-to-market strategy really enables us to reach all customer segments through a highly efficient land and expand motion.
The first part of that strategy is that we land and acquire new customers through a repeatable sales motion, digital experiences that we've only been further enhancing because of the COVID-19 environment, robust partnerships, whether it's with technology vendors or resellers and system integrators. We work to drive greater adoption within our customers. We know that the only way that we get paid is if our customers are successful with our product. We have to drive greater and greater adoption of the platform, into deeper and higher value use cases, which is, again, what our new capabilities allow us to go solve. Finally, we're able to then expand with our customers as we make them more successful. This is where we can expand either with selling more seats to those customers or our add-on products.
More and more, we're actually not seeing a trade-off between those two things because our customers are going deeper and wider with Box at the same time. We are continuing to see great examples of this. This was an example deal of a customer that is now paying us a little over $2.5 million. They became an enterprise-wide Digital Business Suite customer at the end of last year. This has been a large technology customer that we've worked with now for over seven years. They've been expanding methodically as they have more use cases, more users in their organization, and they go wider with the platform. You can see like clockwork, we're able to expand both the seat penetration as well as the amount of products that customer is growing with over time.
We want every single one of our customers to look like this canonical example customer. Driving more adoption, driving more powerful use cases, and then more expansion opportunity over time. We're going to do that, of course, through, again, a broad distribution strategy. We certainly primarily sell direct to customers, but in many cases, we go alongside partners to be able to make sure that our value proposition is complementary to other technologies that that customer is using. We have a strong array of technology partners, again, across Cisco, Zoom, G Suite, Microsoft 365, Salesforce, and many others. We work with system integrators and resellers, technology companies that are building on top of the Box platform or where we're integrating more deeply with our customers to be able to go and power their digital experiences.
We're just continuing to, again, hone the components of this land and expand strategy and this go-to-market strategy. In terms of acquiring new logos, we're going to continue to do this in a very efficient way. We're doing it through our digital acquisition engine, through our partner ecosystem. We're going to grow in our core international markets. We're still very focused on the key markets that we're in today, and we're going to just continue to double down in those spaces right now as we drive more repeatability of that motion. Then we want to make sure that we're going after the key industries and verticals where we see the most opportunity. There's, fortunately, because of the diversification of our customer base, there's a lot of opportunity in a range of industries, whether it's financial services, healthcare, the public sector, the tech industry, professional services.
You're going to see us go after key industries to really drive growth. We're going to continue to drive really industry record level of adoption within the product. We want to make sure that all of our customers are successful with Box. We have to make sure that we're driving adoption both through our product experiences with consulting, with customer success, driving higher value use cases, getting stickier within the organization. Ultimately, we want to expand with our customers. This is really where our suite strategy comes into play. We want to make sure that we're pulling together all of the capabilities of Box and ensuring that customers can buy that full platform suite in a single transaction.
Continuing to tune and optimize our packaging to make it easier to get the full value of our platform when we go to sell to our customers. This is also making the sales motion more efficient. Instead of having bespoke one-off sales processes, we want to be able to bring all these capabilities together in a single sale. We're going to keep focusing on driving more enterprise-wide deals. Whenever possible, we want to go wider within a customer, not just selling add-on product , but more seats, and our ELA strategy helps with that. Certainly, driving more and more growth intercompany. As Box gets adopted more, how do we make sure that it's spreading inside and outside the organization to drive more expansion opportunities?
We're going to continue to double down on this land, adopt, expand motion, and this is ultimately what drives that repeatability of our sales model. Just to recap, we're going after what we believe is one of the largest markets in software that is really ripe for disruption. The majority of spend on document management and storage technology is still on-prem. We know that's going to move to the cloud, and we have the best platform and multi-tenant architecture in a cloud platform to be able to help serve our customers. We're going to make sure that we're continuing to innovate on this product with the best-of-breed platform capabilities that we launched today and that you're just going to continue to see us innovate on.
We are, again, continuing to tune our go-to-market model to drive repeatability and make sure that we can scale to serve that full total addressable market. We want to make sure that we're driving highly profitable growth, again, as we evidenced this year, but certainly what we're going to be driving going forward. That's just a brief recap, and I'm excited to hand it over to Dylan to talk about how we're going to be driving profitable growth going forward.
Thanks, Aaron. As you heard from Aaron, we've made significant progress in evolving our product portfolio and go-to-market capabilities over the past year, while also delivering significant profitability improvements. We built a strong foundation to continue driving profitable growth in the years to come. Today, I'm going to walk through how everything Aaron's been talking about flows through to our underlying business model and what we're seeing in the business that gives us the confidence that we're well-positioned to capitalize on our leadership position in cloud content management. First, we'll look at the various components of our proven business model and how the underlying economics have been improving over time. We'll dive into the strong momentum that we're seeing across our customer base with a focus on the traction we're seeing in the adoption of our more advanced and newer product capabilities.
After that, we'll discuss how this has allowed us to accelerate margin expansion this year and where we're focused to generate additional margin expansion going forward. Finally, we'll look at how we plan to drive profitable growth in the coming years as we go after our massive market opportunity. Our strong business model is the foundation for our ability to drive profitable growth as we continue to scale toward $1 billion in revenue. More than 95% of our revenue comes from recurring subscriptions. Combined with our 5% annualized full churn rate and with about three-quarters of new bookings coming from existing customers, we have more visibility than virtually any other company in software. Our horizontal platform serves customers of all sizes, which has allowed us to build and scale a highly diverse blue-chip customer base to fuel our future growth.
Our product differentiation, strong pricing, and cost structure optimizations all support high gross margin, which has been trending upward over the past year. Finally, the economics of our customer base remain strong with a net retention rate of 106% over the past year. As our customers increasingly adopt our more advanced product capabilities to support higher value, stickier use cases, our underlying customer economics should only improve over time. I'll spend a bit of time on what our revenue base looks like today. As mentioned, the vast majority of our revenue is recurring, although we do expect the services component of our business to trend slightly upward over time, once we move through some of the impacts of COVID-19, and as we continue to sell larger and more strategic deals to our customers. International markets now account for 28% of our revenue.
That's up from about 25% a year ago, which has been driven primarily by continued strength in Japan. Over time, as we improve our EMEA performance and further tap into our large global opportunity, we expect that international can be a material growth driver for us. We have a very diverse customer base by industry as well, with no single industry contributing more than 15% of our revenue. We also don't have much exposure to the industries that have been most heavily impacted by COVID-19, which collectively make up about 10% of our total revenue. We tend to see the most success in industries that are focused on security and compliance, as well as secure external collaboration. As such, our top three industries are financial services, professional services, and healthcare and life sciences.
Over the past year, we've also been seeing some strong momentum in the public sector, and our recent announcement of FedRAMP High certification should help us continue the momentum that we're seeing here. Finally, we're focused on serving large enterprises, but we serve a wide range of customers. We organize our sales force around four segments based on customer size. Our enterprise segment includes customers with at least 2,000 employees and now accounts for about 55% of our revenue. Our mid-market segment covers customers with 500 - 2,000 employees, and our SMB and online sales segments serve customers with fewer than 500 employees and combined account for a little less than 30% of total revenue. While we're not immune to macroeconomic factors, our highly diversified revenue base drives a resilient business model and has allowed us to mitigate the current pandemic's impact on our growth trajectory.
Looking back at how our business has scaled since we went public, we've been steadily growing our revenue while achieving significant margin expansion. Last year was an important milestone for us as we delivered our first full year of non-GAAP profitability, and this year we've been able to accelerate those profitability improvements, now expecting to deliver operating margin well ahead of the guidance we issued entering this year. This year, our fiscal 2021, we're on track to generate 11%-12% of operating margin expansion year-on-year, landing at 12%-13% for the full year. Our growth rate has been stabilizing, and as mentioned, we have strong visibility into future growth, which is captured in the RPO trends you're seeing here.
RPO is a meaningful indicator of the underlying growth we're seeing in the business, although it is still a fairly seasonal metric given the higher volume of bookings and renewals that we tend to see in Q4. Total RPO is up 13% year-on-year, which is made up of about 10% growth in short-term RPO and about 20% growth in long-term RPO. The latter has benefited from the positive trends that we've been seeing in average customer contract durations. The average contract duration of deals that we signed over the past year is about 23 months, which is up year-on-year despite the environment we're in, as our customers continue to view Box as a critical component of their long-term IT strategies. Turning to our total gross margin, we've been seeing a steady upward trend over the past year with software gross margin now over 75%.
This improvement has allowed us to grow gross profit 15% year-on-year. Recently, our gross profit has been growing at a faster clip than revenue, which is a trend that we expect to continue in the coming years as we continue to expand gross margin. As we've now completed our data center migration project and grow into this expanded data center footprint, we're beginning to generate economies of scale. We're also benefiting from the public cloud negotiations that we completed at the tail end of last year. The strong pricing trends that we're seeing have also contributed to this gross margin improvement, which we'll dive into now. Pricing power, as mentioned, has been a key driver of our gross margin improvement.
Even as we're selling larger deals, which come with volume discounting, this has been more than offset by the pricing improvements that we're seeing, with most of that coming from the impact of increasing add-on product traction. As a reminder, we tend to see some seasonality in the price per seat for deals in period due to the seasonality of our larger deals and volume discounting, particularly in Q4. Still, the overall pricing of new deals in each period has increased year-on-year in eight of the past nine quarters, growing by about 10% on average over the past year.
This dynamic has allowed us to steadily improve the average price per seat across our install base, which is more than $100 per year across our business customers and is represented by that lower line. Now we'll dive into some of the trends that we're seeing related to our cloud content management strategy. Last year, we highlighted the importance of migrating more and more customers to use Box for more sophisticated, stickier use cases, leveraging the product introductions we had made or were about to make at the time. This year, and as Aaron talked about, we've solidified our product portfolio and our go-to-market strategies to support customers realizing the full vision of our CCM solution. We're very proud of the results we've demonstrated over the past year and as our strategy has enabled us to steadily grow our customer base through strong product adoption trends.
Aaron highlighted the land, adopt, expand framework that we've been using and how we think about growing and retaining our customer base. I'll now highlight how this translates into our overall growth drivers and the core levers that we're focused on through our next phase of growth. Within our existing customer base, we have the opportunity to generate significant growth with 7x seat growth potential, looking at the opportunity even our existing customers versus those users who are paying us today. At the same time, we're well-positioned to continue evolving how our customers use Box through the adoption of our recently expanded CCM product portfolio. While our current focus is on growth through our existing customers and in more established markets, over time, we'll be addressing a massive global opportunity.
Across all of these growth opportunities, we'll continue to focus on improving sales productivity and our overall sales and marketing efficiency. As our product offering evolves to address increasingly valuable use cases, our largest customers are viewing Box as a more and more critical component of their IT strategies. That's allowed us to capture more value from these customers, which is leading to larger deals. We've been generating more of our business from enterprise customers over time, and our 100,000-plus customers now represent 60% of our total recurring revenue. All of these customer categories that you're seeing here have grown consistently over each of the past two years.
I'd highlight one of the trends driving this is that a few years ago, an SMB customer wouldn't have reached $100,000 in annual contract value with our normal pricing on core Box than what we had at the time. However, as we built out our product portfolio and are increasingly selling suites and platform into these customers, they can and often are doing just that. Our six-figure SMB customers have tripled over the past couple of years and now account for about 10% of our total $100,000+ customers. These overall trends that we're seeing in large deals highlight the importance of our land, adopt, expand strategy, as nearly 1/2 of our $84 million+ customers grew to that size, not with a single or ever having a single million-dollar transaction, but rather with a series of consistent upsells over time.
Customer expansion is the underlying driver, engine driving growth across our entire customer base. As I mentioned earlier, we can grow our paying business seat count by 7 x without signing up a single new customer, and we're still only scratching the surface of our overall market opportunity that you're looking at here through digital workers. That represents the core geographies that we serve today. That includes North America, EMEA, Japan, and Australia, where there are 45 x more digital workers than the paid business seats that we have currently. It excludes the markets that we're not in, as well as education seats. We've been seeing strong momentum in seat expansion across our enterprise customers, particularly this year, as the importance of remote work has led to heightened pain points around file access and content security that Box is uniquely positioned to address.
In addition to the seat growth, we have a significant growth opportunity from the adoption of add-on products. We went public 5.5 years ago as a single-product company, and since then are increasingly moving into more advanced use cases. As a reminder, in terms of the impact of this, when customers purchase an add-on product, we tend to see an increase in contract value in the 20%-30% range, what they'd be paying versus what they'd be paying for core, and a rough doubling in price per seat and contract value when you compare the price and values of customers adopting suites versus just the core. As Aaron talked about, enhancing Relay and Shield has been a core focus of our product innovation over the past year.
Our no-code content workflow solution, Box Relay, automates everyday processes like digital asset reviews, work order approvals, regulatory reporting approvals, grant reviews, and the like. We just announced custom workflow templates that process owners can now create and publish for their enterprise, simplifying rollout and standardizing business processes and using workflow best practices. That's something that should continue to drive the value and traction of Relay in the market. As for Shield, earlier this year, we added both native malware detection capabilities and intelligent automated classification. Today, we announced additional administrative controls to further tune and improve security without impacting the end-user experience, as well as integrations with Microsoft Information Protection and IBM's QRadar security analytics solution.
These new products have seen strong early traction, especially Shield, which is the fastest-growing add-on product we've ever launched and was attached to a full 50% of our 100,000+ deals last quarter. All of these more recent introductions have seen strong more than 3x growth over the past year since they were introduced, with the breadth of our portfolio being packaged into suites, which we launched about a year ago to deliver holistic solutions and simplify our overall go-to-market motions. The traction that we're seeing in these newer products really highlights the progress we've made in helping our customers to leverage our full product capabilities. As a result, we've been steadily growing the percentage of our revenue base that's associated with customers using at least one add-on, and that's now 60% of our revenue versus about 50% a year ago.
Those add-on products now directly contribute 22% of our recurring revenue, up from 19% a year ago. As you can see, we've seen the strongest growth in the segment of customers who have adopted two or more add-on products, which now is about the same size as the revenue associated with customers who have only adopted a single add-on product, which is a very different distribution than where we were a year ago. Now, in terms of the new deals we've been selling, the average customer is purchasing 1.9 add-on products, which was about 1.3 a year ago. Increasingly, primarily driven through suites, but also just the new products that we have in the market, we've been seeing some really strong trends there.
We've been very successful in cross-selling add-on products to our core-only customers over the past year as well, which will continue to be a huge focus area for us going forward. This encouraging trend is particularly important for our ability to drive profitable growth, as the data shows that the more add-on products customers adopt, the better those customer economics are. As you can see, increasing CCM product adoption has a material impact on our underlying customer economics, from deal sizes to net retention to gross margin. We also tend to see much higher win rates in deal opportunities with add-on products versus core-only opportunities as we're that much more differentiated. As a reminder, in many cases, growth in these add-on categories comes directly from our core-only customer base.
As we increasingly drive this conversion, the economics of each category may move around a bit, but still, if we're successful in continuing to drive this momentum, that mix shift will lead to a stronger overall financial profile, including higher average contract values, healthier expansion of retention rates, and greater profitability. These customer-based dynamics, fueled by the continued momentum in our CCM strategy, will be the foundation for us to deliver profitable growth in the years to come. We'll dive into how we've been expanding our overall operating margins and the key areas we'll be focused on going forward to drive continued margin expansion and profitable growth. As we outlined going into this year, we set out to accelerate margin expansion through a focus on workforce expenses, gross margin improvements, and overall cost discipline.
We've been very pleased with how we've been performing in each of these areas. We've been able to efficiently scale our workforce expenses through a combination of leveraging lower-cost regions, and driving disciplined headcount growth. This year, we expect to maintain roughly flat headcount as we reallocate resources and leverage the investments that we made in system automation. On the gross margin side, as you saw earlier, that trajectory has been improving over the past year, which has been supported by strong pricing trends. This year, we've executed against several key projects to improve our infrastructure utilization and the cost of delivering our service to customers by delivering different innovations in areas like storage, compression, and density, file conversion, and more efficient search. Entering this year, we also renegotiated key contracts to reduce our public cloud cost structure.
Finally, we've been taking a more rigorous ROI-based approach across all areas of spending. That includes things such as rationalizing marketing programs and events, reducing outside consulting spend, and streamlining T&E. We're very proud of the results that we demonstrated across these categories, and we're now committed to delivering an 11%-12% improvement in non-GAAP operating margin year-over-year, resulting in 12%-13% margins, which is a full 300 basis points higher than the expectations that we laid out entering this year. Of that improvement, that 300 basis points, a little less than 1/2 was driven by savings that were related to COVID-19, like T&E, facility spend, certain in-person events.
However, even as the world returns to be a bit more normal, we don't expect spend in any of these areas to return to pre-COVID levels, so the significant majority of the operating margin improvements we've shown this year will carry forward to future years. This year, we've been able to drive leverage across all areas of the business, with the greatest improvement in sales and marketing spend as a percentage of revenue. As for sales and marketing, we're on track to deliver 800-900 basis points in sales and marketing leverage this year, which is more than 400 basis points higher than the expectations we set for the year at Analyst Day a year ago.
Over the past year, the way we've been able to do this, is we've been reallocating resources from lower-performing to higher-performing regions, which has had a positive impact on our overall sales force productivity and allows us to deliver against our growth targets without increasing the total size of our sales force this year. This overall improvement in sales force productivity has been driven primarily by the double-digit improvement we've seen in our enterprise sales force productivity, as well as by the impact of our newer products and by simplifying our overall sales motions. In terms of where we have been growing, the hires we've made are ramping nicely with solid improvements in the productivity, the bookings per AE, of our ramping reps across all segments.
As we've moderated the growth of the sales force and as these reps continue to ramp, we're seeing average tenure improving, which should positively impact future overall sales productivity. In addition to sales productivity, we're also generating increased marketing leverage by shifting our focus toward more efficient digital channels. Finally, as we've discussed previously, sales to existing customers are significantly more efficient and profitable than sales to entirely new customers. As we continue to drive growth from our install base, and as our customer base continues to scale, that will drive additional leverage in our overall business model. Now zooming back out to our multi-year trajectory, the profitability improvement initiatives we've been discussing have enabled us to deliver accelerated operating margin and free cash flow margin improvements this year.
In addition to the double-digit improvement that we've talked about and expect to deliver in non-GAAP operating margin, we're on track to deliver even stronger improvements in free cash flow margin this year, expecting to generate an improvement of roughly 16% year-over-year. Most of that improvement is coming from the same components of our operating margin improvements, but in addition, as CapEx and capital lease purchases have normalized this year versus last year's elevated levels due to our data center migration project, that has further benefited our trajectory of free cash flow margin improvement, and we're now at more kind of stable, normalized levels. Although we do expect CapEx and capital leases combined to continue trending down as a percentage of revenue over time.
While we're pleased with the overall operating margin and free cash flow margin improvements we've been able to deliver this year, we're just getting started. Now, I'll walk through how we'll deliver continued margin expansion as we drive profitable growth over the next three years. This year, we made significant improvement in the combination of revenue growth and free cash flow margin, which was a big focus area and commitment that we made at Analyst Day a year ago. We continue to be on track and are committed to delivering 25% in this combined outcome, despite the headwinds that COVID-19 has created on our revenue growth rate, particularly through its impact on smaller customer demand and our professional services revenue. As these normalize, that will only help support continued improvement in both these areas.
Going forward, we expect to drive consistent improvement in this combined result, improving by about 500 basis points annually in revenue growth plus free cash flow margin over each of the next three years. While some of this dynamic is going to be impacted over the medium term by the timing and slope of the recovery related to COVID-19, even factoring in these dynamics and the uncertainties of the current environment, we're confident in our strategy and path to deliver 40 points of combined revenue growth plus free cash flow margin in FY 2024, 40 percentage points. On that path, we have multiple levers for continued operating margin expansion, which will allow us to double operating margins over the next three years.
Many of these levers are continuing to execute and evolve in the areas that we've already been talking about and begun to execute on previously. Going left to right, starting with workforce strategy, we will continue to shift resources, and headcount growth to our higher performing regions. Additionally, we're on track to open our first engineering center of excellence outside the U.S. or the Bay Area in the back half of this year in Poland, which will contribute to our ability to scale our R&D investments more efficiently going forward. We'll also continue to optimize our data center footprint and further leverage public cloud providers to drive hardware and software efficiencies. We'll continue to optimize our overall infrastructure and cost to serve, which will be supported as we expand customer use cases through the sale of our CCM product portfolio.
We'll also be taking and continue to take a rigorous approach to expense management in areas like T&E, facilities, and events, and continue to leverage more automation and digital processes, such as digital marketing to drive more efficient demand and overall ways that we work with and support our customers. For the reasons that I highlighted earlier, we expect to drive further improvements in sales force productivity, particularly as our CCM product portfolio continues to gain traction in the market. Finally, and as a reminder, the strong expansion of renewals and those dynamics drive operating leverage by contributing higher margins than acquiring new customers, particularly as customers purchase our higher margin add-on products. As such, we expect the inherent business model leverage resulting from greater customer expansion and renewals to continue in the years to come.
As we execute against all of these areas, and as we continue to build on the strong CCM momentum that we've been talking about, this results in our ability to drive significant improvements to our financial profile over the next several years. As discussed earlier, we're committed to delivering 40% in the combination of revenue growth plus free cash flow margin in FY 2024. We're seeing our growth rate stabilize despite some of the short-term impacts of COVID-19. As we get through this current environment, we believe we can improve our growth rate in the coming years to be growing in the low to mid-10s three years from now in FY 2024. At that time, we expect to deliver a gross margin of roughly 75%.
Note that this represents our total gross margin, as over time we expect professional services revenue and its corresponding lower gross margin profile to become a somewhat larger part of our business. From an operating expenses point of view, we expect to drive leverage, and a reduction in spend as a percentage of revenue across all areas of the business. Of the improvement between this year's guidance and our FY 2024 target, we expect to generate roughly 1/2 of that improvement through sales and marketing and the other 1/2 through the combination of R&D and G&A. When you put that all together, it results in significantly higher operating margin in FY 2024, in the range of 23%-27%, which represents a 10%-15% improvement versus the margins that we expect to achieve this year.
We have a consistent track record of improving our profitability, we're confident that we'll continue to do so in the coming years while delivering healthy growth. As we execute against our market opportunity while improving our financial profile, we believe that we'll be able to create significant shareholder value. Again, as a recap, including what Aaron had highlighted, we're going after a large market opportunity with a very differentiated best-of-breed product. We are building, and this is all supported by a repeatable and scalable go-to-market engine, and all of this contributes to our ability to drive profitable growth. In sum, our large market opportunity, combined with our CCM momentum and a strong underlying business model, put us in a strong position to deliver healthy long-term revenue growth and profitability improvements as we continue to build on our leadership position in the cloud content management market.
We're confident in delivering significant margin expansion as we continue to go after this market, as we're the only cloud platform with the opportunity and ability to do this. With that, let me turn it over to Alice to moderate our executive Q&A session.
All right. We'll now take questions from our audience. You can submit your questions through the Q&A chat box or use the raise your hand button to ask your question live. If you raise your hand, I'll go ahead and call on you, and just make sure you're not on mute. We'll take our first question from Rishi Jaluria of D.A. Davidson.
All right. Hey, Aaron, Dylan, and Alice. Thanks so much for doing this. Really appreciate you taking my questions. Just two from my end. First, on the self-service business, I think you said it's about 9% of [PCV]. It feels like that's a potentially important driver to getting greater sales efficiency and generating warmer sales leads. Any plans to grow the self-service side of the business and any particular investments you can make to make that a more significant part of the business? The second question is on when you're talking about the market opportunity, you talk about there being 7 x potential seat expansion within existing customers. Just want to get a sense, how are you quantifying that?
Is that just based on existing seats in your customer base divided by total employees, or are you doing a little bit more and kind of limiting that specifically to knowledge workers? Thanks.
Thanks, Rishi. Yeah. On the first question, we do look at what we consider to be effectively a digital worker, so somebody who's using technology to do their job. For instance, we would maybe not classify certain parts of the federal government if they're in the field or in certain retail institutions, that as the seat population we can go after. We actually have, in many cases, monetized those users, but we wanted to be a little bit more conservative on the seat opportunity. That 7x is sort of seats that look like the seats we've already sold to, but now within our existing customer base as potential upside. On the digital front, I concur with you, it's a huge opportunity. We had some, I think, moderate investments coming into this year around digital. We knew we wanted to get better at a self-serve engine.
At a minimum, just because customers want to buy that way. You don't always want to hop on a sales call when you just need to add 10 or 20 or 30 seats. You want to be able to get going in the product right away. There's a lot of enterprise-oriented value when you can have a great digital onboarding approach. When COVID hit, it became even more strategic for us to put more emphasis in this area, because now you have customers all around our key markets that want to be able to instantly get onboarded, start using Box right away, be able to expand it. I think we're actually just getting started on the digital opportunity.
It's already a nice recurring revenue stream that is very attractive financially. It certainly can expand from here as we invest more in being able to sell the full suite online, be able to drive more upsell motions within the existing install base. Some of the tactics that we don't actually even do today. We think we have some healthy upside in the digital space going forward that will drive greater efficiency in the sales motion.
Great. Thank you.
Thanks, Rishi. Our next question comes from Ittai Kidron. Ittai?
Hi, Alice. Can you hear me?
Yep.
I can hear you just fine.
Okay. Very good. Excellent. Thanks, guys, for hosting the event. Really appreciate it. The input is quite interesting. I guess I had a couple of questions. Firstly, Aaron, from a big picture standpoint, you've talked about the 7x opportunity you have within your install base to increase your seats. Help me understand, why is your solution is not one that's being viewed as one that can have enterprise-wide adoption very quickly? I'm not talking about Zoom, which naturally, given the situation, had to be adopted very quickly, but you see how the solutions like Slack get adopted very quickly. Why Box is not in that same category? Then I have a follow-up.
Yeah. I think that it depends on the use cases that we're going after. I think traditionally in the content management market, customers usually saw it for specific business processes. A lot of times you might say, "Okay, if I'm a large technology player, I'm going to go really drive secure workflows in the R&D department." If I'm a major retailer, I have supply chain operations and field operations where they need content management. I think in the history of ECM, it's largely been a line of business or department-specific technology. I'd say we're the first company that's brought ECM to the masses in their organization, which is why we do have so many customers that adopt us enterprise-wide. To some extent, that requires some education of the customers.
It's also required us to make sure we have a good licensing model that's attractive to help customers ramp up, because they might not know the distribution of usage right away. We want to make it easy for them to ramp into an enterprise-wide model. I think that we're getting closer to companies realizing that this needs to be a platform capability across the organization, but we have to make sure that is well understood by our entire customer base. In some cases, that requires us to go back and sell to those customers again, making sure that the packaging is built in the right way. Obviously, suites and our add-on product story helps with that.
I'd say it's on us to go change how the market thinks about the content management space as an enterprise-wide solution, and I think we're going to be certainly working to do that pretty aggressively.
Okay. As I think about your financial targets all the way through fiscal 2024, your revenue target at the time, 12%-16%, is nice. I guess when I put it in the context of the fact that you're already growing over 10%, clearly there's ASP increase that you're seeing from the uplift into suites and things like that. Can you tell me what's the implied seat expansion you have over the next three to four years? Is there something a little bit more, how shall I put it, radical, that you can take to accelerate seat adoption within customers?
Yeah. Great question, and I think on our target growth rate, again, I think as we did last year, we want to be thoughtful about putting out long-term re-acceleration targets out there, especially ones that tie to an ultimate bottom-line target. We wanted to make sure that it was very clear that our plan is to hit 40% on free cash flow margin and growth rate and not have that depend on a massive kind of re-acceleration change from where we're at today. That being said, our strategy is one that is very much oriented around how do we get customers to expand Box across their organization, really be able to drive greater and greater penetration of those add-on products.
In terms of creative ways to do that, I think between our suites and our ELAs, which in many cases are actually converging for customers in the same conversation, that's going to be a major component of how we think about going to market going forward. I can imagine some incentive structure and compensation model evolution as we think about going forward. Now that we've got the product portfolio, much of the packaging worked out, although there's probably some areas we could even tune it further to make it more attractive to customers. I think as we head into the rest of this year and going into next year, we certainly are going to get more creative on how we go wider with those customers with our full suite of capabilities.
Note that every single day, all day long, we think about how do we drive profitable growth at greater levels, and we are working backwards from the strategy that can go out and drive that. We want to make sure that we're simultaneously improving the profitability of the business, but ultimately working backwards from the size of this market and how much we want to grow to be able to go address it.
Very good. Good luck, guys.
Thanks.
Our next question comes from Phil Winslow of Wells Fargo. Go ahead, Phil.
Sorry, I was muted. Thanks for taking my question. Last year, you disclosed that cost of customer acquisition for a new ARR had fallen to $1.60 per dollar new ARR, that was versus $1.65 the prior year and $2 in the first half of 2017. Clearly, as you pointed out, productivity has improved over the past year. Can you give us an update on where that CAC ratio stands today versus the $1.60 from last Analyst Day? When you think going forward, what are the levers you still have to pull to continue to improve that productivity when we think of the next couple of years? Thanks.
Sure, Phil. We are on track to improve those ratios. For a lot of the underlying trends that we've talked about, both from a Salesforce point of view and other areas of sales and marketing spend, we are generating efficiencies in terms of the cost to support acquiring a new business. Given how our business and our go-to-market focus areas have evolved, we've been placing less emphasis on landing customers. Focusing the trends and what we talk about around the trends that we're seeing in overall customer economics, sales productivity, and sales and marketing efficiency, as especially with a different mix shift between new customers, expansion, renewals, and a different renewal motion, even comp model in some cases, there isn't really an apples-to-apples comparison for the way our business is structured and what it was last year.
The overall trends have been positive and consistent with Salesforce productivity. In terms of the levers going forward, while we've been really pleased with the results we've seen in the enterprise business and the areas that had been performing well, even as we've kind of added resources by kind of funding them from areas that we kind of de-invested in.
We still are seeing globally the opportunity to drive more consistency. Especially as we continue to build on and communicate the differentiation and the value of our add-on products, we do think that that and increasingly selling Box through suites as a pricing and packaging mechanism, is a big driver of performance. We see a very direct connection between the reps who do that well and the overall productivity levels. Similarly, this kind of productivity and then tenure and kind of composition of sales force are all somewhat related. One of the trends that we're beginning to see is, because we're seeing higher levels of success in the sales force, that leads to stronger overall retention of the sales force, and that drives more tenured reps, which are more productive on average.
Some of it is a function of just what we're selling and how consistently we can sell that. Some of it is a function of just the kind of mechanics and composition of our sales force, but certainly ties back to a lot of the key growth drivers and kind of parts of the product and sales marketing strategy that Aaron highlighted as well.
Then just one follow-up for Aaron. One of the sort of follow-ons of COVID-19 seems to be an accelerated shift to cloud. How have your customer conversations changed when you think about sort of traditional ECM use cases? Are you seeing that as well in your business and what are customers saying now?
Yeah. I think if you think about the traditional ECM use case of I'm running some storage infrastructure, document management software, VPN technology, added data security technology, I might have to invest in three, four, five different systems just to be able to enable content management and the ability to collaborate around that content in my enterprise. We think that just makes no sense as you move that information to a modern way of working. If you think about the modern IT stack, when you think HR systems, you think maybe Workday and Oracle or SAP in the cloud. When you think CRM systems, you think Salesforce and Microsoft Dynamics in the cloud. When you think about ITSM, you think about ServiceNow in the cloud.
We don't believe that you're going to be thinking about document management and content management in an on-prem environment in one, two or three years from now. I think customers are really starting to recognize that. We've seen some surveys from customers in the content management space that post-COVID, some of the biggest problems they're running into are employees being able to find the information they need to do their job, the ability to collaborate in a secure way with legacy solutions. These are all going to catalyze more growth into the cloud, and we are the only multi-tenant platform that has one source of truth for content that brings together workflow security in collaboration with the integration strategy.
As customers really do their homework and look at what type of platform is going to enable them to have a real system of record for content in the cloud, we believe that we're going to stand up very well against the competition as customers look at that. I think this will be a catalyst to more migration from on-prem systems to cloud environments.
Great. Thanks, guys.
Thanks, Phil.
Our next question comes from Brian Peterson of Raymond James. Brian, go ahead. Are you there, Brian?
He's just on mute. Hey, Brian, you might be on mute.
Might be on mute. There you go.
Yep. Hey, sorry. I'm a software analyst. I am. I just wanted to ask a question about the 12 - 16.
Hey, Brian, any chance you could talk a little bit louder?
Can you guys hear me? Sorry.
Yes. Yeah, way better. Thanks.
Yeah. Just on the 12% -1 6% growth target, I'm just curious, does that include any assumptions or contributions from products yet to be announced? How should we think about, at a high level, the sales capacity assumption that kind of goes into that? Is it modest growth? Is it double-digit growth every year, or is it just mostly based on productivity improvements?
Yeah. I can hit that. I would say those growth expectations are not based on having any sort of material impact from new products that aren't already in the market today. Similarly, it's an organic growth model, nothing about acquisitions or anything. It's really just kind of building on the elements that we have in the business today. As it relates to the overall sales force growth that supports that, we do expect, after maintaining headcount flat in the sales force this year, to continue growing that again in future years, but really commensurate with the type of opportunity, the productivity trends that we're seeing in the business.
We do expect because of the dynamics we talked about and our kind of confidence in our ability to improve sales productivity over time, we think that growth rate of the sales force, while it will be growth, expect that to be more metered than the revenue growth that we're generating. To continue to generate sales and marketing leverage over time over that period as well.
Great. Thanks, Dylan.
Okay. Our next question comes from Erik Suppiger of JMP. Go ahead, Erik.
There we go.
You can go ahead and unmute. Great.
There we go. Just on the enterprise-wide licenses, can you talk a little bit about how much of your revenue is coming from those currently, where you would like that to go, and at what point does it make sense for a customer to transition to an enterprise-wide relationship?
Maybe I'd start just noting that it's a pretty small component of the business today. We are certainly seeing an uptick, kind of elevated volume in those types of conversations with customers. Particularly, it's been really fueled by a lot of the demands and now increasingly relevance of Box and everything we do to support remote work across a much broader set of employees, as there's this huge opportunity, as we talked about, in terms of seat expansion, where on average, it's 7x in our install base, in terms of number of total applicable workers out of those who are paying business users today. Then maybe I'll turn it over to Aaron to talk about where we're seeing that success and the strategy around it.
I think certainly a lot of the success right now is coming from customers where they've had a healthy expansion rate. I showed the example of a major technology vendor that had a pretty wide step-up in their deployment at the end of last year. When you think about a customer that has been driving that healthy land and expand motion and ultimately is at a point now where they're saying, "Okay, we need to standardize on a platform across the enterprise," this is really where our ELA strategy comes into play. We do want to try and encourage customers to be adopting Box enterprise-wide, as Ittai kind of brought up, more and more. We also know there's a huge opportunity of healthy customers that have been expanding to be able to get them into ELAs as a pretty consistent pattern.
We're seeing this, just recent deals being in the defense industry, in financial services, in the technology industry. Customers really across sectors that want to be able to have a standard cloud-based content management platform across the enterprise, we think this is a great play for, and we're working aggressively to try and make it simpler, and simpler, and simpler to buy Box in this kind of fashion.
Is there a number of services where it becomes a logical transition?
Honestly, it's usually more about how much usage they have across their organization and how rapidly that usage is increasing. We have some customers that only had a single core product, we were able to expand them into the full suite and an ELA, just because they were a healthy customer adopting us pretty broadly, and we wanted to be able to get them into better security, better data governance, better workflow. I think we'll start to see trigger points as we look at the data more around, okay, one or two products, and then it makes sense to get them into the full suite and an ELA. The ELA is really around the customer having a recognition that, okay, I want to have one platform across my business that's available to all of my teams.
That's either driven by adoption that they're seeing or by our sales motion, really kind of checking a few of the line of business boxes and getting the customer to see the full potential of the platform.
Thank you.
Great. Our next question comes from Josh Baer of Morgan Stanley.
Great. One for Aaron. Back at BoxWorks last year, I think you talked about win rates for core around 50% or maybe a little bit less, and for customers that had one or two add-on products, win rates jumped to two-thirds. I'm just wondering if there's any update their given the introduction of suites over the last year, or maybe how anything's changed in this environment.
I think I don't have the very updated data on the win rate on the two or more-product side. In general, I think our win rates have held, and if anything, as we have more add-on products in suites, it does increase our ability to win against customers. In many cases, those customers are already more qualified into the pipeline because they want to be able to use Box for workflow and data security. Almost by definition, they're not really comparing us at that point to a lot of competition, given that those capabilities build on top of the core offering. I think you're going to just see greater and greater velocity of us getting customers into those add-on products, which of course will then have almost arbitrarily high win rates.
Yeah, just to build on that, would echo that we have seen really stability across all those different kinds of categories of deals in terms of the win rates that we've seen over the last year. That is both kind of in aggregate as well as versus specific competitors. What I would say is that as you would imagine based on the trajectory and the kind of composition of our overall opportunities, we are seeing more and more of those opportunities involve one or more add-on products. That kind of mix shift is actually a tailwind to our total win rates, but in terms of the underlying dynamics, those have been strong and stable over the last year.
Awesome. If I could ask one for Dylan, if you could double-click on the digital self-service engine, just what are some of the recent efforts there? How is that business trending, growing, and how do the unit economics differ from the rest of the business?
I think about it as the biggest change is around the economic side, to start there, is really around those customer acquisition costs, and really just the efficiency to kind of work with our customers. In some cases, when we say digital, we've made a pretty broad set of changes, where it's not just kind of impacting the economics of the customer or the acquisition funnel, but even just all the ways that we more efficiently educate about the business, hosting webinars that might have been through lengthier and less well-attended in-person events, things like that. It really expands the reach and the efficiency to get our message out to customers. We are seeing from an acquisition point of view, the biggest impact on our smallest customers, who will never speak to a sales rep and just do everything online, which has been more efficient.
That's actually an impact across the way that we serve and support our customers across the entire customer base.
Great. Thanks.
All right. Let's go into some of the questions in our Q&A chat. First question, can you rank the main drivers for growth re-acceleration starting next year?
On the timeframe question, that's a little bit unknown just because, again, the broader macro environment is driving different types of trends between the SMB business, our professional services revenue line. Without sort of getting into specific on the timeline, I think the things that will drive re-accelerated growth from here are really, again, the continued momentum that we're seeing on our add-on products, on being able to pull together our capabilities in a single package with suites, as well as additional pricing and packaging optimization, and then being able to go wider in customers. What we're seeing in every single customer call I'm on right now, and we've had a number at BoxWorks, but every single day we're talking to plenty of customers across the business. Customers are looking for Box to become more of a system of record for their content.
How do companies have a single hub for content and collaboration that can then integrate into the other applications they're using? Whether it's a sales team that wants to be able to enable everybody on the right sales assets, a marketing team that wants digital asset management, an HR team that needs to be able to distribute out policies, an R&D team that needs to be able to work across their supply chain. That ability to have one single hub for secure content management and collaboration connected to Microsoft Teams or Webex or Zoom or Slack or Salesforce, this is really what's going to continue to drive growth. I think we're seeing, again, the kind of death knell for legacy document management systems, and there's going to be a propelled push toward cloud environments and cloud solutions.
Our job is to win a pretty high rate of those customers that are moving from on-prem to the cloud, as well as expand within our existing install base.
All right. Our next question is, you guys have done a good job reducing non-GAAP expenses. Do you plan to reduce stock compensation, stock-based compensation?
We do. As you've seen, the expectations we've set for this year, even relative to what we had laid out entering the year, have improved from a stock-based compensation point of view and overall GAAP EPS expectations is where that shows up, even above and beyond the improvements that we've outlined from a non-GAAP point of view. That's based on as we have more visibility and as we've managed the business has what's caused us to bring that forecast down even in the short term. Over time, we do expect stock-based comp to decrease as a percentage of revenue as we manage our overall dilution. A couple of the primary drivers of that are, first of all, our overall headcount growth that we've been metering.
Increasingly, as we hire in lower cost locations, the sort of market equity and equity demands for a lot of the employees that we'll be hiring, we expect that to help drive an improvement here as well, based on kind of the composition of our employee base, particularly between areas like the Bay Area and areas like Poland where you see a pretty stark difference.
Thanks, Dylan. All right. Well, that concludes the Q&A portion of our event. We really appreciate you taking the time to spend with us today for our investor breakout session, as well as BoxWorks Digital. If you have any follow-up questions, please feel free to contact the investor relations team at ir@box.com. Have a great day.
Awesome. Yes. I just want to chime in and say thanks a lot for everybody taking the time today, and anything that we can help follow up on, please let us know. Hopefully you'll have a chance to tune in to some of the, again, sessions that got recorded today around our product strategy, some of the keynotes. We're obviously looking forward to continue to transform how companies work in the cloud by delivering a completely new way to help them manage their content. Looking forward to chatting soon. Take care.
Thanks, everyone.