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Box (BOX) Q1 Loss Narrower Than Expected, Revenues Beat

Zacks Equity Research
Updated

Box, Inc.’s BOX fiscal first-quarter 2019 adjusted loss was 7 cents per share, narrower than the Zacks Consensus Estimate of a loss of 8 cents. The reported loss was lower than the guided range of loss of 9-8 cents per share.

Revenues came in at $140.5 million, surpassing the consensus mark of $140 million. Revenues were above the guided range of $139 million and $140 million and increased 20% year over year.

Following the first-quarter results, the share price declined 4.6% due to slower-than-expected revenue growth guidance. Year to date, the stock has gained 26.4%, outperforming its industry’s growth of 9.84%.

During the first quarter, the company had 85,000 paid customers, up from 82,000 in the fourth quarter.

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The company’s top-line improvement was driven by growth in paid customers, growing add-on products and positive contribution from its strategic partnerships.

Box is currently working on enriching its cloud content management and AI platforms. It has made some notable partnerships with Apple AAPL and Microsoft MSFT.

The company’s rich technology partner ecosystem will continue to be a strong driving force behind its growth and we expect this to continue going forward.

Let’s delve deeper into the numbers.

Billings and Deferred Revenues

Billings were $116.7 million, up 17% year over year. Deferred revenues were $286.9 million, up 31% from the year-ago quarter.

Operating Results

Box’s operating expenses (general &administrative, sales & marketing, and research & development) of $99.1 million increased 9% year over year.

On a non-GAAP basis, the company recorded an operating loss of $9.2 million compared with $16.7 million a year ago. Operating margin was (7%) compared with (14%) in the year-ago quarter.

On a GAAP basis, the company recorded a net loss of $10 million or loss of 7 cents per share compared with the net loss of $16.7 million or loss of 13 cents per share a year ago.

Balance Sheet and Cash Flow

At the end of the fiscal first quarter, cash and cash equivalents, and accounts receivables balance were $217.1 million and $91.0 million, respectively, compared with $208.1 million and $162.1 million at the end of the fourth quarter.

Long-term debt was $40 million, flat with the previous quarter. During the quarter, cash provided by operations was $18.4 million and free cash flow amounted to $7.3 million.

Outlook

For the second quarter of fiscal 2019, Box expects revenues between $146 million and $147 million. The Zacks Consensus Estimate is pegged at $146.2 million. On a non-GAAP basis, the company projects loss per share in the range of 6-5 cents. The Zacks Consensus Estimate is pegged at a loss per share of 7 cents. GAAP loss per share is expected within 28-27 cents per share.

For fiscal 2019, the company expects revenues between $603 million and $608 million. The Zacks Consensus Estimate is pegged at $605.99 million. On a non-GAAP basis, the company projects loss per share in the range of 19-16 cents. The consensus mark is pegged at a loss per share of 7 cents. GAAP loss per share is expected within $1.07-$1.04 per share.

Box, Inc. Price, Consensus and EPS Surprise

 

Box, Inc. Price, Consensus and EPS Surprise | Box, Inc. Quote

Zacks Rank and a Stock to Consider

Currently, Box has a Zacks Rank #3 (Hold). A better-ranked stock in the technology sector is Twitter, Inc.  TWTR, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Twitter has a long-term earnings per share growth rate of 23.1%.

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