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BOX Q1 Earnings and Revenues Surpass Estimates, Rise Y/Y

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Box, Inc. (BOX - Free Report) reported first-quarter fiscal 2022 earnings per share of 18 cents, which surpassed the Zacks Consensus Estimate by 5.9%. Further, the figure surged 80% from the year-ago period but decreased 18.2% from fiscal fourth-quarter 2021.

Total revenues were $202.4 million, surpassing the consensus mark of 200.5 million. Also, the top line increased 10% year over year and was above the company’s guided range of $200-$201 million. Further, the figure increased 2% from the fiscal fourth quarter.

Growing adoption of Box’s Content Cloud drove top-line growth of the company.

Further, it closed 59 deals during the fiscal first quarter, up 48% year over year.

Additionally, the company saw a record 49% attach rate of its suites due to increasing demand for multi-product suite offerings.

Coming to price performance, Box has returned 26.7% on a year-to-date basis against the industry's decline of 11.2%.

Notably, increasing work-from-home trends and rising demand for cloud applications as the result of the ongoing pandemic are likely to continue benefiting the company in the near term.

Billings and Deferred Revenues

Billings were $159.4 million for the reported quarter, which increased 24% year over year. This improvement was due to early renewals from customers who had been set to renew in the fiscal second quarter.

Deferred revenues were $423.2 million, improving 15% from the prior-year quarter.

Quarter in Detail

Box witnessed several wins and expansions with companies like D.A. Davidson Companies, DoorDash, IQVIA, Isuzu Motors Limited, Penguin Random House and Tokyo Institute of technology in the reported quarter.

Moreover, the company’s integration with Microsoft’s (MSFT - Free Report) Office software suite, Microsoft 365, was noteworthy.

In addition, the introduction of Box Shield with advanced security features to prevent accidental data leaks and protect content cloud supported the quarter’s results.

Further, the company signed a definitive agreement to acquire SignRequest in the reported quarter.

Operating Results

Non-GAAP gross profit for the fiscal first quarter was $147.9 million, up 10.3% year over year. As a percentage of revenues, the figure was flat with the year-ago quarter.

Box’s operating expenses (research & development, sales & marketing and general & administrative) of $151.8 million decreased 1.3% year over year. As a percentage of revenues, the figure contracted 890 basis points (bps) from the year-ago quarter.

On a non-GAAP basis, the company recorded operating margin of 17%, which expanded 800 bps from the prior-year quarter.

Box, Inc. Price, Consensus and EPS Surprise

Box, Inc. Price, Consensus and EPS Surprise

Box, Inc. price-consensus-eps-surprise-chart | Box, Inc. Quote

Balance Sheet and Cash Flow

As of Apr 30, 2021, cash and cash equivalents were $561.5 million compared with $595.1 million on Jan 31, 2021. Also, its short-term investments amounted to $50 million.

Moreover, accounts receivables amounted to $112.3 million at fiscal first quarter-end, which decreased from $228.3 million at the end of the prior quarter.

Further, the company generated $94.8 million of cash from operations in the reported quarter, up from $57.5 million in the previous quarter. Additionally, it generated free cash flow of $75.9 million in the fiscal first quarter.

Guidance

For second-quarter fiscal 2022, Box expects revenues between $211 million and $212 million. The Zacks Consensus Estimate for the same is pegged at $209.2 million.

On a non-GAAP basis, the company projects earnings per share of 17-18 cents. The Zacks Consensus Estimate for the same is pegged at 19 cents per share.

For fiscal 2022, Box has raised its revenue guidance from $840-$848 million to $845-$853 million. The Zacks Consensus Estimate for the same is pegged at $843.9 million.

On a non-GAAP basis, the company projects earnings per share of 71-76 cents. The consensus mark for the same is pegged at 79 cents per share.

Zacks Rank & Stocks to Consider

Box currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) and Analog Devices, Inc. (ADI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for MACOM Technology and Analog Devices is currently projected at 37% and 12.3%, respectively.

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