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Box (BOX) Q2 Loss Narrower Than Expected, Revenues Beat

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Box, Inc.’s (BOX - Free Report) fiscal second-quarter 2019 adjusted loss was 5 cents per share, narrower than the Zacks Consensus Estimate of 6 cents per share.

Revenues came in at $148.2 million, surpassing the consensus mark of $147 million. Revenues were also ahead of the guided range, increasing 21% year over year.

Following second-quarter results, its share price declined 6.9% due to weaker-than-expected revenue guidance for fiscal third quarter. Over the past year, the stock has gained 32.9%, underperforming its industry’s growth of 41.1%.

 

 

During the second quarter, the company had 87,000 paid customers, up from 85,000 in the first quarter.

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 - Free Report) and Microsoft (MSFT - Free Report) .

The company’s rich technology partner ecosystem will continue to be a strong driving force behind its growth.

Let’s delve deeper into the numbers.

Billings and Deferred Revenues

Billings were $162.8 million, up 17% year over year. Deferred revenues were $301.5 million, up 25% from the year-ago quarter.

Operating Results

Box’s operating expenses (general &administrative, sales & marketing, and research & development) of $142.8 million increased 10.5% year over year.

On a non-GAAP basis, the company recorded an operating loss of $6.5 million compared with $14.9 million a year ago. Operating margin was (4%) compared with (12%) in the year-ago quarter.

Balance Sheet and Cash Flow

At the end of fiscal second quarter, cash and cash equivalents, and accounts receivables balance were $203.7 million and $114.8 million, respectively, compared with $217.1 million and $91million at the end of first quarter.

During the quarter, cash provided by operations was negative $1.3 million and free cash flow amounted to negative $10.3 million.

Outlook

For the third quarter of fiscal 2019, Box expects revenues between $154 million and $155 million. The Zacks Consensus Estimate is pegged at $154.8 million. On a non-GAAP basis, the company projects loss per share in the range of 8-7 cents. The Zacks Consensus Estimate is pegged at a loss of 6 cents per share. GAAP loss per share is expected within29-30 cents per share.

For fiscal 2019, the company expects revenues between $606 million and $608 million. The Zacks Consensus Estimate is pegged at $606.4 million. On a non-GAAP basis, the company projects loss per share in the range of 18-16 cents. The consensus mark is pegged at a loss of 17 cents per share. GAAP loss per share is expected within $1.02-$1.00 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 Paycom Software, Inc. (PAYC - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Paycom Software has a long-term earnings per share growth rate of 24.8%.

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