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.
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.
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.
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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