Box (BOX) Q4 Loss Narrower Than Expected, Revenues Match

Box, Inc.’s BOX fiscal fourth-quarter 2018 adjusted loss was 6 cents per share, lower than the Zacks Consensus Estimate. Loss was 54% narrower on a sequential basis and 40% narrower than the year-ago quarter. The reported loss was lower than the guided range.

Revenues came in at $136.7 million, in line with the consensus mark. Revenues were within the guided range, increasing 7% sequentially and 25% year over year.

Following the fourth-quarter results, the share price plunged 23.3%. Also, the stock has gained only 10.8% in a year’s time, underperforming its industry’s gain of 30.4%.

During the fourth quarter, the company had 82,000 paid customers, up from 80,000 in the third quarter.

The company’s top-line growth was impacted by slowing growth in paid customers, partially offset by 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 $204.6 million, up 28% year over year. Deferred revenues were $320.9 million, up 33% from the year-ago quarter.

Operating Results

Box’s operating expenses (general and administrative, sales and marketing, research and development) of $133.9 million increased 15% year over year.

On a non-GAAP basis, the company recorded operating loss of $7.5 million compared with $12.7 million a year ago. Operating margin was (5%) compared with (12%) in the year-ago quarter.

On a GAAP basis, the company recorded net loss of $32.7 million or loss of 24 cents per share compared with net loss of $36.9 million or loss of 28 cents per share a year ago.

Balance Sheet and Cash Flow

As of Dec 31, 2017, cash and cash equivalents, and accounts receivables balance were $208.1 million and $162.1 million, respectively, compared with $172.9 million and $95.9 million as of Oct 31, 2017.

Long-term debt was $40 million, flat with the previous quarter. During the quarter, cash provided by operations was $48.7 million and free cash flow was $13.3 million.

Outlook

For the first quarter of fiscal 2019, Box expects revenues between $139 million and $140 million. The Zacks consensus estimate is pegged at $143.6 million. On a non-GAAP basis, the company projects loss per share in the range of 9-8 cents. GAAP loss per share is expected within 28-27 cents per share.

For the fiscal year 2019, the company expects revenues of $605 million at its mid-point of guidance, well below expectations of $624 million.

Box, Inc. Price, Consensus and EPS Surprise

 

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

Zacks Rank

Box has a Zacks Rank #4 (Sell). A better-ranked stock in the technology sector is Paycom Software, Inc. PAYC, 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 26%.

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