Box Drops 15% Despite Reporting Stronger Than Expected Q4 Revenue Growth

Update: Box's shares have recovered somewhat, and are now down around 10 percent, instead of 15 percent. The chart, however, remains rough: Today following the cessation of normal trading, Box announced its fiscal fourth-quarter financial performance, including revenue of $62.6 million, and an operating loss of $45.8 million on a GAAP basis, and $32.2 million using adjusted metrics. The company also reported billings for the period of $82.0 million. The company's GAAP net loss for the period totaled $52.92 million. On a GAAP basis, Box lost $2.64 per share. Using non-GAAP metrics, which the street is currently using to measure Box's per-share profits, Box lost $1.65 per share in the quarter. (Clarification: Box informed TechCrunch after publications that consensus estimates of its adjusted earnings per share employed an incorrect share count. Given a proper accounting of its shares, Box informed TechCrunch that it beat a -$1.99 per-share consensus figure.) The market had expected Box to report a $39.75 million loss, revenue of $58.03 million, and billings of $80.85 million. Box's revenue grew 61 percent compared to the year-ago quarter. Its GAAP loss increased from its fourth-quarter, fiscal 2014 tally of $40.2 million. Following the news of its mixed earnings, the company's stock, up nearly five points in regular trading, is sharply down around 8 percent. The company recently strengthened its balance sheet by selling shares to the general masses in an initial public offering. Box ended its current quarter with cash and equivalents of $330.4 million. Box's net cash burn stemming from operating activities for the period totaled $15.6 million in the quarter, down from the year-ago period's $22.6 million burn. For its full fiscal year, Box had revenue of $216.4 million, up 74 percent, and a net cash burn due to operating activities in the period of $84.9 million, down slightly from its fiscal 2014 burn. Box showed strong revenue growth, beating expectations, but the same questions regarding its path to profitability remain. Increasing dollar-based losses on a year-over-year basis, even coupled to strong top line expansion, is troubling. Box expects to generate revenue of $63 million to $64 million in its current quarter, and $281 million to $285 million in its current fiscal year. The firm anticipates a non-GAAP operating loss "as a percentage of revenue" of between -50 percent and -52 percent. Box estimates that it will grow its revenue by around 30 percent in its current fiscal year. Correction: The original headline for this post indicated that Box lost more money in the quarter than expected. That conclusion was predicated on a consensus per-share loss for Box, on an adjusted basis, of $1.17 in the quarter. Box lost $1.65 per share in the quarter, using adjusted metrics. However, the initial consensus was predicated on a share count that was incorrect. Thus, the consensus estimate was actually a per-share loss of $1.99. This means that Box actually beat on adjusted profit. The title has been updated to reflect the fact. TechCrunch did not learn of the analyst error regarding share count until after the company had reported its earnings.
Alex Wilhelm

Alex Wilhelm is a Writer at Gigabuzz, focused on covering early-stage startups, especially those with a technology focus and great perks.

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