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Box (BOX) Q3 Loss In Line with Estimates, Revenues Beat

Zacks Equity Research

Box, Inc. BOX reported fiscal third-quarter 2020 loss per share of 1 cent, which was inline with the Zacks Consensus Estimate. The company reported a loss of 6 cents per share in the year-ago quarter.

Total revenues came in at $177.16 million, surpassing the consensus mark of $174.5 million. Moreover, the top line increased 13.6% year over year and was above the guided range of $174-$175 million.

Strong demand for its add-on products and high volume of large enterprise deals aided revenue growth during the quarter.

Box is currently working on enriching cloud content management and AI platforms. During the quarter, it made some notable partnerships and deeper integrations with IBM, Microsoft Teams, and Slack. In addition, it launched Box Shield, major new Relay enhancements, which will expand its share in the cloud market.

Following Box’s third-quarter results, the share price was up 2.1% in after-hours trading.

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

Let’s delve deeper into the numbers.

Box, Inc. Price, Consensus and EPS Surprise

Box, Inc. Price, Consensus and EPS Surprise

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

Billings and Deferred Revenues

Billings were $171.9 million, up 10% year over year. Deferred revenues were $325.6 million, up 8% from the year-ago quarter.

Operating Results

Box’s operating expenses (general & administrative, sales & marketing, as well as research & development) of $160.1 million increased 6.2% year over year.

On a non-GAAP basis, the company recorded non-operating loss of $0.5 million versus an operating loss of $7.7 million a year ago. Operating margin was 0% versus (5%) in the year-ago quarter.

Balance Sheet and Cash Flow

At the end of the quarter, cash and cash equivalents, and accounts receivables balance were $200.9 million and $108.4 million compared with $201.5 million and $117.9 million, respectively, at the end of the fiscal second quarter.

Net cash provided by operations was $8.9 million and free cash flow was negative $1.7 million in the fiscal third quarter.

Guidance

For the fourth quarter of fiscal 2020, Box expects revenues between $181 million and $182 million. The Zacks Consensus Estimate for the same is pegged at $180.88 million. On a non-GAAP basis, the company projects the bottom line within 4-5 cents. The corresponding Zacks Consensus Estimate is pegged at earnings of4 cents per share. GAAP loss per share is expected within 22-21 cents.

For fiscal 2020, Box increased its revenue guidance to $693.7-$694.7 million from $690-$692 million. The Zacks Consensus Estimate for the metric is pegged at $690.93 million. On a non-GAAP basis, it projects earnings per share to be approximately 1 cent. The consensus mark for the same is also pegged at 1 cent. GAAP loss per share is expected to be $1.01.

Zacks Rank and Stocks to Consider

Currently, Box has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Advantest Corp. ATEYY, Itron, Inc. ITRI and AMETEK, Inc. AME. While Advantest sports a Zacks Rank #1 (Strong Buy), Itron and AMETEK carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Advantest, Itron and AMETEK is currently projected at 15.5%, 25% and 10.9%, respectively.

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