Box Shows 28 Percent Revenue Growth, But Profit Still Elusive

Box remains in "growth" mode, which in financial code means it hasn't yet hit black ink.

Aaron Levie Box

When Aaron Levie founded Box 12 years ago, he instinctively knew that lots of people and companies were going to want to store their files, photos, videos and various other data somewhere outside their own computers where it was going to be safe.

That instinct has been relevant to the market for more than a decade, demand for secure places to put data continues to skyrocket, and Box has kept ahead of the data-volume curve.

As evidence of all this, the Redwood City, Calif.-based cloud storage and collaboration tools provider on Aug. 30 revealed its Q2 2018 earnings report, and the result is another strong quarter for the young company, which went public in January 2015.

Box banked record revenue of $122.9 million, equating to 28 percent year-over-year growth and exceeding guidance of $121 million to $122 million. Billings came to $139.5 million, which is 31 percent year-over-year growth and exceeded consensus estimates by $6.7 million, the company said.

Deferred Revenue Increases

Deferred revenue as of July 31, 2017, was $240.8 million, an increase of 32 percent from the previous year.

However, Box remains in "growth" mode, which in financial code means it hasn't yet hit black ink.

Box showed an operating loss of $39 million, or 32 percent of revenue. This compares to its operating loss of $37.9 million, or 40 percent of revenue, in the second quarter of fiscal 2017.

As for Q3 FY18 guidance, the company said it expects revenue to be in the range of $128 million to $129 million.

Significant business and product accomplishments for Box during the quarter included:

  • hiring of a new COO, Stephanie Carullo, who has 25 years of enterprise go-to-market experience at leading companies such as Apple, IBM and Cisco;
  • expansion its partnership with Microsoft to co-sell Box with Azure;
  • launching of its first AI and machine learning capabilities--advanced image recognition--through an integration with Google Cloud Vision;
  • growing of its paying customer base to 76,000 businesses and added or expanded deployments with companies that include Amazon, Delta Global Services (a subsidiary of Delta Air Lines), Freedom Financial Network, the Met Police Service of London, and United Talent Agency;  
  • launching of Box Drive, which it describes as the only unlimited cloud drive built for the enterprise, to power collaboration streamed directly from the desktop; and
  • introduction of Box Elements, a new set of tools for businesses of all sizes to bring the Box content experience into any application built with Box Platform.

Box grew its paying customer base to 76,000 businesses, and added or expanded deployments with leading companies, including Amazon, Delta Global Services (a subsidiary of Delta Air Lines), Freedom Financial Network, the Met Police Service of London and United Talent Agency.  

The company will stage its annual BoxWorks 2017 conference in San Francisco Oct. 11-12. The guest speaker lineup includes Microsoft, IBM, Dr. Neil deGrasse Tyson, Dr. Jill Biden, former Obama administration advisor Valerie Jarrett, and others.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor of Features & Analysis at eWEEK, responsible in large part for the publication's coverage areas. In his 12 years and more than 3,900 stories at eWEEK, he...