Box Stock Hops Up 12 Percent as Earnings Beat Projections

Box recorded its first positive operational cash flow as a public company in Q4 2016, with $5 million to the good.

Box has been a publicly traded company for nearly 14 months, since its initial public offering on Jan. 23, 2015. It is still in "growth" mode, despite having reached its 10th birthday last year--which in financial code means it hasn't yet hit black ink.

As of March 9, when it reported its quarterly earnings and first fiscal year results, the cloud storage and collaboration tools provider still hadn't reached that goal. But it continues to plod steadily toward financial high ground, so investors are keeping their fingers crossed.

After all, the Redwood City, Calif.-based company has taken quite a bit of investment funding during its tenure: $558.9 million, according to Crunchbase. Despite a plethora of competitors in the enterprise cloud space--such as Dropbox, Google, Microsoft, and a host of others--the company still seems on track to eventually get to the Promised Land of Profitability.

Revenue up a Healthy Amount

Box on March 9 reported its revenue at $303 million for fiscal year 2016, up a healthy 40 percent year-over-year. Billings in fiscal year 2016 were $369.1 million, also a sharp increase of 50 percent from fiscal year 2015.

Notable is the fact that Box recorded its first positive operational cash flow as a public company in Q4 2016, with $5 million to the good. Bankers, creditors and CFOs like that sort of thing.

Fourth-quarter revenue totaled $85 million, an increase of 36 percent from a year ago. Billings in the fourth quarter of fiscal 2016 were $130 million, an increase of 59 percent from Q4 2015.

Box stock climbed 11.8 percent in value to $14 (its IPO price) in after-hours trading, largely because the company beat Wall Street projections. Investors and analysts apparently have come to accept the company's gradually decreasing losses as a predictable occurrence. Nonetheless, Box’s stock remains down 39 percent from a year ago following a rocket-like first couple of weeks.

Box's red-ink loss in the fourth quarter was $31.1 million -- 37 percent of revenue--a 14-point improvement from its loss of $32.2 million, or 51 percent of revenue, in Q4 2015.

Growth has been steady. The company now claims to service more than 8 million users and 57,000 paying companies with secure cloud content management and collaboration. Box's mantra is that it "enables personal and commercial content to be accessible, sharable, and storable in any format from anywhere."

New Product, Deployments in Q4

Box claimed new or enhanced deployments in Q4 with enterprises such as AIG, The Home Depot, Genentech, Bain Capital and Unilever. It also relocated to a shiny new headquarters in downtown Redwood City, Calif., from its leased location in Los Altos, Calif.

The company launched a new product in Q4 2016: Box KeySafe, a new software-based solution that allows customers to manage their own encryption keys in the cloud.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...