Box (BOX) Tops Q2 EPS by 1c, Revenues Beat; Offers FY19 EPS/Revenue Outlook

Box (NYSE: BOX) reported Q2 EPS of ($0.05), $0.01 better than the analyst estimate of ($0.06). Revenue for the quarter came in at $148.2 million versus the consensus estimate of $146.54 million.

• Revenue for the second quarter of fiscal 2019 was a record $148.2 million, an increase of 21% (ASC 606 in fiscal 2019 compared to ASC 605 in fiscal 2018) and 23% (ASC 605 in fiscal 2019 compared to ASC 605 fiscal 2018) from the second quarter of fiscal 2018.
• Deferred revenue as of July 31, 2018 was $301.5 million, an increase of 25% (ASC 606 to ASC 605) and 27% (ASC 605 to ASC 605) from July 31, 2017.
• Billings for the second quarter of fiscal 2019 were $162.8 million, an increase of 17% (ASC 606 to ASC 605 and ASC 605 to ASC 605) from the second quarter of fiscal 2018.
• GAAP operating loss in the second quarter of fiscal 2019 was $37.2 million, or 25% of revenue, under ASC 606, and $40.1 million, or 27% of revenue, under ASC 605. This compares to GAAP operating loss of $39.0 million, or 32% of revenue, in the second quarter of fiscal 2018.
• Non-GAAP operating loss in the second quarter of fiscal 2019 was $6.5 million, or 4% of revenue (ASC 606), and $9.4 million, or 6% of revenue (ASC 605). This compares to a non-GAAP operating loss of $14.9 million, or 12% of revenue, in the second quarter of fiscal 2018.
• GAAP net loss per share, basic and diluted, in the second quarter of fiscal 2019 was $0.27 (ASC 606) and $0.29 (ASC 605) on 140.7 million shares outstanding. This compares to a GAAP net loss per share of $0.30 in the second quarter of fiscal 2018 on 133.0 million shares outstanding.
• Non-GAAP net loss per share, basic and diluted, in the second quarter of fiscal 2019 was $0.05 (ASC 606) and $0.07 (ASC 605). This compares to non-GAAP net loss per share of $0.11 in the second quarter of fiscal 2018.
• Net cash used in operating activities in the second quarter of fiscal 2019 totaled negative $1.3 million. This compares to net cash used in operating activities of negative $9.8 million in the second quarter of fiscal 2018.
• Free cash flow in the second quarter of fiscal 2019 was negative $10.3 million. This compares to negative $15.0 million in the second quarter of fiscal 2018.

“Driving deeper relationships with customers such as JLL, Nationwide and Societe Generale, as well as focusing on strategic solution sales, led to another quarter of strong attach rates for add-on products like Box Governance, Zones and Platform,” said Aaron Levie, co-founder and CEO of Box. “Our approach to providing a single, neutral platform for cloud content management with enterprise-grade security and powerful workflow capabilities positions us to help the world’s largest and most regulated enterprises digitize their workplace and business processes.”

“In the second quarter, we delivered solid top line growth and improved cash flow from operations by over $8 million year-over-year,” said Dylan Smith, co-founder and CFO of Box. “Our proven ability to further capture our market opportunity while driving operational leverage positions us for long-term growth on our path to $1 billion and beyond.”

GUIDANCE:

Box sees FY2019 EPS of ($0.18)-($0.16), versus the consensus of ($0.18). Box sees FY2019 revenue of $606-608 million, versus the consensus of $606.48 million.

For earnings history and earnings-related data on Box (BOX) click here.

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