Box's (BOX) Q4 Earnings Surpass Estimates, Revenues Miss

Box, Inc.’s (NYSE:BOX) fiscal fourth-quarter 2019 adjusted income was reported at 6 cents per share, surpassing the Zacks Consensus Estimate of 2 cents.

Total revenues came in at $163.7 million, marginally missing the consensus mark of $164.1 million. The top line increased 20% year over year but were at the lower end of the guided range of $163.5-$164.5 million.

During the fiscal fourth quarter, the company expanded its paying customer base to more than 92,000 organizations, up from 90,000 in the fiscal third quarter.

During the quarter, the company experienced weakness in the EMEA region. However, growing add-on products and its increasing customer base aided profits.

Box is currently working on enriching cloud content management and AI platforms. It has made some notable partnerships with Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT).

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

Let’s delve deeper into the numbers.

Billings and Deferred Revenues

Billings were $237.7 million, up 16% year over year. Deferred revenues were $375 million, up 17% from the year-ago quarter.

Operating Results

Box’s operating expenses (general & administrative, sales & marketing, as well as research & development) of $138.2 million increased 3.2% year over year.

On a non-GAAP basis, the company recorded operating income of $8.5 million against loss of $7.5 million a year ago. Operating margin was 5% versus (5%) in the year-ago quarter.

Balance Sheet and Cash Flow

At the end of fiscal fourth quarter, cash and cash equivalents, and accounts receivables balance were $217.5 million and $175.1 million compared with $200.1 million and $105.7 million, respectively, at the end of the fiscal third quarter.

During the quarter, cash provided by operations was $31.3 million and free cash flow amounted to $21 million.

Guidance

For the first quarter of fiscal 2020, Box expects revenues between $161 million and $162 million. The Zacks Consensus Estimate for the same is pegged at $169.8 million. On a non-GAAP basis, the company projects loss per share in the range of 6-5 cents. The corresponding Zacks Consensus Estimate is pegged at a loss of 1 cent per share. GAAP loss per share is expected within 29-28 cents.

For fiscal 2020, the company expects revenues between $700 million and $704 million. The Zacks Consensus Estimate for the metric is pegged at $732.8 million. On a non-GAAP basis, the company projects earnings per share in the range of ($0.03) to 1 cent. The consensus mark for the same is pegged at earnings of 2 cents per share. GAAP loss per share is expected within $1.06-$1.02.

Zacks Rank and Stocks to Consider

Currently, Box has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Expedia Group, Inc. (NASDAQ:EXPE) , AMETEK, Inc. (NYSE:AME) and Inphi Corporation (NYSE:IPHI) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Expedia, AMETEK and Inphi is projected to be 13.4%, 9.6% and 18.5%, respectively.

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