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Box Announces Record Third Quarter Fiscal 2016 Results

REDWOOD CITY, Calif.--(BUSINESS WIRE)--

Box, Inc. (BOX), the leading enterprise content management and collaboration platform, today announced financial results for the third quarter of fiscal 2016, which ended October 31, 2015. During the quarter, Box added over 4,000 new customers, and added or significantly expanded deployments with leading enterprises like Amgen, Westfield Corporation, Sally Beauty Holdings, Grey Global Group, Southwest Airlines, Nest Labs, and more.

“Enterprises in every industry are moving content to the cloud by investing in modern platforms that accelerate employee productivity and replace legacy systems,” said Aaron Levie, co-founder and CEO of Box. “As our strong revenue growth in Q3 indicates, Box is uniquely positioned to drive this transition. We continue to deliver innovations like Box Governance and Box Platform that differentiate us from competitors and assist our global customers to standardize on Box as their next-generation content platform.”

“In the third quarter, we delivered strong year-over-year revenue growth of 38% and billings growth of 37%,” said Dylan Smith, Box co-founder and CFO. “We continued to make significant progress towards achieving positive free cash flow in the fourth quarter of our next fiscal year.”

Fiscal Third Quarter Financial Highlights

  • Revenue for the third quarter of fiscal 2016 was a record of $78.7 million, an increase of 38% from the third quarter of fiscal 2015.
  • Billings in the third quarter of fiscal 2016 were a record of $89.4 million, an increase of 37% from the third quarter of fiscal 2015.
  • Non-GAAP operating loss in the third quarter of fiscal 2016 was $37.9 million, or 48% of revenue. This compares to non-GAAP operating loss of $34.2 million, or 60% of revenue, in the third quarter of fiscal 2015. GAAP operating loss in the third quarter of fiscal 2016 was $55.0 million, or 70% of revenue. This compares to GAAP operating loss of $44.8 million, or 78% of revenue, in the third quarter of fiscal 2015.
  • Non-GAAP net loss per share attributable to common stockholders, basic and diluted, in the third quarter of fiscal 2016 was $0.31 on 121.8 million shares outstanding, compared to $2.32 in the third quarter of fiscal 2015 on 15.0 million shares outstanding. GAAP net loss per share attributable to common stockholders, basic and diluted, in the third quarter of fiscal 2016 was $0.45 on 121.8 million shares outstanding, compared to $3.40 in the third quarter of fiscal 2015 on 15.0 million shares outstanding.
  • Net cash used in operating activities in the third quarter of fiscal 2016 totaled $17.3 million, compared to $21.7 million in the second quarter of fiscal 2016 and $19.6 million in the third quarter of fiscal 2015.
  • Cash, cash equivalents, marketable securities, and restricted cash were $244.0 million as of October 31, 2015, of which $29.1 million was restricted.

Business Highlights (through October 31, 2015, unless otherwise noted)

  • Customer Growth and Momentum:
    • Added or significantly expanded deployments with leading enterprises like Amgen, Westfield Corporation, Sally Beauty Holdings, Grey Global Group, Southwest Airlines, Nest Labs, and more.
    • Grew paying customer base to 54,000 businesses, including 55% of the Fortune 500.
    • Increased number of registered users to over 41 million.
    • Hosted nearly 5,000 attendees, representing thousands of customers, prospects, and partners from more than 15 different countries at BoxWorks 2015.

Outlook

  • Q4 FY16 Guidance: Revenue is expected to be in the range of $81 million to $82 million, and non-GAAP operating margin is expected to be in the range of (43%) to (44%). Weighted average diluted shares outstanding is expected to be approximately 123 million.
  • Full Year FY16 Guidance: Revenue is expected to be in the range of $299 million to $300 million, raised from previous guidance of $295 million to $297 million. Non-GAAP operating margin is expected to be approximately (46%), raised from previous guidance of (47%) to (49%). Weighted average diluted shares outstanding is expected to be approximately 121 million.

All forward-looking non-GAAP financial measures contained in this section titled “Outlook” exclude estimates for stock-based compensation expense, intangible assets amortization and, as applicable, other special items. While a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis, Box has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for its third quarter fiscal 2016 non-GAAP results included in this press release.

Webcast and Conference Call Information

Box’s management team will host a conference call today beginning at 2:00 PM (PT) / 5:00 PM (ET) to discuss Box’s financial results, business highlights and future outlook. A live audio webcast of Box’s third quarter fiscal 2016 earnings call will be available through Box’s Investor Relations website at www.box.com%2Finvestors&index=12&md5=44d1a9509eafa080afafc0e...">www.box.com/investors and will be available before being archived for a period of 90 days.

The access details for the live conference call are:

+ 1-888-632-3382, (U.S. and Canada), conference ID: BOXQ316

+ 1-785-424-1667 (international), conference ID: BOXQ316

A telephonic replay of the call will be available approximately two hours after the call and will run for one week. The replay can be accessed by dialing:

+ 1-800-695-1564 (U.S. and Canada)

+ 1-402-530-9025 (international)

Box has used, and intends to continue to use, its Investor Relations website (www.box.com%2Finvestors&index=13&md5=b376c34ad600e6417ce52e8...">www.box.com/investors), as well as certain Twitter accounts (@boxhq, @levie and @boxincir), as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

This press release, the financial tables, as well as other supplemental information including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, are also available on Box’s Investor Relations website. Box also provides investor information, including news and commentary about Box’s business and financial performance, Box’s filings with the Securities and Exchange Commission, notices of investor events and Box’s press and earnings releases, on Box’s Investor Relations website.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding Box’s expectations regarding its ability to achieve positive free cash flow, profitability, planned investments, planned product enhancements, as well as revenue, non-GAAP operating margin and weighted average diluted outstanding share count expectations for Box’s fourth fiscal quarter and fiscal year 2016 in the section titled “Outlook” above. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: (1) adverse changes in general economic or market conditions; (2) delays or reductions in information technology spending; (3) factors related to Box’s intensely competitive market, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by Box’s current or future competitors; (4) the development of the cloud-based Enterprise Content Collaboration market; (5) risks associated with Box’s ability to manage its rapid growth effectively; (6) Box’s limited operating history, which makes it difficult to predict future results; (7) the risk that Box’s customers do not renew their subscriptions or expand their use of Box’s services; (8) Box’s ability to provide successful enhancements, new features and...


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