Business collaboration app Box just reported its first earnings on Wednesday.
Investors were not pleased, sending Box shares down as much as 17% after hours.
Here are the most important numbers, versus Wall Street expectations:
- EPS: a loss of $1.65 per share ($2.64 GAAP loss) vs. $1.17 per share — however, Box CEO Aaron Levie said that analysts were using the wrong share count in their estimates, and that Box actually beat (more detail below)
- Revenue: $62.6 million vs. $57.99 million
On the earnings call, CEO Aaron Levie mentioned that analysts used the wrong share count when predicting EPS. If they'd use the right number of shares, their estimates would have been a loss of $1.99 per share, which Box beat by $0.30.
For a company of its size (~$2.5 billion market cap), Box has drawn a lot of attention because of its unusual IPO process. More than anything, Box's earnings will serve as a bellwether for other software-as-a-service (SaaS) companies looking to go public this year.
It's a good sign that sales grew 61% from last year. Its non-GAAP operating loss has also improved from $35.2 million to $32.2 million year-over-year, too.
Also, Box gave revenue guidance in the range of $63 to $64 million, slightly higher than estimates in between $60 to $62 million.
Box received a lot of flak for its incredibly high sales and marketing costs relative to total revenue before going public. In its S1, Box had indicated its S&M cost was 94% of its revenue, after spending 166% of it on S&M two years before that. For this quarter, those numbers have improved quite a bit to 80.4%.
Box also had over 44,000 paying businesses and a roughly 130% retention rate when it went public. It now has 45,000 paying customers and 126% retention rate, Box said.
Yet, investors still don't seem to be impressed. Box's shares are still down more than 13% after hours because of big growth in operating expenses, which grew to $94 million, up 33% from last year, while revenue only grew to $63 million.
