Box Earnings Meet Estimates but Fail to Impress

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Box Inc. (NYSE: BOX) reported its fiscal third-quarter financial results after the markets closed on Wednesday. The company had a net loss of $0.31 per share on $78.7 million in revenue. That compared to consensus estimates from Thomson Reuters that called for a net loss of $0.31 per share on $76.76 million in revenue.

During this quarter the company grew its paying customer base to 54,000 businesses, including 55% of the Fortune 500. At the same time it increased the number of registered users to over 41 million.

In terms of fourth quarter guidance, revenue is expected to be in the range of $81 million to $82 million, and the operating margin is expected to be in the range of negative 43% to negative 44%. The weighted average diluted shares outstanding is expected to be roughly 123 million.

Cash, equivalents, marketable securities and restricted cash totaled $244.0 million at the end of the quarter.

Aaron Levie, co-founder and CEO of Box, commented on earnings:

Enterprises in every industry are moving content to the cloud by investing in modern platforms that accelerate employee productivity and replace legacy systems. 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.

Dylan Smith, Box co-founder and CFO, added:

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

Shares of Box closed Wednesday up 3.2% at $14.16, with a consensus analyst price target of $20.00 and a 52-week trading range of $10.93 to $24.73. Following the release of the earnings report, shares were initially down 4.3% at $13.55 in the after-hours trading session.

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