Box: Fiscal 4Q16 Financial Results

 Box, Inc. announced financial results for the fiscal fourth quarter and full fiscal year 2016, which ended January 31, 2016.

“Fiscal 2016 was a momentous year for Box with record revenue of more than $300 million. With new products like Box Platform, Governance, and KeySafe, and major customer wins in the fourth quarter with AIG, Genentech, Bain Capital, The Home Depot and Unilever, among others, we continue to be the platform of choice as enterprises move their content to the cloud,” said Aaron Levie, co-founder and CEO. “We achieved higher operating leverage driven by our strong business model and execution, and we remain focused on expanding our customer base, increasing our scale and driving further operational efficiencies.”

“In the fourth quarter, we delivered strong year-over-year revenue growth of 36% and billings growth of 59%,” said Dylan Smith, co-founder and CFO. “These top-line results, coupled with our positive cash flow from operations, reflect our progress towards achieving positive free cash flow in the fourth quarter of fiscal year 2017. With strong strategic partnerships, expanding cross-selling opportunities, and a large market opportunity still ahead of us, we are well-positioned for both continued growth and future profitability.”

Fiscal Fourth Quarter Financial Highlights

• Revenue for the fourth quarter of fiscal 2016 was a record $85.0 million, an increase of 36% from the fourth quarter of fiscal 2015.
• Billings in the fourth quarter of fiscal 2016 were a record $130.2 million, an increase of 59% from the fourth quarter of fiscal 2015.
• Non-GAAP operating loss in the fourth quarter of fiscal 2016 was $31.1 million, or 37% of revenue. This compares to non-GAAP operating loss of $32.2 million, or 51% of revenue, in the fourth quarter of fiscal 2015. GAAP operating loss in the fourth quarter of fiscal 2016 was $49.6 million, or 58% of revenue. This compares to GAAP operating loss of $45.8 million, or 73% of revenue, in the fourth quarter of fiscal 2015.
• Non-GAAP net loss per share attributable to common stockholders, basic and diluted, in the fourth quarter of fiscal 2016 was $0.26 on 123.3 million shares outstanding, compared to $1.65 in the fourth quarter of fiscal 2015 on 20.0 million shares outstanding. GAAP net loss per share attributable to common stockholders, basic and diluted, in the fourth quarter of fiscal 2016 was $0.41 on 123.3 million shares outstanding, compared to $2.64 in the fourth quarter of fiscal 2015 on 20.0 million shares outstanding.
• Net cash generated from operating activities in the fourth quarter of fiscal 2016 totaled $4.9 million, including $6.8 million of tenant improvement reimbursement for our new HQs, compared to a net cash use of $15.6 million in the fourth quarter of fiscal 2015.

Fiscal Year 2016 Financial Highlights

• Revenue was $302.7 million for fiscal year 2016, an increase of 40% from $216.4 million in fiscal year 2015.
• Billings in fiscal year 2016 were $369.1 million, an increase of 50% from $246.4 million in fiscal year 2015.
• Non-GAAP operating loss in fiscal year 2016 was $134.3 million, or 44% of revenue. This compares to non-GAAP operating loss of $127.2 million, or 59% of revenue, in fiscal year 2015. GAAP operating loss in fiscal year 2016 was $201.0 million, or 66% of revenue. This compares to GAAP operating loss of $166.7 million, or 77% of revenue, in fiscal year 2015.
• Non-GAAP net loss per share attributable to common stockholders, basic and diluted, in fiscal year 2016 was $1.12 on 121.2 million shares outstanding, compared to $8.13 in fiscal year 2015 on 15.9 million shares outstanding. GAAP net loss per share attributable to common stockholders, basic and diluted, in fiscal year 2016 was $1.67 on 121.2 million shares outstanding, compared to $11.48 in fiscal year 2015 on 15.9 million shares outstanding.
• Net cash used in operating activities in fiscal year 2016 totaled $66.3 million, compared to $84.9 million in fiscal year 2015.
• Cash, cash equivalents, marketable securities, and restricted cash were $221.1 million as of January 31, 2016, of which $28.0 million was restricted.

Customer Growth and Momentum:

• New or expanded deployments with enterprises like AIG, American Family Insurance, Bain Capital, Campbell Soup company, The GAP, Genentech, The Home Depot, Intuit, Live Nation, Panasonic Automotive Systems and Unilever.
• Grew paying customer base to 57,000 businesses, including 59% of the Fortune 500.

Product Innovation and Strategic Partnerships:

• Generated traction in the market through the IBM partnership, leading to a new extended agreement that has the potential to last for a decade or more with additional sales commitments from IBM.
• Announced the availability of two new product integrations with IBM Case Manager and IBM Datacap, adding to previously announced integrations with IBM Content Navigator and IBM StoredIQ.
• Announced a deeper partnership with Microsoft, unveiling three new integrations with Office 365 that enable seamless collaboration across devices and platforms. Box now supports integrations with Microsoft Office Online with real time co-authoring, Office for iOS and Outlook.com.
• Introduced Box for Enterprise Mobility Management (EMM) with Microsoft Intune, which provides cloud-based mobile device management, mobile application management and PC management capabilities.
• Launched a new Box for Windows 10 universal application to provide users with a seamless content experience across their Windows 10 devices.
• Announced new solutions with Salesforce, which will provide Box customers an all-new set of ways to access and share files from within Salesforce.
• Introduced Box KeySafe, a new software-based solution that allows customers to easily manage their own encryption keys in the cloud.
• Announced Box for iOS 9 to take advantage of the new features available in iOS 9 and enhance workforce productivity, collaboration and efficiency on the go.

Q1 FY17 Guidance:
Revenue is expected to be in the range of $88 million to $89 million, and non-GAAP earnings per share is expected to be in the range of ($0.24) to ($0.23). Weighted average diluted shares outstanding is expected to be approximately 124 million.

Full Year FY17 Guidance:
Revenue is expected to be in the range of $390 million to $394 million and non-GAAP earnings per share is expected to be in the range of ($0.85) to ($0.83). Weighted average diluted shares outstanding is expected to be approximately 127 million.