Box Raises Annual Sales Outlook on File-Sharing Demand
(Bloomberg) -- Box Inc. projected quarterly and annual sales that narrowly topped analysts’ estimates, signaling that businesses are looking for solutions to collaborate and share information remotely in the midst of the coronavirus pandemic.
The software maker raised its annual revenue forecast to as much as $770 million. Analysts, on average, expected $765 million, according to data compiled by Bloomberg. Sales in the period that ends Oct. 31 will be $193 million to $195 million, the Redwood City, California-based company said Wednesday in a statement. Analysts had projected $193 million. The shares rose about 8.5% in extended trading after closing at $19.29. The stock has climbed 15% this year.
Chief Executive Officer Aaron Levie has been under shareholder pressure to goose the company’s sales growth and profitability. The software maker reached an agreement with activist investor Starboard Value LP to add more independent directors to the company’s board. Levie has tried to sell new products to Box’s large user base, including a security program called Box Shield that the company recently updated with new features. Box also announced an expanded partnership with Alphabet Inc.’s Google Cloud Platform.
“We stabilized the growth rate, which, for this environment, we feel pretty good about,” Levie said in an interview. “There are a lot of existing customers expanding to more use cases and employees.”
In the period ended July 31, Box reported an adjusted profit of 18 cents a share, compared with break-even profitability in the same period a year earlier. Revenue in the fiscal second quarter was $192 million, up 11% from a year earlier.
Demand is still mixed, Levie said, with large enterprises procuring Box software suites while small and mid-sized businesses pull back. The company has also seen “softness” in international markets, he said.
Box projected a profit, excluding some items, of 56 cents to 60 cents a share this fiscal year, higher than analysts’ expectations and the company’s forecast in May. In the current period, adjusted profit will be 13 cents to 15 cents a share, while Wall Street had expected 13 cents. Levie has tried to reduce Box’s sales and marketing costs, as well as other expenses, to improve the company’s operating margin -- a key goal of Starboard.
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