Box: Fiscal 1Q16 Financial Results

 Box, Inc. announced financial results for the first quarter of fiscal 2016, which ended April 30, 2015.

“Faced with rapid technological change, enterprises today are going digital by adopting cloud platforms like Box to reimagine how they engage with customers and transform how their employees work,” said Aaron Levie, co-founder and CEO. “As evident from our healthy customer adoption and strong billings growth of 58% year over year, Box has a significant opportunity to help organizations in every industry navigate this shift.”

“We are proud to have achieved revenue growth of 45% year over year, driven by our continued success moving up market and closing more enterprise deals,” said Dylan Smith, co-founder and CFO. “While we continue to focus on investing in technology innovation and growth, we also remain committed to achieving positive free cash flow. Our Q1 results show the progress we have made toward this milestone as we demonstrated significant improvement in our operating cash flow.”

Fiscal First Quarter of Fiscal 2016 Highlights

• Revenue was $65.6 million, an increase of 45% from the first quarter of fiscal 2015.
• Billings were $69.8 million, an increase of 58% from the first quarter of fiscal 2015.
• Non-GAAP operating loss was $32.6 million, or 50% of revenue. This compares to non-GAAP operating loss of $31.3 million, or 69% of revenue, in the first quarter of fiscal 2015. GAAP operating loss in the first quarter of fiscal 2016 was $46.6 million, or 71% of revenue. This compares to GAAP operating loss of $37.8 million, or 83% of revenue, in the first quarter of fiscal 2015.
• Non-GAAP net loss per share attributable to common stockholders, basic and diluted, was $0.28 on 119.4 million shares outstanding, compared to a net loss per share of $2.32 in the first quarter of fiscal 2015 on 13.7 million shares outstanding. GAAP net loss per share attributable to common stockholders, basic and diluted, in the first quarter of fiscal 2016 was $0.40, compared to a net loss per share of $2.81 in the first quarter of fiscal 2015.
• Net cash used in operating activities totaled $7.2 million, excluding $25.0 million in restricted cash used to secure a line of credit for the newly leased Redwood City HQs. This compares to $23.5 million in the first quarter of fiscal 2015.
• Cash, cash equivalents and marketable securities were $284.0 million as of April 30, 2015. In addition, restricted cash of $28.4 million was primarily related to leased facilities.

Business Highlights (for the quarter ended April 30, 2015 unless otherwise noted)

Healthy Customer Growth:

• Added 2,000+ customers and now have more than 47,000 customers globally.
• Grew paying customers to include more than 51% of the Fortune 500 and more than 27% of the Global 2000.
• Surpassed 37 million registered users. The number of paying users grew 70% compared to the first quarter of fiscal 2015 and now makes up more than 10% of total users.

Execution in Box for Industries:

• Announced Box for Financial Services.
• Hired Sonny Hashmi, previously the CIO of the General Services Administration, to lead Box’s efforts with the Federal Government.
• Announced a new deployment with the U.S. Department of Justice in May 2015.
• Selected by the Government Digital Service in the UK, the digital arm of the British government, in June 2015 to power its content sharing and collaboration across government departments.

Enterprise Innovation and Investment:

• Launched Box Enterprise Key Management, a patent-pending solution that enables organizations to collaborate in the cloud, while maintaining full control over the encryption keys.
• Completed acquisition of Subspace to help extend content securely to all devices.
• Announced the acquisition of Verold, a cloud-based 3D rendering technology that extends Box’s capabilities to interactive 3D content and new use cases in industries like manufacturing, retail, and consumer products.

Box Platform Developments:

• Held Box Dev, the company’s second annual developer conference, attracting third-party developers from around the world.
• Introduced Box Developer Edition, which for the first time enables Box customers and developers to tap the full power of the Box platform and create apps for millions of new users.
• Introduced the Box Platform Partner Program and announced up to $40 million to be invested by Bessemer Venture Partners and Emergence Capital Partners in start-ups building on the Box platform.
• Expanding Partner Ecosystem:
• Introduced deeper Microsoft integrations with Box for Office 365 and Box for Windows 10.
• Delivered new integration with Google Android for Work and released a new integration with Slack.

Technology Leadership:
Announced T3, a new framework to speed the development of large-scale JavaScript applications; built by the Box Engineering team and open sourced for the benefit of the broader tech community.

Outlook

• Q2 FY16 Guidance: Revenue is expected to be in the range of $69 to $70 million, and non-GAAP operating margin is expected to be in the range of (49%) to (51%). Weighted average diluted shares outstanding is expected to be approximately 120 million.
• Full Year FY16 Guidance: Revenue is expected to be in the range of $286 to $290 million, compared to previous guidance of $281 to $285 million. Non-GAAP operating margin is expected to be in the range of (49%) to (51%), compared to previous guidance of (50%) to (52%). Weighted average diluted shares outstanding is expected to be approximately 122 million.