Box (BOX) reported earnings Wed 2 Dec 2015 (a/h)

** charts before earnings **

 

** charts after earnings **

 

Box reports EPS in-line, beats on revs; guides Q4 revs just above consensus; raises margin guidance :

• Reports Q3 (Oct) loss of $0.31 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of ($0.31); revenues rose 38.1% year/year to $78.7 mln vs the $76.76 mln Capital IQ Consensus. Billings +37% to $89.4 mln.
• Co issues upside guidance for Q4, sees Q4 revs of $81-82 mln vs. $80.82 mln Capital IQ Consensus; non-GAAP operating margin (43-44%).
• Raises FY16 non-GAAP op. margin to -46% from (47-49%).

Box (BOX) : 4-month performance

Box (BOX), 3-week performance

Box (BOX) : 2-week performance

Box (BOX) : 1-week performance

-19% first week

Box (BOX) began trading on the NYSE on 23 January 2015

Box (NYSE:BOX), a provider of online storage and file-sharing services, popped 66% on its first day of trading, raising $175 million. The debut is expected to fuel enthusiasm for other high-profile new issues this year.

Box stock priced at 14, above the estimated range, and sold 12.5 million shares. The stock peaked at 24.73 and closed at 23.23. The strong performance came despite Box showing huge losses on the bottom line.

Box's founders, CEO Aaron Levie and CFO Dylan Smith, take turns striking a ceremonial bell Friday at the New York Stock Exchange.

30-year-old Box CEO Aaron Levie

Fast Growth, Big Losses
Box revenue rose 80% to $153.8 million for the nine months ended Oct. 31. But the company lost a net $121.5 million. Box spent $152.4 million on sales and marketing in that span, up 23% from a year earlier. Another $48.4 million went for research and development, up 49%.
Box says its annual recurring revenue — the value of subscription contracts likely to recur over 12 months — is $225 million .

Box is spending heavily to draw in more customers, with the idea being it will turn profitable down the road. It's a recurring theme for tech IPOs.

Box says it has more than 44,000 paying corporate customers or organizations and 32 million registered users. The basic service is free, with fees charged for premium services.

In its IPO road show to institutional investors, Box presented a long-term outline for profitability, said Francis Gaskins, founder of IPOdesktop.com and research director for Equities.com.

Another reason for investor enthusiasm is Box's transition from data storage into the broader field of enterprise content management, a category with huge market potential.
"Box is losing money now, but their long-term financial goal is 20%-to-25% free cash flow on revenue," he said.

Boxed In By Rivals?
Box was the first IPO of a company in its category, albeit one with many rivals. They include Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Dropbox, which is expected to IPO this year.

Eleven new issues are planned for the week of Jan. 26, expected to raise about $1 billion. That's the most in one week since the 13 IPOs in the first week of October that raised $2.9 billion, according to IPO research firm Ipreo.

Among the IPOs coming is Shake Shack, which looks to raise $75 million. The fast-casual burger chain will follow Habit Restaurants (NASDAQ:HABT), which popped 120% on its Nov. 20 debut, closing at 40.25. The stock priced at 18 and currently trades near 30.

Another closely watched IPO in the coming week is Spark Therapeutics, which is developing gene therapies for retinal dystrophies and hematologic disorders. It plans to raise $88 million.
Nine of the 11 IPOs slated for the coming week are in the health care field, maintaining the hot streak from 2014.

Last year was the best IPO market since 2001. The year ended with 273 IPOs, up 23% from the prior year, according to Renaissance Capital. Proceeds leaped 55% to $85 billion, led by Alibaba (NYSE:BABA), which raised $22 billion in its record-setting IPO.

Data storage firm Box files for IPO

(Reuters) - Data storage company Box Inc filed with U.S. regulators on Monday to raise up to $250 million in an initial public offering of common stock.

The Los Altos, California-based company said Morgan Stanley, Credit Suisse, JPMorgan and BMO Capital Markets were among the underwriters for the IPO.

Box intends to list its Class A common stock on the New York Stock Exchange under the symbol "BOX."

Box CEO Aaron Levie

The company began as an academic project of CEO Aaron Levie, who launched it from his dorm room at the University of Southern California's Marshall School of Business in 2005. Box focuses on business customers, and says over 200,000 firms use its technology, including LinkedIn (LNKD), Pandora (P) and Procter & Gamble (PG).

Key numbers:

• $124 million : That's the amount of revenue Box reports for the year ending January 31, 2014. It compares to around $59 million for fiscal 2012 and just $21 million for fiscal 2011.
• $169 million : That's how much Box lost last year. The only real upside is that its losses are growing at a lower rate than are its revenues increasing. For example, Box had a net loss of $112.5 million for fiscal 2012 and around $50 million for fiscal 2011. As for cost increases, Box more than doubled both R&D and sales & marketing expenses last year.
• 174,000 : That's Box's number of billings last year, compared to 85,700 the prior year.
• $109 million : That's how much cash Box has on hand. Guess that means it hasn't yet tapped any of the $100 million in Series F funding that it raised at the end of last year.
• 25.5% : That's the percentage of Box currently owned by venture capital firm Draper Fisher Jurvetson, which led the company's $1.5 million Series A round back in 2006. Other significant shareholders include U.S. Venture Partners (13%), General Atlantic (8.4%), Scale Venture Partners (7.4%), Bessemer Venture Partners (5.6%) and Meritech Capital Partners (5.1%).

The next wave of potentially hot IPOs

SAN FRANCISCO – Just as one high-tech breakthrough often paves the way for the next big thing, initial public offerings in the tech world sometimes follow the same pattern.

Twitter’s scintillating stock market debut punctuated a procession of highly anticipated coming-out parties during the past 2 1/2 years, providing a springboard for a new generation of rapidly growing startups to make the leap to Wall Street.

The next wave of potentially hot IPOs includes Airbnb, Square, Spotify, Dropbox, Uber, Snapchat, Pinterest, Box, Scribd, Flipboard and King.com. Most of their services are tailor-made for smartphones and tablets, a crucial characteristic that helped feed the rabid demand for Twitter’s stock in its initial public offering this month.

Despite Twitter’s unprofitable history, the company is now worth about $29 billion – a valuation that has enriched its founders, employees and early investors.

The message service’s successful IPO even proved that it’s irrelevant whether companies are profitable, he says.

“Twitter just made it clear that the IPO window is open, and a lot of success can be had,” says Ira Rosner, an attorney and shareholder for Greenberg Traurig, a law firm that helps prepare companies for IPOs.

“There is no question that a successful offering encourages other offerings,” he says. “It gets people excited, and it creates buzz.”

Even before Twitter’s IPO, good vibes were rippling through the stock market as the Dow Jones industrial average and Standard & Poor’s 500 indexes repeatedly set new highs. The fertile conditions have produced 199 IPOs in the U.S. this year, according to the research firm Renaissance Capital.

At the current pace, 2013 is on track to be the biggest year for IPOs in a decade.

The string of IPOs that helped fuel investors’ interest in rapidly growing Internet companies began with the May 2011 debut of professional network LinkedIn Corp.

Other online services that followed LinkedIn into the stock market include online review site Yelp, Internet radio station Pandora Media, daily deal-maker Groupon, online game-maker Zynga and Facebook.