Box, Inc.


BOX

reported fiscal third-quarter 2021 earnings per share of 20 cents, which surpassed the Zacks Consensus Estimate of 14 cents. The company recorded a loss of $0.01 per share a year ago.

Total revenues came in at $196 million, surpassing the consensus mark by 1.01%. The top line increased 10.6% year over year and was above the guided range of $193-$195 million.

Despite strong fiscal third-quarter results, its share price was down 0.8% due to weaker-than-expected revenue guidance.

The global shift to work from home due to the coronavirus crisis increased the demand for Box’s online collaboration tools.

Also, strength in financial services and health-care organizations’ sales aided growth for the quarter. In addition, strong demand for its add-on products and high volume of large enterprise deals were positives.

The company’s rich technology partner ecosystem will continue to be a strong driving force behind growth.

Let’s delve deeper into the numbers.

Billings and Deferred Revenues

Billings were $185.5 million, up 7.9% year over year. Deferred revenues were $354.4 million, up 8.8% from the year-ago quarter.

Operating Results

Non-GAAP gross profit for the fiscal third quarter was $143.9 million, up 14.8% year over year.

Box’s operating expenses (general & administrative, sales & marketing, as well as research & development) of $141.8 million decreased 11.4% year over year.

On a non-GAAP basis, the company recorded operating income of $35.2 million versus operating loss of $0.5 million a year ago. Operating margin was 18%, up 1,800 basis points year over year.

Balance Sheet and Cash Flow

At quarter-end, cash and cash equivalents, and accounts receivables balance were $275.4 million and $115.7 million compared with $271.9 million and $123 million, respectively, at fiscal second quarter-end.

Net cash provided by operations was $45.1 million and free cash flow was $26.2 million for the fiscal third quarter.

Guidance

For the fourth quarter of fiscal 2021, Box expects revenues between $196 million and $197 million. The Zacks Consensus Estimate for the same is pegged at $198.7 million. On a non-GAAP basis, the company projects earnings per share within 16-18 cents. The corresponding Zacks Consensus Estimate is pegged at 15 cents per share. GAAP loss per share is expected within 8-6 cents.

For fiscal 2021, Box’s revenue guidance is expected within $768-$769 million. The Zacks Consensus Estimate for the metric is pegged at $768.7 million. On a non-GAAP basis, it projects earnings per share in the range of 64-66 cents. The consensus mark for the same is pegged at 58 cents per share. GAAP loss per share is expected in the range of 32-30 cents.

Zacks Rank and Stocks to Consider

Currently, Box has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include

Marchex


MCHX

,

Overstock.com


OSTK

and

Maxim Integrated Products, Inc.


MXIM

, each carrying a Zacks Rank #2 (Buy). You can see


the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here


.

Long-term earnings growth for Marchex, Overstock.com, and Maxim is currently projected at 15%, 20% and 10%, respectively.

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