Box to Wall Street: We didn't miss earnings, you guys can't count

Business collaboration app Box saw its shares plunge as much as 17% after hours following its first-ever earnings report on Wednesday.

At first, it looked like Box had missed on earnings. Wall Street estimated an non-GAAP loss of $US1.17 per share, while Box reported negative $US1.65 per share.

But it turns out Wall Street analysts counted the wrong number of shares.

“A number of news reports have quoted consensus non-GAAP EPS estimates that relied on an incorrect share count,” Box CEO Aaron Levie said as he joined his first-ever earnings call since going public in January.

“For reference, FactSet, which we believe aggregated an analyst that used the correct share count, calculated consensus non-GAAP EPS at negative $US1.99 per share, as compared to our actual Q4 results of negative $US1.65. Therefore, based on FactSet consensus, Box beat by $US0.34.”

Box said in its earnings report that its EPS were based on 20 million shares outstanding in Q4. Based on the incorrect EPS, Wall Street analysts had used 28 million shares outstanding in the past quarter.

But investors didn’t seem to respond to the change. Box’s shares are still down more than 13% after hours because of big growth in operating expenses.

The company’s operating expenses grew $US23 million (33%) from last year’s quarter, to $US94 million, while revenue grew $US24 million (61%) to $US63 million. That’s barely $US1 in additional revenue for every $US1 in additional operating expenses.

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