Box stock skyrockets after second-ever earnings report

Aaron Levie ReutersBox CEO Aaron Levie

Box reported its second quarter earnings on Wednesday, the company’s second-ever earnings report since going public in January.

These are the most important numbers, versus Wall St. expectations:

  • EPS: a loss of $US0.28 per share vs. a loss of $US0.31 per share
  • Revenue: $US66 million vs. $US63.70 million

In the first quarter, Box’s stock price took a huge hit after hours following what looked to be a miss on its earnings. But it turned out analysts had used the wrong number of shares in their estimates, and Box had actually beat by $US0.30 a share. Still, investors weren’t impressed, sending its shares down by as much as 17% at one point.

Box is an interesting company to keep an eye on. It’s one of the fastest growing enterprise software companies, but also has one of the highest burn rates, especially in sales and marketing costs.

In 2013, it spent 168% of its revenue on sales and marketing, but it dropped those numbers to around 99% of total revenue in late 2014. In the previous quarter, it brought it down to a more modest 80% of total revenue, but it was still growing at a pace higher than the revenue was, which caused some concerns.

The big question mark is whether this spending will translate to any meaningful, large enterprise contracts. Over the past three months, Box announced a deal with the Department of Justice, a positive sign that the government is trusting Box as a file sharing repository, and also a school-wide deployment at Japan’s Waseda University, reflecting its international growth.

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