Cloud content management service Box Inc.’s top and bottom lines beat Wall Street expectations for the first quarter, sending its stock up sharply in after-hours trading.
Box’s revenue reached a record $117.2 million, an increase of 30% from the year-ago period, while billings increased 31% to $99.6 million. Analysts had forecast revenue of $114.7 million.
The company’s net loss widened slightly to $40.1 million but its adjusted loss of 13 cents a share beat estimates of a loss of 14 cents a share.
After the earnings were released late Wednesday, Box’s shares jumped nearly 3% to $19.25. “It was a strong quarter in terms of top line growth,” CEO Aaron Levie told Reuters. “It was another quarter of positive free cash flow, which is very important for Wall Street.”
According to Levie, Box is on track to achieve goals of reaching profitability and generating more than $1 billion in annual revenue by fiscal year 2021. For now, though, it remains focused on growing its customer base.
“We want to make sure that as we’re scaling the company we don’t need to raise outside capital, but grow the business in a completely sustainable way,” Levie said.
Box now claims 74,000 paying customers, up 3,000 from the previous quarter. It also upped its guidance for the current quarter, projecting revenue of $121 million to $122 million.
Adam Sarhan, CEO of 50 Park Investments, told Reuters that the first-quarter results showed Box is holding its own against rivals like Microsoft, Google, DropBox, and Amazon.com. Going forward, he said, the question is whether Box can hang onto its market share.
“Our strong revenue and billings growth, in combination with generating positive free cash flow, demonstrates our competitive differentiation and the strength of our business model,” Box CFO Dylan Smith said in a news release. “With our leadership position in cloud content management, loyalty of our install base, and roadmap for continued innovation, we are well positioned to achieve our $1 billion revenue target.”