Box (BOX) Q4 Earnings Beat Estimates, Revenues Increase Y/Y
Box, Inc. BOX reported fourth-quarter fiscal 2023 non-GAAP earnings per share of 37 cents, which surpassed the Zacks Consensus Estimate by 8.8%. The figure jumped 54.2% year over year.
Total revenues of $256.5 million surpassed the consensus mark of $256.3 million. The top line increased 10% year over year (15% growth on a constant currency basis).
Strength in Content Cloud and growing adoption of Enterprise Plus Suites drove the top line despite macroeconomic headwinds.
Moreover, strong deal wins with Enterprise Plus were a positive.
Box, Inc. Price, Consensus and EPS Surprise
Box, Inc. price-consensus-eps-surprise-chart | Box, Inc. Quote
Quarter in Detail
Billings were $357.1 million for the reported quarter, improving 6% year over year (9% growth on a constant currency basis).
Deferred revenues were $567 million in the fiscal fourth quarter, increasing 6% from the prior fiscal-year quarter’s reading.
BOX saw a 72% attach rate for its Enterprise Plus Suites, owing to increasing demand for multi-product suite offerings. Nearly 46% of revenues were generated from suite sales compared with 35% in the year-ago period.
Further, Box’s net retention rate was 106% at the end of the fiscal fourth quarter.
The remaining performance obligations for the reported quarter were $1.24 billion, up 16% on a year-over-year basis (21% growth on a constant currency basis).
Operating Results
Non-GAAP gross margin was 78.5%, expanding 340 bps from the same-quarter level in the previous year.
Box’s operating expenses of $175.8 million increased 4.1% year over year. As a percentage of revenues, the figure contracted 380 bps from the year-ago quarter’s level to 68.5%.
On a non-GAAP basis, BOX recorded an operating margin of 26%, which expanded 520 bps from the prior-year quarter’s level.
Balance Sheet & Cash Flow
As of Jan 31, 2023, cash and cash equivalents were $428.5 million, up from $358.1 million as of Oct 31, 2022. BOX’s short-term investments amounted to $32.8 million, down from $44.6 million in the previous fiscal quarter.
Accounts receivables amounted to $264.5 million at the end of the fiscal fourth quarter, which increased from $176.6 million at the end of the prior fiscal quarter.
Non-current debt stood at $369.35 million at the reported quarter-end compared with $368.9 million at the prior quarter-end.
Box generated $92.2 million in cash from operations in the fiscal fourth quarter, up from $69.7 million in the previous fiscal quarter.
Additionally, BOX generated a free cash flow of $74.7 million in the fiscal fourth quarter.
Guidance
For first-quarter fiscal 2024, Box expects revenues between $248 million and $250 million, suggesting a 5% rise at the high end of the range from the prior fiscal year’s reported figure. Further, the constant currency growth rate is pegged at 10%. The Zacks Consensus Estimate for the same is pegged at $260.41 million.
On a non-GAAP basis, BOX projects earnings per share of 26 to 27 cents. The guidance includes an expected foreign exchange headwind of 6 cents. The Zacks Consensus Estimate for the same is pegged at 30 cents.
The non-GAAP operating margin for the fiscal first quarter is expected to be 21%.
For fiscal 2024, Box anticipates revenues between $1.05 billion and $1.06 billion, indicating an increase of 7% from the last fiscal year’s reading at the high end of the range. Further, the constant currency growth rate is pegged at 10%. The Zacks Consensus Estimate for the stock is pegged at $1.08 billion.
On a non-GAAP basis, BOX expects earnings per share in the band of $1.42-$1.48, which includes an expected foreign exchange headwind of 14 cents. The consensus mark for the same is pegged at $1.43 per share.
The non-GAAP operating margin for the full fiscal year is expected to be 25%.
Zacks Rank & Stocks to Consider
Box currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Arista Networks ANET, Agilent Technologies A and AMETEK AME. While Arista Networks sports a Zacks Rank #1 (Strong Buy), Agilent and AMETEK carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks has lost 16.7% in the past year. The long-term earnings growth rate for ANET is currently projected at 14.2%.
Agilent’s shares have lost 7.9% in the past year. A’s long-term earnings growth rate is currently projected at 10%.
AMETEK’s shares have gained 10.3% in the past year. The long-term earnings growth rate for AME is currently projected at 8.8%.
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