Box Says It Has Over 87,000 Paying Subscribers

Cloud storage provider Box on Tuesday forecast current-quarter below analysts’ estimates, clouding a strong second-quarter beat and sending its shares down nearly 4 percent in extended trading.

The company said the absence of a head for its Europe, the Middle East and Africa region took a toll on its operations.

“We were doing a search (for a new head of EMEA) for a number of months throughout the first half of the year,” Chief Executive Officer Aaron Levie said, adding that it affected Box’s ability to run its business smoothly.

The company named Chris Baker as the head of the region earlier this month.

The company expects an adjusted loss of 7 cents to 8 cents per share for the third quarter which analysts’ estimate a loss of 6 cents per share.

“We expect to have a non-GAAP profitability quarter in financial year 2019,” Levie told Reuters, adding that Box is currently in the best position it has ever been competitively.

Earlier this month, rival Dropbox Inc forecast third-quarter above Wall Street estimates, with the online storage firm earning more from a higher number of paying subscribers.

For the full-year 2019, Box forecast an adjusted loss of between 16 cents and 18 cents per share, while analysts, on average, were expecting a loss of 18 cents per share.

Box also raised the lower end of its full-year 2019 revenue forecast to $606 million (roughly Rs. 4,200 crores) from $603 million, keeping the higher end at $608 million.

The company, which also competes with Microsoft Corp’s OneDrive and Google’s Drive, had more than 87,000 paying customers in the quarter, up from 85,000 in the previous quarter.

Box’s second-quarter revenue topped Wall Street estimates, despite a rise in costs that the company has been incurring to attract new customers.

Net loss narrowed to $38.1 million, or 27 cents per share, in the second-quarter ended July 31 from $39.3 million, or 30 cents per share, a year earlier.

Excluding items, Box reported a loss of 5 cents per share, while analysts were expecting a loss of 6 cents per share.

Revenue rose 20.6 percent to $148.2 million, above estimates of $146.5 million.