Why Box Inc (NYSE: BOX) stock is crashing

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Box Inc (NYSE: BOX) stock fell over 8.3% on June 4th, 2019 (as of 12:22 pm GMT-4; Source: Google finance) after the company reported weak revenue guidance for the full year 2020. However, the company for the first quarter 2020 has surpassed estimates and second quarter outlook came in line with street expectations. Billings rose modestly by 1% to $118.4 million. Box continues the unfavorable trend from last quarter where Q1 billings growth (1%) came in lower than the revenue growth (16%), which is a huge concern for investors. The company continues to experience delays in closing larger deals as the sales cycles are taking longer-than-anticipated which has resulted in lower revenue guidance for the full year.

Why Box Inc (NYSE: BOX) stock is crashing

Moreover, during the first quarter, BOX delivered wins and expansion with major customers including BT Group, Blackboard, Nintendo Europe, Remy Cointreau Group and Dignity Health. The free cash flow was positive $13.4 million, which is an improvement of $6.2 million compared to Q1 last year. In the quarter, BOX has closed three deals worth more than $1 million versus one a year ago, six deals over $500,000 versus four a year ago and 33 deals greater than $100,000 versus 35 a year ago.

BOX in the first quarter of 2020 has reported the adjusted loss per share of 3 cents, beating the analysts’ estimates for the adjusted loss per share of 5 cents. The company had reported the adjusted revenue growth of 16 percent to $163 million in the first quarter of 2020, beating the analysts’ estimates for revenue of $161.45 million. The revenue grew as the company continues to experience strong demand from existing clients. Further, the company is seeing good traction for add-on products from existing customers.

For the second quarter 2020, the company expects revenue to be in the range of $169-170 million and non-GAAP loss per share to be in the range of $0.02 to $0.01. The analysts are expecting top line to come in at $170.8 million, slightly above what Box had forecasted. However, a 2 cent loss per share expected is in line with the firm’s estimates.

For the full-year fiscal 2020, the company has lowered its revenue expectations from the prior outlook. The revenue is now expected to be between $688-692 million compared to last quarter’s guidance of $700-704 million. The revised sales expectations is lower than the estimates of $701.91 million. The adjusted earnings per share is now projected to be in the range $0.00-0.02, better than the prior outlook of 3 cent loss to 1 cent profit. The earnings outlook has also surpassed analyst expectations of 2 cent loss.

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