Box Inc (NYSE: BOX) stock rose over 4.4% on 27th August, 2020 (as of 10:37 am GMT-4; Source: Google finance) post second quarter of FY20 performance after the company’s net loss narrowed to $7.7 million from $36.2 million, a year earlier. The company has posted better than expected results for the second quarter of FY 21 as more people opted for its online software services to manage and store content while working from home due to the COVID-19 pandemic and raised the outlook for fiscal 2021. The company has also generated more than $13 million in positive free cash flow, which is an improvement of more than $32 million versus a year ago. The company ended Q2 with RPO at $726.7 million, up 13% year-over-year. The company expects to recognize approximately 65% of the RPO over the next 12 months. The company is on track to open the first Engineering Center of Excellence outside the U.S. in the back half of this year in Poland, which will contribute to the company’s ability to scale the R&D investments more efficiently going forward. The company ended the second quarter with $272.4 million in cash, cash equivalents and restricted cash. The company generated strong cash flow from operations of $32.3 million in Q2, a $37 million improvement from negative $4.7 million a year ago.
Moreover, the company posted the non-GAAP gross margin of 73.5%, up from 71.3% a year ago and 73.1% in Q1. The company’s focus is on reducing infrastructure costs and gaining economies of scale is paying off. The company delivered the Q2 gross profit of $137.0 million, which is up 15% year-over-year outpacing the revenue growth by 400 basis points.
BOX in the second quarter of FY 21 has reported the adjusted earnings per share of 18 cents, beating the analysts’ estimates for the adjusted earnings per share of 12 cents. The company had reported the adjusted revenue growth of 11.4 percent to $192.3 million in the second quarter of FY 21, beating the analysts’ estimates for revenue of $189.56 million, according to IBES data from Refinitiv. 28% of this revenue came from regions outside of the United States, up from 25% a year ago and due to continued strength in Japan. Second quarter billings came in at $188.8 million representing 9% year-over-year growth.
The company now expects revenue of between $767 million and $770 million for fiscal year 2021, compared with its previous forecast of $760 million to $768 million. For FY ’21, the company has raising the expectations for non-GAAP operating margin to be 12% to 13% of revenue, which represents a 100 basis points higher than the previous expectations and up considerably from 1% in FY ’20.