Box Inc (NYSE:BOX) Slips Despite Surpassing Wall Street Expectations

Cloud storage provider Box Inc (NYSE:BOX) recently announced its Q1 earnings revealing that it managed to outperform the expectations of Wall Street analysts. However, the company’s shares took a downturn after the company revealed its earnings forecast for the second quarter.

The cloud storage firm’s shares dropped by 5 percent during Wednesday’s trading session after publicizing its forecast for the second quarter. Box expects its Q2 revenue to come in at around $146 million to $147 million in comparison to the average revenue expectation of $146.1 million. However, it seems that investors expected the company to announce a higher earnings expectation for the second quarter and they lost confidence when that failed to happen.

Aaron Levie, the CEO of Box told Reuters that he thinks investors are always expecting the company to keep raising its guidance. He stated that it made sense for the firm to do that but also revealed that Box wants to provide forecast figures that it is confident with.

Meanwhile, Box’s Q1 revenue came in at roughly $140.5 million and managed to outperform the $139.7 million revenue figure that was estimated by analysts. The revenue figure also marked a 20 percent improvement compared to the revenue that the company reported in Q1 of the previous year.

Box’s billings revenue surged to $116.7 million in the first quarter and managed to outdo Wall Street’s $113.1 million consensus estimate. FactSet revealed that the company managed to gain 3,000 paying customers and some of them are high-profile clients such as Komatsu and Dubai Airports. This means that the company has a total of 85,000 customers.

The cloud storage firm expects its adjusted loss for the second quarter of 2018 to come in between 5 and 6 cents per share. The expected figures are most likely based on how the company has been performing within the first few weeks of Q2 although Box did not go into specifics.

Box revealed that it has been doubling down on its investment in key areas such as administrative technology, compliance, and cybersecurity. The company also revealed that it plans to employ more sales personnel in line with its mission of expanding into more markets such as Canada, Germany, and Australia. The expansion is part of the company’s plan to compete more effectively with rivals such as Alphabet Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT) and Dropbox Inc (NASDAQ:DBX).

Dropbox also managed to surpass analyst expectations as revealed in its quarterly report which revealed that it managed to outperform the estimates for paying subscribers in the first quarter. Meanwhile, the net loss for box shareholders dropped to $36.6 million from $40.1 million. The company lost 7 cents per share excluding some other items.

Despite the slight decline in the company’s performance, the company’s executives remain confident in its performance in the future, especially as it works on expanding into new markets. The cloud storage provider looks forward to more growth in the future as it seeks out more opportunities to expand its influence in a highly competitive space.