Box posted a 43% jump in second-quarter revenue and raised its growth forecast for the fiscal year, the latest sign that the cloud storage and collaboration service is adding new companies to its customer list and attracting more users at each company.
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The company's net loss widened, however, as Box continued to spend heavily on marketing to help grab a larger share of the market for enterprise services.
Box's results were better than analysts expected, sending its shares up 3% to $14.70 in after-hours trading.
The three months ended July "was a breakout quarter for Box across multiple dimensions," said Aaron Levie, Box's chief executive, during a conference call Wednesday. "We did deals with thousands of new and existing customers."
Box, which went public January, saw its shares slide amid signs of slowing growth and little sign that its losses would end soon. The stock continues to trade well below the $23.23 it reached at the end of its first day of trading.
The Los Altos, Calif., company is best known for a Web service that lets users save files online and then access and share them from multiple devices. Box said it topped 39 million registered users in the second quarter, up roughly two million from the first quarter ended in April. Most users take advantage of a free version of the service; Box said the percentage of paid users was about 11% in the second quarter.
Box has been gradually turning entrenched enterprise technology players into partners. In June, the company struck a multifaceted deal with International Business Machines, whose sales representatives will help resell Box services. Box, in turn, may use IBM's data centers to host services in countries where it doesn't have its own facilities.
IBM is becoming a Box customer, too, Mr. Levie said. "When fully rolled out, this will be one of our largest deployments to date," he said.
Where traditional software companies book revenue as sales deals are closed, accounting rules force cloud companies like Box to recognize revenue gradually. As a result, many such startups post net losses.
Mr. Levie, while stopping short of predicting a net profit, said Box remained committed to achieving positive free cash flow in the quarter ending January 2017.
In the latest quarter, Box reported a net loss of $49.8 million, or 42 cents a share. In the year-earlier period, the loss came to $38.3 million, or $2.71 a share on fewer shares outstanding. Revenue rose to $73.5 million from $51.4 million.
Excluding stock-based compensation and other items, Box reported an adjusted loss per share of 28 cents. Analysts on that basis had predicted a per-share loss of 29 cents on revenue of $70 million, according to Thomson Reuters.
Box issued third-quarter guidance for revenue in the range of $76 million to $77 million, compared with analysts' average estimate of $74 million.
For the year, Box projected revenue of $295 million to $297 million, up from a prior projection of $286 million to $290 million.
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