Box Slips Despite Strong Sales Growth as Foreign Exchange Rates Pressure Profit

For the quarter, Box (ticker: BOX) reported revenue of $238.4 million, up 18% from a year ago, and ahead of the company’s guidance range of $233 million to $235 million. Non-GAAP profit was 23 cents a share, just below the forecast of 24 to 25 cents a share.

Box noted reported results include a negative impact of 3 cents a share from foreign exchange headwinds. Under generally accepted accounting principles, the company lost 6 cents a share in the quarter.

Remaining performance obligations were $1 billion, up 16% from a year ago, reflecting 6 percentage points of headwind from currency. Billings were $172.2 million, up 9%, and inclusive of a currency exchange rate hit of 9 percentage points. Net retention rate, a measure of repeat business, was 111%, up from 103% a year ago.

For the July quarter, Box is projecting revenue of $244 million to $246 million, slightly above the Street at $243.7 million, with a non-GAAP profit of 27 to 28 cents a share, consistent with the Street consensus at 27 cents. On a GAAP basis, the company expects to lose a penny or two per share.

For the January 2023 fiscal year, Box now sees revenue of $992 million to $996 million, narrowing the forecast from the prior range of $990 million to $996 million. On a non-GAAP basis, the company now sees a profit of $1.11 to $1.15 a share, increasing both ends of the range by a penny.

CEO Aaron Levie said in an interview that other than the currency drag, it was “a strong quarter overall.”

He said Box has a healthy new business pipeline, and so far hasn’t seen any impact on its business from macroeconomic issues.

“We’re built for being super cost conscious,” says Levie. “We’ve already been taking an ROI-oriented lens to every dollar we spend in the business.”

Box in late trading is down 1.8%, to $25.59.

Write to Eric J. Savitz at eric.savitz@barrons.com