Cloud storage company Box has announced its Q2 earnings results for fiscal year 2021, reporting strong growth and beating analyst expectations.
The company reported an 11% rise in revenue compared to Q2 2019, up to $192.3m. This exceeded Box’s own guidance range of $189m to $190m as well as the consensus prediction from Wall Street analysts of $189.6m.
The Box Q2 earnings announcement also saw the company report GAAP gross profit of $137m and non-GAAP gross profit of $141.1m, compared to $181.7m and $123m respectively in Q2 of the 2020 fiscal year.
Non-GAAP profits also exceeded expectations, at 18 cents a share compared to a consensus prediction of 12 cents and company guidance of 12 to 14 cents.
“Our strong Q2 results demonstrate the progress that we’ve made in delivering an excellent balance of growth and profitability, even in these uncertain times,” said Dylan Smith, co-founder and CFO of Box.
“Our heightened focus on driving expansion and renewals in our existing customer base drove strong top line results, while our focus on overall cost discipline allowed us to significantly improve operating margins and cash flow. For FY21, we now expect our non-GAAP operating margin to be 12 to 13 percent of revenue, a significant improvement from 1 percent a year ago.”
Box Q2 earnings soar as cloud use climbs
While the Box Q2 earnings have exceeded industry expectations, they are unlikely to be particularly surprising to many given the growing demand for cloud services that the pandemic and resulting shift to remote working has brought.
“The world is fundamentally different today than it was just a few months ago as organisations must support remote work and rethink their business processes in the cloud,” said Aaron Levie, co-founder and CEO of Box.
“As IT strategies are evolving from only thinking about remote work to now managing their entire future of operations and work in this new normal, our opportunity has never been greater.”
Speaking during the earnings call, Levie set out plans to continue capitalising on the growth beyond the pandemic.
“To drive greater profitability, we are focused on three key initiatives: optimising workforce expenses, improving gross margin and taking an ROI-based approach to all areas of spend,” he said.
“We have implemented greater cost discipline across the business and this is evident in our significant operating margin and cash flow improvements. With our rigorous approach to overall cost discipline, we are now committed to delivering 12% to 13% operating margin versus our previous goal of 11% to 12% for the full fiscal year, up significantly from 1% in FY ’20.
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“We laid the foundation to significantly improve our margins a year ago, and we are confident that our focus on efficient growth and cost discipline will continue to be an advantage in today’s uncertain environment and in the future when Covid-19 is behind us.”