Box, Inc. revenue surged on 27.0% and EBITDA Margin increased on 5.2 pp from -27.7% to -22.5%
02/28/2018 • About Box, Inc. (
$BOX) • By InTwits
Box, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Box, Inc. is a fast growth stock: FY2018 revenue growth was 27.0%, 5 year revenue CAGR was 53.8% at FY2018 ROIC -120%
- The company operates at negative EBITDA Margin: -22.5%
- Box, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 18.0%. Average EBITDA Margin for the same period was -42.9%. In FY2018 SBC/Revenue was even higher: 19.3%
- Box, Inc. has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.5%. At the same time it's in pair with industry average of 13.2%
- CAPEX is quite volatile: $12m in FY2018, $15m in FY2017, $73m in FY2016, $39m in FY2015, $24m in FY2014
- The company has unprofitable business model: ROIC is -120.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 27.0%. Revenue growth showed small slowdown in FY18Q4 - it was 24.3% YoY. Revenue decline was accelerating on average at -21.1 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.9 pp from 18.2% to 22.1% in 2018. EBITDA Margin stuck to a growing trend at 21.8 pp per annum in FY2014-FY2018.
Gross Margin increased slightly on 1.4 pp from 71.9% to 73.3% in FY2018. During the last 5 years Gross Margin bottomed in FY2016 at 71.2% and was growing since that time. SG&A as a % of Revenue decreased on 3.9 pp from 80.6% to 76.7% in FY2018. SG&A as a % of Revenue declined at -23.0 pp per annum in the last 5 years. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018. During FY2014-FY2018 SBC as a % of Revenue topped in FY2017 at 19.7%.
Net Income margin increased on 7.5 pp from -38.1% to -30.6% in FY2018. Net Income margin grew at 25.0 pp per annum in FY2014-FY2018.
Investments (CAPEX, working capital and M&A)
Box, Inc.'s CAPEX/Revenue was 2.3% in FY2018. The company showed big decline in CAPEX/Revenue of 15.5 pp from 17.9% in FY2015 to 2.3% in FY2018. Average CAPEX/Revenue for the last three years was 10.1%.
Accounts receivable as a % of Revenue increased slightly on 1.9 pp from 30.1% to 32.0% in FY2018. Accounts payable as a % of Revenue increased on 6.7 pp from 5.9% to 12.6% in FY2018.
Return on investment
The company operates at negative ROIC (-120.2%) and ROE (-345.5%). ROIC dropped on 33.4 pp from -86.8% to -120% in FY2018. ROE dropped on 203 pp from -143% to -346% in FY2018. During the last 5 years ROIC topped in FY2016 at -79.3% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.3x and Debt / EBITDA is . Debt surged on 13.8% while cash surged on 17.3%.
Box, Inc. has no short term refinancing risk: cash is higher than short term debt (1,104.2%).
Management team
Box, Inc.'s CEO Aaron Levie is a founder and has spent 5 years with the company. CEO total compensation was
$275,200 in FY2018 which included
$180,000 salary. The company's CFO is Dylan Smith. Dylan Smith has 7 years tenure at the company.
Insider ownership is 3.1%. Insider ownership didn't change in 2018.
At the end of financial year the company had 1,784 employees. The number of employees jumped on 19.3%. Average revenue per employee in FY2018 was
$283,712 and it increased on 6.4%.
Financial and operational results
FY ended 01/31/2018
Box, Inc. ($BOX) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 124.2 | 216.4 | 302.7 | 398.6 | 506.1 | 27.0% |
| Gross Profit | 98.2 | 169.2 | 215.6 | 286.5 | 370.9 | 29.5% |
| SG&A | 211.0 | 269.4 | 314.1 | 321.2 | 388.1 | 20.8% |
| EBITDA | -140.9 | -137.6 | -160.6 | -110.5 | -113.9 | |
| EBIT | -158.8 | -166.7 | -201.0 | -150.7 | -154.0 | |
| Tax | -2.4 | -0.6 | 0.7 | 0.9 | 0.7 | -21.8% |
| Net Income | -168.6 | -168.2 | -202.9 | -151.8 | -155.0 | |
| Stock Based Compensation | 11.7 | 31.9 | 59.5 | 78.4 | 97.5 | 24.4% |
Balance Sheet
|
|---|
| Cash | 108.9 | 330.4 | 185.7 | 177.4 | 208.1 | 17.3% |
| Accounts Receivable | 42.7 | 54.2 | 99.5 | 120.1 | 162.1 | 35.0% |
| Accounts Payable | 12.4 | 17.5 | 9.9 | 6.7 | 17.0 | 155.9% |
| Short Term Debt | 0.0 | 0.6 | 4.7 | 13.7 | 18.8 | 37.1% |
| Long Term Debt | 34.0 | 41.2 | 47.3 | 61.7 | 67.0 | 8.6% |
Cash flow
|
|---|
| Capex | 24.4 | 38.7 | 72.9 | 15.0 | 11.8 | -21.0% |
| Acquisitions | 7.8 | 0.2 | 0.3 | | | |
Ratios
|
|---|
| Revenue growth | 111.2% | 74.3% | 39.9% | 31.7% | 27.0% | |
| EBITDA growth | 40.2% | -2.3% | 16.7% | -31.2% | 3.1% | |
|
|---|
| Gross Margin | 79.1% | 78.2% | 71.2% | 71.9% | 73.3% | 1.4% |
| EBITDA Margin | -113.5% | -63.6% | -53.1% | -27.7% | -22.5% | 5.2% |
| EBIT Margin | -127.9% | -77.0% | -66.4% | -37.8% | -30.4% | 7.4% |
| SG&A, % of revenue | 169.9% | 124.5% | 103.8% | 80.6% | 76.7% | -3.9% |
| SBC, % of revenue | 9.5% | 14.8% | 19.7% | 19.7% | 19.3% | -0.4% |
| Net Income Margin | -135.7% | -77.7% | -67.0% | -38.1% | -30.6% | 7.5% |
| CAPEX, % of revenue | 19.7% | 17.9% | 24.1% | 3.8% | 2.3% | -1.4% |
|
|---|
| ROIC | -138.3% | -81.0% | -79.3% | -86.8% | -120.2% | -33.4% |
| ROE | | | -100.0% | -142.8% | -345.5% | -202.7% |
People
|
|---|
| Insider ownership | 3.1% | 3.1% | 3.1% | 3.1% | 3.1% | 0.0% |
| Employees | 972 | 1,158 | 1,370 | 1,495 | 1,784 | 19.3% |
| Revenue/Employee, th. $ | 128 | 187 | 221 | 267 | 284 | 6.4% |
Box, Inc. ($BOX) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 117 | 123 | 129 | 137 | | 30.0% | 28.4% | 25.8% | 24.3% |
| EBITDA | -30 | -29 | -33 | -22 | | | | | |
| Net Income | -40 | -39 | -43 | -33 | | | | | |
Balance Sheet
|
|---|
| Cash | 184 | 165 | 173 | 208 | | 0.5% | -4.6% | 3.0% | 17.3% |
| Short Term Debt | 16 | 17 | 18 | 19 | | 127.7% | 113.8% | 67.8% | 37.1% |
| Long Term Debt | 65 | 66 | 67 | 67 | | 31.6% | 30.1% | 21.9% | 8.6% |
Ratios
|
|---|
| Gross Margin | 72.1% | 73.3% | 73.3% | 74.2% | | 3.0% | 2.2% | -0.3% | 1.1% |
| EBITDA Margin | -25.9% | -23.8% | -25.2% | -15.8% | | 3.5% | 4.6% | 3.0% | 9.4% |
| Net Income Margin | -34.2% | -32.0% | -33.2% | -23.9% | | 8.6% | 7.9% | 4.0% | 9.6% |
Peers in Application Software
Below you can find Box, Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| nFusz Inc ($FUSZ) | | | | | 433.3% |
| CloudCommerce Inc ($CLWD) | | -38.1% | 247.6% | 40.9% | 301.1% |
| Seven Stars Cloud Group, Inc. ($SSC) | | 134.7% | 663.8% | 310.3% | 161.7% |
| Aurora Mobile Limited ($JG) | | | | 304.9% | 150.8% |
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (150 companies) | 27.9% | 13.5% | 13.6% | 14.8% | 15.2% |
|---|
| Box, Inc. ($BOX) | | 74.3% | 39.9% | 31.7% | 27.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 99.7% | 97.4% | 98.0% | 97.6% | 96.5% |
| hopTo Inc ($HPTO) | 91.8% | 87.8% | 95.9% | 98.2% | 95.4% |
| Aware, Inc. ($AWRE) | 75.4% | 87.2% | 90.3% | 94.6% | 92.3% |
| Alteryx, Inc. ($AYX) | 77.5% | 80.5% | 81.3% | 83.4% | 91.0% |
| Aspen Technology, Inc. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (149 companies) | 62.8% | 61.7% | 63.8% | 64.4% | 65.3% |
|---|
| Box, Inc. ($BOX) | 79.1% | 78.2% | 71.2% | 71.9% | 73.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($AZPN) | 34.5% | 42.2% | 46.0% | 45.2% | 43.3% |
| ANSYS, Inc. ($ANSS) | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% |
| Paycom Software, Inc. ($PAYC) | 15.1% | 19.5% | 35.1% | 34.4% | 35.9% |
| j2 Global, Inc. ($JCOM) | 41.6% | 40.6% | 41.7% | 36.5% | 35.7% |
| Adobe Inc. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (151 companies) | -10.1% | -9.4% | -4.7% | -3.3% | -3.1% |
|---|
| Box, Inc. ($BOX) | -113.5% | -63.6% | -53.1% | -27.7% | -22.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
| Integrated Ventures Inc ($INTV) | | | | | 199.9% |
| ShotSpotter, Inc. ($SSTI) | | 18.3% | 28.9% | 27.1% | 24.3% |
| Ellie Mae, Inc. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (152 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| Box, Inc. ($BOX) | 19.7% | 17.9% | 24.1% | 3.8% | 2.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($ITCC) | -558.9% | | | | 127.4% |
| Manhattan Associates, Inc. ($MANH) | 64.8% | 78.7% | 99.3% | 102.5% | 80.9% |
| Intuit Inc. ($INTU) | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% |
| Aspen Technology, Inc. ($AZPN) | 133.4% | | | | 58.1% |
| Paycom Software, Inc. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (178 companies) | -14.2% | -11.2% | -9.2% | -10.2% | -9.1% |
|---|
| Box, Inc. ($BOX) | -138.3% | -81.0% | -79.3% | -86.8% | -120.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Upland Software, Inc. ($UPLD) | | | 16.4x | 115.6x | 16.7x |
| Nuance Communications, Inc. ($NUAN) | 7.9x | 5.7x | 5.3x | 7.1x | 15.2x |
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (70 companies) | -1.4x | -1.0x | -0.9x | -0.8x | -0.7x |
|---|
