Box, Inc. revenue growth decelerated from 20.2% in FY2019 to 14.4% in FY2020
02/26/2020 • About Box, Inc. (
$BOX) • By InTwits
Box, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Box, Inc. is a fast growth stock: FY2020 revenue growth was 14.4%, 5 year revenue CAGR was 26.3% at FY2020 ROIC -42.3%
- The company operates at negative EBITDA Margin: -6.1%
- Box, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 is 9.4%. Average EBITDA Margin for the same period was -20.5%
- Box, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.7%. At the same time it's in pair with industry average of 14.0%
- CAPEX is quite volatile: $5m in FY2020, $15m in FY2019, $12m in FY2018, $15m in FY2017, $73m in FY2016
- The company has unprofitable business model: ROIC is -42.3%
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 surged on 14.4%. Revenue growth showed slowdown in FY20Q4 - it was 12.1% YoY. Revenue decline was accelerating on average at -6.2 pp per annum in the last 5 years. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.3 pp from -3.5% to 1.9% in 2020. EBITDA Margin grew at 10.7 pp per annum in the last 5 years.
Gross Margin decreased on 2.4 pp from 71.5% to 69.0% in FY2020. During the last 5 years Gross Margin topped in FY2018 at 73.3% and was declining since that time. SG&A as a % of Revenue decreased on 6.2 pp from 66.6% to 60.4% in FY2020. SG&A as a % of Revenue declined at -10.1 pp per annum in FY2016-FY2020.
Net Income margin increased slightly on 1.4 pp from -22.1% to -20.7% in FY2020. Net Income margin grew at 10.9 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2020 Box, Inc. had CAPEX/Revenue of 0.78%. The company's CAPEX/Revenue decreased on 3.0 pp from 3.8% in FY2017 to 0.78% in FY2020. For the last three years the average CAPEX/Revenue was 1.9%.
Return on investment
The company operates at negative ROIC (-42.3%) and ROE (-537.0%). ROIC jumped on 65.3 pp from -108% to -42.3% in FY2020. ROE jumped on 43.6 pp from -581% to -537% in FY2020. During the last 5 years ROIC bottomed in FY2018 at -120% and was growing since that time. ROE followed a declining trend at -131 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is -5.8x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2020. Debt jumped on 276% while cash dropped on 10.1%.
Box, Inc. has no short term refinancing risk: cash is higher than short term debt (205.9%).
Management team
Box, Inc.'s CEO is Aaron Levie. Aaron Levie has 9 years tenure with the company. Dylan Smith is a the company's CFO. Dylan Smith has spent 9 years at the company.
Financial and operational results
FY ended 01/31/2020
Box, Inc. ($BOX) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 302.7 | 398.6 | 506.1 | 608.4 | 696.3 | 14.4% |
| Gross Profit | 215.6 | 286.5 | 370.9 | 434.8 | 480.7 | 10.6% |
| SG&A | 314.1 | 321.2 | 388.1 | 405.3 | 420.4 | 3.7% |
| EBITDA | -160.6 | -110.5 | -113.9 | -87.9 | -42.7 | |
| EBIT | -201.0 | -150.7 | -154.0 | | | |
| Tax | 0.7 | 0.9 | 0.7 | | | |
| Net Income | -202.9 | -151.8 | -155.0 | -134.6 | -144.3 | |
| Stock Based Compensation | 59.5 | 78.4 | 97.5 | | | |
Balance Sheet
|
|---|
| Cash | 185.7 | 177.4 | 208.1 | 217.5 | 195.6 | -10.1% |
| Accounts Receivable | 99.5 | 120.1 | 162.1 | | | |
| Accounts Payable | 9.9 | 6.7 | 17.0 | | | |
| Short Term Debt | 4.7 | 13.7 | 18.8 | 28.3 | 95.0 | 235.4% |
| Long Term Debt | 47.3 | 61.7 | 67.0 | 84.6 | 329.6 | 289.6% |
Cash flow
|
|---|
| Capex | 72.9 | 15.0 | 11.8 | 14.8 | 5.5 | -63.2% |
| Acquisitions | 0.3 | | | | | |
Ratios
|
|---|
| Revenue growth | 39.9% | 31.7% | 27.0% | 20.2% | 14.4% | |
| EBITDA growth | 16.7% | -31.2% | 3.1% | -22.8% | -51.5% | |
|
|---|
| Gross Margin | 71.2% | 71.9% | 73.3% | 71.5% | 69.0% | -2.4% |
| EBITDA Margin | -53.1% | -27.7% | -22.5% | -14.5% | -6.1% | 8.3% |
| EBIT Margin | -66.4% | -37.8% | -30.4% | | |
| SG&A, % of revenue | 103.8% | 80.6% | 76.7% | 66.6% | 60.4% | -6.2% |
| SBC, % of revenue | 19.7% | 19.7% | 19.3% | | |
| Net Income Margin | -67.0% | -38.1% | -30.6% | -22.1% | -20.7% | 1.4% |
| CAPEX, % of revenue | 24.1% | 3.8% | 2.3% | 2.4% | 0.8% | -1.7% |
|
|---|
| ROIC | -79.3% | -86.8% | -120.2% | -107.5% | -42.3% | 65.3% |
| ROE | -100.0% | -142.8% | -345.5% | -580.6% | -537.0% | 43.6% |
People
|
|---|
| Insider ownership | 3.1% | 3.1% | 3.1% | | | |
| Employees | 1,370 | 1,495 | 1,784 | | | |
| Revenue/Employee, th. $ | 221 | 267 | 284 | | | |
Box, Inc. ($BOX) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 163 | 173 | 177 | 184 | | 16.0% | 16.4% | 13.6% | 12.1% |
| EBITDA | -14 | -13 | -14 | -2 | | - | - | - | - |
| Net Income | -37 | -36 | -41 | -30 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 231 | 201 | 201 | 196 | | 6.6% | -1.1% | 0.4% | -10.1% |
| Short Term Debt | 69 | 74 | 90 | 95 | | 236.7% | 246.9% | 269.1% | 235.4% |
| Long Term Debt | 326 | 325 | 336 | 330 | | 366.4% | 352.1% | 354.3% | 289.6% |
Ratios
|
|---|
| Gross Margin | 70.1% | 68.8% | 68.2% | 69.1% | | -2.1% | -2.5% | -3.1% | -2.1% |
| EBITDA Margin | -8.4% | -7.7% | -7.7% | -1.1% | | 9.0% | 9.5% | 10.3% | 5.0% |
| Net Income Margin | -22.6% | -21.0% | -23.1% | -16.6% | | 3.5% | 4.7% | 2.7% | -4.5% |
Peers in Application Software
Below we provide Box, Inc. benchmarking against other companies in Application Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 14.8% | 15.1% | 19.4% | 14.7% |
|---|
| Box, Inc. ($BOX) | - | 31.7% | 27.0% | 20.2% | 14.4% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 63.8% | 64.4% | 65.3% | 67.9% | 70.6% |
|---|
| Box, Inc. ($BOX) | 71.2% | 71.9% | 73.3% | 71.5% | 69.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -4.7% | -3.3% | -3.3% | 4.5% | 7.7% |
|---|
| Box, Inc. ($BOX) | -53.1% | -27.7% | -22.5% | -14.5% | -6.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 2.9% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| Box, Inc. ($BOX) | 24.1% | 3.8% | 2.3% | 2.4% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.2% | -10.2% | -9.8% | -4.2% | -1.8% |
|---|
| Box, Inc. ($BOX) | -79.3% | -86.8% | -120.2% | -107.5% | -42.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (54 companies) | -0.9x | -0.8x | -0.7x | 0.4x | 0.2x |
|---|
