Box Inc. gains 4% following better than expected results in the third quarter

California-based cloud content management and file-sharing company, Box Inc., announced its quarterly earnings report on Tuesday. Having beaten the analysts’ forecast for sales in 2019’s Q3, the company revised its full-year guidance for revenue. The report further added that higher customer addition contributed lucratively to better than expected results in the third quarter.

Box’s Stock Is Currently Trading At $18.62

The cloud management company printed a 4% gain in the after-hours trading on Tuesday following the release of the earnings report. The gain was sustained through Wednesday as the stock closed the session at around $18.62. The U.S markets are closed for Thanksgiving on Thursday.

Share prices for Box have remained fairly flat on average in 2019. Having started the year at $18.38, shares are currently exchanging hands at $18.62. The stock recorded a year-to-date high of around $25 in February, that was followed by a decline to $13 level in August.

Box had previously estimated its full-year revenue to be capped at $692 million. Following the upbeat earnings report, the guidance has been revised to $693.7 million to $694.7 million. Based on Refinitiv’s survey, experts have forecasted the revenue to lie close to $691 million for the business.

Add-on Products And Large Enterprise Deals Cited As Reasons For Upbeat Results

CEO Aaron Levie commented on the earnings report and stated that the rising sales of add-on products and large enterprise deals have contributed the most to the better than expected performance in the third quarter. He further added that the cloud services offer lower costs at greater convenience that has led to an increasing global demand for such services as businesses continue to switch to the cloud.

As per the Canalys (research firm) report of August, cloud infrastructure has seen a 38% growth in global spending this year as compared to 2018. Box has made generous investments in its cloud management services in order to build its reputation in a market that is already dominated by services like Dropbox, Google’s Drive, and Microsoft’s OneDrive.

According to the stock market analysts, the company can be expected to note $180.8 million in revenue in the fourth quarter. An internal estimate from Box, however, anticipates a greater $181 to $182 million in the upcoming quarter. In Q3, Box has recorded $177.2 million (13.6% increment) in revenue against the analysts’ forecast of $174.6 million.

Compared to the figure for last year ($40.2 million), net loss was reported to have stretched further in the third quarter to $40.9 million. This marks a loss of 1 cent per share that is aligned with the analysts’ estimate.