Cloud content storage and management platform Box (NYSE:BOX) met Wall Street’s revenue expectations in Q4 CY2024, with sales up 6.3% year on year to $279.5 million. On the other hand, next quarter’s revenue guidance of $274.5 million was less impressive, coming in 1.8% below analysts’ estimates. Its GAAP profit of $1.12 per share was significantly above analysts’ consensus estimates.
Is now the time to buy Box? Find out by accessing our full research report, it’s free.
Box (BOX) Q4 CY2024 Highlights:
- Revenue: $279.5 million vs analyst estimates of $279.3 million (6.3% year-on-year growth, in line)
- EPS (GAAP): $1.12 vs analyst estimates of $0.09 (significant beat)
- Adjusted Operating Income: $76.37 million vs analyst estimates of $77 million (27.3% margin, 0.8% miss)
- Management’s revenue guidance for the upcoming financial year 2026 is $1.16 billion at the midpoint, in line with analyst expectations and implying 6.2% growth (vs 5% in FY2025)
- Operating Margin: 6.4%, down from 8.1% in the same quarter last year
- Free Cash Flow Margin: 32.7%, up from 20.8% in the previous quarter
- Billings: $398.6 million at quarter end, up 5.1% year on year
- Market Capitalization: $4.71 billion
Company Overview
Founded in 2005 by Aaron Levie and Dylan Smith, Box (NYSE:BOX) provides organizations with software to securely store, share and collaborate around work documents in the cloud.
Document Management
The catch phrase "digital transformation" originally referred to the digitization of documents within enterprises. The growth of digital documents has spurred an explosion of collaboration within and between businesses, which in turn is driving the demand for e-signature and content management platforms.
Sales Growth
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Box’s 7.6% annualized revenue growth over the last three years was weak. This fell short of our benchmark for the software sector and is a tough starting point for our analysis.
This quarter, Box grew its revenue by 6.3% year on year, and its $279.5 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 3.7% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 6.3% over the next 12 months, similar to its three-year rate. This projection is underwhelming and suggests its products and services will see some demand headwinds.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Box’s billings came in at $398.6 million in Q4, and over the last four quarters, its growth was underwhelming as it averaged 4.7% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
It’s relatively expensive for Box to acquire new customers as its CAC payback period checked in at 103 months this quarter. The company’s slow recovery of its sales and marketing expenses indicates it operates in a highly competitive market and must invest to stand out, even if the return on that investment is low.
Key Takeaways from Box’s Q4 Results
Revenue was just in line and operating profit missed in the quarter. Looking ahead, its revenue guidance for next quarter missed significantly. Overall, this quarter could have been better. The stock traded down 8.3% to $30.75 immediately following the results.
Is Box an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
