Taking a closer look at its Q1 report, BOX reported a loss per share of ($0.13), a penny better than the Capital IQ consensus, with revenue up a healthy 30% to $117.2 million, also beating the $114.7 million consensus. Similar to its winning streak versus consensus, BOX has also been very consistent in terms of revenue growth. While the growth rate has decelerated some from the 45% seen in 1Q15, over the past four quarters, it has come in right at the 30% level.
A key metric outside of the headline numbers for BOX is billings. Billings represents the amount of money a customer will pay over the life of a contract. So, billings for a specific quarter is the total of all the deals closed, making it a good measure of overall demand. Revenue, on the other hand, is the portion of those contracts that was actually realized during the quarter.
For the quarter, BOX generated billings of $99.6 million, up 30% year/year. That is an increase from the 22% growth in billings for 4Q16, as well as the 26% growth in 3Q16. Another significant positive is that annualized revenue per paying organization climbed by 9% to $6,336. These are encouraging metrics for BOX as it relates to its topline growth.
What also stood out about the report is that it reported positive cash flow from operations of $8.5 million, a major improvement from the cash burn of ($4.2) million in the year ago period. So, while BOX isn't profitable on an operating basis, it is now generating cash flow, mitigating concerns regarding its lack of profitability. Furthermore, both gross and operating margin showed meaningful improvement this quarter, rising to 72.1% from 69.1%, and to (14)% from (25)%, respectively. As the company continues to scale in size, it is realizing operating efficiencies that are pushing it towards profitability.
That said, it still has a ways to go in that regard. In its earnings press release, it guided for a loss per share of ($0.48)-($0.44) for this year, inline with the ($0.46) consensus. Then, for next year, BOX is still expected to have a loss of ($0.21)/share. The good news, though, is that it is clearly on the right path and its solid, consistent revenue and billings growth, and the move to positive cash flow, shows that its business is pretty healthy.