Cloud storage provider Box's revenue rises as growth slows

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Box Inc (BOX.N) shares fell more than 3 percent in after-hours trading Wednesday after the company reported slower quarterly growth in revenue compared with a year prior.

The cloud content company turned in revenue of $122.9 million and a loss of 11 cents per share. Analysts on average had expected a loss of 13 cents and revenue of $121.7 million, according to Thomson Reuters I/B/E/S.

Despite beating expectations, Box saw its revenue growth slow. Revenue was up 28 percent, billings were up 31 percent and deferred revenue was up 32 percent year-to-year, but those figures were lower than the growth the company reported this time last year.

“There’s no question we can be driving pretty significant growth, and that’s the opportunity that lays ahead of us,” Chief Executive Officer Aaron Levie told Reuters on Wednesday.

Levie emphasized the company’s July hire of new Chief Operating Officer Stephanie Carullo, who he said will be tasked with helping the company accelerate growth.

“One of the core reasons we brought her in is to help Box go to $1 billion and beyond in revenue as quickly as possible,” Levie said.

Despite slower revenue, Levie highlighted Box’s top deals in the quarter, saying the company closed eight deals over $500,000 and four over $1 million. By comparison, Box closed just five deals worth more than $500,000 and one over $1 million in the same period last year. These included deals with Amazon.com Inc (AMZN.O) and Delta Global Services, he said.

“We’re seeing a significant migration from large enterprises,” Levie said. “They’re starting to move to the cloud.”

Box’s success with large customers is a good sign for the company going forward, said analyst Richard Davis of Canaccord Genuity.
“That’s the most important thing,” Davis said. “That’s what will help them become a big business.”