SA News • Tue, Nov. 18
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SA News • Fri, Jun. 20
These Numbers Show That Box CEO Aaron Levie Is A Genius
- Most investors don't understand the subscription-based, recurring revenue business model of software-as-a-service (SaaS) companies.
- Annual Recurring Revenue (ARR) is a key metric for subscription businesses and a critical indicator of a company's health, but accounting rules don't recognize it.
- Box CEO Aaron Levie has built a growing, profitable SaaS company. He's a true genius - and this article explains why.
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Tue, Nov. 18, 2:53 PM
- Looking to halt ongoing collaboration revenue declines - sales fell 10% Y/Y last quarter to $871M - Cisco (CSCO +0.7%) has launched a new high-end telepresence system (the IX5000) for conference rooms, as well as a new VoIP/videoconferencing terminal for mid-sized firms (the BE6000S).
- The networking giant has also unveiled Project Squared, a Web/mobile platform that leverages existing collaboration products (WebEx, telepresence, unified communications, etc.) to create an online workspace for users to communicate and share messages/files.
- Cisco claims the IX5000, which features three 70" screens and 4K cameras, requires half the bandwidth of rival three-screen telepresence systems. A partnership has been formed with cloud storage/file-sharing startup BOX to integrate the company's services with Project Squared.
- Both Cisco's telepresence and unified communications sales have been under pressure amid tough competition from the likes of Polycom (PLCM +0.5%) and Microsoft, as well as various startups. On the FQ1 CC (transcript), John Chambers noted Cisco wants to shift more of its collaboration revenue to comprehensive enterprise license agreements/subscriptions.
Mon, Oct. 27, 1:56 PM
- Looking to speed up the migration from traditional Office licenses to 365 subscriptions, Microsoft (MSFT -0.4%) is now providing unlimited OneDrive cloud storage to 365 subs. The feature is initially being rolled out to Home, Personal, and University subs; business subs will receive it in the coming months.
- Home/Personal 365 plans are priced from $70-$100/year, and business plans from $60-$264/year per user. Save for the cheapest business offering, the plans support both locally-installed and cloud apps.
- Microsoft reported last week its 365 Home/Personal sub base rose by ~1.4M in FQ1 to over 7M, and that its commercial 365 seats rose 96% Y/Y. It was only this spring the company began providing 1TB of free storage to 365 subs (up from a prior 25GB).
- Google charges $120/user/year for Google Apps subscriptions featuring unlimited cloud storage (5 or more users needed). Those paying $50/user/year get 30GB. Dropbox charges $99/year for 1TB of storage. BOX, which has delayed its IPO a couple of times, offers users of its cloud file-sharing/collaboration platform unlimited storage for $180/user/year.
Wed, Oct. 1, 4:38 PM
- Enterprise cloud storage/file-syncing leader BOX's IPO "probably won’t happen until 2015 because of volatile market conditions," Bloomberg reports. Box filed a public S-1 back in March, and was once expected to go public by this summer (if not sooner).
- Market volatility, of course, didn't stop Alibaba from recently doing a blockbuster IPO. Box has been looking to soothe investor concerns about the cash burn caused by its heavy sales/marketing spend (still larger than revenue as of the 3 months ending April 30).
- Box raised $150M in July at a $2.4B valuation. The funds extended the company's IPO runway. Since then, Amazon has launched a competing service, and Microsoft has aggressively slashed prices for its offerings.
Thu, Jul. 10, 2:55 PM
- Zocalo, a new Amazon Web Services (AMZN -0.7%) offering aimed at enterprises, provides 200GB of cloud storage to go with document-sharing, IT admin controls, and integration with AWS' WorkSpaces PC virtualization offering.
- Amazon is charging just $5/user/month, easily undercutting BOX, Dropbox, and a slew of other rivals. Microsoft and Google are also pricing aggressively.
- Amazon is also rolling out several new services for mobile developers relying on AWS. They include mobile analytics tools able to deliver usage reports on billions user events, a cross-platform push notification service, and a service (Cognito) for managing user identities/data across platforms. An SDK for connecting apps to AWS is also being launched.
- Last November, Amazon rolled out AppStream, a service that allows games/apps to be streamed to mobile devices. The latest service launches come as Google tries hard to sell developers on the simplicity/ease-of-use of its cloud platform relative to Amazon's, which maintains a feature set edge.
- Amazon's North American "Other" revenue (mostly AWS) rose 60% Y/Y in Q1 to $1.2B. Synergy Research's numbers suggest Amazon's combined IaaS/PaaS share still dwarfs that of rivals.
- Separately, the FTC has officially announced it's suing Amazon for billing parents for in-app purchases accidentally made by their kids; the agency settled a similar suit with Apple earlier in 2014. Any payout should amount to a slap on the wrist for a company of Amazon's size.
Mon, Jul. 7, 6:23 PM
- During the 3 months ending April 30, BOX had revenue of $45.3M (+94% Y/Y), and a net loss of $38.5M (up from $34M a year ago). Excluding stock compensation, net loss was $32.7M. (prospectus)
- Sales/marketing spend ($47.4M) exceeded revenue, just as it did in FY14 (ended Jan. 31). A silver lining: Its Y/Y growth rate slowed to 39% from FY14's 73%. R&D spend totaled $14.9M during the quarter, and G&A $11.5M.
- Box now claims 27M+ registered users and 39K+ paying organizations, up from 25M+ and 34K+ at the time of its March S-1. Customers now include over 45% of the Fortune 500, up from over 40% before.
- Cash burn remains heavy: Cash/equivalents totaled $79.3M as of April 30, down from $108.9M as of Jan. 31. The WSJ just reported Box has raised $150M to extend its IPO runway.
Mon, Jul. 7, 3:52 PM
- BOX has raised $150M at a $2.4B valuation from P-E firm TPG and hedge fund Coatue Managment, the WSJ reports. The reports follows a pair on June 20 that stated Box is looking to raise funds from TPG that would allow it to delay its IPO.
- The reported valuation is above the ~$2B assigned in a funding round last fall. Box, whose enterprise cloud storage/file-sharing platform squares off against the likes of Microsoft, Google, Dropbox, and EMC, has now raised $500M+ over its lifetime.
- A source tells the WSJ Box, which is working to narrow the heavy losses reported in its March S-1, is still looking to go public this year, albeit after Labor Day.
Mon, Jun. 23, 2:39 PM
- All Office 365 subs will now get 1TB of OneDrive cloud storage. Microsoft (MSFT +0.5%) had begun offering 1TB to business Office 365 subs in April.
- In addition, Microsoft is upping the storage allotment for free OneDrive accounts to 15GB from 7GB, and respectively slashing prices for its 100GB and 200GB standalone accounts by 73% and 65% to $1.99/month and $3.99/month.
- The free allotment and 100GB pricing is now even with Google Drive's; Google charges $9.99/month for 1TB, and $99.99/month for 10TB. Following recent price cuts, Apple is set to offer 5GB of free iCloud storage, and respectively charge $0.99/month and $3.99/month for 20GB and 200GB.
- The price war could take a toll on Dropbox, which recently raised funding at a $10B valuation: Dropbox charges $9.99/month ($99/year) for 100GB, and $19.99/month ($199/year) for 200GB.
- BOX, which argues its enterprise feature set keeps its services from being commoditized, charges $5/month for its Starter plan, and offers unlimited storage for its Business ($15/month) and Enterprise ($35/month) plans.
- Microsoft has made a priority of boosting Office 365 sales: The year has already seen the launch of Office iPad apps (full versions are free with Office 365 subscriptions) and a 365-focused Salesforce partnership. Commercial 365 sales doubled Y/Y in calendar Q1.
Fri, Jun. 20, 4:54 PM
- The WSJ reports enterprise cloud storage/file-syncing leader BOX is in talks with P-E firm TPG to raise funds that would allow it to (further) delay its IPO.
- The talks are still at an early stage. In addition, a source says that while the timing of a Box IPO is uncertain, the company still expects to go public by year's end.
- The report shortly follows one from re/code stating Box's IPO plans are "back on track" thanks to the recent rebound in cloud software stocks, and that the company is "hoping to complete its IPO by July or August." Fortune and the WSJ had previously reported of delays.
- A fresh funding round would give Box time to narrow the huge losses (caused in large part by heavy sales/marketing spend) that have put many would-be IPO investors on edge.
- Update: Re/code now reports Box is looking to raise $100M or more from TPG.
Fri, May. 30, 2:44 PM
- "My understanding is that Box is leaning toward submitting an amended filing within the next month, which likely would mean an IPO in July," reports Fortune's Dan Primack.
- But he adds "those plans could be derailed if the recent stabilization of public SaaS company prices is upset, or even if it gets a particularly attractive equity offer on the private markets."
- The WSJ reported a month ago BOX's IPO has been delayed at least until June due to a tech stock selloff. With Box not having yet amended its S-1 to provide details about its offering size or pricing, the odds of a June offering are looking slim.
- Today's price action in cloud software names probably isn't making Box, whose S-1 stoked concerns about its heavy sales spend, feel any more comfortable.
Thu, May. 15, 10:19 AM
- Zendesk (ZEN) priced its 11.1M-share IPO at $9 (the midpoint of an $8-$10 range), opened at $11.40, and is now at $11.84, up 31.6%.
- The cloud customer support software vendor has a market cap of $831M, or 11.5x 2013 sales.
- Enterprise cloud storage/file-sharing upstart BOX, which has reportedly delayed its IPO due to the recent tech selloff, might take heart in Zendesk's reception.
- Prospectus, IPO preview, analysis
- Previous: Zendesk's IPO filing/details
Thu, May. 1, 8:48 AM
- The recent tech stock selloff (a selloff that has hit richly-valued cloud software stocks especially hard) has led enterprise cloud storage/file-syncing leader BOX to delay its anticipated IPO, the WSJ reports. Though Box's March 24 public S-1 filing made it eligible to list as soon as early April, there's still no timetable.
- Possibly adding to Box's caution: Its S-1 raised eyebrows on account of the huge losses that were disclosed. The company's sales/marketing spend for the fiscal year ending Jan. 31 single-handedly exceeded its revenue for the period by 34%.
- The WSJ's report comes shortly after Microsoft (MSFT) fired a fresh salvo at Box and Dropbox by increasing the amount of storage provided by its OneDrive for Business by 40x to 1TB, and providing the solution for free to Office 365 ProPlus customers.
- Box, which sells to ~40% of the Fortune 500 to varying degrees, has long argued its rich feature set and 3rd-party app support help it differentiate.
Fri, Apr. 4, 6:23 PM
- Dropbox has named partnerships VP Sujay Jaswa its first CFO, a move that has heightened speculation the cloud storage/file-sharing giant is getting ready to go public.
- Jaswa's promotion comes two months after Dropbox hired Google vet/ex-Motorola Mobility CEO Dennis Woodside to be its COO.
- Dropbox recently raised $325M at a $10B valuation. Enterprise-focused rival BOX, which has raised funding at a ~$2B valuation, filed a public S-1 last month.
- In its Q4 report, GSV Capital (GSVC) estimated its Dropbox stake was worth $15.9M (5.5% of NAV). Thanks to Dropbox's latest funding round, that figure might be dialed higher in GSV's Q1 report.
Mon, Mar. 24, 5:03 PM
- Enterprise cloud storage/file-syncing upstart Box, reported in January to have confidentially filed for an IPO, has released its public S-1.
- Box is looking to raise $250M under the symbol (you guessed it) BOX. The underwriters: Morgan Stanley, Credit Suisse, JPMorgan, Canaccord, Pac Crest, Raymond James, BMO, and Wells Fargo.
- During the fiscal year ending Jan. 31, Box had revenue of $124.2M (+111% Y/Y), and a net loss of $168.9M. Even after backing out stock compensation expenses of $5M, sales/marketing spend totaled $166.2M, exceeding revenue by 34%. R&D spend totaled $42.8M excluding stock compensation.
- Box has 25M registered users, and counts over 40% of the Fortune 500 and 20% of the Global 2000 among its clients. Rivals include Dropbox (more consumer/SMB-focused, valued at $10B), EMC's Syncplicity unit, Citrix's ShareFile unit, Microsoft, and Google.
- A late-2013 funding round valued Box at ~$2B. VC firms Draper Fisher Jurvetson and U.S. Venture Partners respectively own 25.5% and 13% of the company, and CEO Aaron Levie owns 4.1%.
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