Box files for $250M IPO on full-year revenue of $124M, net loss of $168M
techcrunch.com
techcrunch.com
Their growth looks less impressive when you consider they spent $292M to only grow revenue $65M.
In short, they are spending $5 to make $1. It's possible the customer LTV is actually $6 over a period of years, but they might not be able to borrow enough to make it back in time.
Am I the only one that thinks that a company turning a profit is not like flipping a light switch? If you have a culture of overspending, you aren't going to wake up money and start running a tight ship.
The difficulty and expense of selling a new product to large companies might also explain the marketing budget.
Or, could Box raise prices significantly enough on some customers to lessen their losses without sending too many customers to competitors?
Completely agree about the unflippable profitability switch. Profitability is a direction, not a destination.
Generally, selling shares is a signal that insiders view the company as overvalued.. otherwise they would hold. If they needed cash, they would issue debt instruments.
The market is hot on tech, so get out while the getting is good.
Look.. look at Amazon. That company has never posted a profit. And yet every trader I know is falling over themselves throwing money at them. It's the belief in investing in something"sexy", and "new".
This is a) a lazy narrative that simplifies the realities of Amazon's business models and b) flat out false.
The last 4 years Amazon has posted EBITDA of $1.497B, $934M, $544M and $506M (2010-2013, respectively). (1)
Over that same time period they've had Net Income of $1.152B, $631M, ($39M), and $274M
So yeah, I'd say unequivocally that $3.481B in EBITDA and $2.018B in Net Income over a four year time span is absolutely "posting a profit."
1) https://www.google.com/finance?q=NASDAQ%3AAMZN&fstype=ii&ei=...
Also this crap about revenue before taxes, interests - etc (your EBITDA) is just that, crap. It's unreliable because a company can decide what is (and what is not) included in the calculation. Of course, this means that a company can change (and many do) this "measure" from reporting period to reporting period. Remember the Dot-Com bust? Companies that had no value, or any chance of value, looked great on paper due to the EBITDA.
EBITDA does not represent a company's cash. More like it's cash flow that it has to service debt (and as I already said, that calculation can be manipulated by the company). It was designed for this purpose in the 80's - the leverage buy-out decade.
// END of rant
EBITDA doesn't measure profit. Or the ability to earn profit. And frankly, it's a cop-out to state to prove a company's value.
Edit: You were before me, so added my comment as a reply to you instead.
(Source: dropbox.com/about)
It's not just file storage for five bucks a month.
In business, usually it's possible to achieve whatever revenue you want; the hard part is getting there without a headcount/other expense basis that makes you bleed money instead of earning it.
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"In 1973, he attended college prep and engineering classes at Lawrence Technological University and graduated from Detroit Country Day School, a private college preparatory school in Beverly Hills, Michigan, with a perfect score of 800 on the mathematical section of the SAT... In 1977, he graduated magna cum laude from Harvard University with an A.B. in applied mathematics and economics... He scored highly in the prestigious William Lowell Putnam Mathematical Competition, an exam sponsored by the Mathematical Association of America, scoring higher than Bill Gates."
I'm not sure if he coded, but Ballmer definitely has a mathematical/technical background. I'm not sure technical background is necessarily an indicator of success as an executive.
Clearly Box is in much better shape, but it's not too hard to imagine that maybe they are rolling the dice on an IPO during a super-hot market in response to feedback from private investors that they were going to have to raise a down (or otherwise disappointing) round.
Does anyone have any data around this?
Nowhere near Twitter's $1.8 billion, of course, but sub-$100m IPOs also happen, e.g. Aerohive filed for an expected $75m offering last month: http://techcrunch.com/2014/02/13/aerohive-networks-files-for...
What company does, how it operates, or how profitable it is doesn't matter. For highly valued (read overvalued) IPO you need to be on the spot. Think Twitter, Zynga, Groupon. They were all at loss IIRC. People buy these sort of stock for short periods of time so they go big and then burst few months or years later.
But I don't think full commoditization will ever fully happen - there's a lot of value in trust and dependability in online storage, and these attributes are difficult to quantify. I'm much more likely to go with dropbox or google than some startup, even if the startup is offering much cheaper rates. Also, companies can compete on efficiency and scale, which adds barriers to entry.
The close to 1000 employees is also fairly surprising, but I would agree that it would mostly be on the sales side.
"Based on shares of our capital stock outstanding as of January 31, 2014, upon the completion of this offering, a total of shares of Class A common stock and"
Can't figure out the valuation.
What am I missing here?
It's a HIPPA requirement.
*According to their governance, risk and compliance policies. Dropbox basically fails all of these checks for large companies.
Sharing files outside of a company is useful and often problematic. But ironically a lot of large enterprises will block sites like box. Having an ftp style system on your own network is faster to upload and less likely to be blocked by the receiving party.