Box Said To Further Delay Its IPO

Box, an enterprise-facing cloud storage and productivity company, is said to be further delaying its initial public offering (IPO). The delay could last until its fiscal fourth quarter, which ends after the first month of the new year.

This is viscerally unsurprising given that the company has consistently said that it will go public when it makes sense, and that it closed another round of funding that left if with more than $200 million in the bank.

Box filed to go public with intention to do so. Despite some notes that investors are savvy to the intricacies of SaaS economics, Box’s losses were larger than the market expected, and its fiscal first quarter numbers that updated its S-1 brought were not in line with select expectations.

The company has shown a shrinking negative GAAP operating margin over time. That figure is now under 100%. Box continues to spend heavily on sales and marketing, the impact of which has skyrocketed its revenue more than 100% in the last year. Its losses, however, have also increased, though at a slower rate.

When those two graphs bump into one another may be when Box pulls the trigger.

In our current climate of loss rates being less in vogue than cash, Box managed to end up boxed into a difficult corner: The revenue growth-focused market that it expected to launch into managed to turn around roughly 8 minutes before it decided to hit go.

Growth at the expense of huge cash losses is no longer celebrated, as fear has set in that such growth isn’t sustainable in the long term. Your burn now gives off a different color of light.

It is now a question of whether Box will continue to report its financial progress each quarter, or will go silent and work on growth, only disclosing new information before it does in fact IPO. We’ll see. For now, don’t expect to be able to buy Box share on the NASDAQ for quite some time.

Box didn’t answer the phone.