Box has been dealing with an ongoing dispute with activist investors (Starboard Value) over who gets to control the board. The argument should be resolved on September 9th when the company holds its annual shareholder meeting.
To show the shareholders that the numbers are improving under the current administration, Box made the unusual move to reveal its earnings report two weeks ahead of schedule, on August 12.
Companies do not normally do this but it seems Box sees an opportunity to lobby or counter negative lobbying Starboard Value may be doing with other investors ahead of the board vote.
Ahead of the curve
The meeting may be on September 9th but, as with any event/activity these days, people will be sending in votes throughout the month, before the day arrives. Box is taking the early-bird approach to capture the early votes before they cast their ballot.
Fortunately for the company and its CEO, Aaron Levine, the numbers are decent.
It is not difficult to figure out why Box released its earnings early. They are a way to make the argument that the current leadership is capable and should be left in place.
In the three months ending July 31, 2021 (Q2 of Box’s fiscal 2022) the company reported revenue of $214 million (about €182 million), up 11% on a year-over-year basis.
Box was quick to call it the second consecutive quarter of revenue growth. The company managed to beat its own guidance of $211 to $212 million in revenue for the period.
Showing that Box can accelerate its revenue growth is necessary as it spurs stock. Since it is experiencing accelerating revenue growth over time, it is safe to say that investors may be enticed to keep things as they are.