International Business Machines Corp. (NYSE:IBM) and Box Inc (NYSE:BOX) inked a high-profile partnership deal last year and it seems they are not regretting the move. Financial results from Box’s F2Q2017 show how the arrangement with IBM is generating large-ticket business deals for the company.
In the quarter, Box succeeded in inking 45 deals in the six-figure order. Were it not for IBM, Box would have done less. IBM contributed 8 of the six-figure deals signed by Box in the quarter.
Box’s CEO, Aaron Levie, now says that partnering with IBM is the most significant deal that his company has entered into in its decade-long history.
Massive sales channel
Box is riding on IBM’s massive sales machine and strong brand to reach large customers domestically and internationally. Keep in mind that over half of the deals that Box signed through IBM came from international customers.
It turns out that customers are seeing greater value when they take IBM and Box products together.
Among the large customers that IBM has brought on board for Box include a large retailer and a financial services company operating in Latin America. As such, Box sees the partnership with IBM helping it to reach markets where it does not already have a footprint or would take it long to establish a strong presence on its own.
Not only is IBM pointing customers to Box, it has also become a major Box customer after signing a contract valued at more than $500,000.
Collaborating on new products
Besides using its salesforce and consulting team to promote Box products, IBM and Box also agreed to collaborate in developing new products to boost their competitive advantage.
How Box fared in 2Q
Box posted 2Q revenue of $95.7 million, up more than 30% YoY and ahead of the consensus estimate by $1.05 million. EPS loss of $0.14 was better than EPS loss of $0.19 that analysts estimated for the quarter.
Box hopes to hit breakeven cash flow by early 2017.