Starting off its first full fiscal year as a public company, online bulk-products retailer Boxed Inc. posted double-digit net revenue growth in both of its business segments for the fiscal 2022 first quarter.
For the quarter ended March 31, net revenue totaled $46.6 million, up 14.1% from $40.9 million a year earlier, New York-based Boxed said yesterday after the market close.
Retail sales, which accounted for over 95% of Boxed’s revenue in the quarter, rose 11.3% to $44.4 million from $39.9 million a year ago, fueled by elevated B2B customer demand, increased marketing investment and higher customer engagement, according to the company. Software & Services segment revenue more than doubled to $2.2 million, rising 127.1% year over year.
“We are reporting strong results to start 2022, with growth re-accelerating and a host of exciting developments under way across both our Retail and Software & Services segments,” Boxed CEO and co-founder Chieh Huang said in a statement.
Boxed went public in December. As part of that strategy, Boxed launched a new income stream by licensing its end-to-end e-commerce platform as a software-as-a-service (SaaS) offering. The technology includes customer-facing front-end and back-end operational software plus homegrown automation robotics for fulfillment.
On the retail side, Boxed provides warehouse club-style shopping — including groceries, pantry items, household staples, HBA, office supplies, and organic and green products — through its website and mobile app. Consumers and businesses can buy club-sized packages with free two-day delivery in the continental U.S. on purchases of over $49, without the membership fees of traditional warehouse clubs. Members of the BoxedUp loyalty program get free shipping for a $19.98 order minimum. The company also offers Boxed Express, an on-demand delivery service for perishables, and in late 2021, entered the rapid grocery delivery arena via its first acquisition: New York City e-grocer MaxDelivery.
Gross merchandise value (GMV) rose 19.2% to $53.4 million for the first quarter, which Boxed attributed to rising B2B customer demand (B2B customer GMV increased 65.4% year over year) and GMV growth in the MaxDelivery and Software & Services customer bases.
Also up by double digits in the quarter versus a year ago were retail average order value (AOV) and retail net revenue per active customer (RPAC), Boxed noted. AOV climbed 16.6%, or $19, to $130, reflecting gains in the B2B order mix, expanding assortment and ongoing price optimizations, according to Boxed. RPAC advanced 32.4%, or $67, to $276 compared to the prior-year period, lifted by higher retail AOVs, elevated customer order frequency and growth in B2B customer demand.
Boxed said it expect an uptick in marketing investment to help support retail active customer growth, bolster customer retention and drive brand awareness in 2022. In the first quarter, advertising expenses totaled $11.7 million, up $6 million from a year ago.
“B2B demand continued to strengthen in the quarter as offices reopen across America,” Huang explained. “Also, in this inflationary environment, we are proud to deliver bulk-sized cost-savings and convenience to our end-customers who may be struggling during this time. Finally, we remain focused on investing in the advancement of our technology, which will support growth of our Software & Services business across the globe.”
Gross profit rose 23.7% to $6.1 million in the first quarter, while gross margin grew 13.1% year over year, mainly from an increase in net revenue mix from the higher-margin Software & Services segment, Boxed said.
At the bottom line, Boxed recorded a first-quarter net loss $36.2 million, or 54 cents per share, compared with a net loss of $14.2 million, or $1.55 per share, in the year-ago period. Meanwhile, the company posted a loss in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $22.2 million in the 2022 quarter, versus an $11 million in the 2021 quarter. Boxed noted that increased gross profit was offset by higher growth-related and public company-related investments, including advertising, staff, insurance expenses and professional services costs.
Analysts, on average, had forecast Boxed’s Q1 adjusted earnings per share at a net loss of 41 cents, with estimates ranging from net losses of 75 cents to 16 cents, according to Refinitiv. Boxed’s Q1 revenue of $46.62 million came in just above analysts’ projection of $45.77 million to $46.5 million.
Boxed reaffirmed its earlier guidance for the 2022 fiscal year, forecasting total net revenue of $220 million to $245 million, or year-over-year growth of 24% and 38%; Software & Services revenue of $15 million to $23 million; and a total adjusted EBITDA loss of $70 million to $80 million. Before Boxed’s Q1 report, analysts pegged the company’s fiscal 2022 revenue at $219.7 million to $228.8 million and adjusted EPS at a net loss of $3.56 to 66 cents, according to Refinitiv.