Lifted by double-digit gain in the second quarter, online bulk-products retailer Boxed Inc. finished its fiscal 2022 first half with retail sales up more than 11%.
For the quarter ended June 30, consolidated net revenue — including the retail and Software & Services divisions — rose 3.1% to $43.7 million from $42.4 million a year earlier, New York-based Boxed reported this week.
Retail sales totaled $43.6 million in the second quarter, up 11.2% from $39.2 million a year ago, driven by higher merchandise sales and growth in active customers, according to Boxed. Software & Services net came in at $0.1 million, compared with nearly $3.2 million in the prior-year period. Boxed noted that the company didn’t recognize any implementation services or up-front license fee revenue in the quarter, and revenue in the Software & Services segment will vary from quarter to quarter in the near to medium term as revenue recognition reflects the timing of enterprise software deployments and ongoing implementation work.
Boxed posted a 14.1% increase in net revenue for the fiscal 2022 first quarter, including upticks of 11.3% in retail and 127.1% in Software & Services.
In the second quarter, gross merchandise value (GMV) jumped 19.4% year over year to $52.7 million amid rising business-to-business (B2B) customer demand, as B2B customer GMV advanced 55.6%, the third straight quarter of B2B GMV growth of over 55%, Boxed said. The company also tallied increases in its MaxDelivery rapid delivery and Software & Services businesses.
Retail average order value (AOV) climbed 7.1%, or $9, to an all-time high of $132 in Q2, which Boxed attributed to increased B2B orders, ongoing price optimization efforts and price inflation. Meanwhile, retail net revenue per active customer came in at $261, up 1.7%, or $4, versus a year earlier. The quarter also saw the number of retail active customers climb by about 14,000 from a year ago and by roughly 6,000 from the first quarter, reflecting investments in customer acquisition and boosting net revenue growth, according to the company.
For the 2022 first half, total net revenue rose 8.5% to $90.3 million, including an 11.3% gain to almost $88 million in the retail segment and a 43.8% drop to $2.3 million in the Software & Services segment, due to the timing of revenue recognition in Q2.
Boxed, too, made some key strategic moves during the second quarter. The company renamed MaxDelivery, acquired in late 2021, as Boxed Market, further integrating the fast-delivery e-grocer into the broader Boxed ecosystem. Recently, Boxed also signed new leases in Westchester and Brooklyn, N.Y., for more Boxed Market micro-fulfillment centers, expected to launch later this year.
In addition, Boxed last month rebranded its Software & Services business as Spresso. Boxed went public in December and, as part of that strategy, 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. In announcing Spresso, Boxed also said animal health supply company Jeffers Pet will become the first U.S.-based Spresso customer. Also in July, Boxed and Asian retail partner AEON Co. Ltd. unveiled plans to launch of an end-to-end Spresso platform in Vietnam.
“Through the hard work of the team, we have made so much progress over the last several quarters, and we are excited to reveal our strategic vision to the investment community and our shareholders,” Boxed CEO and co-founder Chieh Huang said in a statement.
That vision includes capitalizing on the back-to-the-office trend via increased sales and marketing efforts toward B2B customers, rolling out Boxed Market to two new markets by the end of the year and signing more Spresso customers, including the expansion of the AEON partnership into additional regions and addition of new customers across the globe. To that end, Boxed said it aims to refocus resource investment and drive profitability and positive free cash flow.
“B2B has grown by over 55% for three straight quarters. Our fresh food offering, Boxed Market, is on the cusp of launching in two additional markets. Also, Spresso, our Software & Services business, has signed several key, market-expanding term sheets in new geographies,” Huang explained. “These businesses are also our highest-margin businesses, and by reprioritizing resources and efforts into these areas, we are confident in our ability to deliver strong top-line growth, as well as positive adjusted EBITDA as we accelerate our path to profitability by the end of 2024.”
At the bottom line, Boxed reported a 2022 second-quarter net loss $31.8 million, or 47 cents per share, compared with a net loss of $10.2 million, or 89 cents per share, a year ago. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) came in at a loss of $22.5 million versus a loss of $8.2 million in the 2021 quarter. Boxed the adjusted EBITDA result stems from higher growth-related and public company-related investments, including advertising, staff, insurance, and IT costs.
Analysts, on average, had forecast Boxed’s Q2 adjusted earnings per share at a net loss of 30 cents, with estimates ranging from net losses of 44 cents to 21 cents, according to Refinitiv. Boxed’s Q2 revenue of $43.7 million came in below analysts’ projection of $46.58 million to $52.4 million.
For the 2022 first half, Boxed recorded a net loss of just over $68 million, or $1.01 per share, versus a net loss of $24.4, or $2.44 per share, in the year-ago period.