Box stock plunges, CEO says lowered guidance reflects 'transition' year

  • Box CEO Aaron Levie emphasized said weak guidance reflects the company's need for breathing room as it brings more products to market.
  • Box intends to target businesses, not consumers.
  • Investors have been watching closely, ever since rival Dropbox filed to list on the Nasdaq last month.
Aaron Levie
Dan Edblom | CNBC
Aaron Levie

Weak earnings guidance on Wednesday sent Box shares plunging more than 23% Thursday, but CEO Aaron Levie remains confident the company will see $1 billion in revenue by 2020 — through better customers and more product offerings.

"As you watch the business over the next couple of quarters, the next couple of years, it's really about going deeper with our customers...selling multiple products to them and the transaction size getting larger and larger," Levie told CNBC.

Thursday was Box's worst day since its 2015 IPO. The cloud storage and content management company reported slowing paid user growth and first quarter and fiscal 2019 guidance that disappointed investors and drove shares down more than 20 percent to $19.09.

The report came at a key moment for Box. Investors have been watching closely ever since rival Dropbox filed to list on the Nasdaq last month.

Levie said the weak guidance was to ensure Box has appropriate breathing room as it invests to diversify its business.

"We are transitioning from a single product company, where customers use us to be able to securely share and collaborate around their data, to really being a platform where you can secure, manage, govern...workflows around information in your business," Levie said.

"We wanted to appropriately guide Wall Street that we are in that transition. We expect to be able to accelerate out of this," he added.

Box may be diversifying its product offering, but it will continue to target businesses. The company won't look to compete in the consumer space anytime soon.

"It is a very competitive market — you are competing with companies like Google, Microsoft, Apple, Facebook and many others — so our 100 percent focus is on being able to power how companies work and operate and secure their information," he said. "We won't be going downmarket to serve consumers."

As for Dropbox, Levie has no beef. He praised his competitor's business model and wished CEO Drew Houston luck -- and, jokingly, the services of a decent hairdresser to hide the gray that comes with going public.

WATCH: Levie says he's bringing machine learning to Box platform