Cloud storage company Box Inc. took a real battering today, with its stock falling almost 14% in after-hours trading.

The reason for the drop was an updated full-year revenue outlook that fell well short of analysts’ estimates.

Box actually did quite well in the quarter just gone. It reported a first-quarter loss before certain costs such as stock compensation of 3 cents per share on revenue of $163 million, up 16% from a year ago.

Wall Street had been expecting a wider loss of 5 cents per share on $161.45 million in revenue. Box also reported first quarter billings of $118.4 million, up 1% from a year ago.

Company officials said the revenue increase was thanks to its ability to attract larger customers for its collaboration and workflow software. But one of the problems with having larger customers is that those deals take longer to close, hence the lowered outlook.

Box now says it’s expecting full-year fiscal 2020 revenue of between $688 million and $692 million. Analysts had forecast full-year revenue of $702 million, so it wasn’t entirely unexpected that shareholders might decide to take their money and run. After all, Box’s stock took a similar battering following its last earnings report in February when its stock fell 24%, also on lowered guidance.

“While we are encouraged by the demand for these larger, more strategic deployments, these deals often have longer sales cycles, which is reflected in our updated guidance,” Box Chief Executive Officer Aaron Levie (pictured) said in a statement.

Shareholders may also have contrasted Box’s performance with that of its main rival, Dropbox Inc., which is driving more than double its revenue and enjoying substantially better growth, said Charles King, an analyst with Pund-IT Inc. In the last quarter, Dropbox not only beat expectations on earnings and revenue but also managed to boost its average revenue per paying user, and issued better than expected guidance.

“Longer sales cycles can throw hiccups into company’s earnings but they also tend to even out over time,” King said. “Waiting for that to shake out requires patience but that seems to be in short supply among some Box shareholders.”

Analyst Holger Mueller of Constellation Research Inc. told SiliconANGLE the lower guidance took the sheen off an otherwise decent quarter for Box, which he said might have even reached profitability had it delivered a stellar performance.

“If it’s really about large and lumpy sales as Levie stated, this will be seen in the next quarters,” Mueller said about the lower guidance. “Sometimes these deals get pulled in, and sometimes not.”

In the last quarter, Box signaled how it’s trying to become less reliant on its main business of providing storage and content management services. The company rolled out a revamped version of its Box Relay workflow automation tool with new features designed to make it easier for companies to automate business processes centered around the content they work with. At the time of the launch, Box Chief Product Officer Jeetu Patel told SiliconANGLE that his company was hoping to transform workflow into a more “mainstream market,” just as it did with its original content management play.

Mueller said Box Relay was a promising development that should help the company to yield higher revenue in future, though it would need to be patient.

For the second quarter, Box said it’s forecasting a loss of 2 cents per share on revenue of $170.8 million, versus the analyst forecast of a 1 to 2 cents loss on revenue of $169 million to $170 million.

Photo: JD Lasica/Flickr