Box (NYSE: BOX), a provider of secure cloud storage and collaboration tools designed for large teams, is rumored to be exploring a sale amid pressure from large investors. The stock jumped more than 10% on this news, but the question investors seem to be asking is: Which company would buy it? While there’s no evidence to claim that Dropbox (NASDAQ: DBX) is a suitor here, combining the two would make sense for a few reasons.
Box first went public in late 2015, but since then, the stock has basically gone nowhere. Though its revenue has more than tripled since 2015, it has yet to produce an annual net profit. Operating cash flow has grown over the years, but that excludes stock-based compensation, which for Box consumes 20% of all revenue.
While its financials don’t look too promising, the company has amassed a customer base of more than 100,000 businesses. With $770 million in revenue, Box generates more than $7,000 a year per customer — a far higher per-customer amount than Dropbox brings in. Differences between their target markets, though, mean that it’s not exactly an apples-to-apples comparison: Box is largely geared toward big teams, while Dropbox still has plenty of individual users.