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According to a recent report published by MarketsandMarkets, the cloud storage market size is estimated to grow $23.76 billion in 2016 to $74.94 billion by 2021. That translates to an annualized growth rate of 25.8% over the five-year period.

Box’s Financials

Box’s (NYSE: BOX) fourth quarter revenues grew 29% over the year to $109.9 million, ahead of the market’s expectations of $108.8 million. But the company continued to suffer losses and ended the quarter with a loss of $0.10 per share. However, it was better than the market’s expected loss of $0.13 per share. During the quarter, billings grew 22% to $159.3 million.

Box ended the year with revenues growing 32% to $398.6 million with billings improving 23% to $454.2 million. Non-GAAP net loss per share improved to $0.56 per share compared with loss of $1.12 per share reported a year ago.

For the current quarter, Box forecast revenues of $114-$115 million, and a net loss of $0.14-$0.15 per share. The Street had a forecast of revenues of $115 million and a loss of $0.12 per share. Box expects to end the year with revenues of $500-$504 million, and a net loss of $0.45-$0.49 per share. The market was looking for revenues of $501 million and a loss of $0.41 per share for the year.

Box’s Product Enhancements

To expand its market reach, Box has been working on new products. During the quarter, it released the new Box Notes web and desktop apps that help in driving real-time collaboration across teams while ensuring that the system meets the security, governance, and compliance needs of large enterprises. The real-time collaboration tool has been built into the Box app and offers an intuitive web application for fast collaboration. It allows users to access and pull up notes through a sidebar, mark and retrieve bookmarked notes, and is available right from the desktop for both Mac and PC Operating systems. Box is now working on making the service available offline so that users will be able to utilize the service whenever they want to. When they connect with the Internet, Box Notes will sync to Box so that everyone will have the latest, up-to-date version.

As part of its integration enhancements, it expanded the service to include Office 365 on Android. Now Box is available across the entire Office product suite and offers improved Excel preview capabilities so that the Box and Office user experience are more seamless. It has also improved its IBM integration through the Box + IBM Cloud Connections, so that users can now store, share, access, and update their Box content within the IBM Connections environment.

Box has been driving growth through two key focus areas. First, it has been innovating in cloud content management through the release of additional products and platform capabilities that help enterprises move to the cloud. Second, it has been investing in global go-to-market efforts to reach more enterprises all around the world. As part of its second initiative, it has been releasing Box Zones that allow global enterprises to store their Box data locally. During the last quarter, it added Australia and Canada to the Box Zones program.

Its stock is trading at $16.93 with a market capitalization of $2.2 billion. It touched a 52-week high of $18.36 in February this year. It has recovered from the 52-week low of $9.86 it had fallen to in July last year. The stock appears to have made a recovery considering that it had been trending at below list price of $14 each for most of the year. Prior to listing, Box had raised $560 million. Its last funding round was held in January 2014, when it raised $150 million at a valuation of $2.6 billion.

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Meanwhile, Box’s competition from startup Dropbox is continuing at a stronger pace. Dropbox is still privately held and does not disclose detailed financials. It did, however, recently announce that after achieving a positive free cash flow position last year, it has now passed an annual revenue run rate of $1 billion. Dropbox does not disclose detailed financials, but analysts estimate that it ended last year with revenues of $750 million.

Dropbox has raised $600 million in venture funding so far. Its last funding round was held in January 2014 when it raised $350 million at a valuation of $10 billion. Valuation has since fallen to nearly half, and Dropbox has also relied increasingly on debt funding to run its business. Many were expecting Dropbox to go public soon. But the company has been delaying plans of going public, partly due to the dismal performance of Box so far. Recently, it also announced the access to a new $600 million line of credit (LoC) facility with six banks. While the LoC may not signify any material impact on the timing of the IPO, it does give Dropbox more flexibility to defer the IPO, if needed.

Dropbox is also improving its offerings to attract more enterprise customers. It recently unveiled Smart Sync, a feature that allows users to see and access all of their files, whether stored in the cloud or on a local hard drive, from their desktop. The service is available to enterprise customers for a fee based on the number of employees who use it. It has also released Dropbox Paper, a collaboration service that allows groups to create, edit, and collaborate on projects in a single workspace. The service is available to users in 21 languages.