Cloud-based storage services provider Box (NYSE: BOX), went public 18 months ago and has since then been trying to improve its valuation. Prior to listing, Box had been valued at $2.4 billion. A year later, the company’s valuation has fallen to just over half that value as the market doesn’t appear too pleased with its loss-making business model.

Box’s Financials

Box’s first quarter revenues increased 37% over the year to $90 million and managed to surpass the market’s expectations of $89 million revenues. Billing grew 8% over the year to $75.9 million, but missed the analyst estimates of $83 million. The company continued to report losses and ended the current quarter with a net loss of $0.31 per share. The market was projecting a loss of $0.39 per share for the quarter.

While the company did manage to surpass market expectations for the last quarter, its outlook was comparatively weak. For its second quarter, Box expects revenues in the range of $94 million-$95 million compared with the Street’s forecast of $95 million. It expects to end the quarter with non-GAAP loss of $0.20 to $0.19 per share, which was better than the Street’s estimated loss of $0.22 per share. Box projected the year’s revenues at $391 million-$395 million with non-GAAP loss of $0.78-$0.75 per share.

Box’s Product Enhancements

During the quarter, Box continued to enhance its product offerings. As part of its objective of international expansion, the company released Box Zones, a cloud-based offering that will allow organizations to store files in data centers that are physically located in other countries. The offering is being made available as an additional subscription service. It will work on top of public cloud data centers from IBM and Amazon and has begun first on AWS regions in Germany, Ireland, Japan, and Singapore. It will be available on additional Asian and European locations on the IBM cloud later this year. Box Zones will help companies meet federal requirements of some countries that require that the data be stored physically in certain places.

Meanwhile, Box announced that it is now a FedRAMP compliant company. The certification ensures that Box for Government’s technology meets the security assessment, authorization, and monitoring for cloud products and services according to the US federal authorities. It is the gold standard for federal certifications and will help Box make bigger inroads into the Government sector along with helping its clients ensure they meet federal requirements. Prior to attaining the FedRamp from the Defense Information Systems Agency, Box has also achieved other federal certifications including HIPAA, PCI DSS 3.1, FINRA/SEC 17a-4, and FISMA certifications.

Meanwhile, also, Box continued to deepen and build relationships with key enterprise vendors. Last quarter, it expanded its partnership with Adobe that will help companies access and edit PDFs and execute workflows with Adobe Document Cloud and Adobe Sign directly in Box on both desktop and mobile.

Its stock is trading at $10.02 with a market capitalization of $1.21 billion. It touched a 52-week high of $19.33 in June last year. It had fallen to a 52-week low of $8.82 in January this year. The stock is still trading below its last year’s list price of $14 each and has failed to recover to the $2.4 billion valuation it had reached prior to listing.

After the announcement of its latest results, Box was downgraded by analysts. JPMorgan is worried about Box’s plans to transition its business model from multi-year payments to annual payments and expects to see less top-line upside than previously expected. The steep miss in the billings for the current quarter were a big driver for the downgrades.