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Boxed Reports 1st Earnings as Public Company

E-commerce grocery platform predicts 2022 revenue to climb 24%-38%
Marian Zboraj, Progressive Grocer
Boxed Reports 1st Earnings as Public Company
Boxed's fourth-quarter year-over-year gross profit growth was 50.4%.

The year 2021 was a momentous one for e-commerce grocery platform Boxed Inc., with the company completing its merger with Seven Oaks Acquisition Corp., a special-purpose acquisition company, and going public. Boxed is also feeling optimistic about the year 2022 after the release of its fourth-quarter and fiscal year 2021 financial results.

Boxed, which sells bulk consumables and licenses its e-commerce software to enterprise retailers, reported its net revenue for the fourth quarter ended Dec. 31, 2021, was $45.0 million, an increase of $1.8 million, or 4.2%, versus the prior-year period. The rise was primarily due to the increase in software and services net revenue, which was partly offset by a modest decline (8.1%) in retail net revenue. 

The average order value was up, at $131 — an increase of $13, or 11.5%, versus last year. The increase was attributed to a rise in B2B order mix, combined with price increases implemented due to industry-wide inflationary pressures.

Gross profit of $9.2 million for the fourth quarter increased $3.1 million, or 50.4%, versus last year.

However, Boxed’s loss of $13.2 million for the fourth quarter, compared with a loss of $6.2 million in the prior-year period. The company cited advertising expense and public company-related investments in staff, insurance costs and professional services costs as reasons for the increase.

Meanwhile, for the fiscal year, Boxed reported net revenue of $177.3 million, a decrease of $9.9 million, or 5.3%, versus the prior-year period. Retail net revenue was $157.0 million, a decrease of $30.2 million, or 16.1% versus last year. The company attributed this decline to the volatility of B2B customer demand, most notably in the first half of 2021, and delays in the ramp-up of its marketing investment in the second half of 2021.

Retail net revenue per active customer, which the company believes is an indicator of customer engagement, was $411, an increase of $15, or 3.7%, compared with the prior year. Retail net revenue per active customer increased $73, or 21.7%, compared with 2019 levels.

Gross profit of $31.9 million for the fiscal year increased $6.0 million, or 23.1%. 

Adjusted EBITDA was a loss of $35.4 million for Boxed’s fiscal year, compared with a loss of $21.8 million in the prior-year period.

Average order value was $122 for the fiscal year, an increase of $14, or 12.7%, versus the prior year, and up $28, or 29.3%, versus fiscal year 2019.

“I am proud of how the entire Boxed team executed this year. Even in light of all the focus we put into our go-public process, we are pleased to be announcing results in line with the forecast released in October 2021,” said Chieh Huang, co-founder and CEO of Boxed. “With $105 million of cash on our balance sheet at year end, we are making strategic investments to fuel growth. We are investing in our B2C and B2B platforms to drive customer acquisition, further enhance our loyalty programs, and broaden our product assortment; we are also investing in our software and services business to help make the world’s e-commerce market more efficient through our advanced technology.”

As Boxed enters its first year as a public company, it estimates that fiscal year 2022 will result in total net revenue of $220 million to $245 million, reflecting a range of 24% to 38% year-over-year growth.

The liquidity generated through the business combination with Seven Oaks Acquisition will help Boxed expand investments in marketing, sales, and research and development initiatives to help support growth of its B2C, B2B, and software and services offerings.

Also helping set itself up for success is Boxed’s partnership with Google Cloud to drive innovation throughout its platform and continuously improve the customer buying experience through enhanced personalization, and faster supply-and- demand planning services. Plus, the acquisition of MaxDelivery LLC, a New York on-demand grocery delivery service, will help broaden the Boxed’s fresh grocery and dark-store fulfillment capabilities.

New York-based Boxed operates an e-commerce retail service that provides bulk pantry consumables to businesses and household customers, without the requirement of a “big-box” store membership. This service is powered by the company’s own purpose-built storefront, marketplace, analytics, fulfillment, advertising and robotics technologies. Boxed further enables e-commerce through its software and services business, which offers customers in need of an enterprise-level e-commerce platform access to its end-to-end technology.

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