Box delivered better-than-expected third quarter financial results Tuesday.

The enterprise cloud storage company reported a net loss of $2.6 million, or 3 cents per share. On a non-GAAP basis, Box delivered EPS of 20 cents on top of $196 million in revenue, up 11% year over year. Wall Street was expecting earnings of 14 cents per share with $194.2 million in revenue. 

Box said Q3 billings were $185.5 million, up 8% year over year. Deferred revenue as of October 31 was $354.4 million, an increase of 9% from a year ago. Free cash flow in Q3 was $26.2 million.

Box highlighted its new and expanded deals in Q3 with a number of customers, including USAA, Murata Manufacturing and the U.S. Air Force. Meanwhile, Box chief executive Aaron Levie pointed to the company's efforts to improve margins and optimize expenses.

"To drive greater profitability, we are focused on 3 key initiatives: continuing to optimize workforce expenses, improving our gross margins by shifting more towards the public cloud and taking an ROI-based approach to all areas of spend," Levie said on the call with analysts. "We have implemented greater cost discipline across the business, and this is evident in our significant gross margin, operating margin and cash flow improvements throughout the year." 

In terms of guidance, Box is forecasting Q4 revenue in the range of $196 million to $197 million with earnings per share between 16 and 18 cents. Analysts are expecting earnings of 15 cents per share with revenue of $198.75 million.

For the year Box expects revenue to be in the range of $768 million to $769 million with EPS ranging from 64 cents to 66 cents. Wall Street is expecting revenue of $768.9 million with earnings per share of 58 cents. Shares of Box were down more than 6% after hours.

On the analyst call, Box CFO Dylan Smith said the company's guidance factors in a revenue impact from lower professional services bookings, which creates a roughly $2 million headwind to the company's overall revenue expectations in Q4.

"We remain prudent in our growth expectations given the macroeconomic challenges that our customers are facing and is the headwinds we experienced this past year and our professional services business may persist," Smith said. "That said, we're seeing continued strength in our enterprise business and a recovery in SMB demand, both of which should benefit from the strong momentum we're seeing in suites and our newer products."