Cloud storage company Box Inc. struggled to generate much enthusiasm from its investors today, despite posting second-quarter financial results that beat expectations.

The company’s earnings before certain costs such as stock compensation came in at zero cents per share. Revenue rose 16% from a year ago, to $172.5 million. That was better than expected, as Wall Street had Box down for a 2-cents-a-share loss on revenue of $169.53 million.

Box’s guidance for the next quarter wasn’t bad either, falling more or less in line with estimates. For the next quarter, the company said it’s expecting to break even or post a one-cent loss. Revenue will fall between $174 million and $175 million, officials said. Wall Street had earlier forecast a loss of a penny a share on revenue of $174.51 million for the third quarter.

But Box’s investors may have been hoping for a bit more progress than that, as the company’s stock fell more than 7% in after-hours trading.

Box also revised its full-year 2020 revenue guidance to between $690 million and $692 million, the midpoint of which is slightly higher than its previous range of $688 million to $692 million. But officials declined to adjust their full-year earnings per share guidance of between breakeven and 2 cents.

Charles King of Pund-IT Inc. told SiliconANGLE this was the most likely reason for the subsequent selloff of Box’s stock in after-hours trading. He said some shareholders were probably disappointed that it didn’t raise its guidance for the remainder of the year after beating expectations this quarter.

“The company stood pat on its earlier estimates, leading some to head for the exits,” King said. “Personally, I believe this course is a wise one. With the lag in businesses’ IT investments and gyrating economic events spooking global markets, the last thing Box needs is to stoke investors’ expectations. Better to stay calm, work hard and hope to reap later rewards.”

And there is reason to be optimistic it can do so. For example, Box’s second-quarter billings rose 6%, to $172.9 million. In addition, six-figure customer deals jumped 36% from a year ago.

“We made significant progress on our key objectives in Q2, as we continued to deliver more products to our customers that enable higher value use cases, while executing on the most compelling product roadmap in our history,” said Box co-founder and Chief Executive Officer Aaron Levie. “We drove strong add-on product attach rates of more than 80% across our six-figure deals in Q2.”

On the product front, Box announced general availability of two key services in the last quarter, including its workflow automation tool Box Relay and a new security offering called Box Shield.

Analyst Holger Mueller of Constellation Research Inc. said he thought Box was executing well, with all the key indicators looking good, regardless of what shareholders might think.

“Now Box needs to keep up the momentum and deliver profitability,” Mueller said. “On the product side the general availability of Box Relay and Box Shield are highlights, and the attach sales speak for Box establishing itself as a platform in enterprises. After all, executives don’t purchase add-ons if they think the platform isn’t there to stay.”

Photo: JD Lasica/Flickr