Shares in Box Inc. dropped in after-hours trading today after the company delivered weaker-than-expected fourth-quarter guidance.

For the quarter ended Oct. 31, Box reported a profit before costs such as stock compensation of 20 cents a share on revenue that rose 11% from a year ago, to $196 million. Analysts had been predicting an adjusted profit of 14 cents a share on revenue of $194.3 million.

The growth was driven by demand for Box’s cloud services combined with a push by the company to be more efficient. “Our cloud content management product suite continues to gain momentum as more enterprises prioritize digital transformation and building around best-of-breed applications,” Aaron Levie, co-founder and chief executive officer of Box, said in a statement.

During the quarter, Box closed strategic deals and expanded business with organizations that included the Defense Contract Management Agency, FICO, Murata Manufacturing Co. Ltd., National Bank of Canada, Sumitomo Corp., USAA and U.S. Department of the Air Force.

For the company’s fourth quarter ending Jan. 31, Box predicted revenue of $196 million to $197 million and an adjusted profit of 16 to 18 cents per share. Analysts had been predicting a 15-cent-per-share profit on revenue of $198.8 million. For the full year, Box said, it’s now expecting revenue of $768 million to $769 million, in line with analysts’ predictions.

On the company’s earnings call, Levie alluded to the COVID-19 pandemic driving overall market growth.

“We’re incredibly excited about the momentum in this industry where customers are going to use multiple applications such as Slack, Salesforce, Teams, WebEx and Zoom to get their work done and they’re going to need access to their content from those applications securely,” Levie said. “Enterprises more and more than ever before need a single source of truth for their content across their IT stack. And Box is the singular content layer that connects to these applications.”

Although Box didn’t exactly miss its guidance by much, investors were seemingly unimpressed. Shares in Box fell more than 6% in after-hours trading.

Image: Box