Shares of the file-sharing company Dropbox Inc. gained more than 4% in extended trading today after it beat analysts targets on earnings and revenue in its second quarter.

The company reported earnings before certain costs such as stock compensation of 51 cents per share, with revenue growing 9% to $622.5 million. It was a strong performance, with Wall Street analysts modeling earnings of just 45 cents per share on sales of $613.6 million.

On the other hand, investors may have been disappointed to see Dropbox’s net income declined from $62 million one year ago to just $43.2 million today.

Dropbox co-founder and Chief Executive Drew Houston (pictured) highlighted how the company beat its own guidance across all metrics. “As we navigate this period of economic uncertainty, we remain focused on improving the product experience within core Dropbox and creating more value across workflows and AI-driven capabilities,” he added.

Dropbox is a familiar name among office workers, since the company has established itself as one of the leading providers of cloud-based file storage and sharing tools. Its software is used by thousands of companies across the world to organize, manage, share and collaborate on business documents.

Underscoring the health of its business, Dropbox said its total annual recurring revenue rose 7% from a year ago, to $2.5 billion at the end of the quarter. It ended the quarter with more than 18 million paying users, up from 17.37 million last year. What’s more, it continues to squeeze more money out of those customers, with average revenue per user rising to $138.94, up from $133.34 one year earlier.

Like most software firms, Dropbox has been enthusiastic about the latest advances in generative artificial intelligence, saying the technology – which powers chatbots that can have humanlike conversations – can be especially useful in the world of files and documents.

During the quarter, it announced new generative AI features that make it easier for users to discover files and quickly find the information they need from within them. Dropbox Dash is a new, generative AI search tool that collects all of the content, apps and tools used by customers and puts them in one place. From there, it can pull information from any file upon request, meaning users can simply ask for whatever it is they need in a conversational way.

Meanwhile, Dropbox AI is a new capability that applies to file previews. It summarizes the content of any document or video file into an easily digestible blurb that appears when the user hovers a mouse cursor over it, so they no longer have to open the file to know what’s in it.

Constellation Research Inc. analyst Holger Mueller said single-digit growth has become the normal state of affairs at Dropbox for some time already. Moreover, the executive management has become accustomed to it, and is managing its costs very well to remain profitable.

“The exception is R&D, where Dropbox has stepped things up a little to invest in AI to power its flagship products,” the analyst said. “If Dropbox can get this right, the AI infusion in its offerings might just be the spark that returns it to double-digit growth, as it has huge potential to change the future of work.”

Dropbox is quietly optimistic that its new generative AI features will help to drive fresh growth in its business, and it shows in the company’s guidance for the third quarter. Officials said they expect revenue of between $626 million and $629 million, well ahead of Wall Street’s target of $624.6 million.

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