Shares of the cloud content management company Box Inc. rose in extended trading today after it posted solid financial results, delivering its first-ever $1 billion fiscal year and announcing a new, $100 million share-buyback program.

The fiscal fourth-quarter results came as Box announced a new integration with its Box AI suite of generative artificial intelligence tools and Microsoft Corp’s Azure OpenAI Service.

In the January quarter, Box delivered earnings before certain costs such as stock compensation of 42 cents per share, above Wall Street’s consensus estimate of 38 cents per share. The company also reported revenue of $263 million, up 2% from a year earlier and in-line with Wall Street’s guidance. Billings came to $379.3 million, up 6% from a year ago.

All told, the company’s net income for the quarter came to $99.2 million, up from $20.5 million one year ago.

For the 2024 fiscal year, the company reported sales of $1.04 billion, up 5% from the prior year, with billings coming to $1.06 billion, up 3%. Full-year profits came to $1.46 per share.

On the other hand, Box’s guidance for the current quarter and full year came just shy of Wall Street’s expectations. The company said it’s looking for revenue of between $261 million and $263 million in the first quarter of fiscal 2025, in-line with the Street’s forecast of $262 million. Earnings are forecast in a range of 35 to 36 cents per share, below the Street’s target of 39 cents.

For fiscal 2025, Box sees revenue of between $1.08 billion and $1.085 billion and earnings of $1.53 and $1.57 per share, below the consensus estimate of $1.09 billion in sales and $1.67 per share in earnings.

In an interview with Barron’s, Box Chief Executive Aaron Levie (pictured) blamed the lower forecast entirely on currency fluctuations. He pointed out that around a third of the company’s revenue comes from international markets, with Japan being the largest offshore contributor. Luckily for Box, it seems investors were in a forgiving mood, as the company’s stock was trading 3% higher after-hours.

The integration between Box AI and Azure OpenAI Service will enable OpenAI’s most powerful large language models to tap into the enormous amounts of data held within Box Content Cloud. Box AI made its debut in beta last year, introducing a suite of generative AI capabilities within the platform. Today, it has become generally available to all Enterprise Plus plan subscribers.

“With advancements in AI, companies are accelerating their adoption of the cloud and transforming how they work with their content,” Levie said in a statement. “Box is at the center of some of the most important trends in technology history as companies look to digitize and automate their businesses, accelerate innovation with the power of AI and protect their most important data.”

The CEO told Barron’s that the company had “numerous wins” with Box AI in the quarter, reiterating his belief that it will become core to the company’s platform and a major reason for organizations to adopt it.

By breaking the $1 billion fiscal revenue barrier for the first time, Box achieved a significant milestone, said Holger Mueller of Constellation Research Inc. “It’s a good achievement, but the problem is that Box’s revenue growth has slowed to such an extent that it literally crawled over the finish line, up by just 3% in the quarter,” the analyst said.

The extremely pedestrian growth level will likely be a concern to investors, Mueller said, because Box is doing everything right in terms of innovation and it is also adding new customers. “It seems that the pace of innovation is moving faster than Box’s price levels, and while that’s good for customers, it’s not so great for Box, which is adding new functionality without seeing much in the way of gains for its efforts,” Mueller said. “We will see if the partnership with Microsoft can make a difference.”

Box is also planning to expand its AI capabilities later this year, opening up new markets for the company in areas such as digital assets and digital invoice management. This will help to expand the total addressable market for Box and pave the way for a return to double-digit growth, he said, though he didn’t give any timeline for when that might happen.

“There is so much content that is effectively unlabeled or unstructured,” Levie said. “AI can apply structure to data at scale.”

Prior to today’s increase, Box’s stock had been flat in the year to date, while the S&P 500 Index had gained 27%.

Photo: The Demo Conference/Flickr