Cloud content management company Box Inc. delivered a comfortable earnings and revenue beat today, increasing its profitability, but the results failed to impress investors all that much, as its stock was flat after-hours.

The company reported first-quarter earnings before certain costs such as stock compensation of 39 cents per share, just ahead of the Street’s target of 39 cents per share. Meanwhile, revenue for the period rose 5% from a year ago, to $265 million, above the consensus estimate of $262 million in sales.

The improved performance meant that Box boosted its profitability in the quarter. The company reported operating income of $18 million, amounting to 6.8% of its revenue. That’s a big improvement from the same period last year, when it recorded an $8.3 million operating profit, or just 3.3% of its revenue.

Box also reported billings of $190.5 million, a 1% drop from last year, but up 5% on a constant currency basis. Cash from operations rose 5%, to $131 million.

The company has made its name as a provider of cloud management tools for managing corporate content, enabling teams to share and collaborate on different files from any location. In recent months, the company has integrated a number of generative artificial intelligence capabilities into its platform to enhance the productivity of the workers it caters to.

One of its most notable initiatives was the launch of Box AI, which has been integrated with the Microsoft Azure OpenAI Service. That enabled OpenAI’s powerful large language models to tap into the data held within Box’s Content Cloud.

During the quarter, Box was focused on extending its AI push. Earlier this month, it debuted a new feature called Box Hubs in beta, which provides a way for users to surface trusted content more quickly than before. It’s billed as an intelligent portal solution for simplifying content curation and publishing.

Box AI is also being integrated with Box Hubs, helping workers to unlock the value of their enterprise data, the company said at the time. Users can use their natural language to ask questions of the data within Box Hubs, summarize large amounts of information, compare specific files, create new content based on their existing files, and more.

Chief Executive Aaron Levie (pictured) said the new capabilities are designed to help users make sense of their unstructured data and tap into the value locked within it. “Box Intelligent Content Cloud is in a prime position to help companies tap into the value of their content,” he said. “As we continue to execute on our innovative roadmap with the launch of Box Hubs and Box AI for Hubs, we are addressing some of the most significant challenges that our customers face in harnessing the power of AI and content.”

In a recent conversation with theCUBE Research, Box Chief Technology Officer Ben Kus discussed the growing role of AI in handling unstructured content. He said he was particularly excited about the advent of newer, more powerful generative AI models that can understand content in the same way as humans do, paving the way for enhancements in data management and analysis.

“Now you can actually start to have AI understand things the way that humans would, and that then changes really what people can do with their content overall,” Kus said. “We have a hundred thousand enterprise customers. We store hundreds of billions of these files. And now AI is a big part of that.”

Despite the solid earnings and revenue beat, Box’s guidance failed to excite investors and likely explains the lack of any after-hours action in its stock price.

Looking to the second quarter, Box offered an forecast of between 40 and 41 cents in earnings, just ahead of Wall Street’s consensus estimate of 39 cents, while its revenue forecast ranges from $268 million to $270 million, just below the Street’s target of $271.6 million.

For the full year, Box is targeting earnings of $1.54 to $1.58, just shy of the Street’s consensus estimate of $1.58, while revenue is set to come in at $1.075 billion to $1.08 billion, short of the Street’s $1.083 billion forecast.

Photo: The Demo Conference/Flickr