Shares of the cloud content company Box Inc. rose in after-hours trading today after it delivered second-quarter financial results that surpassed estimates and it raised its full-year forecast.

The company reported earnings before certain costs such as stock compensation of 44 cents per share, easing past the analyst’s consensus estimate of 40 cents. Revenue for the period rose by just over 3%, to $270 million, just ahead of the Street’s guidance of $269.5 million.

The results were solid enough, and Box followed up by announcing that it’s raising its full-year guidance for fiscal 2025. It said it’s now forecasting total revenue of $1.086 billion and $1.09 billion, just ahead of the $1.08 billion analyst outlook. All told, Box delivered net income of $20.5 million in the quarter, up from $10.8 million one year ago.

In an interview with SiliconANGLE, Box Chief Executive Aaron Levie said the increased guidance is partly thanks to the weakening of the U.S. dollar versus the Japanese yen. He explained that around a third of Box’s revenue comes from customers outside of the U.S., and that 60% of those are based in Japan. Previously, Box had guided for full-year revenue of between $1.075 billion and $1.08 billion.

For the current quarter, Box said it’s eyeing earnings of 41 to 42 cents per share on revenue of between $274 million and $276 million. Wall Street is looking for earnings of 40 cents per share on lower sales of $217.6 million.

Constellation Research Inc. analyst Holger Mueller told SiliconANGLE that Box’s slow pace of revenue growth remains a big concern. “It had another typical Box quarter, with tiny revenue growth that barely outpaced the rate of inflation,” he said. “The good news is that it did manage to become more profitable, and now looks like it’s on track to beat the $1 billion barrier in terms of annual revenue.”

The results also exposed the fragile nature of Box’s business, showing how its fortunes can rise and fall due to simple fluctuations in foreign exchange rates. “While foreign exchange rates are relevant for most companies, they are especially significant for Box, and that isn’t really a good thing,” he said.

In any case, investors reacted positively to the results, and Box’s stock gained more than 7% in the extended trading session, having remained flat earlier in the day.

The company, which made its name as a provider of cloud-based content management tools for enterprises, enables customers to share and collaborate on different files from any location. In more recent times, it has been heavily focused on artificial intelligence, integrating various generative AI features within its platform to try and enhance user’s productivity.

Most of those new features are available through Box AI, a suite of tools that debuted last year to help business workers ask questions about their data stored in Box and create new content on the fly, such as marketing emails or newsletters.

Levie said these new capabilities have been well received by most of the company’s customers. He explained that Box’s long-term goal is to try and “bake AI into the platform” so it can support a variety of use cases.

“In general, customers are leaning into Box AI,” he said. “Enterprises want to move off legacy content management systems and AI is certainly part of that.”

Earlier this month, Box announced it had acquired a startup called Alphamoon that offers intelligent document processing tools in order to boost its AI capabilities. Alphamoon’s technology helps to extract metadata from documents by running them through powerful AI algorithms, so as to make them more searchable and accessible.

It also boasts optical recognition technology, which makes it possible to scan paper documents and quickly make them digital. This will enable Box to help its customers get boxes of paper-based documentation online, so the information within them can then be leveraged by AI.

Levie said the company is working fast to integrate Alphamoon’s technology, and that users can expect to see new features arriving in the next few quarters that will help to automate queries around documents such as contracts, invoices and client onboarding.

This is a promising development, Levie said, because many enterprises have struggled to apply structure to their contracts and other business documents, so they typically just leave such files in opaque storage environments. By using AI, customers will finally have a way to extract value from these paper documents, instead of simply stuffing them into boxes and forgetting about them, he explained.

“AI is the ultimate frontier of reinventing this category of content management,” he said. “I can create a tremendous amount more value from my data – automate workflows, get a notice of contract renewals and so on.”

The CEO added that Box will continue to pursue its strategy of buying up smaller AI companies with capabilities that can be useful to its customers. Eventually, he hopes that Box will be able to become more “agentic,” offering AI systems that can perform tasks on behalf of human users, as opposed to just providing insights like they do now.

Mueller said Box’s bet on AI is a sensible one, as AI is impacting almost everything in the technology industry, including document management, where the company is one of the major players.

“The company has set itself up well for the future with Box AI, and its recent acquisition of Alphamoon is a smart move that should help it to enhance those capabilities,” the analyst said. “But Box faces competition in this area, and it will need to demonstrate that Box AI can be one of the winners and have a positive impact on the future of work.”

In an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio, during Google Cloud Next 2024 in April, Box Chief Technology Officer Ben Kus discussed how the future of enterprise content management hinges on effectively using AI and cloud technology:

With reporting from Robert Hof

Photo: The Demo Conference/Flickr