Shares of the cloud content storage company Box Inc. jumped late today after it logged better-than-expected earnings and sales and raised its full-year guidance, saying it’s seeing traction with its new agentic artificial intelligence offerings.

The company reported first-quarter earnings before certain costs such as stock compensation of 30 cents per share, beating Wall Street’s estimate of 26 cents. Revenue for the period increased 4%, to $276.3 million, coming in ahead of the $275 million target.

Those numbers helped Box to eke out a total profit of $8.2 million in the quarter, down from $17.2 million in the same period one year ago. Although disappointing, the drop in profitability wasn’t unexpected, as Box warned investors three months earlier that its bottom line is likely to be affected by a stronger U.S. dollar. The company does a lot of business outside of the U.S., with close to a quarter of its revenue coming from Japan, for example.

Box co-founder and Chief Executive Aaron Levie (pictured) said the company is emerging at the cusp of a pivotal moment, in which AI is slowly but surely revolutionizing how enterprises do business.

“In this AI-first era, organizations are embracing this shift to stay competitive, and at Box, we help businesses to unlock value from their unstructured data with our Intelligent Content Management platform,” he said.

Box has emerged as a pioneer of AI, making the technology a central aspect of its platform. Its AI offerings are centered on the Box AI suite, which launched in 2023 and includes a host of AI agents that can automate repetitive tasks on behalf of its users. With its Box AI Studio, companies can even create their own AI agents.

The company has been gradually expanding its AI offerings ever since, and earlier this month announced a major update with the launch of newer, more powerful AI agents for content search, deep research and data extraction.

In an interview, Levie told SiliconANGLE he’s seeing a lot of excitement from customers about Box’s agentic deep research capabilities, though most customers are still learning how best to employ it. “We’re still on day one of what’s fully possible, [but] AI data extraction is very compelling,” he said. “We have a lot of core AI agents for interacting with data.”

According to Levie, most customers are talking about how AI can help to augment and accelerate their work, rather than completely replace the humans that perform existing tasks. In addition, many are looking at using AI to do things that weren’t possible before. “Companies are trying to go AI-first, and we’re here to help them,” he added.

Box’s AI investments look to be generating a tangible return for the company too, for it’s notable that that company is forecasting revenue growth of about 7% to 8% in the current quarter and full year, as opposed to growth of just 4% in the prior quarter. For instance, Box said it’s looking at full-year sales of $1.165 billion to $1.17 billion, up from its earlier guidance of $1.155 billion to $1.160 billion. It also hiked its earnings forecast to a range of $1.22 to $1.26 per share, up from its previous target of $1.13 to $1.17 per share. Wall Street is looking for full-year revenue of $1.15 billion and earnings of $1.19 per share.

Holger Mueller of Constellation Research Inc. said Box is showing an impressive level of innovation and is really now betting its future on AI, but he said the company still needs to show it can lift its revenue growth back into the double-digits if it’s to really satisfy Wall Street’s demands.

“Investors expect double-digit growth at the very least for an innovative AI company, but Box hasn’t yet been able to achieve it,” the analyst said. “In the current quarter, it flirted a bit with the inflation rate, meaning that it was really treading water in terms of its revenue growth.”

Despite this, Mueller said it’s clear that there is a lot of potential for Box to improve, but it all depends on its ability to convince enterprises of the value its AI offerings can provide them with.

“The promise of AI changing the way people work with documents is becoming clearer by the day, and if Box can unleash the acceleration potential it offers in terms of business best practices, it may well hit the expected double-digit growth rate,” Mueller said. “But on the downside, it still faces risk in terms of the commoditization pressures it has faced since the days of the Covid pandemic.”

In any case, it seemed that investors were willing to cut Box some slack, as its stock gained more than 10% after-hours.

For the current quarter, Box is targeting sales of $290 million to $291 million, which would represent growth of 8% at the midpoint. It’s also looking for earnings of between 30 and 31 cents per share. Analysts have modeled $284.5 million in revenue and earnings of 28 cents per share.

With the after-hours price action, Box’s stock is now almost flat in the year-to-date, more or less on a par with the broader S&P 500 Index, which has gained about 1% so far this year.

With reporting from Robert Hof

Photo: The Demo Conference/Flickr