Shares of the cloud content management firm Box Inc. were trending lower in after-hours trading today despite the company beating expectations on earnings and revenue and forecasting it will achieve $1 billion in annual sales for the first time this fiscal year.

The company reported fourth-quarter earnings before certain costs such as stock compensation of 37 cents per share on revenue of $256.5 million, up 10% from a year earlier. That came in ahead of expectations, with Wall Street analysts predicting earnings of 34 cents on sales of $256.3 million. The results meant Box posted a net profit for the quarter of $20.5 million, rising from a loss of $8.7 million in the year-ago quarter.

Box also reported full-year revenue for fiscal 2023 of $990.9 million, up 13% from a year ago.

Looking ahead, Box offered first quarter guidance of between $248 million and $250 million, below Wall Street’s target of $260.7 million. For fiscal 2024, it’s targeting revenue of $1.05 billion to $1.06 billion. That would represent a key milestone for the company, but notably it was also below the $1.1 billion consensus estimate.

Co-founder and Chief Executive Aaron Levie told SiliconANGLE in an interview that Box was forced to rein in its revenue growth estimates in response to the macroeconomic issues that most other technology companies are seeing. “We’re seeing additional IT budget scrutiny and budgets coming down,” he said. “It’s an environment where there are pressures.”

Levie also cited the currency headwinds Box is facing along with other companies, noting that its revenue in the fourth quarter actually grew by 15% on a constant-currency basis.

The after-hours stock fall was likely a direct result of Box’s softer guidance, but Levie said there were still many reasons to be optimistic about the company’s prospects. For one thing, the company is forecasting higher operating margins next year, and it has refrained from announcing any major layoffs. In addition, Box has seen a “meaningful” increase in the number of customers spending greater than $100,000 annually on its products and services. That’s partly because more customers are upgrading to Box’s Enterprise Plus suite, Levie said.

“They need to improve their productivity, they need to improve their security, they need to consolidate their suppliers,” the CEO explained.

Levie also hinted that Box might implement more artificial intelligence capabilities such as Open AI LLC’s ChatGPT into its products at some point. He explained that Box has an advantage over its competitors in this area, thanks to its ability to maintain privacy of customer’s datasets, so they’re not exposed to AI training sets.

Analyst Holger Mueller of Constellation Research Inc. told SiliconANGLE that while Box posted a solid year overall, he wonders why it’s not growing much faster. Given the nature of its business, Box should be at the very center of digital transformation and the future of work, he said.

“Still, Box did well, barely missing the $1 billion revenue mark and insisting it will hit that target next year,” Mueller said. “Box is also investing in expanding its portfolio, with Box Canvas launching later this year. That’s a nice product that has the potential to jolt Box’s growth back into the mid-teens or even 20% growth. Meantime, Box founders Aaron Levie and Dylan Smith are improving the company’s overall profitability, which is always a good financial strategy.”

Box’s stock was down more than 8% in after-hours trading, having stayed flat during the regular trading session. Overall, Box’s stock is still up about 5% this year, ahead of the broader S&P, which has gained just 3%.

With reporting from Robert Hof

Photo: The Demo Conference/Flickr