Shares of Box (BOX 1.38%) surged as much as 19.7% higher on Wednesday, peaking around 1:30 p.m. ET. The cloud-based data storage and content management veteran reported robust first-quarter fiscal-year 2026 results on Tuesday evening. By 3:10 p.m. ET, the stock was up about 18% from the previous day's close.
Image source: Getty Images.
Foreign exchange, taxes, and shrinking earnings
Box's Q1 2026 sales rose 4% year over year to $276.3 million. Adjusted earnings fell from $0.39 to $0.30 per diluted share, including a $0.01 headwind from changing foreign currency exchange rates. Your average Wall Street analyst would have settled for earnings near $0.26 per share on revenue in the neighborhood of $275.1 million.
Looking ahead, Box's management projects second-quarter revenue of approximately $290 million with roughly $0.30 of adjusted earnings per share. These numbers will compare to $270 million and $0.44 per share, respectively, in the year-ago period.
Box's next big leap: Feeding the robots
Non-cash tax charges are weighing on Box's bottom-line results this year. The company recently turned profitable and is now recognizing $248 million of deferred tax credits, little by little. This item reduced Box's first-quarter adjusted earnings by $0.12 per share.
The company recently unveiled a brand-new artificial intelligence (AI) platform that will help enterprise-scale clients feed data to their AI agents. Box's stock is trading at an all-time high today, boosted by a promising AI strategy and five straight quarters of analyst-stumping financial results. Even so, Box shares trade at a fairly modest valuation. In that context, today's significant price jump looks reasonable.
