According to a recent report published by Allied Market Research, the global cloud storage market is estimated to grow 25% annually over the next few years to reach $97.4 billion by 2022. Box (NYSE: BOX) is driving towards this growth through continued product innovation and market tie-ups.

Box’s Financials

Box’s second quarter revenues grew 16% over the year to $172.55 million, ahead of the market’s expectations of $169.5 million. Billings grew 6% to $172.9 million. Net loss reduced to $36.2 million, or $0.25 per share, compared with a loss of $38.1 million reported a year ago. On an adjusted basis, the company reported a break-even quarter, and was ahead of the market’s forecast of a loss of $0.02 per share.

Among operating metrics, Box’s customer retention rate fell to 106% in the quarter compared with 107% reported a quarter ago and 115% rate in 2017. The decline suggests that Box isn’t expanding as rapidly within its existing customer base as it has in the past.

For the current year, Box raised its revenues forecast to $690-$692 million but kept its earnings estimate constant at $0.00-$0.02 per share. Box expects to end the third quarter with revenues of $174-$175 million with an earnings forecast of a loss of $0.01 per share to a break-even quarter. The market forecast a break-even year with revenues of $689.65 million and third quarter revenues of $174.6 million and a loss of $0.01 per share.

Box’s Growth Focus

Box continues to expand its market reach through product innovation and partner expansion. During the last quarter, it released a new workflow solution, the Box Relay. Relay automates critical workflows across the enterprise while leveraging Box’s security compliance and integrations. The product has received positive reviews as it helps automate document review and approvals, streamlining the recruiting and on-boarding process and automating routing and approval of incoming invoices and other documents.

Recently, the company also released Box Shield, a new security capability that it has been developing for the past two years. Shield offers a new set of security controls and intelligent threat detection capabilities for content management. It has been built natively into Box, so it helps prevent accidental data leakage, detects potential access and misuse, and identifies external threats. It is expected to be especially useful in preventing accidental sharing of documents across organizations. Shield will be generally available later in the quarter and will be sold as a stand-alone product as well as part of the Box suites.

Within partner expansion, Box recently entered into a strategic tie-up with Oracle. As part of the integration, Oracle will allow customers to connect their cloud and on-premises Oracle and third-party applications with Box via Oracle Integration. The integration will allow organizations to simplify and standardize line-of-business processes with Oracle and Box. It is expected to simplify the process of integrating content-driven business processes within the applications. For instance, one use case is that of HR teams where they will be able to deploy workflows to automatically create Box folders whenever new employee records are added to Oracle PeopleSoft, thus streamlining the onboarding process and eliminating manual work. The integration will help accelerate the digital modernization projects of its customers by combining machine learning with business processes and a library of run-ready application adapters.

Recently, Box has been in the news due to an activist investor interest. A recent filing revealed that investor Starboard has 11 million shares or approximately 7% stake of Box stock. Starboard is known as an activist investor who seeks to make major changes at companies that executives might not be happy about. The market reacted positively to the news, and the stock climbed 11%. Box believes that it is already focused on growth and profitability, while driving more value out of its current customer base.

Its stock is currently trading at $17.36 with a market capitalization of $2.6 billion. It touched a high of $24.93 in February this year. It has recovered from a year low of $12.46 that it had fallen to in August this year.