CIOs see AI agents as journey, token budgets a concern, says Box CEO Levie

Box CEO Aaron Levie said customers are rapidly deploying AI agents, but are wrestling with bringing the productivity of coding productivity to other functions and token budgets.

Levie's take was outlined on Box's first quarter earnings call. The company performed well, appears to be upselling and has a strategy that revolves around providing the best integrations and APIs so AI agents can get the context they need.

The big picture is that Box sees AI agents as a force multiplier for its platform, which serves as a neutral layer for content management. "We don't want to fight for the UI layer. We want to fight for the best possible level of integrations and APIs across all of those agentic systems. And then the UI gets used as much as knowledge workers want to be able to go and directly interact with their content or interact with the Box Agent," said Levie.

Needless to say, Levie and Box are closely monitoring agentic AI uptake and CIO concerns. Here's the state of the AI agent union this minute.

The urgency of AI agent strategies. Levie said:

"Most companies have either deployed or are in the midst of deploying some kind of chat agent strategy. And so now the big kind of open area is, okay, well, how do I get the gains of these kinds of coding agents, but in the rest of knowledge work. How do I accelerate the productivity of my sales organization or of my finance team or of the legal organization for client onboarding and contract review processes or research and development in life sciences or manufacturing."

But there is a lot of process, workflows and getting data where it needs to go. "You have access to it all in an efficient way. You have the right kind of tooling to get your agents access to that information. And all of those kinds of challenges kind of show up pretty quickly because a customer says, I want to get these gains with AI, but my data is in some legacy on-premises system," said Levie.

Suddenly, all of that integration, controls, content repositories and Model Context Protocol support matters. Change management is critical too.

There's not one big switch to AI agents. Levie said enterprises are more on a journey that's going to take time.

"Demand is strong. Pipeline is building. The conversations are fantastic. And so, the momentum is absolutely building there. But customers do realize they have to go through this journey and there is change management, there is new technology they have to deploy, and that is going to take them some amount of time," said Levie.

Token budgets matter. "Every dinner we host with CIOs, and we do this every 1 to 2 weeks pretty much somewhere in the country, the token budgeting conversation has absolutely taken over as one of the most important topics for CIOs," said Levie.

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Neutral layers will matter because you'll want to swap models, harnesses and agents to optimize for costs. "You don't want to have your data stuck with one vendor that's going to sort of try and keep your workloads going down a particular path. You want to be able to have some flexibility of which agents you can use, which models do you choose based on the workload," said Levie. "As token budgeting becomes a bigger topic, you're going to see more value accrued to the layer that can really kind of swap out models for different workloads based on what the customer is trying to solve."

The numbers

Box reported better-than-expected first quarter results. The company reported first quarter earnings of 8 cents a share on revenue of $306 million, up 11% from a year ago. Non-GAAP earnings were 37 cents a share.

The non-GAAP earnings topped estimates by a penny a share.

For the second quarter, Box projected revenue of $319 million, up 9% from a year ago. Non-GAAP earnings will be 39 cents a share. For fiscal 2027, Box projected revenue of $1.28 billion, up 9% from a year ago. Non-GAAP earnings will be about $1.56 a share.

In April, Box launched Box Automate to orchestrate AI agents and Box Agent.

Constellation Research analyst Holger Mueller said Box is doing a good job innovating to grow along with AI agents. Mueller said:

“It's clear by now that AI raises all the boats, and the includes Box, who now solidly hovers around 10% growth. Good cost management allowed the vendor to double income and quadruple EPS. The challenge is that Box is in a hamster wheel of having to deliver cutting edge innovation in document related processes to offset the commoditization of simple file services on the low end.

If you consider the innovation speed and the partnership activity, Box is punching way above its weight. The question is, of course how long can Box pull it off. But for now, things are looking up and the next quarter will show if Box can get further revenue growth acceleration - or if it will level around 10%. Box’s latest quarter is an improvement over the single digit growth rates of recent years that sometimes even flirted with the inflation rate in bad quarters. We will see if agents will 'kill' document management as we knew it, or if parallels to SaaS, and leads to a docalypse. Or not.”