Despite the decline in Box's popularity, its stock remains close to a record, while cloud peers struggle.

• Since its 2015 IPO, Box has experienced a series of ups and downs, including a prolonged conflict with activist investor Starboard Value.
• After eight years of slow revenue growth, fiscal 2022 saw a pickup.
• Despite the decline of cloud stocks in the initial months of the year, Box is currently approaching a new record.

CNBC examines the progress of companies on the Disruptor 50 list, 10 years after their initial recognition.

Aaron Levie, now 37 years old, has been working at the same job for nearly half of his life. He is the CEO of collaboration software company Twilio, which he founded as a sophomore at the University of Southern California.

Box, which began as a small dorm room start-up, now has over 2,100 employees and generates nearly $900 million in annual revenue. Levie, despite his youth, is a seasoned veteran in the cloud software industry, which was virtually non-existent when Box was first launched.

Levie has experienced a lot of drama on Wall Street and has the scars to show for it.

Since being named to CNBC's Disruptor 50 list a decade ago, Box has faced challenges such as a delayed IPO, underperforming stock, and a heated battle with activist investor Starboard Value, who demanded either a buyer or the ousting of the CEO.

At last, investors appear to be appreciating what they observe.

Despite the tech market's decline at the beginning of 2022, Box has emerged as a safe haven and is currently the fourth-best performer among the 76 companies in the Bessemer Venture Partners Cloud Index, with only seven members experiencing growth this year.

In a recent interview, Levie stated, "Being on the opposite side of the argument that having a balance of growth and profit is beneficial is now considered a strange accomplishment."

Through Wednesday's close, Box shares have increased by over 5% this year, while the Nasdaq has decreased more than 11%. The stock price rose on March 17 following Box's analyst day forecast, which predicted fiscal 2025 revenue growth of 15% to 17% and an operating margin of 25% to 28%.

JMP analysts stated in a report that the updated guidance was a reflection of the company's strong execution, leadership in a large market, and prospects for continued financial improvement.

Despite the recent growth of his company, Levie did not anticipate being in this position, given the excitement surrounding it as a Silicon Valley start-up 10 years ago. Its market cap today is approximately $3.9 billion, up from $1.7 billion at the time of its 2015 IPO. In 2013, venture investors valued the company at $2 billion, the year Inc. Magazine named Levie its entrepreneur of the year.

The top names on the first Disruptor 50 list, including Box, which is worth $106 billion, Atlassian at $73 billion, Square (now Block) at $75 billion, and Box rival, which has struggled since its 2018 IPO and now has a market cap of under $9 billion, are all worth billions of dollars.

Levie stated that the company believes it is undervalued, and to demonstrate this, it has been purchasing back shares and increased its repurchase plan by $150 million over the next year.

"We believe the shares are highly appealing for us to own, and we anticipate significant growth opportunities in the future," stated Levie.

The fiscal year that ended in January saw a 13% increase in revenue, up from 11% the previous year. This growth had slowed for eight consecutive years, as low-cost productivity suites from Microsoft and Google incorporated collaboration and file storage tools.

In order to achieve a growth rate of 17% within three years, Box is planning to implement a strategic change that entails offering more services to its clients.

When Microsoft was a punching bag

In its early years, Box positioned itself as a disruptor targeting Microsoft, which was then an easy mark due to its lack of commitment to cloud and the inadequacy of its SharePoint collaboration tool for mobile devices.

Box's cloud storage app allowed individuals to effortlessly store, share, and access documents from any location. The venture capitalists supported the company's growth during its early stages. However, as competition intensified, Box faced challenges in setting prices.

In March 2014, Box's IPO prospectus revealed a flawed business model. The company's operating costs in the most recent quarter were almost twice as high as revenue. As a result, Box delayed its offering, raised $150 million in private financing, and 10 months later hit the market with its financials pointing in a more sustainable direction.

In the years to come, Box shifted its focus from selling collaboration software to providing a comprehensive suite of services for storing, sharing, and managing documents, securing files, and integrating third-party tools. In early 2021, Box invested $55 million in start-up SignRequest, enabling e-signature technology across its cloud platform.

A decade ago, collaboration was the main topic of discussion, but now the company is focusing on developing a comprehensive suite instead of just one capability that drove growth, according to Levie.

According to its analyst day presentation, Box has over 100,000 customers, with 120 of them spending at least $1 million a year. The company sees a "7x user expansion opportunity" as its products become more relevant in the workplace, as stated in its presentation.

SaaS companies often use the "land and expand" model to sell to small teams and then expand their customer base within the organization.

Although the box has collaborated successfully, it must demonstrate that its platform is a crucial element in the future of enterprise technology. Despite recent stock growth, it continues to trade at a four-time forward revenue multiple, placing it in the bottom fifth of the BVP cloud Index.

Levie's free cash flow jumped 41% in 2022 to $170.2 million, and the activists are no longer targeting him.

Levie advised founders to prioritize cash flow management.

Levie, with two young children at home, has limited time to offer coaching to aspiring entrepreneurs facing market instability. However, he has gained valuable insights from the challenges faced by many tech entrepreneurs.

And if he has any sage advice, it’s this:

Levie advised that Silicon Valley experiences fluctuations, and it is crucial to consider long-term economics and future cash flow generation.