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SAN FRANCISCO - Dropbox, Inc. (NASDAQ:DBX) reported third-quarter earnings and revenue that exceeded analyst expectations, sending shares up 5.5% following the announcement.
The cloud storage company posted adjusted earnings per share of $0.74 for the third quarter, significantly beating the analyst estimate of $0.64. Revenue came in at $634.4 million, surpassing the consensus estimate of $620.11 million, despite being down 0.7% YoY. On a constant currency basis, revenue decreased by 1.2% compared to the same period last year.
"We delivered a strong Q3, exceeding our revenue guidance and expanding operating margins as we continue to drive efficiency across the business," said Drew Houston, Dropbox Co-Founder and Chief Executive Officer.
The company reported a non-GAAP operating margin of 41.1%, up from 36.2% in the same period last year. GAAP operating margin improved to 27.5% from 20.0% a year ago, partially due to decreased employee-related costs from reduced headcount.
Free cash flow reached $293.7 million, compared to $270.1 million for the same period last year, while net cash provided by operating activities was $302.1 million.
Dropbox’s paying user base stood at 18.07 million, down slightly from 18.24 million a year ago. Average revenue per paying user remained essentially flat at $139.07, compared to $139.05 in the prior-year period.
The company recently launched the self-serve version of Dash with deep integration into Dropbox, providing AI assistant and search capabilities to both new and existing customers. Total annual recurring revenue was $2.536 billion, down 1.7% from the same period last year, with a quarter-over-quarter decrease of $6.1 million.
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