From Nasdaq: 2024-11-08 12:34:00

Dropbox (DBX) reported third-quarter 2024 non-GAAP earnings of 60 cents per share, beating the Zacks Consensus Estimate by 15.38% and increasing 7.1% year over year. Revenues of $638.8 million inched up 0.9% year over year, with total annual recurring revenues reaching $2.579 billion.

Dropbox shares were slightly down post Q3 results, with a year-to-date decline of 5.4%. The company offered positive guidance for 2024, expecting margin growth despite fierce competition in the File Sync and Share (FSS) business. The launch of Dropbox Dash, an AI-powered universal search product, is expected to enhance clientele.

Dropbox’s paid user base increased in Q3 to 18.24 million, with a sequential growth of nearly 19,000 users. The company leads in content sharing and collaboration applications, supporting over 700 million users. Dropbox’s market share surpasses Apple and Box, according to IDC’s estimates.

In Q3, Dropbox saw an expansion in non-GAAP gross margin to 84%, with operating margin reaching 36.2%. The company reported increased expenses in research, development, sales, and marketing, leading to a solid operating margin growth year over year.

As of Sept. 30, 2024, Dropbox had $890.8 million in cash and short-term investments. The company reported a free cash flow of $270.1 million in Q3, with over 11 million shares repurchased. Dropbox raised its 2024 margin guidance, expecting higher revenues and margins for the full year.

Currently holding a Zacks Rank #3 (Hold), Dropbox anticipates strong revenue performance for 2024, with an expected non-GAAP operating margin of around 32%. The company aims for a gross margin of 84% for the full year and free cash flow between $860 million and $875 million.



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