Dropbox has had a long road to profitability. They should do well in a post-coronavirus world:
Dropbox posts first quarterly profit
Published Thu, May 7 20204:12 PM EDT
Updated Moments Ago
Jordan Novet @jordannovet
Key Points
-- Dropbox’s bottom line is in the black for the first time since the company debuted on the Nasdaq in 2018.
-- The company beat estimates for revenue and adjusted earnings.
-- Guidance will come on the company’s conference call.
Dropbox shares rose as much as 7% on Thursday before falling to a 2% decline from the day’s $21.89 closing price after the company showed its first quarterly profit. CEO Drew Houston said in February that the company’s goal was to be profitable by the end of the year.
Here’s how the company did in Q1 2020:
Earnings: 17 cents per share, adjusted
Revenue: $455.0 million
Dropbox posted $39.3 million in net income, or 9 cents per share, according to a statement. The company expects to have a profit for the full year, Ajay Vashee, its finance chief, said on a conference call with analysts.
Revenue grew 18% in the quarter, down from 19% growth in the fourth quarter.
Analysts polled by Refinitiv had expected 14 cents in adjusted earnings per share on $452.2 million in revenue. However, comparing results against estimates isn’t straightforward given that the coronavirus spread during the quarter.
The company reported 14.6 million paying users at the end of the first quarter, up from 14.3 million one quarter ago. Analysts surveyed by FactSet had expected 14.61 million paying users. The number of weekly active users of Dropbox’s redesigned desktop app is up about 60% since March, the company said in a blog post on Thursday.
Average revenue per paying user was $126.30 for the quarter, up from $125 in the fourth quarter. The FactSet consensus was $126.22.
Dropbox enables remote content collaboration, although it has “meaningful” exposure to small and medium-sized businesses, DA Davidson analysts Rishi Jaluria wrote in a note distributed to clients on Monday.
In the quarter Dropbox announced new features for its HelloSign electronic-signature technology, which Dropbox acquired for $230 million last year.
Dropbox stock debuted on the Nasdaq in 2018. The company had positive free cash flow in 2016 after a year of negative free cash flow, according to the prospectus for its initial public offering.
Notwithstanding the after-hours move, Dropbox shares are up about 22% for the year.
Dropbox will issue guidance on the conference call.
This is breaking news. Please check back for updates.
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