For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both. The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor. It also includes access to the Zacks Style Scores. What are the Zacks Style Scores? Devel ...

Shares of Dropbox (DBX) have gained 3.3% over the past four weeks to close the last trading session at $23.73, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $30 indicates a potential upside of 26.4%. The average comprises nine short-term price targets ranging from a low of $24 to a high of $37, with a standard deviation of $4.58. While the lowest estimate indicates an increase ...

Investing in the internet is still a spectrum for growth as a seemingly unlimited number of businesses can benefit from what is one of the greatest inventions of our lifetime.There will always be up-and-coming or emerging investments in this regard and after posting strong Q1 results on Thursday, several internet-related stocks are starting to stand out.Dropbox (DBX)  - Zacks Rank #2 (BUY) Current Stock Price: $23 Serving more than 700 million registered users across 180 countries, Dropbox’s cloud-based pla ...

Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or UNITED STATES SECURITIES AND EXCHANGE COMMISSION Dropbox, Inc. 1800 Owens Street San Francisco, California 94158 (415) 930-7766 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) Securities registered pursuant to Section 12(b) of the Act: Class A Common Stock, p ...

Dropbox (DBX) reported first-quarter 2024 non-GAAP earnings of 58 cents per share, beating the Zacks Consensus Estimate by 18.37% and increasing 38.1% year over year.Revenues of $631.3 million increased 3.3% year over year and beat the consensus mark by 0.40%.Total annual recurring revenues came in at $2.556 billion, up 3.6% year over year.Quarter DetailsDropbox exited the first quarter of 2024 with 18.16 million paying users, marking a sequential growth of roughly 35,000. The average revenue per paying use ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2024 increased by 3.3% year-over-year to $631 million, slightly above guidance [8] - Total ARR grew to $2.556 billion, up 3.6% year-over-year, with a constant currency growth rate of 2.8% [8] - Gross margin was 84.6%, benefiting from an increase in the useful life of servers, resulting in approximately $10 million of benefit in Q1 [9] - Operating expenses decreased by approximately 8% year-over-year to $303 million, leading to an operating margin of 36.5%, ahead of guidance [9] - Net income for Q1 was $197 million, up 35% year-over-year, with diluted EPS of $0.58 [31] Business Line Data and Key Metrics Changes - The core FSS business is focused on improving Teams offerings, with higher net revenue retention rates and opportunities for license expansion [4] - The Document Workflow group, including Form Swift, Sign, and DocSend, performed better than anticipated, indicating a positive trend [24] - The mobile channel has not fully recovered, but there have been improvements in top funnel metrics [25] Market Data and Key Metrics Changes - The company added approximately 35,000 net new paying users in Q1, bringing the total to 18.16 million users [8] - There is observed pressure in the SMB market, particularly in tech and manufacturing verticals, affecting demand [19] Company Strategy and Development Direction - The company is focused on enhancing product experiences for core FSS users while investing in AI-enabled products like Dash [28] - There is a strategic emphasis on reducing friction in onboarding processes and improving customer feedback integration into product development [5][6] - The company is committed to returning a significant portion of free cash flow to shareholders through share repurchases [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing macroeconomic challenges and an uncertain demand environment, particularly in the SMB space [24] - The company remains disciplined in operations and capital allocation, focusing on efficiency and long-term value creation [34] - There is optimism about the potential of AI-enabled experiences and the evolution of the core FSS business [79] Other Important Information - The company repurchased over 11 million shares for $279 million in Q1, with approximately $1.1 billion remaining under the current repurchase authorization [10] - The company is monitoring a recent security incident related to its Sign business, which represents a low single-digit percentage of total revenue [33] Q&A Session Summary Question: Feedback on AI products in Dash - Early feedback indicates positive engagement and improvements in search latency and onboarding success [14] Question: Bundling opportunities and pricing changes - The company is focused on optimizing the bundling strategy and addressing price sensitivity in the market [16][57] Question: Health of SMBs and its impact on demand - Management notes that SMBs are more price-sensitive post-downturn, impacting top-of-funnel metrics [18][59] Question: Document Workflow business performance - The Document Workflow business showed stability, with increased usage driven by seasonal factors like tax season [64] Question: Security incident response - The company has taken proactive measures to address the security incident and expects limited impact on revenue [76]

[First Quarter Fiscal 2024 Results Highlights](index=1&type=section&id=First%20Quarter%20Fiscal%202024%20Results%20Highlights) Dropbox reported solid Q1 2024 results, achieving $631.3 million revenue, 3.3% YoY growth, strong profitability, and robust cash flow Q1 2024 Key Financial Metrics | Metric | Value (Millions) | YoY Change (%) | | :--- | :--- | :--- | | Revenue | $631.3 | +3.3 | | GAAP Operating Margin | 22.7% | N/A | | Non-GAAP Operating Margin | 36.5% | N/A | | Net Cash Provided by Operating Activities | $175.5 | N/A | | Free Cash Flow | $166.3 | N/A | [CEO Statement and Business Outlook](index=1&type=section&id=CEO%20Statement%20and%20Business%20Outlook) CEO Drew Houston noted Q1 revenue met expectations, profitability exceeded forecasts, and emphasized investing in AI-powered product experiences - The core business delivered **in-line revenue** and **better-than-anticipated profitability** in Q1[3](index=3&type=chunk) - The company recently launched product updates to enhance content security, organization, and sharing across various platforms[3](index=3&type=chunk) - Future strategy involves maintaining operational discipline while investing in AI-powered product experiences to improve distributed work[3](index=3&type=chunk) [Detailed Financial Performance](index=1&type=section&id=First%20Quarter%20Fiscal%202024%20Results) Dropbox achieved steady Q1 2024 growth with revenue up 3.3% to $631.3 million, ARR up 3.6% to $2.556 billion, and significant profitability gains Q1 2024 Performance vs. Q1 2023 | Metric | Q1 2024 | Q1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue (Millions) | $631.3 | $611.1 | +3.3% | | Total ARR (Billions) | $2.556 | N/A | +3.6% | | Paying Users (Millions) | 18.16 | 17.90 | +1.45% | | Avg. Revenue per Paying User ($) | $139.59 | $138.97 | +0.45% | | GAAP Gross Margin (%) | 83.2 | 80.9 | +2.3 p.p. | | Non-GAAP Gross Margin (%) | 84.6 | 82.4 | +2.2 p.p. | | GAAP Operating Margin (%) | 22.7 | 13.8 | +8.9 p.p. | | Non-GAAP Operating Margin (%) | 36.5 | 28.6 | +7.9 p.p. | | GAAP Net Income (Millions) | $132.3 | $69.0 | +91.7% | | Non-GAAP Net Income (Millions) | $196.7 | $146.1 | +34.6% | | Free Cash Flow (Millions) | $166.3 | $138.0 | +20.5% | | GAAP Diluted EPS ($) | $0.39 | $0.20 | +95.0% | | Non-GAAP Diluted EPS ($) | $0.58 | $0.42 | +38.1% | - The company increased the useful lives of certain infrastructure assets from four to five years, which reduced depreciation expense by **$10.4 million** in Q1 2024[6](index=6&type=chunk) - Cash, cash equivalents, and short-term investments stood at **$1.176 billion** at the end of the quarter[6](index=6&type=chunk) [Financial Outlook and Corporate Events](index=3&type=section&id=Financial%20Outlook) Dropbox will provide forward-looking guidance during its Q1 earnings call, and CFO Tim Regan will attend the Jefferies Software Conference - Forward-looking guidance will be provided on the company's conference call and investor relations website[7](index=7&type=chunk) - CFO Tim Regan will participate in the Jefferies Software Conference on **Wednesday, May 29th, 2024**[9](index=9&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents Dropbox's condensed consolidated statements of operations, balance sheets, and cash flows for the reported period [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Dropbox's Q1 2024 revenue grew to $631.3 million, with income from operations increasing to $143.5 million and net income nearly doubling Q1 2024 Statement of Operations (in millions) | Line Item | Q1 2024 (Millions) | Q1 2023 (Millions) | | :--- | :--- | :--- | | Revenue | $631.3 | $611.1 | | Gross Profit | $525.5 | $494.3 | | Total Operating Expenses | $382.0 | $410.2 | | Income from Operations | $143.5 | $84.1 | | Net Income | $132.3 | $69.0 | | Diluted Net Income per Share | $0.39 | $0.20 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, Dropbox reported total assets of $2.798 billion, a decrease from year-end 2023, and an increased total stockholders' deficit Balance Sheet Highlights (in millions) | Account | March 31, 2024 (Millions) | Dec 31, 2023 (Millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $548.9 | $614.9 | | Short-term investments | $627.0 | $741.1 | | **Total Assets** | **$2,797.7** | **$2,983.5** | | Deferred revenue | $741.8 | $725.0 | | Convertible senior notes, net | $1,378.7 | $1,377.8 | | **Total Liabilities** | **$3,074.9** | **$3,149.3** | | **Total stockholders' deficit** | **($277.2)** | **($165.8)** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2024, Dropbox generated $175.5 million in operating cash flow, with financing activities using $352.7 million, leading to a net decrease in cash Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2024 (Millions) | Q1 2023 (Millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $175.5 | $139.9 | | Net cash provided by investing activities | $113.7 | $200.8 | | Net cash used in financing activities | ($352.7) | ($241.3) | | **Change in cash and cash equivalents** | **($66.0)** | **$99.9** | | Cash and cash equivalents - end of period | $548.9 | $332.7 | - Common stock repurchases significantly increased to **$279.4 million** in Q1 2024 from **$175.4 million** in Q1 2023, driving the higher cash outflow from financing activities[18](index=18&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides a reconciliation of Dropbox's GAAP financial results to its non-GAAP measures, including operating income, net income, and free cash flow [Reconciliation of GAAP to Non-GAAP Results](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20results) In Q1 2024, Dropbox's GAAP income from operations of $143.5 million was adjusted to a Non-GAAP income of $230.7 million, yielding a 36.5% Non-GAAP operating margin Q1 2024 GAAP to Non-GAAP Reconciliation (in millions) | Item | GAAP (Millions) | Adjustments (Millions) | Non-GAAP (Millions) | | :--- | :--- | :--- | :--- | | Gross Profit | $525.5 | $8.3 | $533.8 | | Income from Operations | $143.5 | $87.2 | $230.7 | | Operating Margin (%) | 22.7 | 13.8 | 36.5 | [Reconciliation of GAAP Net Income to Non-GAAP Net Income](index=10&type=section&id=Reconciliation%20of%20GAAP%20net%20income%20to%20Non-GAAP%20net%20income) In Q1 2024, GAAP net income of $132.3 million was reconciled to Non-GAAP net income of $196.7 million, resulting in a Non-GAAP diluted EPS of $0.58 Net Income Reconciliation (in millions, except per share data) | Item | Q1 2024 (Millions) | Q1 2023 (Millions) | | :--- | :--- | :--- | | GAAP net income | $132.3 | $69.0 | | Stock-based compensation | $78.0 | $76.0 | | Acquisition-related and other expenses | $3.0 | $7.4 | | Amortization of acquired intangible assets | $6.2 | $7.0 | | Income tax effects of non-GAAP adjustments | ($22.8) | ($13.3) | | **Non-GAAP net income** | **$196.7** | **$146.1** | | **Non-GAAP diluted net income per share ($)** | **$0.58** | **$0.42** | [Reconciliation of Free Cash Flow](index=10&type=section&id=Reconciliation%20of%20free%20cash%20flow) Free cash flow for Q1 2024 was $166.3 million, a 20.5% increase from Q1 2023, with the free cash flow margin improving to 26.3% Free Cash Flow Reconciliation (in millions) | Item | Q1 2024 (Millions) | Q1 2023 (Millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $175.5 | $139.9 | | Less: Capital expenditures | ($9.2) | ($1.9) | | **Free cash flow** | **$166.3** | **$138.0** | | Free cash flow margin (%) | 26.3 | 22.6 | [About Non-GAAP Financial Measures](index=11&type=section&id=About%20Non-GAAP%20Financial%20Measures) Dropbox uses non-GAAP financial measures to provide investors with additional insight into operational performance, excluding certain non-recurring or non-cash expenses - Non-GAAP measures are used to supplement GAAP results by excluding expenses not reflective of ongoing operations, such as **stock-based compensation**, **amortization of acquired intangibles**, and other **acquisition-related costs**[27](index=27&type=chunk) - Management utilizes these non-GAAP figures for internal budgeting, forecasting, and evaluating financial performance against previous periods and peer companies[28](index=28&type=chunk) - Free Cash Flow (FCF) is defined as net cash from operating activities minus capital expenditures and is considered a key indicator of **long-term liquidity**[27](index=27&type=chunk)[30](index=30&type=chunk)

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.Zacks Premium also includes the Zacks Style Scores.What are the Zacks Style Scores?Developed alongsid ...

Shares of Dropbox (DBX) have gained 0% over the past four weeks to close the last trading session at $23.49, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $30.11 indicates a potential upside of 28.2%.The mean estimate comprises nine short-term price targets with a standard deviation of $4.57. While the lowest estimate of $24 indicates a 2.2% increase from the current price lev ...