funky-data Growth stocks are great, until the growth slows down. Then you have a relatively stagnant company trading at bad premiums to its underlying value. Today, we'll be looking at one of those growth stocks that has seen some slowing of its growth in recent quarters, Dropbox (NASDAQ:DBX). The software company has some interesting multiples which may make it worth our attention. We will be looking at Dropbox not just for its lack of shareholder equity, but also from a potential value and growth perspect ...

Revenue Growth - Total annual recurring revenue (Total ARR) increased to $2,573 million as of June 30, 2024, compared to $2,523 million as of December 31, 2023, and $2,500 million as of June 30, 2023[191]. - Total revenue for the three months ended June 30, 2024, was $634.5 million, compared to $622.5 million for the same period in 2023, indicating a growth in revenue[220]. - Revenue for the six months ended June 30, 2024, was $1,265.8 million, an increase of $32.2 million or 2.6% compared to $1,233.6 million in the same period of 2023[237]. - Revenue for the three months ended June 30, 2024, was $634.5 million, an increase of $12.0 million or 1.9% compared to $622.5 million in the same period of 2023[227]. User Growth - The number of paying users grew to 18.22 million as of June 30, 2024, up from 18.12 million as of December 31, 2023, and 18.04 million as of June 30, 2023[195]. - The overall paying user growth rate has declined, and future growth in paying users is expected to fluctuate, necessitating a focus on increasing average revenue per paying user[206]. - The company served over 700 million registered users but only 18.22 million paying users as of June 30, 2024[284]. Financial Performance - Net income for the three months ended June 30, 2024, was $110.5 million, significantly higher than $43.2 million for the same period in 2023, showcasing strong operational performance[220]. - Free Cash Flow (FCF) for the six months ended June 30, 2024, was $391.0 million, up from $322.6 million in the same period of 2023, primarily driven by increased cash from operating activities[203]. - Net income for the three months ended June 30, 2024, was 17% of revenue, compared to 7% in the same period of 2023[223]. Cost Management - Cost of revenue decreased to $107.0 million for the three months ended June 30, 2024, from $120.1 million in the same period of 2023, contributing to improved gross profit[220]. - Research and development expenses for the three months ended June 30, 2024, were $227.1 million, down from $262.8 million in the same period of 2023, reflecting cost management efforts[220]. - Sales and marketing expenses for the three months ended June 30, 2024, were $112.5 million, compared to $120.9 million in the same period of 2023, indicating a reduction in marketing costs[220]. Cash Flow and Investments - Net cash provided by operating activities was $406.1 million for the six months ended June 30, 2024, an increase of $78.6 million compared to the same period in 2023[254][257]. - The company has a $500.0 million credit facility available for additional working capital flexibility as of June 30, 2024[249]. - The company repurchased 22.4 million shares of Class A common stock for $543.8 million during the six months ended June 30, 2024[248]. Market and Competitive Landscape - The competitive landscape includes major players like Microsoft, Amazon, and Google, which poses challenges for the company's market position[300]. - Demand for the platform is sensitive to pricing, and competitive pricing strategies may negatively impact top-of-funnel and conversion rates[303]. - The company anticipates intensified competition due to new technologies and market entrants, with competitors having advantages such as greater name recognition and larger marketing budgets[302]. Strategic Initiatives - The company plans to continue investing in infrastructure and user support to accommodate growth and enhance platform reliability[208]. - The company is focused on increasing recurring revenue by encouraging both basic and paying users to upgrade to premium offerings[280]. - The company is making significant investments in AI to enhance its platform, although there are risks associated with the success of these new products and potential regulatory scrutiny[306]. Risks and Challenges - Economic factors such as inflation, rising interest rates, and geopolitical issues may lead to reduced spending by paying users, impacting revenue growth[299]. - The company has faced and may continue to face cybersecurity threats, which could compromise user data and harm its reputation[290]. - The company has experienced fluctuations in renewals and upgrades of subscriptions, which may continue to impact future revenue growth[279]. Operational Considerations - The company has retained a portion of its office space while subleasing the remainder as part of its Virtual First strategy[180]. - The company may incur additional impairment charges depending on the state of the corporate real estate market[181]. - The company’s ability to maintain adequate infrastructure capacity is critical, and misestimations could lead to either excess costs or inability to meet user demand[314].

Dropbox (DBX) reported non-GAAP earnings of 60 cents per share in second-quarter 2024, beating the Zacks Consensus Estimate by 15.38% and increasing 17.6% year over year. Revenues of $634.5 million inched up 1.9% year over year and 1.8% on constant currency (CC) basis beating the consensus mark by 0.77%. The upside was driven by improved performance in self-serve individual plans. Total annual recurring revenues came in at $2.73 billion, up 2.9% year over year. Quarter Details Dropbox exited second-quarter ...

Dropbox Inc DBX stock is trading higher after the company reported better-than-expected second-quarter financial results Thursday. The results came during an exciting earnings season. Here are key analyst takeaways. Goldman Sachs Kash Rangan reiterated a Sell rating while lowering his price target to $20 from $22. RBC Capital Markets analyst Rishi Jaluria maintained an Outperform rating with a price target of $32. Goldman Sachs: Dropbox gained after marginally beating the consensus in ARPU, paying users, re ...

Dropbox (DBX) came out with quarterly earnings of $0.60 per share, beating the Zacks Consensus Estimate of $0.52 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 15.38%. A quarter ago, it was expected that this online file-sharing company would post earnings of $0.49 per share when it actually produced earnings of $0.58, delivering a surprise of 18.37%. Over the last four quarters, ...

Financial Data and Key Metrics - Q2 2024 revenue increased 1.9% YoY to $635M, slightly above the high end of prior guidance [21] - Total ARR grew 2.9% YoY to $2.573B, with constant currency growth of 2.2% [21] - Paying users reached 18.22M, adding 63K net new users sequentially [21] - Average revenue per paying user was $139.93 [21] - Gross margin was 84.5%, benefiting from a change in server useful life [22] - Operating margin was 35.9%, up 170 bps YoY [23] - Net income increased 12% YoY to $194M, with diluted EPS of $0.60, up 18% YoY [23] - Free cash flow was $225M, up 28% YoY [24] Business Line Performance - Individual self-serve plans showed strength, offsetting challenges in the Teams business [4] - DocSend's Advanced Data Room performed well, offsetting seasonal pressure in FormSwift [5] - Teams business faced headwinds from macro challenges, price sensitivity, and storage limit changes [8] - Sharing activity improved YoY in Q2 after declines due to fragmented user experience [11] - Mobile user growth continued, with a redesigned mobile web experience driving trial starts [12] Market and Geographic Performance - Foreign exchange rates had minimal impact on revenue, with constant currency growth of 1.8% [21] - The company is focusing on priority industries like professional services, manufacturing, and media [9] Strategy and Competitive Landscape - The company is prioritizing improvements in the Teams business and Dash, its AI-powered universal search product [6] - Investments in onboarding and invitation flows have improved Teams activation rates [7] - Dash is being developed with a focus on AI summarization and search efficiency, targeting IT admins' security needs [16] - The company is refining its customer segmentation model to align product development and go-to-market efforts [8] Management Commentary on Operating Environment and Outlook - The macro environment remains challenging for SMBs, with near-term volatility expected in the Teams business [28] - Seasonal pressure on FormSwift and headwinds in the Sign business are expected to impact paying user growth [29] - Full-year revenue guidance was narrowed to $2.540B-$2.550B, with operating margin expected between 33.5%-34% [27] - Free cash flow guidance remains unchanged at $910M-$950M [27] Other Important Information - The company repurchased 11M shares for $260M in Q2, with $868M remaining under the current authorization [25] - Partial provisioning and standalone purchasing options are being introduced to improve customer flexibility [13] - Bundling strategy adjustments were made after initial results fell short of expectations [14] Q&A Summary Question: Monetization plans for Dash and pricing strategy [33] - Dash is pre-revenue and in beta, with pricing expected to follow a subscription model similar to Dropbox 1.0 [34] Question: Teams business challenges and competitive dynamics [35] - Teams challenges are driven by macro pressures and price sensitivity, with some competitive factors but no new dynamics [36][37] Question: Customer feedback and monetization for Dash [39] - Early feedback on Dash has been positive, with strong value proposition and product quality improvements [40] - IT admins' unmet security needs are a focus for Dash development [41] Question: Impact of security incident on Sign business [42] - The security incident was isolated to Dropbox Sign and had minimal impact on overall revenue [42] Question: Right to win for Dash and potential pricing strategies [45] - Dash addresses a universal knowledge worker need, leveraging Dropbox's scale and security track record [46][50] - Pricing strategies may include bundling and volume-based options [52] Question: Progress on individual plans and bundling [55] - The company is making progress in reducing friction in onboarding and sharing experiences [56] Question: Hiring efficiencies and Dash GA timeline [58] - Hiring efficiencies include prioritizing lower-cost regions and managing vendor spend [58] - More details on Dash's GA and pricing will be shared later this year [59]

Dropbox Announces Fiscal 2024 Second Quarter Results Second Quarter Revenue of $634.5 Million, up 1.9% year-over-year; on a constant currency basis, up 1.8% year-over-year GAAP Operating Margin of 20.0% and Non-GAAP Operating Margin of 35.9% Net Cash Provided by Operating Activities of $230.6 Million and Free Cash Flow of $224.7 Million SAN FRANCISCO, Calif. - August 8, 2024 - Dropbox, Inc. (NASDAQ: DBX), today announced financial results for its second quarter ended June 30, 2024. "In Q2, we improved the f ...

Although it is always a good idea to monitor volume change and price resilience, some stocks — especially those categorized as overhyped stocks to sell when they reach new highs — have more fishy fundamentals than others, particularly if there is a possibility of a recession. The global equity sell-off on Monday certainly hinted at a hard landing scenario. Citi (NYSE:C) economist Andrew Hollenhorst wisely noted that "Once you start to worry about [a] recession, you are usually in a recession." Despite inter ...

Dropbox (DBX) is scheduled to report its second-quarter 2024 results on Aug 8. For the to-be-reported quarter, Dropbox expects revenues between $628 million and $631 million. Non-GAAP operating margin is expected to be roughly 33%. The Zacks Consensus Estimate for revenues is currently pegged at $629.65 million, suggesting growth of 1.15% from the year-ago quarter's reported figure. The consensus mark for earnings is pegged at 52 cents per share, unchanged over the past 30 days and indicating 1.96% growth f ...

About this content Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Use of technology 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 ...