Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $626 million, a decline of 1.4% year over year, with constant currency revenue also down 1.3% [16] - Total Annual Recurring Revenue (ARR) was $2.542 billion, down 1.2% year over year [16] - Gross margin was 82.2%, down 230 basis points from the previous year, while operating margin was 41.5%, exceeding guidance of 37.5% [19][20] - Net income for Q2 was $198 million, up 2% year over year, with diluted EPS increasing 18% to $0.71 [20] Business Line Data and Key Metrics Changes - The decline in paying users was primarily driven by reduced investment in the FormSwift business, with a total of 18.13 million paying users, a sequential decline of approximately 34,000 [16][17] - Improvements in onboarding processes led to a 510% increase in activation and setup rates, and a 100% increase in desktop downloads [11] - The document workflow business, particularly DocSend, continued to grow at a double-digit pace year over year [13] Market Data and Key Metrics Changes - The company anticipates a decline of approximately 1.5% or about 300,000 paying users for the full year, with FormSwift expected to represent roughly half of that decline [25] - The company is seeing positive momentum in churn rates due to improved retention efforts [44] Company Strategy and Development Direction - The strategic priorities for the year include scaling Dash and simplifying the core FSS business [6] - The company plans to launch a self-serve version of Dash to target the underserved SMB space and enhance user growth and monetization [10][46] - Continued investment in backend improvements and security features is a focus to strengthen platform usability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the core business, allowing for investments in future growth opportunities [15] - The company raised its full-year revenue guidance due to positive momentum across the core business and retention efforts [24][28] Other Important Information - The company repurchased approximately 14 million shares, spending about $400 million, with $470 million remaining under the existing share repurchase authorization [21] - The company expects unlevered free cash flow to be at or above $970 million for the full year [24] Q&A Session Summary Question: Can you discuss retention or downgrade prevention lift among early DASH adopters? - Management noted positive early adoption metrics and improvements in onboarding and retention rates for DASH users [35][36] Question: What sort of uplift did you see due to the cancellation flow change? - The cancellation flow improvements highlighted the value provided by Dropbox, leading to better retention and reduced churn [38] Question: Is FormSwift declining at a slower pace than expected? - Management confirmed that while FormSwift is performing well, they still expect it to represent roughly half of the anticipated decline in paying users [43][44] Question: What are the key areas of investment for Dash going forward? - The focus will be on launching a self-serve version of Dash and integrating it into the Dropbox FSS experience [46][47] Question: How is the company navigating changes in API access from partners like Slack? - Management stated that they maintain a good partnership with Slack and are adapting to API changes while ensuring continued value delivery [52] Question: What is the strategy for converting the free user base? - The strategy includes providing more value to free users and optimizing pricing and packaging to balance free and premium offerings [59][60]