Third Quarter Revenue of $633.0 Million, up
7.1% year-over-year; on a constant currency basis, up 8.3%
year-over-year
Net Cash Provided by Operating Activities of
$255.9 Million and Free Cash Flow of $246.5 Million
Dropbox, Inc. (NASDAQ: DBX), today announced financial results
for its third quarter ended September 30, 2023.
“In Q3, we delivered a solid quarter, beating our revenue
guidance and driving better than expected profitability,” said
Dropbox Co-Founder and Chief Executive Officer Drew Houston. “We
also released Dropbox Dash into open beta, redesigned the core
Dropbox web experience, and introduced new business plans that
seamlessly integrate workflow solutions beyond storage. We continue
to see an opportunity to leverage AI and machine learning to
improve the experience of distributed work that will provide long
term value for our customers and shareholders.”
Third Quarter Fiscal 2023 Results
- Total revenue was $633.0 million, an increase of 7.1% from the
same period last year. On a constant currency basis, year-over-year
growth would have been 8.3%.(1)
- Total ARR ended at $2.525 billion, an increase of 3.8% from the
same period last year. On a constant currency basis, Total ARR grew
$24.5 million quarter-over-quarter, and year-over-year growth would
have been 7.5%.(2)
- Paying users ended at 18.17 million, as compared to 17.55
million for the same period last year. Average revenue per paying
user was $138.71, as compared to $134.31 for the same period last
year.
- GAAP gross margin was 81.1%, as compared to 81.4% for the same
period last year. Non-GAAP gross margin was 82.6%, as compared to
82.9% for the same period last year.
- GAAP operating margin was 20.6%, as compared to 15.1% for the
same period last year. Non-GAAP operating margin was 36.0%, as
compared to 31.6% for the same period last year.
- GAAP net income was $114.1 million, as compared to $83.2
million for the same period last year. Non-GAAP net income was
$194.1 million, as compared to $153.1 million for the same period
last year.
- Net cash provided by operating activities was $255.9 million,
as compared to $251.4 million for the same period last year. Free
cash flow was $246.5 million, as compared to $245.2 million for the
same period last year.
- GAAP diluted net income per share attributable to common
stockholders was $0.33, as compared to $0.23 in the same period
last year. Non-GAAP diluted net income per share attributable to
common stockholders was $0.56, as compared to $0.43 in the same
period last year.(3)
- Cash, cash equivalents and short-term investments ended at
$1.309 billion.
(1)
We calculate constant currency revenue
growth rates by applying the prior period weighted average exchange
rates to current period results.
(2)
We calculate total annual recurring
revenue ("Total ARR") as the number of users who have active paid
licenses for access to our platform as of the end of the period,
multiplied by their annualized subscription price to our platform.
We adjust our exchange rates used to calculate Total ARR on an
annual basis, at the beginning of each fiscal year. We calculate
constant currency Total ARR growth rates by applying the current
period exchange rate to prior period results.
(3)
GAAP and Non-GAAP diluted net income per
share attributable to common stockholders is calculated based upon
346.0 million and 360.1 million diluted weighted-average shares of
common stock for the three months ended September 30, 2023 and
2022, respectively.
Financial Outlook
Dropbox will provide forward-looking guidance in connection with
this quarterly earnings announcement on its conference call,
webcast, and on its investor relations website at
http://investors.dropbox.com.
Conference Call Information
Dropbox plans to host a conference call today to review its
third quarter financial results and to discuss its financial
outlook. This call is scheduled to begin at 2:00 p.m. PT / 5:00
p.m. ET and can be accessed by using the web link at
http://investors.dropbox.com.
During these events, a live webcast will be accessible from the
Dropbox investor relations website at http://investors.dropbox.com.
Following the event, a replay will be made available at the same
location.
About Dropbox
Dropbox is the one place to keep life organized and keep work
moving. With more than 700 million registered users across
approximately 180 countries, we're on a mission to design a more
enlightened way of working. Dropbox is headquartered in San
Francisco, CA, and has employees around the world. For more
information on our mission and products, visit
http://dropbox.com.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to the most
directly comparable financial results as determined in accordance
with GAAP are included at the end of this press release following
the accompanying financial data. For a description of these
non-GAAP financial measures, including the reasons management uses
each measure, please see the section of the tables titled "About
Non-GAAP Financial Measures."
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
including, among other things, our expectations regarding
distributed work and artificial intelligence and machine learning
trends, related market opportunities and our ability to capitalize
on those opportunities. Words such as "believe," "may," "will,"
"estimate," "continue," "anticipate," "intend," "expect," "plans,"
and similar expressions are intended to identify forward-looking
statements. We have based these forward-looking statements largely
on our current expectations and projections about future events and
financial trends that we believe may affect our business, financial
condition, and results of operations. These forward-looking
statements speak only as of the date of this press release and are
subject to risks, uncertainties, and assumptions including, but not
limited to: (i) our ability to retain and upgrade paying users, and
increase our recurring revenue; (ii) our ability to attract new
users or convert registered users to paying users; (iii) our
expectations regarding general economic, political, and market
trends and their respective impacts on our business; (iv) impacts
to our financial results and business operations as a result of
pricing and packaging changes to our subscription plans; (v) our
future financial performance, including trends in revenue, costs of
revenue, gross profit or gross margin, operating expenses, paying
users, and free cash flow; (vi) our ability to achieve or maintain
profitability; (vii) our liability for any unauthorized access to
our data or our users’ content, including through privacy and data
security breaches; (viii) significant disruption of service on our
platform or loss of content; (ix) any decline in demand for our
platform or for content collaboration solutions in general; (x)
changes in the interoperability of our platform across devices,
operating systems, and third-party applications that we do not
control; (xi) competition in our markets; (xii) our ability to
respond to rapid technological changes, extend our platform,
develop new features or products, or gain market acceptance for
such new features or products; (xiii) our ability to improve
quality and ease of adoption of our new and enhanced product
experiences, features, and capabilities; (xiv) our ability to
manage our growth or plan for future growth; (xv) our various
acquisitions of businesses and the potential of such acquisitions
to require significant management attention, disrupt our business,
or dilute stockholder value; (xvi) our ability to attract, retain,
integrate, and manage key and other highly qualified personnel,
including as a result of our transition to a Virtual First model
with an increasingly distributed workforce and in light of the
reduction of our workforce announced earlier this year; (xvii) our
capital allocation plans with respect to our stock repurchase
program and other investments; and (xviii) the dual class structure
of our common stock and its effect of concentrating voting control
with certain stockholders who held our capital stock prior to the
completion of our initial public offering. Further information on
risks that could affect Dropbox’s results is included in our
filings with the Securities and Exchange Commission ("SEC"),
including our Form 10-Q for the quarter ended June 30, 2023.
Additional information will be made available in our quarterly
report on Form 10-Q for the quarter ended September 30, 2023 and
other reports that we may file with the SEC from time to time,
which could cause actual results to vary from expectations. If the
risks materialize or assumptions prove incorrect, actual results
could differ materially from the results implied by these
forward-looking statements. Dropbox assumes no obligation to, and
does not currently intend to, update any such forward-looking
statements after the date of this release, except as required by
applicable law.
Dropbox, Inc.
Condensed Consolidated
Statements of Operations
(In millions, except per share
data)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue
$
633.0
$
591.0
$
1,866.6
$
1,726.1
Cost of revenue(1)(2)
119.6
109.7
356.5
328.4
Gross profit
513.4
481.3
1,510.1
1,397.7
Operating expenses(1)(2):
Research and development
216.4
227.6
714.4
653.4
Sales and marketing
106.3
103.6
346.4
304.3
General and administrative
60.0
56.8
175.8
165.6
Impairment related to real estate
assets(3)
—
4.0
2.2
12.7
Total operating expenses
382.7
392.0
1,238.8
1,136.0
Income from operations
130.7
89.3
271.3
261.7
Interest income (expense), net
5.0
1.7
12.6
(0.2
)
Other (expense) income, net
(0.2
)
7.2
(1.8
)
9.6
Income before income taxes
135.5
98.2
282.1
271.1
Provision for income taxes
(21.4
)
(15.0
)
(55.8
)
(46.2
)
Net income
$
114.1
$
83.2
$
226.3
$
224.9
Basic net income per share
$
0.34
$
0.23
$
0.66
$
0.62
Diluted net income per share
$
0.33
$
0.23
$
0.65
$
0.61
Weighted-average shares used in computing
net income per share attributable to common stockholders, basic
339.2
358.1
342.5
364.2
Weighted-average shares used in computing
net income per share attributable to common stockholders,
diluted
346.0
360.1
345.9
366.5
(1)
Includes stock-based compensation expense
as follows (in millions):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Cost of revenue
$
5.8
$
6.4
$
17.6
$
18.8
Research and development(4)
58.6
60.6
178.9
169.6
Sales and marketing
5.2
6.0
17.0
16.4
General and administrative
14.2
13.1
41.6
38.6
(2)
Includes expenses related to our reduction
in workforce such as severance, benefits and other related items
during the three and nine months ended September 30, 2023.
(3)
Includes impairment charges related to
real estate assets as a result of changes in the corporate real
estate market which has impacted the Company's subleasing strategy
in conjunction with the Company's Virtual First model.
(4)
On March 15, 2023, the Company's President
resigned, resulting in the reversal of $6.7 million in stock-based
compensation expense. Of the total amount reversed, $4.4 million
related to expense recognized prior to January 1, 2023.
Dropbox, Inc.
Condensed Consolidated Balance
Sheets
(In millions)
(Unaudited)
As of
September 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
604.3
$
232.8
Short-term investments
704.6
1,110.6
Trade and other receivables, net
64.1
53.8
Prepaid expenses and other current
assets
94.1
92.6
Total current assets
1,467.1
1,489.8
Property and equipment, net
298.9
308.4
Operating lease right-of-use asset
244.4
260.6
Intangible assets, net
65.8
88.3
Goodwill
400.5
403.3
Deferred tax assets
486.9
498.7
Other assets
47.0
61.0
Total assets
$
3,010.6
$
3,110.1
Liabilities and stockholders'
deficit
Current liabilities:
Accounts payable
$
45.2
$
38.6
Accrued and other current liabilities
150.5
139.9
Accrued compensation and benefits
86.4
131.7
Operating lease liability
67.4
68.9
Finance lease obligation
112.6
114.8
Deferred revenue
734.7
702.6
Total current liabilities
1,196.8
1,196.5
Operating lease liability, non-current
550.8
585.2
Finance lease obligation, non-current
153.3
151.7
Convertible senior notes, net,
non-current
1,376.9
1,374.0
Other non-current liabilities
83.1
112.1
Total liabilities
3,360.9
3,419.5
Stockholders' deficit:
Additional paid-in-capital
2,561.3
2,511.6
Accumulated deficit
(2,874.7
)
(2,772.1
)
Accumulated other comprehensive loss
(36.9
)
(48.9
)
Total stockholders' deficit
(350.3
)
(309.4
)
Total liabilities and stockholders'
deficit
$
3,010.6
$
3,110.1
Dropbox, Inc.
Condensed Consolidated
Statements of Cash Flows
(In millions)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Cash flows from operating
activities
Net income
$
114.1
$
83.2
$
226.3
$
224.9
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
41.8
38.9
127.0
117.5
Stock-based compensation
83.8
86.1
255.1
243.4
Impairment related to real estate
assets
—
4.0
2.2
12.7
Amortization of debt issuance costs
1.1
1.0
3.2
3.1
Net gains on equity investments
—
—
—
(5.0
)
Amortization of deferred commissions
9.4
10.2
30.2
28.9
Non-cash operating lease expense
10.5
15.4
34.0
48.3
Deferred taxes
4.2
4.4
11.7
18.5
Other
1.8
4.2
2.3
7.5
Changes in operating assets and
liabilities:
Trade and other receivables, net
(4.1
)
(4.4
)
(10.6
)
(2.6
)
Prepaid expenses and other current
assets
(6.4
)
2.6
(24.0
)
(23.6
)
Other assets
2.8
(1.4
)
6.5
3.8
Accounts payable
0.5
8.9
7.4
10.3
Accrued and other current liabilities
(1.7
)
(6.8
)
(9.3
)
2.3
Accrued compensation and benefits
19.9
29.3
(45.2
)
(35.9
)
Deferred revenue
0.2
6.8
31.5
26.1
Other non-current liabilities
(3.0
)
(7.2
)
(10.6
)
(13.1
)
Operating lease liabilities
(19.1
)
(28.7
)
(54.4
)
(72.6
)
Tenant improvement allowance
reimbursement
0.1
4.9
0.1
8.2
Net cash provided by operating
activities
255.9
251.4
583.4
602.7
Cash flows from investing
activities
Capital expenditures
(9.4
)
(6.2
)
(14.3
)
(20.9
)
Purchases of short-term investments
(64.7
)
(138.4
)
(112.6
)
(439.9
)
Proceeds from sales of short-term
investments
4.2
37.6
335.8
154.2
Proceeds from maturities of short-term
investments
77.7
100.6
197.1
339.8
Proceeds from sales of equity
investments
—
10.6
—
10.6
Other
2.5
3.3
11.2
12.8
Net cash provided by investing
activities
10.3
7.5
417.2
56.6
Cash flows from financing
activities
Payments of debt issuance costs
—
—
(0.1
)
—
Payments for taxes related to net share
settlement of restricted stock units and awards
(34.4
)
(29.6
)
(100.6
)
(91.0
)
Proceeds from issuance of common stock,
net of taxes withheld
1.2
0.1
2.4
0.4
Principal payments on finance lease
obligations
(31.3
)
(31.6
)
(95.2
)
(96.0
)
Common stock repurchases
(104.1
)
(171.4
)
(433.7
)
(621.1
)
Net cash (used in) financing
activities
(168.6
)
(232.5
)
(627.2
)
(807.7
)
Effect of exchange rate changes on cash
and cash equivalents
(3.6
)
(6.5
)
(1.9
)
(12.6
)
Change in cash and cash equivalents
94.0
19.9
371.5
(161.0
)
Cash and cash equivalents - beginning
of period
510.3
352.1
232.8
533.0
Cash and cash equivalents - end of
period
$
604.3
$
372.0
$
604.3
$
372.0
Supplemental cash flow data:
Property and equipment acquired under
finance leases
$
26.2
$
18.3
$
94.1
$
52.5
Dropbox, Inc.
Three Months Ended September
30, 2023
Reconciliation of GAAP to
Non-GAAP results
(In millions, except for
percentages, which may not foot due to rounding)
(Unaudited)
GAAP
Stock-based
compensation
Acquisition related and other
expenses
Intangibles
amortization
Workforce reduction
expense(1)
Non-GAAP
Cost of revenue
$
119.6
$
(5.8
)
$
—
$
(3.7
)
$
(0.2
)
$
109.9
Cost of revenue margin
18.9
%
(0.9
%)
—
%
(0.6
%)
—
%
17.4
%
Gross profit
513.4
5.8
—
3.7
0.2
523.1
Gross margin
81.1
%
0.9
%
—
%
0.6
%
—
%
82.6
%
Research and development
216.4
(58.6
)
(4.6
)
—
(0.6
)
152.6
Research and development margin
34.2
%
(9.3
%)
(0.7
%)
—
%
(0.1
%)
24.1
%
Sales and marketing
106.3
(5.2
)
—
(3.4
)
(0.3
)
97.4
Sales and marketing margin
16.8
%
(0.8
%)
—
%
(0.5
%)
—
%
15.4
%
General and administrative
60.0
(14.2
)
—
—
(0.3
)
45.5
General and administrative margin
9.5
%
(2.2
%)
—
%
—
%
—
%
7.2
%
Income from operations
$
130.7
$
83.8
$
4.6
$
7.1
$
1.4
$
227.6
Operating margin
20.6
%
13.2
%
0.7
%
1.1
%
0.2
%
36.0
%
(1)
Includes expenses related to our reduction
in workforce such as severance, benefits and other related
items.
Dropbox, Inc.
Three Months Ended September
30, 2022
Reconciliation of GAAP to
Non-GAAP results
(In millions, except for
percentages, which may not foot due to rounding)
(Unaudited)
GAAP
Stock-based
compensation
Acquisition related and other
expenses
Intangibles
amortization
Impairment related to real
estate assets(1)
Non-GAAP
Cost of revenue
$
109.7
$
(6.4
)
$
—
$
(2.0
)
$
—
101.3
Cost of revenue margin
18.6
%
(1.1
%)
—
%
(0.3
%)
—
%
17.1
%
Gross profit
481.3
6.4
—
2.0
—
489.7
Gross margin
81.4
%
1.1
%
—
%
0.3
%
—
%
82.9
%
Research and development
227.6
(60.6
)
(1.4
)
—
—
165.6
Research and development margin
38.5
%
(10.3
%)
(0.2
%)
—
%
—
%
28.0
%
Sales and marketing
103.6
(6.0
)
(1.7
)
(1.2
)
—
94.7
Sales and marketing margin
17.5
%
(1.0
%)
(0.3
%)
(0.2
%)
—
%
16.0
%
General and administrative
56.8
(13.1
)
(1.0
)
—
—
42.7
General and administrative margin
9.6
%
(2.2
%)
(0.2
)%
—
%
—
%
7.2
%
Impairment related to real estate
assets
4.0
—
—
—
(4.0
)
—
Impairment related to real estate assets
margin
0.7
%
—
%
—
%
—
%
(0.7
%)
—
%
Income from operations
$
89.3
$
86.1
$
4.1
$
3.2
$
4.0
$
186.7
Operating margin
15.1
%
14.6
%
0.7
%
0.5
%
0.7
%
31.6
%
(1)
Includes impairment charges related to
real estate assets as a result of changes in the corporate real
estate market which has impacted the Company's subleasing strategy
in conjunction with the Company's Virtual First model.
Dropbox, Inc.
Nine Months Ended September
30, 2023
Reconciliation of GAAP to
Non-GAAP results
(In millions, except for
percentages, which may not foot due to rounding)
(Unaudited)
GAAP
Stock-based
compensation
Acquisition related and other
expenses
Intangibles
amortization
Impairment related to real
estate assets(1)
Workforce reduction
expense(2)
Non-GAAP
Cost of revenue
$
356.5
$
(17.6
)
$
—
$
(10.9
)
$
—
$
(2.9
)
$
325.1
Cost of revenue margin
19.1
%
(0.9
%)
—
%
(0.6
%)
—
%
(0.2
%)
17.4
%
Gross profit
1,510.1
17.6
—
10.9
—
2.9
1,541.5
Gross margin
80.9
%
0.9
%
—
%
0.6
%
—
%
0.2
%
82.6
%
Research and development
714.4
(178.9
)
(17.9
)
—
—
(27.6
)
490.0
Research and development margin
38.3
%
(9.6
%)
(1.0
%)
—
%
—
%
(1.5
%)
26.3
%
Sales and marketing
346.4
(17.0
)
(8.3
)
(10.2
)
—
(6.6
)
304.3
Sales and marketing margin
18.6
%
(0.9
%)
(0.4
%)
(0.5
%)
—
%
(0.4
%)
16.3
%
General and administrative
175.8
(41.6
)
(0.4
)
—
—
(1.8
)
132.0
General and administrative margin
9.4
%
(2.2
%)
—
%
—
%
—
%
(0.1
%)
7.1
%
Impairment related to real estate
assets
2.2
—
—
—
(2.2
)
—
—
Impairment related to real estate assets
margin
0.1
%
—
%
—
%
—
%
(0.1
%)
—
%
—
%
Income from operations
$
271.3
$
255.1
$
26.6
$
21.1
$
2.2
$
38.9
$
615.2
Operating margin
14.5
%
13.7
%
1.4
%
1.1
%
0.1
%
2.1
%
33.0
%
(1)
Includes impairment charges related to
real estate assets as a result of changes in the corporate real
estate market which has impacted the Company's subleasing strategy
in conjunction with the Company's Virtual First model.
(2)
Includes expenses related to our reduction
in workforce such as severance, benefits and other related
items.
Dropbox, Inc.
Nine Months Ended September
30, 2022
Reconciliation of GAAP to
Non-GAAP results
(In millions, except for
percentages, which may not foot due to rounding)
(Unaudited)
GAAP
Stock-based
compensation
Acquisition related and other
expenses
Intangibles
amortization
Impairment related to real
estate assets(1)
Non-GAAP
Cost of revenue
$
328.4
$
(18.8
)
$
—
$
(5.9
)
$
—
$
303.7
Cost of revenue margin
19.0
%
(1.1
%)
—
%
(0.3
%)
—
%
17.6
%
Gross profit
1,397.7
18.8
—
5.9
—
1,422.4
Gross margin
81.0
%
1.1
%
—
%
0.3
%
—
%
82.4
%
Research and development
653.4
(169.6
)
(6.0
)
—
—
477.8
Research and development margin
37.9
%
(9.8
%)
(0.3
%)
—
%
—
%
27.7
%
Sales and marketing
304.3
(16.4
)
(5.1
)
(3.9
)
—
278.9
Sales and marketing margin
17.6
%
(1.0
%)
(0.3
%)
(0.2
%)
—
%
16.2
%
General and administrative
165.6
(38.6
)
(1.2
)
—
—
125.8
General and administrative margin
9.6
%
(2.2
%)
(0.1
)%
—
%
—
%
7.3
%
Impairment related to real estate
assets
12.7
—
—
—
(12.7
)
—
Impairment related to real estate assets
margin
0.7
%
—
%
—
%
—
%
(0.7
%)
—
%
Income from operations
$
261.7
$
243.4
$
12.3
$
9.8
$
12.7
$
539.9
Operating margin
15.2
%
14.1
%
0.7
%
0.6
%
0.7
%
31.3
%
(1)
Includes impairment charges related to
real estate assets as a result of changes in the corporate real
estate market which has impacted the Company's subleasing strategy
in conjunction with the Company's Virtual First model.
Dropbox, Inc.
Three and Nine Months Ended
September 30, 2023 and 2022
Reconciliation of GAAP net
income to Non-GAAP net income and Non-GAAP diluted net income per
share
(In millions, except per share
data)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
GAAP net income
$
114.1
$
83.2
$
226.3
$
224.9
Stock-based compensation
83.8
86.1
255.1
243.4
Acquisition-related and other expenses
4.6
4.1
26.6
12.3
Amortization of acquired intangible
assets
7.1
3.2
21.1
9.8
Impairment related to real estate
assets
—
4.0
2.2
12.7
Workforce reduction expense
1.4
—
38.9
—
Net gains on equity investments
—
—
—
(5.0
)
Income tax effects of non-GAAP
adjustments
(16.9
)
(27.5
)
(56.0
)
(65.4
)
Non-GAAP net income
$
194.1
$
153.1
$
514.2
$
432.7
Non-GAAP diluted net income per share
$
0.56
$
0.43
$
1.49
$
1.18
Weighted-average shares used to compute
Non-GAAP diluted net income per share
346.0
360.1
345.9
366.5
Dropbox, Inc.
Three and Nine Months Ended
September 30, 2023 and 2022
Reconciliation of free cash
flow and supplemental cash flow disclosure
(In millions, except for
percentages)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Free cash flow reconciliation:
Net cash provided by operating
activities
$
255.9
$
251.4
$
583.4
$
602.7
Less:
Capital expenditures
(9.4
)
(6.2
)
(14.3
)
(20.9
)
Free cash flow
$
246.5
$
245.2
$
569.1
$
581.8
Free cash flow margin
38.9
%
41.5
%
30.5
%
33.7
%
Supplemental disclosures:
Key employee holdback payments related to
acquisitions(1)
$
0.5
$
—
$
21.9
$
14.3
Payments related to workforce
reduction(2)
$
4.9
$
—
$
38.9
$
—
(1)
Includes payments related to employee
holdbacks pertaining to our acquisitions. The related expenses are
recognized within research and development and sales and marketing
expenses over the required service period.
(2)
Includes payments made related to our
reduction in workforce such as severance, benefits, and other
related items.
About Non-GAAP Financial Measures
To provide investors and others with additional information
regarding Dropbox's results, we have disclosed the following
non-GAAP financial measures: revenue growth and Total ARR growth
excluding foreign exchange effect, which we refer to as on a
constant currency basis, non-GAAP cost of revenue, non-GAAP gross
profit, non-GAAP operating expenses (including research and
development, sales and marketing and general and administrative),
non-GAAP income from operations, non-GAAP net income, free cash
flow ("FCF") and non-GAAP diluted net income per share. Dropbox has
provided a reconciliation of each non-GAAP financial measure used
in this earnings release to the most directly comparable GAAP
financial measure. Non-GAAP cost of revenue, gross profit,
operating expenses, income from operations, and net income differ
from GAAP in that they exclude stock-based compensation expense,
amortization of acquired intangible assets, other
acquisition-related expenses, which include third-party diligence
costs and expenses related to key employee holdback agreements,
impairment charges related to real estate assets, expenses related
to our reduction in workforce, net gains on equity investments and
the income tax effect of the aforementioned adjustments. FCF
differs from GAAP net cash provided by operating activities in that
it treats capital expenditures as a reduction to net cash provided
by operating activities. Free cash flow margin is calculated as FCF
divided by revenue. In order to present revenue on a constant
currency basis for the quarter ended September 30, 2023, Dropbox
calculates constant currency revenue growth rates by applying the
prior period weighted average exchange rates to current period
results. Dropbox calculates constant currency Total ARR growth
rates by applying the current period rate to prior period results.
Dropbox presents constant currency information to provide a
framework for assessing how our underlying business performed
excluding the effect of foreign currency rate fluctuations.
Dropbox's management uses these non-GAAP financial measures to
understand and compare operating results across accounting periods,
for internal budgeting and forecasting purposes, for short and
long-term operating plans, and to evaluate Dropbox's financial
performance and the ability to generate cash from operations.
Management believes these non-GAAP financial measures reflect
Dropbox's ongoing business in a manner that allows for meaningful
period-to-period comparisons and analysis of trends in Dropbox's
business, as they exclude expenses that are not reflective of
ongoing operating results. Management also believes that these
non-GAAP financial measures provide useful supplemental information
to investors and others in understanding and evaluating Dropbox's
operating results and future prospects in the same manner as
management and in comparing financial results across accounting
periods and to those of peer companies.
We believe that the non-GAAP financial measures, non-GAAP cost
of revenue, gross profit, operating expenses, income from
operations, net income, and diluted net income per share are
meaningful to investors because they help identify underlying
trends in our business that could otherwise be masked by the effect
of the expenses that we exclude.
We believe that FCF is an indicator of our liquidity over the
long term and provides useful information regarding cash provided
by operating activities and cash used for investments in property
and equipment required to maintain and grow our business. FCF is
presented for supplemental informational purposes only and should
not be considered a substitute for financial information presented
in accordance with GAAP. FCF has limitations as an analytical tool,
and it should not be considered in isolation or as a substitute for
analysis of other GAAP financial measures, such as net cash
provided by operating activities. Some of the limitations of FCF
are that FCF does not reflect our future contractual commitments,
excludes investments made to acquire assets under finance leases,
includes capital expenditures, and may be calculated differently by
other companies in our industry, limiting its usefulness as a
comparative measure.
The use of non-GAAP cost of revenue, gross profit, operating
expenses, income from operations, net income, free cash flow, and
diluted net income per share measures has certain limitations as
they do not reflect all items of income, expense, and cash
expenditures, as applicable, that affect Dropbox's operations.
Dropbox mitigates these limitations by reconciling the non-GAAP
financial measures to the most comparable GAAP financial measures.
Additionally, we have provided supplemental disclosures in our
reconciliation of net cash provided by operating activities to free
cash flow to include expenses related to reduction in workforce and
key employee holdback payments related to our various acquisitions.
These non-GAAP financial measures should be considered in addition
to, not as a substitute for or in isolation from, measures prepared
in accordance with GAAP. Further, these non-GAAP measures may
differ from the non-GAAP information used by other companies,
including peer companies, and therefore comparability may be
limited. Management encourages investors and others to review
Dropbox's financial information in its entirety and not rely on a
single financial measure.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102034557/en/
Investors: Kern Kapoor ir@dropbox.com or Media:
Alissa Stewart press@dropbox.com
Dropbox (NASDAQ:DBX)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Dropbox (NASDAQ:DBX)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024