Dropbox (DBX) Q1 Earnings Beat Estimates, Revenues Up Y/Y

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 Details

Dropbox 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 user was $139.59 compared with $138.97 in the year-ago quarter.

As of Mar 31, 2024, Dropbox had roughly 575K business teams, and 34% of paying users were business teams.

In the first quarter, Dropbox reported a non-GAAP gross margin of 84.6%, up 220 basis points (bps) year over year.
 

Dropbox, Inc. Price, Consensus and EPS Surprise

Dropbox, Inc. Price, Consensus and EPS Surprise

Dropbox, Inc. price-consensus-eps-surprise-chart | Dropbox, Inc. Quote

In the reported quarter, research and development expenses were $160.7 million, down 9.2% year over year.

Sales & marketing expenses decreased 7.4% year over year to $100.6 million.

General & administrative expenses fell 3.5% year over year to $41.8 million.

Dropbox reported a non-GAAP operating margin of 36.5%, up 800 bps year over year.

Balance Sheet & Cash Flow

As of Mar 31, 2024, Dropbox had cash, cash equivalents and short-term investments of $1.18 billion compared with $1.36 billion as of Dec 31, 2023.

In the first quarter, the company reported a free cash flow of $166.3 million as compared with $190.3 million reported in the previous quarter.

Guidance

For the second quarter of 2024, Dropbox expects revenues between $628 million and $631 million. Non-GAAP operating margin is expected to be roughly 33%.

For 2024, it expects revenues between $2.535 billion and $2.55 billion. At constant currency, revenues are expected between $2.532 billion and $2.547 billion.

The company expects gross margin to be in the 83-83.5% range for the full year. Non-GAAP operating margin is expected in the 32.5-33% range.

Dropbox expects free cash flow between $910 million and $950 million.

Zacks Rank & Other Stocks to Consider

The company currently carries a Zacks Rank #2 (Buy).

DBX shares have declined 21.5% year to date, underperforming the Zacks Computer & Technology sector’s growth of 12%.

Nutanix NTNX, NetApp NTAP and NVIDIA NVDA are some other top-ranked stocks that investors can consider in the broader sector. While Nutanix sports Zacks Rank #1 (Strong Buy) at present, NetApp and NVIDIA carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutanix shares have gained 41.7% in the year-to-date period. NTNX is set to report its third-quarter fiscal 2024 results on May 29.

NetApp shares have gained 22.7% year to date. NTAP is set to report its fourth-quarter fiscal 2024 results on May 30.

NVIDIA shares have gained 79.2% year to date. NVDA is set to report its first-quarter fiscal 2025 results on May 22.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NetApp, Inc. (NTAP) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Nutanix (NTNX) : Free Stock Analysis Report

Dropbox, Inc. (DBX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.