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.


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.

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

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