Dropbox: Fiscal 3Q23 Financial Results

Dropbox, Inc. announced financial results for its third quarter ended September 30, 2023.

“In 3FQ23, we delivered a solid quarter, beating our revenue guidance and driving better than expected profitability,” said co-founder and CEO 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.”

3FQ23 Results

• Total revenue was $633.0 million, an increase of 7.1% from 3FQ22. On a constant currency basis, Y/Y growth would have been 8.3%.
• Total ARR ended at $2.525 billion, an increase of 3.8% from 3FQ22. On a constant currency basis, total ARR grew $24.5 million Q/Q, and Y/Y.
• Paying users ended at 18.17 million, as compared to 17.55 million for 3FQ22. Average revenue per paying user was $138.71, as compared to $134.31 for 3FQ22
• GAAP gross margin was 81.1%, as compared to 81.4% for 3FQ22. Non-GAAP gross margin was 82.6%, as compared to 82.9% for 3FQ22.
• GAAP operating margin was 20.6%, as compared to 15.1% for 3FQ22. Non-GAAP operating margin was 36.0%, as compared to 31.6% for 3FQ22.
• GAAP net income was $114.1 million, as compared to $83.2 million for 3FQ22. Non-GAAP net income was $194.1 million, as compared to $153.1 million for 3FQ22.
• Net cash provided by operating activities was $255.9 million, as compared to $251.4 million for 3FQ22. Free cash flow was $246.5 million, as compared to $245.2 million for 3FQ22.
• GAAP diluted net income per share attributable to common stockholders was $0.33, as compared to $0.23 in 3FQ22. Non-GAAP diluted net income per share attributable to common stockholders was $0.56, as compared to $0.43 in 3FQ22.
• Cash, cash equivalents and short-term investments ended at $1.309 billion.