Dropbox: Fiscal 4Q18 Financial Results

Dropbox, Inc. announced financial results for its fourth quarter and fiscal year ended December 31, 2018.

“We ended our incredible first year as a public company with a great Q4,” said co-founder and CEO Drew Houston. “Our healthy top line growth and free cash flow generation reflect our strong business model, and our new product updates and integrations, like Dropbox Extensions, put Dropbox at the center of our users’ workflows and helped us close out the year with over 400,000 business teams. We kicked off 2019 with our acquisition of HelloSign, which extends the capabilities of our platform and solves even more problems for our users. I’m excited for the road ahead and looking forward to another great year.”

4FQ18 Results
• Revenue was $375.9 million, an increase of 23% from 4FQ17.
• Paying users totaled 12.7 million, as compared to 11.0 million for 4FQ17. Average revenue per paying user was $119.61, as compared to $113.39 for 4FQ17.
• GAAP gross margin was 74.9%, as compared to 70.0% in 4FQ17. Non-GAAP gross margin was 75.7%, as compared to 70.9% in 4FQ17.
• GAAP operating margin was (3.2%), as compared to (12.2%) in 4FQ17. Non-GAAP operating margin was 11.0%, as compared to 3.3% in 4FQ17.
• GAAP net loss was ($9.5) million, as compared to ($37.7) million in 4FQ17. Non-GAAP net income was $42.3 million, as compared to $11.2 million in 4FQ17.
• Net cash provided by operating activities was $123.7 million, as compared to $71.1 million in 4FQ17. Free cash flow was $88.3 million, as compared to $57.8 million in 4FQ17.
• GAAP basic and diluted net loss per share was ($0.02), as compared to ($0.19) in 4FQ17. Non-GAAP diluted net income per share was $0.10, as compared to $0.03 in 4FQ17.
• Cash, cash equivalents and short-term investments were $1,089.3 million at the end of 4FQ18, as compared to $430.0 million at the end of 4FQ17.

FY18 Results
• Total revenue was $1,391.7 million, an increase of 26% Y/Y.
• Average revenue per paying user was $117.64, as compared to $111.91 in FY17.
• GAAP gross margin was 71.6%, as compared to 66.7% in FY17. Non-GAAP gross margin was 75.1%, as compared to 67.8% in FY17.
• GAAP operating margin was (35.5%), as compared to (10.3%) in FY17. Non-GAAP operating margin was 12.2%, as compared to 5.5% in FY17.
• GAAP net loss was ($484.9) million, as compared to ($111.7) million in FY17. Non-GAAP net income was $166.2 million, as compared to $59.9 million in FY17.
• Net cash provided by operating activities was $425.4 million, as compared to $330.3 million in FY17. Free cash flow was $362.4 million, as compared to $305.0 million in FY17.
• GAAP basic and diluted net loss per share was ($1.35), as compared to ($0.57) in FY17. Non-GAAP diluted net income per share was $0.41, as compared to $0.17 in FY17.