Dropbox: Fiscal 3Q26 Financial Results

Summary:

• Revenue of $637.3 Million, an increase of 0.5% YoY; excluding FormSwift, up 1.0% YoY
• Third quarter GAAP operating margin of 27.5% and non-GAAP operating margin of 42.2%
• Net cash provided by operating activities of $259.2 Million and unlevered free cash flow of $303.9 Million
• Announced $350.0M planned acquisition of Tigris Data, a globally distributed, object storage platform built for AI

Dropbox, Inc. announced financial results for its third quarter ended September 30, 2026.“Q3 was another beat-and-raise quarter, with revenue growth excluding FormSwift and non-GAAP operating margin both ahead of our guidance, marking our fifth consecutive quarter of YoY revenue growth excluding FormSwift,” said Ashraf Alkarmi, coCEO, Dropbox. “We’re executing on our strategy to become the trusted, independent content foundation for the AI era, and I’m excited about the opportunity in front of us. We’re making our customers’ content smarter and more useful by connecting Dropbox to the AI tools they already use. And with DBX Agent Cloud and our agreement to acquire Tigris, we’re putting the infrastructure we’ve built over nearly two decades to work for companies building AI applications, opening a new avenue for growth.”

Third Quarter 2026 Results Compared to Third Quarter 2025

• Total revenue was $637.3 million, an increase of 0.5%. Excluding FormSwift, revenue grew 1.0%. On a constant currency basis, total revenue excluding FormSwift increased by 0.2% ⁽¹⁾
• Total ARR was $2.555 billion, an increase of 0.8%. Excluding FormSwift, Total ARR grew 1.9%, and 0.4% on a constant currency basis. Total ARR on a constant currency basis decreased $10.4 million quarter-over-quarter due to completion of the wind down of FormSwift as of the end of the third quarter of 2026; excluding FormSwift, it increased $4.7 million quarter-over-quarter ⁽²⁾
• Paying users totaled 18.20 million, as compared to 18.07 million. Paying users increased by 20,000 quarter-over-quarter largely due to growth in our Simple plan and slight growth in Teams plan offset by the wind down of FormSwift. Average revenue per paying user was $138.76, as compared to $139.07
• GAAP gross margin was 80.6%, as compared to 79.8%. Non-GAAP gross margin was 81.8%, as compared to 81.4%
• GAAP operating margin was flat at 27.5%. Non-GAAP operating margin was 42.2%, as compared to 41.1%
• GAAP net income was $116.1 million, as compared to $123.8 million. Non-GAAP net income was $197.8 million, as compared to $196.7 million
• Net cash provided by operating activities was $259.2 million, as compared to $302.1 million. Unlevered free cash flow was $303.9 million, as compared to $314.2 million
• GAAP diluted net income per share attributable to common stockholders was $0.52, as compared to $0.47. Non-GAAP diluted net income per share attributable to common stockholders was $0.88, as compared to $0.74 ⁽³⁾
• Cash, cash equivalents and short-term investments ended at $1.142 billion

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Recent Business Highlights

• On November 5, 2026, Dropbox introduced DBX Agent Cloud, a new infrastructure business for companies and developers building AI applications, starting with standalone, S3-compatible object storage and expanding over time to include filesystem and content-processing capabilities
• On November 5, 2026, Dropbox announced an agreement to acquire Tigris Data Inc., a globally distributed object storage platform, for approximately $350.0 million in cash, subject to customary purchase price adjustments. The acquisition is expected to close in the fourth quarter of 2026, subject to customary closing conditions
• On November 5, 2026, Dropbox launched the new Dropbox experience, which lets customers find, understand, create, and edit content directly in Dropbox

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(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 225.1 million and 265.1 million diluted weighted-average shares outstanding of common stock for the three months ended September 30, 2026 and 2025, respectively