Education
About Us
Working with TipRanks
Follow Us
Dropbox Inc (DBX)
NASDAQ:DBX
Top Page
Dropbox
(NASDAQ:DBX)68Neutral
Positive Factors
AI Integration
Dropbox is focusing on AI integration and scaling up Dropbox Dash, emphasizing innovation in its platform.
Share Repurchase
Dropbox announced a new $1.2 billion share repurchase program, reflecting confidence in its stock.
Negative Factors
Revenue Decline
Revenue guidance for the full year came in below expectations by roughly $80 million, attributed to reduced investment in FormSwift.
Dropbox (DBX) vs. S&P 500 (SPY)
Market Cap
$7.84B
Dividend YieldN/A
Average Volume (3M)4.12M
Price to Earnings (P/E)18.5
Beta (1Y)1.06
Revenue Growth1.86%
EPS Growth6.21%
CountryUS
Employees2,693
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)1.40
Shares Outstanding224,824,680
10 Day Avg. Volume6,756,282
30 Day Avg. Volume4,116,206
Financial Highlights & Ratios
PEG Ratio2.98
Price to Book (P/B)N/A
Price to Sales (P/S)3.08
Price to Cash Flow (P/CF)9.20
P/FCF Ratio8.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$31.25Price Target Upside18.73% Upside
Rating ConsensusHold
Number of Analyst Covering7
Dropbox Business Overview & Revenue Model
Company DescriptionDropbox (DBX) is a leading provider of cloud-based file storage and collaboration solutions. Founded in 2007 and headquartered in San Francisco, California, Dropbox offers a platform that allows individuals and businesses to store, sync, and share files securely. The company's core products include Dropbox Basic (free version), Dropbox Plus, Dropbox Family, and Dropbox Business plans, which cater to different user needs, from personal to enterprise-level requirements. Dropbox also offers additional tools like Dropbox Paper for document collaboration and HelloSign for electronic signatures.
How the Company Makes MoneyDropbox makes money primarily through its subscription-based revenue model. Users can access basic services for free but are encouraged to upgrade to paid plans that offer additional storage, features, and capabilities. The company's key revenue streams include individual users subscribing to Dropbox Plus and Family plans, as well as teams and enterprises opting for Dropbox Business and Advanced plans. Dropbox also generates revenue from its HelloSign e-signature service and other productivity tools. Partnerships with technology companies and integration with third-party applications enhance the platform’s functionality, driving user engagement and retention, which in turn supports the company's revenue growth.
Dropbox Financial Statement Overview
Summary
Dropbox exhibits solid financial health with strong revenue growth and cash flow generation. High profitability margins are countered by slightly declining net profits. The balance sheet poses risks due to negative equity and high leverage but is mitigated by substantial cash reserves.Income Statement
Dropbox shows strong financial performance with consistent revenue growth, evidenced by a 1.86% increase in TTM. The gross profit margin stands at 82.53%, indicating effective cost management. However, the net profit margin slightly decreased to 17.75% in TTM. Despite this, the company maintains solid EBIT and EBITDA margins at 19.08%, showcasing operational efficiency.85
Very Positive
Balance Sheet
Dropbox's balance sheet reflects a high debt-to-equity ratio due to negative stockholders' equity, indicating financial risk. Despite this, the company has improved its equity position over time. The equity ratio is negative, suggesting liabilities exceed assets, which is a concern. However, the company maintains a substantial cash reserve, offering liquidity.60
Neutral
Cash Flow
Dropbox demonstrates robust cash flow generation with a 14.83% growth in free cash flow. The operating cash flow to net income ratio is strong at 1.98, indicating excellent conversion of income to cash. The free cash flow to net income ratio of 1.93 further underscores efficient cash management.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.55B | 2.50B | 2.32B | 2.16B | 1.91B | Gross Profit |
| 2.10B | 2.02B | 1.88B | 1.71B | 1.50B | EBIT |
| 486.20M | 383.50M | 531.70M | 274.40M | 519.40M | EBITDA |
| 486.20M | 553.50M | 688.80M | 463.30M | 678.70M | Net Income Common Stockholders |
| 452.30M | 453.60M | 553.20M | 335.80M | -256.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.59B | 1.36B | 1.34B | 1.72B | 1.12B | Total Assets |
| 3.33B | 2.98B | 3.11B | 3.09B | 2.39B | Total Debt |
| 2.03B | 2.03B | 2.29B | 2.37B | 1.12B | Net Debt |
| 705.40M | 1.42B | 2.06B | 1.84B | 804.60M | Total Liabilities |
| 4.08B | 3.15B | 3.42B | 3.39B | 2.05B | Stockholders Equity |
| -752.40M | -165.80M | -309.40M | -293.90M | 333.80M |
| Cash Flow | Free Cash Flow | |||
| 871.60M | 759.10M | 762.40M | 700.90M | 490.50M | Operating Cash Flow |
| 894.10M | 783.70M | 797.30M | 729.80M | 570.80M | Investing Cash Flow |
| 443.80M | 395.20M | -48.50M | -524.80M | -233.60M | Financing Cash Flow |
| -586.60M | -799.20M | -1.04B | 16.20M | -577.70M |
Dropbox Technical Analysis
Negative
26.32
Price Trends
30.36
Negative
28.87
Negative
26.04
Positive
Market Momentum
-1.43
Positive
28.40
Positive
6.61
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DBX, the sentiment is Negative. The current price of 26.32 is below the 20-day moving average (MA) of 29.91, below the 50-day MA of 30.36, and above the 200-day MA of 26.04, indicating a neutral trend. The MACD of -1.43 indicates Positive momentum. The RSI at 28.40 is Positive, neither overbought nor oversold. The STOCH value of 6.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DBX.
Dropbox Risk Analysis
Dropbox disclosed 55 risk factors in its most recent earnings report. Dropbox reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Dropbox Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.89T | 31.30 | 30.64% | 0.81% | 15.04% | 12.38% | |
78 Outperform | $193.98B | 35.94 | 39.42% | ― | 11.02% | 4.96% | |
74 Outperform | $2.09T | 21.17 | 30.80% | 0.35% | 13.89% | 38.99% | |
73 Outperform | $22.59B | 23.01 | 11.31% | ― | 3.05% | 55.96% | |
69 Neutral | $4.70B | 40.89 | 1086.23% | ― | 4.09% | 299.27% | |
68 Neutral | $7.84B | 18.47 | -60.11% | ― | 1.86% | 6.21% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
DBX
Dropbox
26.32
2.52
10.59%
ADBE
Adobe
446.03
-97.06
-17.87%
GOOGL
Alphabet Class A
170.92
40.00
30.55%
MSFT
Microsoft
388.61
-10.43
-2.61%
BOX
Box
33.47
3.87
13.07%
ZM
Zoom Video Communications
74.93
8.51
12.81%
Dropbox Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -17.44% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
Dropbox's earnings call highlighted strategic progress with Dash and strong financial metrics like operating margin and free cash flow growth. However, challenges persist with a decline in paying users, pressure on Team's business, and headwinds from FormSwift strategy shifts and FX impacts. Despite these challenges, the company demonstrates resilience and strategic focus.Highlights
Exceeding Sales Goals for Dash
Dropbox launched Dash for business, exceeded Q4 sales goals, and is building a strong pipeline. Universal search and security tools are key features driving customer interest.
Free Cash Flow Growth
The company achieved a 23% year-over-year growth in free cash flow per share for both the quarter and the full-year.
Strong Operating Margin
Dropbox reported an operating margin of 36.9% for Q4, exceeding guidance and reflecting a 470 basis points increase from the previous year.
Successful Share Repurchase Program
Dropbox reduced its diluted share count by 12.5 million shares, contributing to a 24% year-over-year increase in free cash flow per share.
Strategic Investments in Dash
Dropbox is aggressively investing in Dash, with plans for a 2025 product roadmap featuring pioneering improvements and new security features.
Lowlights
Decline in Paying Users
The company ended Q4 with a decrease of 15,000 paying users sequentially, with further declines expected in 2025 due to reduced FormSwift investments and workforce reductions.
Pressure on Teams Business
Despite improvements in team metrics, elevated churn and down-sell pressure persist due to pricing sensitivities and external factors.
Impact of FormSwift Strategy Shift
The decision to reduce headcount and marketing for FormSwift is expected to serve as a revenue growth headwind, contributing to a 150 basis point headwind for 2025.
Foreign Exchange Headwinds
A strengthening U.S. dollar has resulted in a $30 million FX headwind, affecting revenue and free cash flow expectations for 2025.
Company Guidance
During the fourth quarter 2024 earnings call, Dropbox provided guidance and expectations for the first quarter and fiscal year 2025, highlighting several key metrics. The company reported a 23% year-over-year growth in free cash flow per share, aided by a share repurchase program that reduced the diluted share count by 12.5 million shares. Dropbox's Q4 revenue was $644 million, with a total annual recurring revenue (ARR) of $2.574 billion, representing a 2% year-over-year increase. The company projected Q1 2025 revenue between $618 million and $621 million, and full-year 2025 revenue between $2.465 billion and $2.480 billion, factoring in a currency headwind of approximately $18 million. Dropbox's non-GAAP operating margin was forecasted to be approximately 38.5% for Q1 2025 and between 37.5% and 38% for the full year. The company guided unlevered free cash flow to be at or above $940 million for 2025, considering the impact of a $36 million lease buyout payment and $11 million in severance costs. Additionally, Dropbox emphasized its strategic focus on scaling its Dash product, which offers AI-powered universal search, while reducing investments in non-core businesses like FormSwift.Dropbox Corporate Events
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Dropbox Reports Q4 2024 Financial Results and Strategic Moves
Positive
Feb 20, 2025
Dropbox reported its financial results for the fourth quarter and fiscal year 2024, showing a modest increase in revenue and a robust free cash flow. The company highlighted its progress with its AI-powered product, Dash for Business, and its ongoing efforts to restructure its core operations to improve efficiency. The year marked significant financial activities, including a $2 billion credit agreement and share repurchases totaling $1.2 billion, which reflect Dropbox’s strategic focus on enhancing shareholder value and operational strength.
Executive/Board ChangesBusiness Operations and Strategy
Dropbox Appoints Warren Jenson to Board of Directors
Positive
Jan 22, 2025
On January 17, 2025, Dropbox appointed Warren Jenson to its Board of Directors and Audit Committee. Jenson brings extensive experience from iconic companies undergoing major transitions, which is expected to be beneficial as Dropbox invests in growth initiatives like Dropbox Dash. His past roles include leadership positions at Amazon.com, Electronic Arts, and Nielsen, highlighting his capability to lead companies through strategic transformations. This appointment signals Dropbox’s commitment to navigating its business maturation and leveraging new opportunities in the digital landscape.
Private Placements and FinancingStock BuybackBusiness Operations and Strategy
Dropbox Secures $2 Billion Loan for Strategic Growth
Positive
Dec 11, 2024
Dropbox has entered into a Credit and Guaranty Agreement, securing up to $2 billion in term loans, with Blackstone Credit & Insurance as the lead arranger. This agreement, which includes a $1.0 billion initial borrowing and a share repurchase program of $1.2 billion, aims to support working capital, corporate purposes, and shareholder returns, while positioning Dropbox to meet or exceed its financial guidance for Q4 and the fiscal year 2024.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.