Market Overview

Dropbox Announces Fiscal 2019 Third Quarter Results


Revenue of $428.2 Million, Up 19% Year-Over-Year

Net Cash Provided by Operating Activities of $149.7 Million and Free Cash Flow of $102.5 Million

Dropbox, Inc. (NASDAQ:DBX), the world's first smart workspace, today announced financial results for its third fiscal quarter ended September 30, 2019.

"We had a strong Q3 highlighted by 19% top line growth and margin expansion," said Dropbox Co-founder and Chief Executive Officer Drew Houston. "We're excited about the early momentum we've seen with our new desktop app — millions are already using it since it was made generally available on September 25. Together with the launch of Dropbox Spaces, we're making great progress towards building the world's first smart workspace where people can focus on the work that matters."

Third Quarter Fiscal 2019 Results

  • Total revenue was $428.2 million, an increase of 19% from the same period last year.
  • Paying users totaled 14.0 million, as compared to 12.3 million for the same period last year. Average revenue per paying user was $123.15, as compared to $118.60 for the same period last year.
  • GAAP gross margin was 75.5%, as compared to 75.0% in the same period last year. Non-GAAP gross margin was 76.7%, as compared to 75.9% in the same period last year.
  • GAAP operating margin was (4.3)%, as compared to (2.5)% in the same period last year. Non-GAAP operating margin, which excludes stock-based compensation, acquisition-related and other expenses, and amortization of acquired intangible assets, was 13.1%, as compared to 12.8% in the same period last year.
  • GAAP net loss was ($17.0) million, as compared to ($5.8) million in the same period last year. Non-GAAP net income was $55.9 million, as compared to $45.0 million in the same period last year.
  • Net cash provided by operating activities was $149.7 million, as compared to $128.0 million in the same period last year. Free cash flow was $102.5 million, as compared to $120.0 million in the same period last year.
  • GAAP basic and diluted net loss per share was ($0.04), as compared to ($0.01) in the same period last year. Non-GAAP diluted net income per share was $0.13, as compared to $0.11 in the same period last year. (1)
  • Cash, cash equivalents and short-term investments were $1.031 billion at the end of the third quarter of 2019.

(1) Non-GAAP diluted net income per share is calculated based upon 418.7 million and 420.0 million diluted weighted-average shares of common stock for the three months ended September 30, 2019 and 2018, respectively.

Financial Outlook

Dropbox will provide forward-looking guidance in connection with this quarterly earnings announcement on its conference call, webcast, and on its investor relations website at

Conference Call Information

Dropbox plans to host a conference call today to review its third quarter financial results and to discuss its financial outlook. This call is scheduled to begin at 2:00 p.m. PT / 5:00 p.m. ET and can be accessed by dialing (877) 300-7844 from the United States or (786) 815-8440 internationally with reference to the company name and conference title, and a live webcast and replay of the conference call can be accessed from the Dropbox investor relations website at Following the completion of the call, a telephonic replay will be available through 11:59 PM ET on November 14, 2019 at (855) 859-2056 from the United States or (404) 537-3406 internationally with recording access code 1636338.

Other Upcoming Events

  • Lev Finkelstein, Vice President of Corporate Finance & Strategy, will be presenting at the RBC Capital Markets Technology, Internet, Media and Telecommunications Conference in New York, NY on Tuesday, November 19, 2019 at 4:05 p.m. ET.

At the time of this event, a live webcast will be accessible from the Dropbox investor relations website at Following the event, a replay will be made available at the same location.

About Dropbox

Dropbox is the world's first smart workspace that helps people and teams focus on the work that matters. With more than 600 million registered users across 180 countries, we're on a mission to design a more enlightened way of working. Dropbox is headquartered in San Francisco, CA, and has 12 offices around the world. For more information on our mission and products, visit

Use of Non-GAAP Financial Measures

Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled "About Non-GAAP Financial Measures."

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, among other things, statements regarding Dropbox's strategies and new products and features, future financial and operational performance, the demand for and engagement with our platform and product features, and the benefits from new product experiences and acquisitions. Words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "plans," and similar expressions are intended to identify forward-looking statements. Dropbox has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that the Company believes may affect its business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this press release and are subject to risks, uncertainties, and assumptions including, but not limited to: (i) our ability to retain and upgrade paying users; (ii) our ability to attract new users or convert registered users to paying users; (iii) our revenue growth rate; (iv) our history of net losses; (v) our liability for any unauthorized access to our data or our users' content, including through privacy and data security breaches; (vi) significant disruption of service on our platform or loss of content; (vii) any decline in demand for our platform or for content collaboration solutions in general; (viii) changes in the interoperability of our platform across devices, operating systems, and third-party applications that we do not control; (ix) competition in our markets; (x) our ability to respond to rapid technological changes, extend our platform, or develop new features; (xi) our ability to manage our growth or plan for future growth; (xii) our acquisition of other businesses and the potential of such acquisitions to require significant management attention, disrupt our business, or dilute stockholder value; and (xiii) the dual class structure of our common stock and its effect of concentrating voting control with certain stockholders who held our capital stock prior to the completion of our initial public offering. Further information on risks that could affect Dropbox's results is included in our filings with the Securities and Exchange Commission ("SEC"), including our Form 10-Q for the quarter ended June 30, 2019. Additional information will be made available in our quarterly report on Form 10-Q and other future reports that we may file with the SEC from time to time, which could cause actual results to vary from expectations. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Dropbox assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release, except as required by applicable law.

Dropbox, Inc.

Condensed Consolidated Statements of Operations

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Three months ended

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