Dropbox: Fiscal 3Q21 Financial Results

(in $ million)	3Q20	3Q21	9 mo. 20	9 mo. 21
Revenue	487.4	550.2	1,410	1,592
*Growth*		13%		*13%*
Net income (loss)	32.7	75.6	89.5	211.2

Dropbox, Inc. announced financial results for its third quarter ended September 30, 2021.

“3Q21 was another solid quarter with record free cash flow, strong revenue growth, and great progress vs. our strategic objectives as we focus on delivering more value to our customers and shareholders,” said co-founder and CEO Drew Houston. “We shipped several new product experiences to help our customers with today’s challenges of distributed and remote work, and I’m confident in our future as we work toward our vision of building one organized place for content and all the workflows around it.”

3Q21 results:

Non-GAAP diluted net income per share attributable to common stockholders is calculated based upon 398.1 million and 419.9 million diluted weighted-average shares of common stock for the three months ended September 30, 2021 and 2020, respectively.
Total revenue was $550.2 million, an increase of 12.9% from the same period last year. On a constant currency basis, Y/Y growth would have been 10.7%.
Total ARR ended at $2.218 billion, an increase of $52.1 million Q/Q and an increase of 12.0% Y/Y. On a constant currency basis, Y/Y growth would have been 10.4%.
Paying users ended at 16.49 million, as compared to 15.25 million for 3FQ20. Average revenue per paying user was $133.79, as compared to $128.03 for 3FQ20.
GAAP gross margin was 79.6%, as compared to 78.8% in 3FQ20. Non-GAAP gross margin was 81.0%, as compared to 80.0% in 3FQ20.
GAAP operating margin was 14.0%, as compared to 6.2% in 3FQ20. Non-GAAP operating margin was 29.3%, as compared to 23.0% in 3FQ20.
GAAP net income was $75.6 million, as compared to $32.7 million in 3FQ20. Non-GAAP net income was $147.1 million, as compared to $110.2 million in 3FQ20.
Net cash provided by operating activities was $231.5 million, as compared to $200.9 million in 3FQ20. Free cash flow was $221.5 million, as compared to $187.0 million in 3FQ20.
GAAP diluted net income per share attributable to common stockholders was $0.19, as compared to $0.08 in 3FQ20. Non-GAAP diluted net income per share attributable to common stockholders was $0.37, as compared to $0.26 in 3FQ20.
Cash, cash equivalents and short-term investments ended at $1.929 billion.

Comments

Total revenue for the quarter increased 12.9% Y/Y to $550 million, beating guidance range of $543 million to $546 million.

Co-founder and CEO Drew Houston commented:" We had another strong quarter across the board, with revenue outperformance driven by continued momentum with our professional SKU, expansion and teams and better retention across teams in mobile, all while achieving record free cash flow."

Total ARR for the quarter grew yearly 12% for a total of $2.218 billion.

Pro SKU grew by about 30% Y/Y, driven by the ongoing adoption by freelancers and creators.

The firm exited the quarter with 16.49 million paying users, and added approximately 350,000 net new ones in the quarter, driven by strength in teams and the continued self-serve adoption of its family plan. Average revenue per paying user was $133.79 in 3FQ21.

For 4FQ21, the company expects revenue to be in the range of $556 million to $559 million or a mere 1%..

For FY21, it is are raising revenue guidance range, which was previously $2.136 billion to $2.142 billion to $2.148 billion to $2.151 billion.

It remains committed to its long-term objectives, including delivering operating margins of 28% to 30% and generating annual free cash flow of $1 billion by 2024.

Fiscal period

Revenue
in $ million

Y/Y growth

Net loss
in $ million

2015

603.8

(352.9)

2016

844.8

40%

(210.2)

2017