Dropbox’s stock falls as it struggles to squeeze more revenue from existing customers

Shares of Dropbox Inc. have been trending down within the after-hours buying and selling session at present after the corporate reported pedestrian development and a decline in its common income per paying person.

The corporate did a minimum of beat expectations with its fourth quarter monetary outcomes. It reported earnings earlier than sure prices comparable to inventory compensation of 40 cents per share, simply forward of Wall Avenue’s goal of a revenue of 39 cents. Income for the interval got here to $598.8 million, up 6% from a 12 months earlier and above the analyst estimate of $593.8 million.

Dropbox ended the quarter with a web revenue of $328.3 million, bettering on the $124.6 million revenue it recorded in the identical interval final 12 months. For the complete 12 months, Dropbox delivered a web revenue of $553.2 million on complete income of $2.32 billion.

Dropbox co-founder and Chief Government Drew Houston (pictured) insisted that fiscal 2022 was a “stable 12 months” for the corporate, which did properly amidst a difficult macroeconomic surroundings. “We elevated our profitability and free money circulation and continued to make use of M&A as an engine for development, welcoming FormSwift to Dropbox.”

Dropbox is an iconic identify for a lot of workplace staff, having established itself as a number one supplier of cloud-based file storage and sharing instruments. Its software program is utilized by hundreds of firms globally to arrange, handle, share and collaborate on vital enterprise paperwork. The company acquired FormSwift in December, including a whole bunch of customizable doc templates to its present suite of doc administration instruments.

The acquisition of FormSwift was primarily designed to make Dropbox’s choices extra engaging, and that’s one thing it clearly must do given its laborious growth in recent quarters. Whereas Dropbox’s annual recurring income grew by 11.2% to $2.514 billion on the finish of the quarter, it additionally reported that its common income per paying person fell barely, from $134.78 a 12 months earlier to $134.53 on the finish of the quarter. However, it did a minimum of improve that buyer base, ending the quarter with 17.77 million paying prospects, up from 16.79 million final 12 months.

Dropbox’s sluggish fee of development has been a priority for traders for a while, and it’s doubtless that the decrease income per buyer was what sparked the after-hours selloff of Dropbox’s shares. The inventory fell by virtually 3% within the prolonged buying and selling session following at present’s report.

The corporate did a minimum of supply some pretty encouraging steering. For the primary quarter of fiscal 2023, Dropbox stated it sees income of between $600 million and $603 million, whereas for the complete 12 months it’s concentrating on a spread of $2.475 billion to $2.49 billion. In distinction, Wall Avenue analysts are modeling first quarter income of simply $590 million and full 12 months gross sales of $2.44 billion.

Picture: WSJ Conference and Meeting Photos/Flickr