In This Article:
Cloud storage and e-signature company Dropbox (Nasdaq: DBX) announced better-than-expected revenue in Q1 CY2025, but sales fell by 1% year on year to $624.7 million. Its non-GAAP profit of $0.70 per share was 12.6% above analysts’ consensus estimates.
Is now the time to buy Dropbox? Find out in our full research report.
Dropbox (DBX) Q1 CY2025 Highlights:
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Revenue: $624.7 million vs analyst estimates of $620.2 million (1% year-on-year decline, 0.7% beat)
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Adjusted EPS: $0.70 vs analyst estimates of $0.62 (12.6% beat)
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Adjusted Operating Income: $260.5 million vs analyst estimates of $237.2 million (41.7% margin, 9.8% beat)
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Guidance will be provided on the upcoming earnings call and could move shares
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Operating Margin: 29.4%, up from 22.7% in the same quarter last year
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Free Cash Flow Margin: 24.6%, down from 32.7% in the previous quarter
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Customers: 18.16 million, down from 18.22 million in the previous quarter
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Annual Recurring Revenue: $2.55 billion at quarter end, in line with the same quarter last year
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Billings: $636.4 million at quarter end, down 1.8% year on year
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Market Capitalization: $8.47 billion
Company Overview
Founded by the long-serving CEO Drew Houston and Arash Ferdowsi in 2007, Dropbox (NASDAQ:DBX) provides a file hosting cloud platform that helps organizations collaborate and share documents.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, Dropbox grew its sales at a weak 4.8% compounded annual growth rate. This fell short of our benchmark for the software sector and is a poor baseline for our analysis.
This quarter, Dropbox’s revenue fell by 1% year on year to $624.7 million but beat Wall Street’s estimates by 0.7%.
Looking ahead, sell-side analysts expect revenue to decline by 3% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and indicates its products and services will face some demand challenges.
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