Cloud Stocks: Dropbox Acquires, But Competition Remains Stiff


Dropbox (Nasdaq: DBX) recently announced its fourth quarter results that surpassed market expectations. The company is going strong on acquisitions and product upgrades, but competition continues to remain brutal in the market.

Dropbox’s Financials

Revenues for the quarter grew 13% to $504.1 million, ahead of the market’s forecast of $498 million. Net loss was $345.8 million compared with a net loss of $6.6 million a year ago. On an adjusted basis, EPS was $0.28 per share compared with the market’s expectations of $0.24.

Among operating metrics, it reported an ARR of $2.02 billion, growing 12% over the year. Paying users grew from 14.31 million a year ago to 15.48 million for the quarter and average revenue per paying user increased from $125 to $130.17.

For the fiscal year, revenues grew 15% to $1.914 billion. It ended the year with an EPS of $0.93.

Dropbox did not provide an outlook for the quarter or the current year.

Dropbox’s Acquisition

Recently, Dropbox announced the acquisition of San Francisco-based DocSend for an estimated $165 million. Founded in 2013 by Dave Koslow, Russ Heddleson, and Tony Cassanego, DocSend provides business leaders with a secure analytics and document sharing product. It lets its customers share documents with their end users and get real-time feedback on the documents. The acquisition will allow clients that use Dropbox to collaborate on messaging docs, presentations, and projects. They will be able to utilize DocSend to deliver proposals as well as track engagement.

Dropbox plans to integrate the offerings from an earlier acquisition, HelloSign, that has helped Dropbox manage contracts and invoices. Dropbox had acquired HelloSign in 2019 for an estimated $230 million. In the last reported quarter, HelloSign saw a 70% increase in end-user signature requests. Dropbox has also expanded support for HelloSign to 21 languages and is working on expanding it internationally. Together with HelloSign and DocSend, Dropbox will be able to deliver a solution that can streamline workflows for sales, finance, client services, and executive teams.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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