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Dropbox (DBX) Q2 Earnings Beat Estimates, Revenues Up Y/Y
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Dropbox (DBX - Free Report) reported non-GAAP earnings of 60 cents per share in second-quarter 2024, beating the Zacks Consensus Estimate by 15.38% and increasing 17.6% year over year.
Revenues of $634.5 million inched up 1.9% year over year and 1.8% on constant currency (CC) basis beating the consensus mark by 0.77%. The upside was driven by improved performance in self-serve individual plans.
Total annual recurring revenues came in at $2.73 billion, up 2.9% year over year.
Quarter Details
Dropbox exited second-quarter 2024 with 18.22 million paying users, marking a sequential growth of nearly 63,000. The average revenue per paying user was $139.93 compared with $138.94 in the year-ago quarter.
As of Jun 30, 2024, Dropbox had nearly 575K business teams and 35% of paying users were business teams.
In the second quarter, Dropbox reported a non-GAAP gross margin of 84.5%, expanding 180 basis points (bps) year over year.
In the reported quarter, research and development expenses were $159.6 million, down 0.6% year over year.
Sales & marketing expenses increased 5.1% year over year to $103.3 million.
General & administrative expenses rose 5.3% year over year to $45.5 million.
Dropbox reported a non-GAAP operating margin of 35.9%, up 170 bps year over year.
Balance Sheet & Cash Flow
As of Jun 30, 2024, Dropbox had cash, cash equivalents and short-term investments of $1.06 billion compared with $1.18 billion as of Mar 31, 2024.
In the second quarter, the company reported a free cash flow of $224.7 million compared with $166.3 million reported in the previous quarter.
In second-quarter 2024, more than 11 million shares were repurchased, totaling $260 million. As of the end of the second quarter, approximately $868 million remained under the current repurchase authorization.
Guidance
For the third quarter of 2024, Dropbox expects revenues between $635 million and $638 million. The company expects an FX tailwind of less than $0.5 million.
Non-GAAP operating margin is expected to be around 32%.
For 2024, it expects revenues between $2.540 billion and $2.550 billion. At constant currency, revenues are expected between $2.537 billion and $2.547 billion.
The company expects gross margin to be in the 83-83.5% range for the full year. Non-GAAP operating margin is expected in the 33.5-34% range.
Dropbox expects free cash flow between $910 million and $950 million.
Zacks Rank & Stocks to Consider
Currently, Dropbox carries a Zacks Rank #3 (Hold).
Dropbox shares have inched down 21.3% year to date compared with the Zacks Computer & Technology sector’s increase of 24.3%.
Here are some top-ranked stocks worth considering in the broader sector.
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Dropbox (DBX) Q2 Earnings Beat Estimates, Revenues Up Y/Y
Dropbox (DBX - Free Report) reported non-GAAP earnings of 60 cents per share in second-quarter 2024, beating the Zacks Consensus Estimate by 15.38% and increasing 17.6% year over year.
Revenues of $634.5 million inched up 1.9% year over year and 1.8% on constant currency (CC) basis beating the consensus mark by 0.77%. The upside was driven by improved performance in self-serve individual plans.
Total annual recurring revenues came in at $2.73 billion, up 2.9% year over year.
Quarter Details
Dropbox exited second-quarter 2024 with 18.22 million paying users, marking a sequential growth of nearly 63,000. The average revenue per paying user was $139.93 compared with $138.94 in the year-ago quarter.
Dropbox, Inc. Price, Consensus and EPS Surprise
Dropbox, Inc. price-consensus-eps-surprise-chart | Dropbox, Inc. Quote
As of Jun 30, 2024, Dropbox had nearly 575K business teams and 35% of paying users were business teams.
In the second quarter, Dropbox reported a non-GAAP gross margin of 84.5%, expanding 180 basis points (bps) year over year.
In the reported quarter, research and development expenses were $159.6 million, down 0.6% year over year.
Sales & marketing expenses increased 5.1% year over year to $103.3 million.
General & administrative expenses rose 5.3% year over year to $45.5 million.
Dropbox reported a non-GAAP operating margin of 35.9%, up 170 bps year over year.
Balance Sheet & Cash Flow
As of Jun 30, 2024, Dropbox had cash, cash equivalents and short-term investments of $1.06 billion compared with $1.18 billion as of Mar 31, 2024.
In the second quarter, the company reported a free cash flow of $224.7 million compared with $166.3 million reported in the previous quarter.
In second-quarter 2024, more than 11 million shares were repurchased, totaling $260 million. As of the end of the second quarter, approximately $868 million remained under the current repurchase authorization.
Guidance
For the third quarter of 2024, Dropbox expects revenues between $635 million and $638 million. The company expects an FX tailwind of less than $0.5 million.
Non-GAAP operating margin is expected to be around 32%.
For 2024, it expects revenues between $2.540 billion and $2.550 billion. At constant currency, revenues are expected between $2.537 billion and $2.547 billion.
The company expects gross margin to be in the 83-83.5% range for the full year. Non-GAAP operating margin is expected in the 33.5-34% range.
Dropbox expects free cash flow between $910 million and $950 million.
Zacks Rank & Stocks to Consider
Currently, Dropbox carries a Zacks Rank #3 (Hold).
Dropbox shares have inched down 21.3% year to date compared with the Zacks Computer & Technology sector’s increase of 24.3%.
Here are some top-ranked stocks worth considering in the broader sector.
Some better-ranked stocks from the broader Computer and Technology sector are Bilibili (BILI - Free Report) , Cisco Systems (CSCO - Free Report) and Applied Materials (AMAT - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bilibili’s shares have declined 14.8% year to date. BILI is set to report second-quarter 2024 results on Aug 22.
Cisco Systems’ shares have dropped 13.5% year to date. CSCO is set to post fourth-quarter fiscal 2024 results on Aug 14.
Applied Materials’ shares have gained 19.5% year to date. AMAT is set to release third-quarter fiscal 2024 results on Aug 15.