Dropbox published its third quarter financial results on Thursday, beating market estimates. The cloud collaboration platform delivered a net income of $32 million, or 8 cents a share. Revenue for the quarter was $487.4 million, up 14%, with non-GAAP earnings at 26 cents per share.
Wall Street was expecting earnings of 18 cents a share with revenue of $483.64 million. Shares of Dropbox were down around 3% in after hours trading.
The company said paying users now sit at 15.25 million, as compared to 14 million for the same period last year. Average revenue per paying user was $128.03, up from $123.15 per user for the same period last year. The company said total ARR ended at $1.981 billion, an increase of 12% year-over-year.
At the end of the quarter, Dropbox had $1.226 billion in cash, cash equivalents and short-term investments.
"In Q3, we saw momentum across the business with strong operating income, profitability, and free cash flow," said Dropbox CEO Drew Houston. "Our margin expansion demonstrates the strength of our business model and execution against our long-term targets. We believe the opportunity to redesign work has never been bigger, and now, as a Virtual First company, we'll truly live our mission as we build better products for distributed teams."
Looking ahead, analysts expect Dropbox to report fourth quarter earnings of 20 cents per share on revenue of $494.09 million. Dropbox is holding its outlook until its conference call this afternoon.