Dropbox Q1 tops estimates as company reaches GAAP profitability
Dropbox reported better-than-expected first quarter financial results on Thursday and marked its first quarter of GAAP profitability. The company also provided an update on Dropbox usage and engagement since the onset of the novel coronavirus pandemic.
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The cloud-based file sharing company delivered a net income of $39.3 million, or 9 cents a share, on revenue of $455 million, up 18%. Non-GAAP earnings were 17 cents per share.
Wall Street was expecting earnings of 14 cents a share with revenue of $451.9 million. Shares of Dropbox were up nearly 5% in after hours trading.
The company said paying users now sit at 14.6 million, as compared to 13.2 million for the same period last year. Average revenue per paying user was $126.30, up from $121.04 per user for the same period last year.
Annual recurring revenue came to $1.864 billion, an increase of 16% year-over-year.
Looking ahead, analysts expect Dropbox to report second quarter earnings of 15 cents per share on revenue of $458.7 million. Dropbox is holding its outlook until its conference call this afternoon. Shares of Dropbox were up nearly 4% in late trading.
"We had a strong first quarter as we rallied together to support our customers and our community during this unprecedented public health crisis," Dropbox chief executive Drew Houston said. "I'm incredibly proud of our team as we continue to build products that help facilitate distributed work at scale. We've built an enduring business and I remain confident in our future."
Meanwhile, Dropbox said it has seen demand for its services increase significantly since mid-March. This is a common trend among software providers in the collaboration space, as millions of people continue to work from home during the pandemic and rely on tech platforms to stay connected.
Dropbox said that a record number of teams and individuals tried Dropbox in Q1 and early Q2. There's also been higher levels of engagement and increased collaboration within its suite of tools, the company said. Since mid-March, daily Dropbox Business team trials increased 40%, and trial starts for its individual plan increased over 25%. Additionally, early adoption of Dropbox's new desktop app has grown to over 350,000 of its more than 450,000 Dropbox business teams, with weekly collaborative users up 60%.