Dropbox reported better-than-expected fourth quarter financial results on Thursday and surpassed $2 billion in annual recurring revenue for the first time. The cloud-based file sharing company delivered a net loss of $345.8 million, or 84 cents a share, on revenue of $504.1 million, up 14%. Non-GAAP earnings were 28 cents per share.
Wall Street was expecting earnings of 24 cents a share with revenue of $498 million. The company noted that it recorded impairment charges of $398.2 million in Q4 stemming from its "Virtual First" policy regarding permanent remote work. The company is subleasing a portion of its office spaces and had to settle charges for right-of-use and other lease related assets.
Shares of Dropbox were up around 2% in after hours trading.
The company said paying users now sit at 15.48 million, as compared to 14.31 million for the same period last year. Average revenue per paying user was $130.17, up from $125 per user for the same period last year. Dropbox said ARR came to $2.022 billion, an increase of 11% year-over-year.
For the full fiscal year 2020, non-GAAP earnings were 93 cents per share on revenue of $1.914 billion, an increase of 15% year-over-year. The company said its board has approved the repurchase of an additional $1 billion of its Class A common stock.
Looking ahead, analysts expect Dropbox to report first quarter earnings of 22 cents per share on revenue of $503.69 million. Dropbox is holding its outlook until its conference call this afternoon.
"2020 was a transformational year for Dropbox and I'm proud of the team for their resilience and focus in addressing our customers' evolving needs," said Dropbox CEO Drew Houston. "We ended the year with strong margin expansion, free cash flow, and more than $2B in ARR as we continued to make progress toward our long-term financial targets. Going into 2021, we're focused on executing against our strategy and building essential products for the new era of distributed work."