Dropbox (NASDAQ:DBX – Get Free Report) issued its quarterly earnings results on Thursday. The company reported $0.88 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.73 by $0.15, FiscalAI reports. Dropbox had a negative return on equity of 22.88% and a net margin of 17.17%. The firm had revenue of $637.30 million during the quarter, compared to analyst estimates of $629.59 million. During the same period last year, the company earned $0.74 EPS. Dropbox’s quarterly revenue was up .5% compared to the same quarter last year.
Here are the key takeaways from Dropbox’s conference call:
- Positive sentiment: Dropbox reported Q3 revenue of $637.3 million, up 0.5% year over year, or 1% excluding FormSwift, and operating margin of 42.2%, ahead of guidance. It added about 60,000 paying users excluding FormSwift, marking a fourth consecutive quarter of paying-user growth.
- Positive sentiment: Early adoption of the AI-powered Dropbox experience is encouraging: nearly 90% of users who received it preferred the experience, and more than 20% of eligible teams have used included AI credits. Dropbox plans to sell additional AI token packs, though monetization is still at an early stage.
- Positive sentiment: Dropbox introduced DBX Agent Cloud and agreed to acquire Tigris Data to pursue demand for AI-focused object storage. Management sees potential to combine Tigris’ developer customer base with Dropbox’s infrastructure and sales capabilities, but the deal is pending and the company has not yet provided detailed financial expectations.
- Positive sentiment: Dropbox raised its 2026 outlook, now expecting revenue of $2.528 billion–$2.531 billion, operating margin of about 40.5%, and unlevered free cash flow of at least $1.075 billion.
- Negative sentiment: Management’s preliminary 2027 outlook calls for roughly flat revenue excluding Tigris, citing the loss of FormSwift revenue, moderating currency tailwinds, and the gradual ramp of new products. The company expects operating margin to expand about 150 basis points, partly by reinvesting efficiency savings, and announced a workforce reduction of approximately 9%.
Dropbox Stock Down 3.1%
NASDAQ:DBX traded down $1.10 during midday trading on Friday, hitting $34.66. The stock had a trading volume of 4,953,244 shares, compared to its average volume of 3,042,914. The stock has a 50-day moving average of $35.29 and a 200 day moving average of $29.25. The company has a market capitalization of $7.82 billion, a price-to-earnings ratio of 17.87, a PEG ratio of 3.42 and a beta of 0.62. Dropbox has a one year low of $21.69 and a one year high of $38.22.
Insider Buying and Selling at Dropbox
In other Dropbox news, CAO Sarah Schubach sold 2,056 shares of the company’s stock in a transaction on Thursday, October 15th. The stock was sold at an average price of $35.79, for a total value of $73,584.24. Following the completion of the sale, the chief accounting officer directly owned 130,821 shares in the company, valued at approximately $4,682,083.59. This represents a 1.55% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Ashraf Alkarmi sold 28,800 shares of the stock in a transaction on Friday, September 11th. The stock was sold at an average price of $35.54, for a total value of $1,023,552.00. Following the transaction, the chief executive officer directly owned 1,004,081 shares in the company, valued at $35,685,038.74. The trade was a 2.79% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 1,331,268 shares of company stock worth $46,553,783 over the last quarter. Insiders own 35.48% of the company’s stock.
Key Headlines Impacting Dropbox
Here are the key news stories impacting Dropbox this week:
- Positive Sentiment: Dropbox reported Q3 adjusted EPS of $0.88 versus estimates of $0.73 and revenue of $637.3 million versus $629.6 million expected. Q4 revenue guidance of $630 million–$633 million also topped the $628.4 million consensus. Q3 earnings and revenue top estimates
- Positive Sentiment: RBC raised its price target to $48 from $42 and maintained an Outperform rating, signaling improved analyst confidence. RBC raises Dropbox price target
- Positive Sentiment: Dropbox plans to acquire Tigris Data for $350 million to build out AI infrastructure and introduce DBX Agent Cloud. Management expects the deal to close in Q4 2026 and has indicated 150 basis points of operating-margin expansion in 2027. Dropbox to acquire Tigris Data Margin expansion outlook
- Neutral Sentiment: CEO Andrew Houston sold 383,800 shares under a pre-arranged Rule 10b5-1 trading plan; the planned nature of the sale makes its signal less clear. CEO share sale
- Negative Sentiment: Revenue increased just 0.5% year over year, highlighting the modest underlying growth rate. The $350 million Tigris purchase also brings investment and integration risks as Dropbox pursues its AI strategy.
Analyst Ratings Changes
A number of analysts have weighed in on the company. Zacks Research upgraded Dropbox from a “strong sell” rating to a “hold” rating in a research note on Tuesday, October 6th. Bank of America reissued an “underperform” rating on shares of Dropbox in a research note on Friday, August 7th. Wall Street Zen upgraded shares of Dropbox from a “hold” rating to a “buy” rating in a report on Saturday. Stephens assumed coverage on shares of Dropbox in a research note on Tuesday. They issued an “equal weight” rating and a $39.00 price target on the stock. Finally, Royal Bank Of Canada lifted their price objective on shares of Dropbox from $42.00 to $48.00 and gave the company an “outperform” rating in a report on Friday. Two investment analysts have rated the stock with a Buy rating, four have given a Hold rating and three have issued a Sell rating to the company. According to data from MarketBeat.com, the company has a consensus rating of “Reduce” and a consensus target price of $33.40.
Read Our Latest Analysis on DBX
Dropbox Company Profile
Dropbox, Inc (NASDAQ: DBX) is a software company that provides cloud-based tools for storing, organizing, sharing and collaborating on files. Its platform enables individuals, businesses and teams to access documents, photos and other content across connected devices, synchronize files and manage shared workflows.
The company’s offerings include Dropbox for cloud storage and file collaboration, Dropbox Paper for shared documents and project work, Dropbox Sign for electronic signatures, and DocSend for securely sharing and tracking business documents.
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