Dropbox (NASDAQ:DBX – Get Free Report) posted its quarterly earnings results on Thursday. The company reported $0.88 EPS for the quarter, beating 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 business had revenue of $637.30 million for the quarter, compared to analysts’ expectations of $629.59 million. During the same period last year, the firm earned $0.74 earnings per share. The business’s quarterly revenue was up .5% on a year-over-year basis.
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 Trading Down 3.1%
Shares of NASDAQ:DBX traded down $1.10 on Friday, reaching $34.66. The company had a trading volume of 4,953,244 shares, compared to its average volume of 3,042,914. The firm has a market capitalization of $7.82 billion, a PE ratio of 17.87, a PEG ratio of 3.42 and a beta of 0.62. Dropbox has a 52-week low of $21.69 and a 52-week high of $38.22. The firm’s 50 day simple moving average is $35.29 and its 200-day simple moving average is $29.25.
Dropbox News Roundup
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.
Insider Activity at Dropbox
In other Dropbox news, CEO Andrew Houston sold 383,800 shares of the firm’s stock in a transaction that occurred on Monday, November 2nd. The shares were sold at an average price of $35.81, for a total value of $13,743,878.00. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider William Yoon sold 12,382 shares of the company’s stock in a transaction dated Friday, September 4th. The shares were sold at an average price of $34.78, for a total value of $430,645.96. Following the transaction, the insider directly owned 366,693 shares in the company, valued at $12,753,582.54. This represents a 3.27% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 1,331,268 shares of company stock valued at $46,553,783 over the last three months. Company insiders own 35.48% of the company’s stock.
Wall Street Analysts Forecast Growth
DBX has been the topic of a number of research reports. Wall Street Zen upgraded shares of Dropbox from a “hold” rating to a “buy” rating in a report on Saturday. Stephens began coverage on Dropbox in a research report on Tuesday. They set an “equal weight” rating and a $39.00 price objective for the company. Weiss Ratings upgraded shares of Dropbox from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Tuesday. William Blair raised Dropbox from an “underperform” rating to a “market perform” rating in a research note on Friday, August 7th. Finally, Bank of America reissued an “underperform” rating on shares of Dropbox in a research report on Friday, August 7th. Two equities research analysts have rated the stock with a Buy rating, four have issued a Hold rating and three have assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, Dropbox has a consensus rating of “Reduce” and a consensus price target of $33.40.
Get Our Latest Stock Report on Dropbox
About Dropbox
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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