Dropbox tops analysts’ estimates for earnings and revenue in the first quarter
- Dropbox posts £368.29 million in revenue in Q1 and 13.7 pence of adjusted earnings per share.
- The U.S company benefitted from the Coroanvirus driven work from home restrictions.
- CFO Ajay Vashee says the company is aiming profitability by the end of the year.
Dropbox (NASDAQ: DBX) released its quarterly financial results on Thursday that topped analysts’ estimates for earnings and revenue. In February, the chief executive officer of Dropbox, Drew Houston, said that the company is aiming profitability by the end of 2020.
Following the release of the earnings report, Dropbox was reported around 2% up in extended trading on Thursday.
Dropbox’s Q1 financial results versus analysts’ estimates
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According to Refinitiv, analysts had expected the company to print £365.63 million in revenue in the first quarter. Their estimate for earnings per share (EPS) was capped at 11.3 pence adjusted. In its report on Thursday, Dropbox topped both estimates posting a higher £368.29 million in revenue in Q1 and 13.7 pence of adjusted earnings per share.
In terms of net income, Dropbox posted £31.78 million in the recent quarter. As per CFO Ajay Vashee, the company is expecting to make a profit in 2020.
Dropbox also added that the Coronavirus quarantines that are encouraging work from home arrangements continue to fuel its business. The shift in trend, as per the CEO, is likely to remain in place even after the lockdowns end.
In the first quarter, the California company noted an 18% growth in its revenue that was only slightly lower than a 19% growth that it registered in Q4. Dropbox also boasted that it closed the first quarter with 14.6 million paid users that were in line with experts’ forecast, but stronger than Q4 when its total paid users were recorded at 14.3 million.
In a blog published on Thursday, the company also highlighted a 60% growth in its redesigned desktop app’s users since March.
Dropbox’s financial guidance for Q2 and fiscal 2020
In the second quarter, Dropbox estimates £374.36 million to £376.78 million in revenue. Analysts, on the other hand, anticipate a higher £384.95 million in revenue for Dropbox in Q2. For full-year, Dropbox forecast £1.52 billion to £1.54 billion in revenue that is marginally ahead of experts’ forecast of £1.52 billion.
Including the gain in after-hours trading on Thursday, Dropbox is now roughly 25% up year to date in the stock market. In March, the stock dropped around 20% below the price at which it started the year. Its performance in 2019 was also reported fairly upbeat with an annual gain of around 15%.
At the time of writing, Dropbox is valued at £7.58 billion.