Dropbox’s (NASDAQ:DBX) Q3 Sales Top Estimates But Customer Growth Slows Down

Cloud retention institution Dropbox (NASDAQ:DBX) bushed Wall Street’s gross expectations successful Q3 CY2025, but income were level twelvemonth connected twelvemonth astatine $634.4 million. Its non-GAAP nett of $0.74 per stock was 14.1% supra analysts’ statement estimates.

Is present the clip to bargain Dropbox? Find retired successful our afloat probe report.

• Revenue: $634.4 cardinal vs expert estimates of $624.1 cardinal (flat twelvemonth connected year, 1.7% beat)

• Adjusted EPS: $0.74 vs expert estimates of $0.65 (14.1% beat)

• Adjusted Operating Income: $261 cardinal vs expert estimates of $231.7 cardinal (41.1% margin, 12.6% beat)

• Operating Margin: 27.5%, up from 20% successful the aforesaid 4th past year

• Free Cash Flow Margin: 46.3%, up from 41.3% successful the erstwhile quarter

• Customers: 18.07 million, down from 18.13 cardinal successful the erstwhile quarter

• Annual Recurring Revenue: $2.54 cardinal vs expert estimates of $2.52 cardinal (1.7% year-on-year decline, 0.5% beat)

• Billings: $632.1 cardinal astatine 4th end, successful enactment with the aforesaid 4th past year

• Market Capitalization: $7.86 billion

Originally named aft the founders' inclination to "drop" files into a shared folder, Dropbox (NASDAQ:DBX) provides a contented collaboration level that helps individuals and teams store, organize, share, and enactment connected files from anywhere.

A company’s semipermanent income show is 1 awesome of its wide quality. Any concern tin person short-term success, but a top-tier 1 grows for years. Regrettably, Dropbox’s income grew astatine a anemic 6.4% compounded yearly maturation complaint implicit the past 5 years. This fell abbreviated of our benchmark for the bundle assemblage and is simply a pugnacious starting constituent for our analysis.

We astatine StockStory spot the astir accent connected semipermanent growth, but wrong software, a half-decade humanities presumption whitethorn miss caller innovations oregon disruptive manufacture trends. Dropbox’s caller show shows its request has slowed arsenic its annualized gross maturation of 1.3% implicit the past 2 years was beneath its five-year trend.

This quarter, Dropbox’s $634.4 cardinal of gross was level twelvemonth connected twelvemonth but bushed Wall Street’s estimates by 1.7%.

Looking ahead, sell-side analysts expect gross to diminution by 1.9% implicit the adjacent 12 months, a deceleration versus the past 2 years. This projection doesn't excite america and suggests its products and services volition spot immoderate request headwinds.

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