Dropbox DBX reported first-quarter 2024 non-GAAP earnings of 58 cents per share, beating the Zacks Consensus Estimate by 18.37% and increasing 38.1% year over year.
Revenues of $631.3 million increased 3.3% year over year and beat the consensus mark by 0.40%.
Total annual recurring revenues came in at $2.556 billion, up 3.6% year over year.
Quarter Details
Dropbox exited the first quarter of 2024 with 18.16 million paying users, marking a sequential growth of roughly 35,000. The average revenue per paying user was $139.59 compared with $138.97 in the year-ago quarter.
As of Mar 31, 2024, Dropbox had roughly 575K business teams, and 34% of paying users were business teams.
In the first quarter, Dropbox reported a non-GAAP gross margin of 84.6%, up 220 basis points (bps) year over year.
Dropbox, Inc. Price, Consensus and EPS Surprise
Dropbox, Inc. price-consensus-eps-surprise-chart | Dropbox, Inc. Quote
In the reported quarter, research and development expenses were $160.7 million, down 9.2% year over year.
Sales & marketing expenses decreased 7.4% year over year to $100.6 million.
General & administrative expenses fell 3.5% year over year to $41.8 million.
Dropbox reported a non-GAAP operating margin of 36.5%, up 800 bps year over year.
Balance Sheet & Cash Flow
As of Mar 31, 2024, Dropbox had cash, cash equivalents and short-term investments of $1.18 billion compared with $1.36 billion as of Dec 31, 2023.
In the first quarter, the company reported a free cash flow of $166.3 million as compared with $190.3 million reported in the previous quarter.
Guidance
For the second quarter of 2024, Dropbox expects revenues between $628 million and $631 million. Non-GAAP operating margin is expected to be roughly 33%.
For 2024, it expects revenues between $2.535 billion and $2.55 billion. At constant currency, revenues are expected between $2.532 billion and $2.547 billion.
The company expects gross margin to be in the 83-83.5% range for the full year. Non-GAAP operating margin is expected in the 32.5-33% range.
Dropbox expects free cash flow between $910 million and $950 million.
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy).
DBX shares have declined 21.5% year to date, underperforming the Zacks Computer & Technology sector’s growth of 12%.
Nutanix NTNX, NetApp NTAP and NVIDIA NVDA are some other top-ranked stocks that investors can consider in the broader sector. While Nutanix sports Zacks Rank #1 (Strong Buy) at present, NetApp and NVIDIA carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutanix shares have gained 41.7% in the year-to-date period. NTNX is set to report its third-quarter fiscal 2024 results on May 29.
NetApp shares have gained 22.7% year to date. NTAP is set to report its fourth-quarter fiscal 2024 results on May 30.
NVIDIA shares have gained 79.2% year to date. NVDA is set to report its first-quarter fiscal 2025 results on May 22.
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