Slide 1: Company Presentation August 2023
Company Presentation August 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements. These statements may relate to, but are not limited to, plans for growth, technological capabilities and new features and products and the long-term financial targets of Dropbox, Inc. (“Dropbox,” “we,” “us,” or similar term
Slide 3: Business Overview
Business Overview 3
Slide 4: Dropbox Today
Dropbox Today Leader in file sync and share Smart workspace for digital content collaboration Addressing individual and team workflows Leveraging virality and scale in go-to-market Balanced growth and cash flow generation model 4
Slide 5: Global Collaboration Platform at Scale
Global Collaboration Platform at Scale* 700M+ registered users 800B+ pieces of content 18.04M paying users 5 *Data as of 6/30/2023
Slide 6: Keeping Files in Sync, Keeping Teams in Sync
Keeping Files in Sync Keeping Teams in Sync Cloud storage Beyond FSS 2007 Today Team collaboration Backup & sync Content management File sync and sharing Professional sharing Secure sharing and analytics Project management eSignature Content backup Template Libraries 6
Slide 7: Our Product Portfolio
Our Product Portfolio Individuals Teams Basic Standard Dropbox Sign Personal Premium Annual Plus Advanced Dropbox Sign API Standard Monthly Subscription Family Enterprise Dropbox Forms Advanced Professional Dropbox Fax Enterprise 7
Slide 8: Reinventing the Software Playbook
Reinventing the Software Playbook Traditional playbook What sets Dropbox apart Designed for IT vs. Designed for users Top-down distribution vs. Bottom-up adoption Walled garden vs. Open ecosystem Rip-and-replace vs. Live side-by-side 8
Slide 9: Efficient Go-to-Market
Efficient Go-to-Market Expand Deploy fully 9
Slide 10: Growth Drivers
Growth Drivers Execute Innovate Convert and Retain New product experiences Drive registered users to become paying Leverage scale and user insights to enhance users of Individual and Team plans existing products and drive adoption of new ones Upsell Expand into workflows Prompt existing users to upg
Slide 11: New Features Help Organize Digital Content
New Features Help Organize Digital Content Dropbox introduces new tools to easily automate and maintain an organized file system Keeping digital content organized Introducing features such as: across work and home has become • Automated folders & dashboards increasingly complex • Multi-file organize
Slide 12: Video Workflows
Video Workflows Dropbox is developing new product experiences for distributed teams and creatives Capture Replay DocSend An all-in-one visual A video collaboration tool that A video and presentation sharing communication tool that helps makes it easier to collect, manage, platform with advanced anal
Slide 13: Dropbox Family Plan
Dropbox Family Plan • Organize, centralize and protect your Family content • Enhanced privacy and security features Manage what matters most Keep your family connected Keep sensitive info safe 13
Slide 14: Dropbox Business
Dropbox Business • Organize and centralize content around the needs of your team • Collaborate in shared workspaces and streamline workflows • Secure company data through visibility into content access and sharing Shared team workspace Data governance and audit logs Advanced security alerts & notifi
Slide 15: Dropbox Business Teams Expansion
Dropbox Business Teams Expansion • Dropbox has ~600K business teams • Making it even easier to invite people to join your team • Team admins & members can now easily invite collaborators to join the team after sharing content with them ~35% of paying users are on Teams plans 16 15
Slide 16: Dropbox Sign Update
Dropbox Sign Update • Dropbox Sign is continuing to improve offerings for international customers: • Now available in 21 additional languages • Expanded SMS tools to more countries • Established availability to purchase Sign in local currencies (Canadian Dollars, Euro, GB Pound, Japanese Yen and Aus
Slide 17: DocSend Update
DocSend Update DocSend provides users x-ray vision into the content they share, enabling complete control and tracking of their files even after the sharing link is sent. Use cases, SKUs, and audiences DocSend Standalone DocSend in Dropbox ● SKUs: Personal, Standard, ● SKUs: Dropbox One Advanced, En
Slide 18: Capture Update
Capture Update • In October 2022, Capture became available across all Dropbox Plans: • Customers on Professional and Team plans can record videos in 4K up to the plan’s storage limit and edit videos of any length • Customers on Basic, Plus and Family plans get up to two hours of recording time at 10
Slide 19: Replay Update
Replay Update • In April 2023, Replay became available as a Freemium offering across all Dropbox Plans and includes 4 free files • It is also available as a paid Add-On for all our paid plans (with the exception of Family plan) with more premium security and collaboration features • Recent feature l
Slide 20: Dropbox AI for file previews
Dropbox AI for file previews • On 6/21, Dropbox announced that it would be applying Dropbox AI to one of its most highly trafficked web surfaces: file previews • Dropbox AI for file previews lets users: • Quickly understand large documents or videos without parsing through the entire file. With the
Slide 21: Dropbox Dash
Dropbox Dash • Introducing Dropbox Dash, your personal universal search tool that allows you to search all your apps, all your tabs, all in one place • Access the info you need instantly. Search for content across Google Workspace, Microsoft Outlook, Asana, Notion, Salesforce, and more from a single
Slide 22: Deep Integration Partners
Deep Integration Partners 22
Slide 23: Environmental, Social, and Governance
Environmental, Social, and Governance Dropbox published its first ESG Impact Report in October, which shares data for 2021. Environmental Social Governance Dropbox is committed to fighting Our DEI initiatives, workforce We’re committed to maintaining climate change and reducing our development progr
Slide 24: Financial Highlights
Financial Highlights 24
Slide 25: Financial Highlights
Financial Highlights Predictable and balanced financial model Investing for continued revenue growth Driving strong operating leverage Significant share repurchases 25
Slide 26: Maintaining Long-Term Targets
Dropbox Financial Strategy: Maintaining Long-Term Targets FN1 80%-82% $1 Bn 30%-32% Non-GAAP Free Cash Flow Non-GAAP Gross Margin by 2024 Operating Margin FN1: All descriptions of any future targets in these materials, including, without limitation, on this slide, are described as of August 3, 2023.
Slide 27: Strong Performance at Scale
Strong Performance at Scale $2,325 $2,158 $764 81% 82% $708 79% $1,914 31% 30% $491 21% 2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 Non-GAAP Non-GAAP Revenue ($M) Free Cash Flow ($M) Gross Margin Operating Margin *Note: Non-GAAP gross margin and non-GAAP operating margin exclude stoc
Slide 28: Key Metrics
Key Metrics $2,514 $2,250 17.77 $133.73 $134.51 16.79 $128.50 $2,022 15.48 2020 2021 2022 2020 2021 2022 2020 2021 2022 CC ARR ($M) Paying Users (MM) ARPU ($) 28
Slide 29: Q2'23 Financial Highlights
Q2’23 Financial Highlights $622 $230 95% $220 $213 85% $210 $573 $200 75% $190 $183 65% $180 55% $170 45% $160 35% $150 34% $140 32% 25% 15% $130 $120 5% Q2 22 Q2 23 Q2 22 Q2 23 Non-GAAP operating margin Revenue ($M) Operating Income ($M) 29 Operating income is non-GAAP and excludes stock-based comp
Slide 30: Operating Leverage
Operating Leverage Proprietary Infrastructure Virtual First Workforce Optimization 30
Slide 31: Long-Term Target Model
Long-Term Target Model Non-GAAP 2020 2021 2022 Long-Term target Gross Margin 79% 81% 82% 80 - 82% R&D expense as % of revenue 28% 25% 28% 23 - 25% S&M expense as % of revenue 20% 18% 16% 18 - 20% G&A expense as % of revenue 10% 8% 7% 8 - 10% Operating margin 21% 30% 31% 30 - 32% Annual Free Cash Flo
Slide 32: Appendix
Appendix
Slide 33: Non-GAAP reconciliation
Non-GAAP reconciliation Twelve Months Ended 2020 2021 2022 Income (loss) from operations - GAAP $ (277.0) $ 274.4 $ 181.3 Stock-based compensation 261.5 287.1 330.7 Acquisition-related and other expenses 16.9 26.8 18.0 Amortization of acquired intangible assets 9.5 13.1 13.8 Impairment related to re
Slide 34: Non-GAAP reconciliation
Non-GAAP reconciliation Three Months Ended June 30, 2022 June 30, 2023 Income from operations - GAAP $ 82.9 $ 56.5 Stock-based compensation 85.0 95.3 Acquisition-related and other expenses 3.2 14.6 Amortization of acquired intangible assets 3.1 7.0 Impairment related to real estate assets 8.7 2.2 Wo
Slide 35: Free cash flow reconciliation
Free cash flow reconciliation Twelve Months Ended 2020 2021 2022 Net Cash provided by operating activities $ 570.8 $ 729.8 $ 797.3 Capital expenditures (80.1) (22.1) (33.8) Free cash flow $ 490.7 $ 707.7 $ 763.5
Slide 36: Non-GAAP reconciliation
Non-GAAP reconciliation Three Months Ended June 30, 2023 Amortization of Acquisition- acquired Impairment Workforce Stock based related and intangible related to real reduction GAAP compensation other expenses assets estate assets expense Non-GAAP Gross profit $ 502.4 $ 6.4 $ — $ 3.6 $ — $ 2.7 $ 515
Slide 37: Non-GAAP reconciliation
Non-GAAP reconciliation Three Months Ended June 30, 2022 Acquisition- Amortization of Impairment Stock based related and other acquired related to real GAAP compensation expenses intangible assets estate assets Non-GAAP Gross profit $ 466.9 $ 6.7 $ — $ 1.9 $ — $ 475.5 Gross margin 82 % 1% —% —% —% 8
Slide 38: Dropbox subscription plans
Dropbox subscription plans Personal Business Basic Plus Family Professional Pro + eSign Standard Standard + Advanced Enterprise DocSend Free $11.99 / month $19.99 / month $19.99 / month $31.99 / month $18.00 / user / month $83 / user / month $30.00 / user / month Negotiated pricing $119.88 / year $2
Slide 39: Dropbox
=> Dropbox