Slide 1: Financial Results & Investor Presentation Q4 2024
Financial Results & Investor Presentation Q4 2024 1
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: Financial Performance
Financial Performance $2.548 billion 1.9% 84.0% 36.4% TTM¹ revenue TTM revenue growth TTM Non-GAAP TTM Non-GAAP gross margin operating margin $872M 18.22M TTM FCF² Paying users³ (1) TTM: Trailing Twelve Months (2) FCF: Free Cash Flow, defined as Operating Cash Flow less Capital Expenditures (3) Payi
Slide 4: Investment Highlights
Investment 1 Scaled platform driven by our core File, Sync, and Share product offering Highlights 2 Subscription-based, recurring revenue model 3 Loyal users with a high retention profile 4 High margin business supported by self-serve model 5 Strong free cash flow conversion 6 Self-funded investment
Slide 5: Business Overview
Business Overview 5
Slide 6: Design a more enlightened way of working
DROPBOX MISSION Design a more enlightened way of working 6
Slide 7: Our Journey
Business Overview Our Journey 1 2 3 WHERE WE STARTED DROPBOX TODAY DROPBOX TOMORROW Dropbox Launches File, Sync, and Share Organize and Secure in 2008 All Cloud Content • Multi-device usage and universal file sharing in its • A leader in the $12bn content sharing and • Dropbox evolves from syncing y
Slide 8: A workplace for digital collaboration
Business Overview DROPBOX TODAY A workplace for digital collaboration Secure Organize Share Secure, streamlined Enhances where and how Effortless sharing and content management with you work with seamless integrations collaboration across teams robust scalable solutions and intuitive content organiz
Slide 9: File Sync and Share (FSS) Plans
Business Overview Dropbox Today File Sync and Share (FSS) Plans FOR BUSINESS TEAMS Standard Business Advanced Business Plus Enterprise $18.00 / user / month $18.00 / user / month $30.00 / user / month $30.00 / user / month Negotiated pricing $180.00 / user / year $180.00 / user / year $288.00 / user
Slide 10: Secure
Business Overview Dropbox Today Secure Our robust security features protect proprietary information and provide peace of mind to customers as they build relationships with their own teams, clients, and partners. • Compliance for Files and Data • Two-factor Authentication • Device Approval and Manage
Slide 11: Organize
Business Overview Dropbox Today Organize We make file organization effortless and intuitive with easy-to-use folder structures and seamless integrations, allowing customers to quickly find what they need so they can get more time to focus more on high-value work. • File naming, sorting, tagging, and
Slide 12: Share
Business Overview Dropbox Today Share Sharing is key to growth, so we've focused on creating a simple and efficient experience for sending large files, managing access, tracking document activity, and syncing edits in real-time, helping teams work together more effectively. • Advanced sharing contro
Slide 13: DocSend and Sign
Business Overview Dropbox Today DocSend gives teams a single, scalable deal platform that maximizes file sharing security and minimizes file viewing friction all while delivering instant alerts that track engagement with documents. We remain focused on making execution faster, data-driven, and more
Slide 14: Q4'24 User Metrics
Business Overview Dropbox Today ARPU Paying Users Scaled 18.22 User Base 18.12 17.77 Q4'24 User Metrics 16.79 $140.23 700M+ $139.38 Registered Users 18.22M $134.51 Paying Users $133.73 15.48 ~ 575k Paying Teams $128.50 2020 2021 2022 2023 2024 14
Slide 15: Globally recognized brand in 180 countries
Business Overview Dropbox Today Globally recognized brand in 180 countries 57% FY'24 United States Revenue 43% FY'24 International Revenue more revenue less revenue 15
Slide 16: Served by scaled infrastructure
Business Overview Dropbox Today Network Point Core Data Center Public Data Center Served by scaled infrastructure of Presence (POP) Toronto Chicago Stockholm Oslo Berlin Frankfurt Amsterdam Seattle London Hillsboro Paris Incheon Palo Alto New York Milan Atlanta Madrid Tokyo San Jose Los Angeles Ashb
Slide 17: Securing and organizing 1T+ pieces of content
Business Overview Dropbox Today Securing and organizing 1T+ pieces of content Total Customer Storage (Petabytes)¹ 4,600 4,700 3,700 2,800 2,100 2020 2021 2022 2023 2024 (1) Petabytes are rounded to the nearest hundred 17
Slide 18: Our FSS business: a category leader
Business Overview Dropbox Today Rest of Market Dropbox Our FSS business: 15.9% 20.9% a category leader Apple 8.6% Total Market: $11.6B Box 8.8% Google Microsoft 16.4% 29.4% (1) Source: IDC, May 2024 (2) Content Sharing and Collaboration applications are classified as applications that enable users t
Slide 19: Ranked by G2 as a leader in customer satisfaction
Business Overview Dropbox Today Ranked by G2 as a leader in customer satisfaction and market presence Cloud Content Collaboration Software: All G2 scores products and sellers based on reviews gathered from our user community, as well as data aggregated from online sources and social networks. 19
Slide 20: Growth Drivers
Business Overview Dropbox Today Growth Drivers File, Sync, and Share Activate Drive top-of-funnel engagement through increased sharing and signup activity Convert Drive registered users to become paying users of Individual and Team plans Upsell Prompt existing users to upgrade to premium plans, addi
Slide 21: Why customers choose Dropbox
Why customers choose Dropbox " Ausolan's added value comes from the professionalism of our staff and the differentiation of our services. Dropbox plays a key role in the technological infrastructure we need to meet that goal, helping us to work faster and better, in both our internal and external Ea
Slide 22: Forces Impacting the Landscape
Business Overview Dropbox Today Forces Impacting the Landscape Cloud Content Collaboration Software Proliferation • Rise of comprehensive platform ecosystems • Knowledge workers seek efficiency and organization as they continue to adopt additional software tools • Teams seek multi-cloud networking s
Slide 23: Dash for Business
Announced October 15th, 2024 Dash for Business Find anything. Protect everything. Dropbox Dash for Business combines universal search and organization with content access control. Find, organize, share, and secure content across all your apps effortlessly—so you can focus on the work that matters mo
Slide 24: Unlock the power of your data
Business Overview Dropbox Tomorrow Unlock the power of your data Centralize company data and enable teams to work smarter, faster, and more securely. Dash combines AI- powered search, organization, and content control to save time and boost efficiency. Find AI-powered universal search helps teams fi
Slide 25: Your company will feel the impact daily
Business Overview Dropbox Tomorrow Save time, save money Enlist AI to take over low-value tasks and free up time for employees to do more work that impacts the business. Your company Speed decision-making will feel the Give employees all the company information and knowledge they need to make better
Slide 26: Worldwide Search and Knowledge Discovery Software TAM
Business Overview Dropbox Today Worldwide Search and Knowledge Discovery Software* TAM Category tailwind for Dash for Business: AI-powered universal search $25.0 +27% CAGR $21.6 $20.0 $17.4 $15.0 $13.6 $10.5 $10.0 $8.1 $6.5 $5.0 $0.0 2023 2024 2025 2026 2027 2028 Note: $ USD in Billions Source: IDC,
Slide 27: Our Go-To-Market approach
Business Overview Dropbox Tomorrow Our Go-To-Market approach PRODUCTS KEY INDUSTRIES OTHER DISTRIBUTION CHANNELS • Distributors Core FSS Profes sional Technology • Direct Market Resellers • Value-Added Resellers Lead with a self-serve sales motion, s er vices • System Integrators complement with m
Slide 28: Dropbox Dash for Business
Business Overview Dropbox Tomorrow Our Go-To-Market approach Cross-sell Create an integrated and bundled experience within our existing Dropbox Dash install base of 575k paying teams customers for Business Create Standalone Purchasing Options Add net new (non-FSS) users to the Dropbox ecosystem by s
Slide 29: Financial Highlights
Financial Highlights 30
Slide 30: Annual Performance
Financial Highlights Annual Performance Strong performance at scale Revenue (as reported) Non-GAAP Non-GAAP Free Cash Flow ($M) ⁽¹⁾ Gross Margin ⁽¹⁾⁽²⁾ Operating Margin ⁽¹⁾⁽²⁾ ($M)⁽¹⁾⁽³⁾⁽⁴⁾ $2,548 $872 $2,502 82% 83% 84% $2,325 $764 $759 36% 31% 33% 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022
Slide 31: Quarterly Performance
Financial Highlights Quarterly Performance (2) (3) Revenue (as reported) Non-GAAP Operating Income ($M) Free Cash Flow ($) (1) (2) ($M) Non-GAAP Operating Margin $643.6 237.4 $270.1 230.7 227.9 231.5 $638.8 204.7 $224.7 $210.5 $190.3 $635.0 $634.5 $166.3 $631.3 32.2% 36.5% 35.9% 36.2% 36.9% Q4'23 Q1
Slide 32: Annual Key Metrics
Financial Highlights Annual Key Metrics Constant Currency ARR ($M) ⁽¹⁾⁽²⁾ Paying Users (M) ⁽¹⁾ ARPU ($) ⁽¹⁾ $139.38 $140.23 $134.51 $2,523 $2,574 $2,430 17.77 18.12 18.22 2022 2023 2024 2022 2023 2024 2022 2023 2024 (1) Graphs presented in this illustration are not drawn to precise scale relative to
Slide 33: Quarterly Key Metrics
Financial Highlights Quarterly Key Metrics Constant Currency ARR ($M) ⁽¹⁾⁽²⁾ Paying Users (M) ⁽¹⁾ ARPU ($) ⁽¹⁾ $2,579 $2,574 $2,573 $2,556 $139.93 $140.06 $139.59 $2,540 $138.83 $139.05 18.22 18.24 18.22 18.16 18.12 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q4'23 Q1'24 Q2'24 Q3'24
Slide 34: Liquidity Overview
Financial Highlights Liquidity Overview $1,000 $2,594 $1,594 $2.6 billion Available Liquidity Q4'24 Cash and Remaining Availability (2) Total Investments(1) on DDTL Liquidity Note: Amounts shown in USD in Millions ($M) (1) Cash and Investments includes cash and cash equivalents and short term invest
Slide 35: Debt Maturities
Financial Highlights Debt Maturities Convertible Notes Maturity $696M (0% Coupon) 2026 $693M (0% Coupon) 2028 Term Loan Maturity $1,000 $1.0B (SOFR + 3.75%) 2029 Additional $1.0B accessible via delayed draw (1% ticking fee) $696 $693 Leverage Ratios (1) Gross Debt : $2.7 billion (2) Net Debt : $1.1
Slide 36: Share Repurchase Summary
Financial Highlights Share Repurchase Summary Share Repurchase Share Repurchases ($M) Diluted WASO (M) Program • In Q4'24, the Company repurchased $ 1,240 approximately 13M shares for ~$350M • In FY'24, The Company repurchased approximately 50M shares $ 1,059 for ~$1.2B • On December 11, 2024, the B
Slide 37: FY25 Guidance
Financial Highlights FY25 Guidance Q1 2025 FISCAL 2025 GAAP Revenue $618-621 $2,465-$2,480 Constant Currency Revenue $621-624 $2,483-$2,498 Non-GAAP Gross Margin ~82.0% Non-GAAP Operating Margin ~38.5% 37.5% - 38.0% Unlevered Free Cash Flow ~$940 Capital Expenditures $25-$30 Reduction in force cash
Slide 38: Appendix
03 Appendix 39
Slide 39: Non-GAAP reconciliation
Financial Highlights Non-GAAP reconciliation TWELVE MONTHS ENDED 2022 2023 2024 Income from operations - GAAP $ 181.3 $ 538.7 $ 486.2 Stock-based compensation 330.7 338.0 346.5 Acquisition-related and other expenses 18.0 30.9 21.7 Amortization of acquired intangible assets 13.8 28.2 25.8 Net loss (g
Slide 40: Non-GAAP reconciliation
Financial Highlights Non-GAAP reconciliation THREE MONTHS ENDED DECEMBER 31, 2023 MARCH 31, 2024 JUNE 30, 2024 SEPTEMBER 30, 2024 DECEMBER 31, 2024 Income from operations - GAAP $ 267.4 $ 143.5 $ 127.0 $ 127.8 $ 87.9 Stock-based compensation 82.9 78.0 90.5 92.3 85.7 Acquisition-related and other exp
Slide 41: Free Cash Flow reconciliation
Financial Highlights Free Cash Flow reconciliation TWELVE MONTHS ENDED 2022 2023 2024 Net Cash provided by operating activities $ 797.3 $ 783.7 $ 894.1 Capital expenditures (33.8) (24.3) 22.5 Free cash flow $ 763.5 $ 759.4 $ 871.6 Note: Amounts shown in USD in Millions ($M) 41
Slide 42: Free Cash Flow reconciliation
Financial Highlights Free Cash Flow reconciliation THREE MONTHS ENDED DECEMBER 31, 2023 MARCH 31, 2024 JUNE 30, 2024 SEPTEMBER 30, 2024 DECEMBER 31, 2024 Net Cash provided by operating activities $ 200.3 $ 175.5 $ 230.6 $ 274.2 $ 213.8 Capital expenditures (10.0) (9.2) (5.9) (4.1) (3.3) Free cash fl
Slide 43: Non-GAAP reconciliation
Financial Highlights Non-GAAP reconciliation THREE MONTHS ENDED DECEMBER 31, 2024 AMORTIZATION STOCK BASED ACQUISITION-RELATED OF ACQUIRED NET LOSS (GAIN) ON WORKFORCE GAAP COMPENSATION AND OTHER EXPENSES INTANGIBLE ASSETS REAL ESTATE ASSETS REDUCTION EXPENSE NON-GAAP Gross Profit $ 522.8 $ 5.9 $ —
Slide 44: Non-GAAP reconciliation
Financial Highlights Non-GAAP reconciliation THREE MONTHS ENDED DECEMBER 31, 2023 AMORTIZATION STOCK BASED ACQUISITION-RELATED OF ACQUIRED NET (GAIN) LOSS ON WORKFORCE GAAP COMPENSATION AND OTHER EXPENSES INTANGIBLE ASSETS REAL ESTATE ASSETS REDUCTION EXPENSE NON-GAAP Gross Profit $ 513.0 $ 5.7 $ —
Slide 45: Non-GAAP reconciliation
Financial Highlights Non-GAAP reconciliation TWELVE MONTHS ENDED - 2024 AMORTIZATION STOCK BASED ACQUISITION-RELATED OF ACQUIRED NET LOSS (GAIN) ON WORKFORCE GAAP COMPENSATION AND OTHER EXPENSES INTANGIBLE ASSETS REAL ESTATE ASSETS REDUCTION EXPENSE NON-GAAP Gross Profit $ 2,103.1 $ 22.9 $ — $ 13.1
Slide 46: Non-GAAP reconciliation
Financial Highlights Non-GAAP reconciliation TWELVE MONTHS ENDED - 2023 AMORTIZATION STOCK BASED ACQUISITION-RELATED OF ACQUIRED NET (GAIN) LOSS ON WORKFORCE GAAP COMPENSATION AND OTHER EXPENSES INTANGIBLE ASSETS REAL ESTATE ASSETS REDUCTION EXPENSE NON-GAAP Gross Profit $ 2,023.1 $ 23.3 $ — $ 14.6
Slide 47: Non-GAAP reconciliation
Financial Highlights Non-GAAP reconciliation TWELVE MONTHS ENDED DECEMBER 31, 2024 Net Income - GAAP $ 452.3 Other (income) / expense, net (9.7) Interest (income) / expense, net (13.9) Tax provision 57.5 Net gain on real estate assets — Depreciation & Amortization 137.3 EBITDA - Non-GAAP $ 623.5 Sto