Slide 1: Second Quarter 2024 Financial Results
Second Quarter 2024 Financial Results August 2024
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 23 Dropbox
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
Slide 5: Global Collaboration Platform at Scale
Global Collaboration Platform at Scale 700M+ Registered Users(1) 18.22M Paying Users(1) 1T+ Pieces of Content(1) (1) As of 6/30/2024 5
Slide 6: Dropbox 2007 vs Dropbox 2024
Dropbox- 2007 Dropbox- 2024 Keeping Files in Sync Keeping Teams In Sync Content Backup Content & User Controls Advanced Sharing Controls & Analytics Collaborative Workflows Professional Delivery Project Management Contract Management Video Editing & Review Cloud & Device Backup Template Libraries AI
Slide 7: Product Portfolio
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 Education Dropbox Fax Advanced Data Room Essentials Business Business Plus 7 * Available to purc
Slide 8: Reinventing the Software Playbook
Reinventing the Software Playbook Traditional Playbook Dropbox Playbook 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 Land Expand Adopt Organically Land Companies Expand Companies Wall-to-Wall Deployment 9
Slide 10: Growth Drivers
Growth Drivers Execute Innovate Convert and Retain New Product Experiences Drive registered users to become paying users of Individual Leverage scale and user insights to enhance existing and Team plans 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 provides streamlined automation tools for organized file systems Managing digital content across work and Introducing features such as: home has grown more complex • Automated Folders & Dashboards • Multi-File Organize • Naming Conventions • Tagging
Slide 12: Dropbox Business
Dropbox Business Tailor team content, collaborate efficiently, and ensure data security Shared team workspace Data governance Advanced security and audit logs alerts & notifications 12
Slide 13: Dropbox Business Teams Expansion
Dropbox Business Teams Expansion Simplified team collaboration invites for shared content ~575K Business Teams(1) ~35% Of Paying Users are Business Teams(1) (1) As of 6/30/24 13
Slide 14: Dropbox DocSend Update
Dropbox DocSend Update DocSend empowers professionals with real-time signal on interest in their proposals and deal documents and control of how/if their documents are distributed or downloaded • DocSend Standalone • SKUs: Personal, Standard, Advanced, Advanced Data Room • Audiences: Capital Markets
Slide 15: Dropbox Replay Update
Dropbox Replay Update In 2023, Replay became available as a Freemium offering across all Dropbox Plans and includes up to 10 free files • Supports file sizes up to 150 GB and audio and video length of up to 12 hours • Also available as a paid Add-On for all our paid plans (with the exception of Fami
Slide 16: Dropbox Dash Update
Dropbox Dash Update (Open Beta) Your personal, AI-empowered universal search tool that allows you to search all your apps, all your tabs, all in one place In Q2, we made a number of updates to improve the user experience: • Integrated browsing history and user activity into the search experience • I
Slide 17: Integrations
Integrations Partner integrations with vendor-neutral software capabilities 17
Slide 18: Environmental, Social, and Governance
Environmental, Social, and Governance Enhancing value through corporate responsibility Environmental Social Governance Dropbox is committed to fighting Our DEI initiatives, workforce We’re committed to maintaining an climate change and reducing our development programs, and ethical independent and d
Slide 19: Financial Highlights
Financial Highlights 23 Dropbox
Slide 20: Financial Highlights
Financial Highlights Predictable and balanced financial model Investing for continued revenue growth Driving strong operating leverage Significant share repurchases 20
Slide 21: Performance
Performance Strong performance at scale 81% 82% 83% $2,502 $2,325 $2,158 764 759 708 33% 31% 30% 2021 2022 2023 2021 2022 2023 2021 2022 2023 2021 2022 2023 Revenue ($M)(1) Non-GAAP Gross Non-GAAP Operating Free Cash Flow ($M)(1)(3)(4) Margin(1)(2) Margin(1)(2) (1) Graphs presented in this illustrat
Slide 22: Key Metrics
Key Metrics 17.77 18.12 $139.38 $2,430 $2,523 16.79 $133.73 $134.51 $2,173 2021 2022 2023 2021 2022 2023 2021 2022 2023 CC ARR ($M)(1)(2) ARPU ($)(1) Paying Users (M)(1) (1) Graphs presented in this illustration are not drawn to precise scale relative to each other. (2) Total ARR for 2021 and 2022 a
Slide 23: Share Repurchase Program
Share Repurchase Program Continuing to return capital to shareholders through strong FCF1 generation • On July 26, 2023, the Board of Directors gave authorization to repurchase an additional $1.2 billion of Class A common stock. • In Q2, the Company repurchased approximately 11.3m shares for ~$260.2
Slide 24: Q2'24 Financial Highlights
Q2’24 Financial Highlights Executing against growth and profitability in economic uncertainty $622.5 $634.5 $213.1 $227.9 34.2% 35.9% Q2 23 Q2 24 Q2 23 Q2 24 Revenue ($M)(1) Operating Income Non-GAAP Operating ($M)(1) Income Margin (%)(1) (1) Graphs presented in this illustration are not drawn to pr
Slide 25: Appendix
Appendix 23 Dropbox
Slide 26: Non-GAAP reconciliation
Non-GAAP reconciliation Twelve Months Ended 2021 2022 2023 Income from operations - GAAP $ 274.4 $ 181.3 $ 538.7 Stock-based compensation 287.1 330.7 338.0 Acquisition-related and other expenses 26.8 18.0 30.9 Amortization of acquired intangible assets 13.1 13.8 28.2 Net (gain) loss on real estate a
Slide 27: Non-GAAP reconciliation
Non-GAAP reconciliation Three Months Ended June 30, 2023 June 30, 2024 Income from operations - GAAP $ 56.5 $ 127.0 Stock-based compensation 95.3 90.5 Acquisition-related and other expenses 14.6 4.6 Amortization of acquired intangible assets 7.0 5.8 Net loss on real estate assets 2.2 — Workforce red
Slide 28: Free cash flow reconciliation
Free cash flow reconciliation Twelve Months Ended 2021 2022 2023 Net Cash provided by operating activities $ 729.8 $ 797.3 $ 783.7 Capital expenditures (22.1) (33.8) (24.3) Free cash flow $ 707.7 $ 763.5 $ 759.4 28
Slide 29: Non-GAAP reconciliation
Non-GAAP reconciliation Three Months Ended June 30, 2024 Acquisition- Amortization of Stock based related and other acquired GAAP compensation expenses intangible assets Non-GAAP Gross profit $ 527.5 $ 6.0 $— $ 2.8 $ 536.3 Gross margin 83% 1% —% —% 85% Research and development 227.1 (64.2) (3.3) — 1
Slide 30: Non-GAAP reconciliation
Non-GAAP reconciliation Three Months Ended June 30, 2023 Acquisition- Amortization of Net loss on Workforce Stock based related and acquired real estate reduction GAAP compensation other expenses intangible assets assets expense Non-GAAP Gross profit $ 502.4 $ 6.4 $ — $ 3.6 $ — $ 2.7 $ 515.1 Gross m
Slide 31: Thank You
Thank You 23 Dropbox