Dropbox raises full-year revenue forecast as paying users rise

[BENGALURU] File sharing and storage company Dropbox raised its full-year revenue forecast and reported better-than-expected quarterly results, as it added more paying subscribers.

Shares of the company were up 4.6 per cent at US$24.30 in extended trading after Dropbox said it had 13.2 million paying subscribers at the end of three months on March 31. Analysts were expecting 13 million, according to FactSet.

The total paying subscribers included 100,000 users from electronic signature company HelloSign, which Dropbox acquired for US$230 million earlier in the year.

Started as a free service to consumers, Dropbox now offers a range of enterprise software services and competes with companies such as Alphabet's Google, Microsoft and Amazon.com in the cloud storage space.

Dropbox said average revenue per user (ARPU) rose 5.9 per cent to US$121.04, ahead of estimates.

"The year-over-year ARPU expansion was primarily driven by strong adoption of our premium professional and advanced plans by new paying users," Dropbox chief financial officer Ajay Vashee said on a post-earnings call.

The cloud storage company forecast second-quarter revenue in the range of US$399 million to US$401 million. Analysts were expecting revenue of US$399.4 million, according to IBES data from Refinitiv.

It also forecast adjusted operating margin for the quarter in the range of 9 per cent to 10 per cent.

San Francisco-based Dropbox also raised its full-year revenue forecast to between US$1.63 billion and US$1.65 billion and its adjusted operating margin forecast to between 11 per cent and 12 per cent.

"I think it was a strong quarter overall, we saw stability in user adds, ARPU growth remains strong. Guidance was above consensus and I'll note that Dropbox does tend to be conservative in its outlook," D.A. Davidson analyst Rishi Jaluria said.

"Directionally, I think expanding usage, product differentiation, and expanding partnerships are major drivers behind the strong quarter and outlook."

Quarterly loss narrowed to US$7.7 million, or 2 US cents per share, in Dropbox's fifth financial report as a publicly traded company from US$465.5 million, or US$2.13 per share, a year earlier.

Excluding one-time items, Dropbox earned 10 cents per share, beating estimates of 6 cents, while total revenue rose 22 per cent to US$385.6 million, ahead of estimates.

REUTERS