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Did Dropbox beat or miss consensus estimates last quarter?

- **Revenue Beat**: Q3 revenue $634M, up 70bps YoY, driven by retention.
- **Dash Momentum**: 60% weekly active users, self-serve launch at $19/month.
- **Financial Strength**: Operating margin 41.1%, net income $197M, EPS $0.74.
- **Guidance Raise**: FY2025 revenue $2.511B, free cash flow $1B+.
- **Strategic Moves**: M&A for AI growth, $1.5B buyback program.

**【CEO Summary Section】**
- Q3 revenue of $634 million exceeded guidance, driven by strong retention across individual and self-serve teams plans.
- **Dash Product Highlights**: 
  - 60% of weekly active users are using Dash at least 2 days a week, indicating daily workflow integration.
  - Self-serve launch at $19/user/month with a 50% discount for existing customers.
  - Integration into Dropbox FSS enables natural language search and content organization.
- **Core FSS Improvements**: 
  - Highest ever CSAT scores for individuals business.
  - New tools for trial conversion and IT admin dashboards for data management.

**【CFO Financial Commentary】**
- **Q3 Financials**: 
  - Total revenue: $634 million (down 70bps YoY).
  - ARR: $2.536 billion (down 1.7% YoY).
  - Operating margin: 41.1% (up 490bps YoY).
  - Net income: $197 million (up 3% YoY).
  - EPS: $0.74 (up 23% YoY).
- **Q4 Guidance**: 
  - Revenue: $626-629 million.
  - Operating margin: 37%.
- **FY2025 Outlook**: 
  - Revenue: $2.511 billion (midpoint up $18 million).
  - Operating margin: 40% (up 100bps).
  - Free cash flow: $1 billion+.
- **Share Repurchases**: 
  - $390 million in Q3, $1.5 billion buyback program remaining.

**【Q&A Key Highlights】**
- **Dash Adoption**: 
  - 60% weekly active users demonstrate strong engagement.
  - Focus on SMBs with self-serve model, offsetting managed sales downselling.
- **M&A Strategy**: 
  - Disciplined approach with acquisitions like Mobius Labs to enhance AI capabilities.
- **Consumer Behavior**: 
  - Stable trends with ongoing price sensitivity, no major macro shifts.
- **Integration Strategy**: 
  - Seamless API access with major platforms, maintaining interoperability.
- **Pricing Strategy**: 
  - $19/month self-serve Dash, 50% discount for Dropbox users.


Dropbox, Inc. (DBX) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

DBX

DBX fundamentals

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