Latest news with #DrewHouston
Yahoo
30-06-2025
- Business
- Yahoo
Dropbox's Q1 Earnings Call: Our Top 5 Analyst Questions
Dropbox's first quarter results came in ahead of Wall Street's expectations for both revenue and non-GAAP profitability, but the company reported a modest year-over-year sales decline and a slight drop in paying users. Management attributed the quarter's outcome to deliberate reductions in marketing and headcount, particularly within the FormSwift business, which pressured top-line growth but boosted margins. CEO Drew Houston emphasized that product improvements—especially in onboarding and user experience for teams—drove better-than-expected retention and engagement, noting a 50% year-over-year increase in desktop activations. Is now the time to buy DBX? Find out in our full research report (it's free). Revenue: $624.7 million vs analyst estimates of $620.2 million (1% year-on-year decline, 0.7% beat) Adjusted EPS: $0.70 vs analyst estimates of $0.62 (12.6% beat) Adjusted Operating Income: $260.5 million vs analyst estimates of $237.2 million (41.7% margin, 9.8% beat) Operating Margin: 29.4%, up from 22.7% in the same quarter last year Customers: 18.16 million, down from 18.22 million in the previous quarter Annual Recurring Revenue: $2.55 billion at quarter end, in line with the same quarter last year Billings: $636.8 million at quarter end, down 1.7% year on year Market Capitalization: $7.92 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Steve Enders (Citi) asked about drivers of better-than-expected user retention. CEO Drew Houston highlighted onboarding improvements and focus on Teams customers, while CFO Tim Regan noted expectations for continued headwinds from FormSwift. Rishi Jaluria (RBC) inquired about Dash's differentiation and customer feedback versus competitors. Houston cited unique features supporting images, video, and compliance, and emphasized Dash's appeal among creative professionals and IT administrators. Matt Bullock (Bank of America) questioned the sustainability of lower R&D spend. Regan explained that some cost savings were timing-related, but investments in Dash R&D and marketing are expected to increase as the year progresses. Alex Nguyen (Jefferies) asked about the Promoted AI acquisition and its impact. Houston said the team would strengthen Dash's AI and search capabilities, with integration focused on enhancing machine learning talent rather than leveraging advertising technology. Patrick Walravens (Citizens) sought clarity on technical challenges in building integrations. Houston described the complexity and resource intensity of developing reliable connectors, which require significant in-house R&D for scalability and security. In upcoming quarters, the StockStory team will be monitoring (1) the pace and breadth of Dash adoption, particularly through self-serve channels and expanded integrations; (2) execution on improving user retention and stemming declines in paying users; and (3) the impact of renewed investments in sales, marketing, and R&D on both Dash growth and core business margins. Progress on leveraging AI and data center modernization will also be key indicators of future performance. Dropbox currently trades at $28.90, down from $29.69 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-06-2025
- Business
- Yahoo
DBX Q1 Earnings Call: Product Updates Offset Declining User Base and Macro Uncertainty
Cloud storage and e-signature company Dropbox (Nasdaq: DBX) reported Q1 CY2025 results topping the market's revenue expectations , but sales fell by 1% year on year to $624.7 million. Its non-GAAP profit of $0.70 per share was 12.6% above analysts' consensus estimates. Is now the time to buy DBX? Find out in our full research report (it's free). Revenue: $624.7 million vs analyst estimates of $620.2 million (1% year-on-year decline, 0.7% beat) Adjusted EPS: $0.70 vs analyst estimates of $0.62 (12.6% beat) Adjusted Operating Income: $260.5 million vs analyst estimates of $237.2 million (41.7% margin, 9.8% beat) Operating Margin: 29.4%, up from 22.7% in the same quarter last year Customers: 18.16 million, down from 18.22 million in the previous quarter Annual Recurring Revenue: $2.55 billion at quarter end, in line with the same quarter last year Billings: $636.8 million at quarter end, down 1.7% year on year Market Capitalization: $8.3 billion Dropbox's first quarter results reflected ongoing efforts to streamline its core file storage and document workflow businesses while prioritizing operating efficiency. CEO Drew Houston attributed performance to focused product improvements, such as easier onboarding and new features for teams, which drove higher-than-expected engagement even as paying users declined. Management highlighted enhancements to the desktop app and admin tools, noting that multi-surface users are more engaged and loyal. Product lineup simplification and strategic discounting were also implemented to improve retention, especially among self-serve customers. Houston acknowledged that reduced investment in FormSwift and marketing weighed on growth, but emphasized that targeted operational changes helped mitigate some headwinds. He explained, "We improved mission critical features that refine key workflows and reduce friction," contributing to better-than-anticipated results in the core business. Looking ahead, Dropbox's outlook focuses on scaling its AI-powered Dash platform and continuing to simplify its core offerings amid an uncertain macroeconomic environment. Management plans to invest in Dash's development and self-serve capabilities, aiming to unlock value across the company's large installed base. CFO Tim Regan stated that operating margin improvements are expected to be tempered by renewed spending on marketing and headcount to support Dash, while revenue guidance remains cautious due to potential volatility in demand and the impact of discontinued FormSwift marketing. Houston highlighted expanding Dash integrations and new compliance features as priorities, noting, 'We'll introduce select Dash functionality onto some of our FSS plans, accelerating our introduction to our large installed base of FSS customers.' Management remains mindful of macro risks but believes broad customer diversification will help navigate market uncertainties. Management attributed the quarter's performance to efficiency gains in its core business and early traction from new product initiatives, despite ongoing headwinds from user attrition and reduced marketing investment. AI-powered Dash expansion: The spring Dash update introduced search capabilities across images, videos, and other rich media, addressing the needs of creative professionals and differentiating Dropbox from competitors focused solely on text documents. Management highlighted strong initial interest, particularly in the creative services sector. Enhanced integrations: Dash now offers full integrations with key workplace apps such as Slack, Zoom, and Microsoft Teams, as well as creative tools like Canva and Jira. These integrations were prioritized based on customer feedback and are expected to increase Dash's utility and adoption. Operational efficiency focus: Strategic reductions in marketing for FormSwift and outbound sales in the core business contributed to improved operating margins. Tim Regan noted, 'headcount reduction from our RIF last fall and lower marketing spend following the strategic shift away from FormSwift' as primary drivers. Product simplification and retention: The company simplified its product lineup by reducing SKUs and aligning features with customer needs, which, along with targeted discounting to encourage annual plans, improved retention rates and admin satisfaction scores among business customers. Document workflow business mix: While DocSend delivered double-digit growth, Dropbox Sign continued to face competitive pressures. The company's efforts to improve onboarding and admin features led to better-than-expected performance in self-serve teams, despite ongoing declines in FormSwift users. Dropbox expects future performance to depend on scaling Dash, expanding integrations, and managing macroeconomic risks while maintaining disciplined investment in core efficiency. Dash monetization and adoption: Management is prioritizing the rollout of a self-serve Dash option and integration with existing file storage customers. While early feedback is positive, management acknowledged onboarding friction and the need to compress customer activation cycles. Drew Houston stated that making Dash easily accessible to Dropbox's extensive business base could be 'a big accelerant.' Macroeconomic and user decline risks: The uncertain macro environment and deliberate reduction in FormSwift marketing are expected to put pressure on paying user numbers and average revenue per user. Regan said guidance assumes a 1.5% decline in paying users for the year, with FormSwift accounting for roughly half of this. Investment in AI and integrations: Ongoing R&D and marketing investments in Dash, including the integration of the recently acquired Promoted AI team, aim to bolster machine learning and search capabilities. Management believes expanded integration and compliance features will be crucial for differentiation, especially as competition in AI-enabled content management intensifies. In future quarters, the StockStory team will watch (1) execution and adoption of self-serve Dash among Dropbox's existing customer base, (2) the pace of paying user declines and any stabilization in core file storage and document workflow segments, and (3) the effectiveness of new integrations and compliance features in driving customer retention and differentiation. Progress on scaling AI-driven capabilities and managing macroeconomic risk will also be critical signposts. Dropbox currently trades at a forward price-to-sales ratio of 3.5×. Should you double down or take your chips? The answer lies in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
San Francisco Chronicle
06-06-2025
- Business
- San Francisco Chronicle
‘It's just a different world now': Dropbox CEO Drew Houston slams return-to-office mandates
In a sharp rebuke of corporate return-to-office policies, Dropbox CEO Drew Houston likened the push to bring employees back into physical workspaces to reviving outdated institutions. 'Forcing people back to the office is probably going to be like trying to force people back into malls and movie theaters,' Houston said during an episode of Fortune's Leadership Next podcast on Wednesday. 'Nothing wrong with the movie theater, but it's just a different world now.' JPMorgan, in particular, has faced criticism from employees after CEO Jamie Dimon insisted on a five-day office week, dismissing remote work as ineffective for collaboration and mentorship. 'You can't learn working from your basement,' Dimon said in a recent Bloomberg interview. 'We can be a lot less dumb than forcing people back into a car three days a week or whatever, to literally be back on the same Zoom meeting they would have been at home,' he said. 'There's a better way to do this.' Nearly half of employees who work from home at least occasionally say they'd be unlikely to stay in their current job if remote work were eliminated, according to a recent Pew Research Center survey. Dropbox pivoted to a 'virtual first' model in 2020, and now operates under a 90/10 model — employees work remotely 90% of the time, with the remainder reserved for periodic in-person gatherings. Houston emphasized the need to evolve remote work strategies beyond the early pandemic's reactive model. 'Version two, version three of this is going to be a lot better than the version point-five that we had in the pandemic,' he said. 'If you trust people and treat them like adults, they'll behave like adults,' he told Fortune in 2023. 'Trust over surveillance.'
Entrepreneur
06-06-2025
- Business
- Entrepreneur
RTO Mandates Need to be 'Less Dumb,' Says Dropbox CEO
Dropbox CEO Drew Houston says RTO needs to be smarter than having people return to the office to do the same Zoom calls they could have done at home. Companies like Amazon, JPMorgan, X and Disney are among those who've given return-to-office mandates to employees. And Drew Houston, CEO of Dropbox, says they are living in the past. "Forcing people back to the office is probably gonna be like trying to force people back into malls and movie theaters. Nothing wrong with the movie theater, but it's just a different world now," he said during an appearance on the Leadership Next podcast. Related: Dropbox's CEO Explains Why the Company Adopted Jeff Bezos' 'Memo-First' Meeting Culture from Amazon Houston voiced the frustrations of many employees who feel like they waste time, energy, and money when they commute to do the same thing that they do from their home office setups. "We can be a lot less dumb than forcing people back into a car three days a week or whatever, to literally be back on the same Zoom meeting they would have been at home," he said. "There's a better way to do this." Dropbox follows a 90/10 rule, reports Business Insider. In this arrangement, employees work remotely 90% of the year and in person 10% of the year. Houston has said that his management style favors "trust over surveillance" and that when it comes to trying to make the office more appealing, management should understand that workers "value flexibility a lot more than snacks." Related: Jamie Dimon Says RTO Complaints Come From 'The Middle'
Time of India
06-06-2025
- Business
- Time of India
Dropbox CEO Drew Houston: 'Forcing people back to the office…is unproductive if you…'
Dropbox CEO Drew Houston said that forcing employees back to office makes no sense if the same work can be done virtually. Speaking in an episode of Fortune's "Leadership Next" podcast, Houston said 'Forcing people back to the office is probably gonna be like trying to force people back into malls and movie theaters. Nothing wrong with the movie theater, but it's just a different world now'. He further stated 'It is unproductive if you just sort of try to photocopy what you're doing in the office onto Zoom'. 'We don't have to do this—we can be a lot less dumb than forcing people back into a car three days a week or whatever, to literally be back on the same Zoom meeting they would have been at home. There's a better way to do this,' he said. For those unaware, Dropbox switched to a 'virtual first' way of working in 2020, making remote work the main setup for its employees. In 2021, the company introduced a 90/10 rule—employees work from home for about 90% of the year and meet in person at a few company events during the remaining 10%. In a 2023 interview, Dropbox CEO said that remote work has given companies "the keys that unlock this whole future of work." "You need a different social contract and to let go of control. But if you trust people and treat them like adults, they'll behave like adults. Trust over surveillance," he then said. JBL Tune Beam 2 Review: The TWS Earbuds That Punch Above Their Weight! AI Masterclass for Students. Upskill Young Ones Today!– Join Now
