Dropbox Sales and Profit Top Estimates in First Post-IPO Report

Dropbox’s sales and profit topped estimates in its first quarter as a public company, lifted by growing corporate demand for paid versions of its cloud-based file-sharing software, according to Bloomberg.

First-quarter profit, excluding some costs, was 8 cents a share, compared with the 4-cent average prediction of analysts polled by Bloomberg. Sales rose 28 percent to $316.3 million, Dropbox said in a statement. Analysts were projecting revenue of $309.3 million. The company also gave an upbeat forecast for second-quarter sales. Still, shares slipped about 4 percent in extended trading, after surging more than 50 percent since the company’s initial public offering in March.

To maintain revenue growth, Dropbox, which has more than 500 million total registered users, must woo customers to pay for its premium products, which offer more storage and business management features. Paying users in the recent period rose 24 percent to 11.5 million, and the company generated more revenue on average for each one, Dropbox said.

"Over the past year or so we have launched higher tiers of individual and business plans," CEO Drew Houston said in an interview following the report. "So average revenue per user increases are driven both by more people shifting from individual to business plans, and people shifting to higher-tier plans." That’s because some popular new features are only available in the higher levels, he said.

Sales in the second quarter may reach $331 million, CFO Ajay Vashee said on a conference call. Analysts had projected sales of $325.1 million. For the full year sales will rise to as much as $1.36 billion, above the average estimate of $1.34 billion. Including a one-time expense related to restricted stock, the company’s net loss widened to $465.5 million from $33.1 million a year ago.