ADVERTISEMENT

Dropbox Posts First Net Income on Rising Cloud-Software Demand

Dropbox reported its first-ever net income, in a quarter when demand for cloud software was bolstered by working from home

Dropbox Posts First Net Income on Rising Cloud-Software Demand
The Dropbox Inc. application is displayed in an arranged photograph. (Photographer: Andrew Harrer/Bloomberg)

(Bloomberg) -- Dropbox Inc. reported its first-ever net income, in a quarter when demand for cloud software was bolstered by a shift to working from home.

Earnings in the first quarter were $39.3 million, or 9 cents a share, the San Francisco-based company said in a statement on Thursday. Sales rose 18% to $455 million. Analysts on average had projected a net loss of 3 cents and revenue of $452.2 million. Dropbox has exceeded analysts’ estimates for sales and profit every quarter since going public in March 2018, according to data compiled by Bloomberg.

The milestone caps years of work by Dropbox to cut costs and add paying customers for its software, which lets users sync and share files via the internet. Demand for Dropbox’s services also got a boost as coronavirus-related lockdowns forced employees to work from home, providing a greater need for cloud services to help workers collaborate and pass files between office and home computers.

“Our customers are turning to Dropbox for help with this transition to remote work,” Chief Executive Officer Drew Houston said in an interview. “We’ve certainly seen record trial volumes, we’ve seen increases in direct purchases, we’ve seen increases in engagement.” He added, though, that there is some uncertainty about whether it will last. “We are mindful of the macroeconomic environment and the unpredictability that the second half of the year may bring.”

Dropbox said its number of paying customers climbed to 14.6 million in the period, up from 13.2 million a year ago.

The company’s shares, which closed at $21.89 in regular New York trading, climbed as high as $23.60 following the report. The stock has gained 22% this year.

Dropbox has slowed its rate of hiring but is still looking to fill certain roles, Houston said. The company has already been more conservative about costs and doesn’t need to do anything “dramatic,” but does want to keep a close eye on the situation, he said.

“We’re experiencing a bunch of tailwinds, but anything that causes our customers to struggle could be reflected in our business,” he said.

©2020 Bloomberg L.P.