Dropbox Inc. reported better quarterly earnings and revenue than expected Thursday, as the cloud-storage company grew its paying customer base and earned more from each user than Wall Street projected.
Dropbox shares DBX, +9.13% fell nearly 10% in after-hours trading.
Second-quarter net losses were $4.1 million, which amounts of 1 cent a share, narrowing from losses of $26.8 million, or 14 cents a share, in the year-ago quarter. Adjusted for items such as stock-based compensation, Dropbox reported profit of $48 million, or 11 cents a share, compared with adjusted net income of $20 million, or 6 cents a share, in the year-earlier period. Wall Street analysts had expected adjusted earnings of 6 cents a share, according to FactSet.
The company’s revenue grew to $339.2 million, 27% growth compared with the year-ago quarter and well ahead of the average analyst estimate of $331 million, according to FactSet. Free cash flow was $102.2 million, ahead of the consensus estimate of $96 million.
User growth also accelerated; Dropbox said it had 11.9 million paying users at the end of the second quarter, up from 9.9 in the year-earlier period; its average revenue per user also grew to $116.66 compared with $111.19 in the year-earlier quarter.
The company also announced the departure of Chief Operating Officer Dennis Woodside, who will remain at the company through early September and serve as an adviser until the end of the year. The company is not replacing Woodside at this point, but instead promoting Dropbox veteran Yamini Rangan to chief customer officer and Ling-Hua Wu to vice president of communications. Both will report directly to Chief Executive Drew Houston.
“We’re grateful for everything Dennis has done for us,” Houston said in a statement.
In the company’s earnings release, Dropbox said it has moved its lock-up period expiration to the close of market on Aug. 23., due to the company’s quarterly blackout period.
Dropbox went public earlier this year and priced its stock at $21, above the expected range. It raised more than $750 million at an initial market valuation of $8.24 billion. The company was founded in 2007 and had previously raised more than $600 million in private cash. Prior to Dropbox going public, it moved its cloud storage from Amazon.com Inc.’s AMZN, +0.64% systems to a system of its own design, which has benefited the company’s bottom line.
Dropbox shares have gained 9.8% in the past three months prior to Thursday’s after market action, as the S&P 500 index SPX, -0.14% rose 5.9%.