File-sharing services provider Dropbox Inc. posted a solid earnings and revenue beat as it published its second-quarter financial results today, but lukewarm sales guidance for the current quarter meant it was unable to generate much excitement on Wall Street.
The company reported earnings before certain costs such as stock compensation of 60 cents per share, easily beating the Street’s forecast of 52 cents. Revenue increased by just 2% from a year earlier, to $634.5 million, comfortably ahead of the $629.7 million consensus estimate.
Better cost management meant that Dropbox was able to boost its profitability by a decent margin, though. It said it ended the quarter with a net profit of $110.5 million, up from just $43.2 million in the year-ago period.
Shares of Dropbox rose 2% in extended trading as investors digested the report.
Dropbox is a familiar name for office workers, as the company has established itself as one of the leading providers of cloud-based file storage and sharing tools. Its software is used by thousands of companies across the world to organize, manage, share and collaborate on business documents.
Drew Houston (pictured), co-founder and chief executive at Dropbox, said the company had recently improved the functionality and experience of its core file sharing services product in order to make it easier for customers to discover, try and buy everything it has to offer.
“As we navigate the natural pressures of a maturing FSS business, we’re focused on solving our customer’s biggest pain points in securing, organizing and sharing their content, and we’re investing our future bets for AI-powered universal search with Dropbox Dash,” he said.
Other key metrics were encouraging too. Dropbox said its total annual recurring revenue rose 3%, to $2.57 billion, while its number of paying customers rose by 60,000 from the previous quarter, to 18.22 million today. Even more impressive is that Dropbox managed to squeeze more money out of those customers. It said its average revenue per paying user came to $139.93, up from $138.94 one year ago.
The only real concern was Dropbox’s guidance for the current quarter. The company is forecasting sales of between $635 million to $638 million, just shy of the analysts’ target of $639.2 million.