Why Dropbox Shares Stumbled Despite Decent Earnings

By Chris Lange Updated Jan 11, 7:33PM EST · Published Aug 10, 10:45AM EDT

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When Dropbox Inc. (NASDAQ: DBX) released its second-quarter financial results after the markets closed on Thursday, the company said that it had $0.11 in earnings per share (EPS) and $339.2 million in revenue. Consensus estimates had called for $0.07 in EPS and revenue of $330.9 million, and in the same period of last year, Dropbox said it had EPS of $0.06 and $266.7 million in revenue.

During the most recent quarter, paying users totaled 11.9 million, as compared to 9.9 million for the same period last year. Average revenue per paying user was $116.66, as compared to $111.19 last year.

Despite the good numbers, the company announced that its chief operating officer, Dennis Woodside, is leaving the company. Woodside will officially step down in early September after four years with the company. However, he will stay on as an advisor until the end of 2018.

Looking ahead, analysts are looking for $0.07 in EPS and $345.9 million in revenue for the fiscal third quarter.

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Drew Houston, Dropbox co-founder and CEO, commented:

We delivered another solid quarter of revenue growth in Q2, reflecting the strength of our unique business model. We added over a dozen new product features to our user and admin experiences, and strengthened our infrastructure, all while driving a 30% free cash flow margin. With our massive scale and continued product innovation, we’re well on our way to advancing our mission of designing a more enlightened way of working.

Shares of Dropbox were last seen down nearly 9% at $31.39, with a consensus analyst price target of $34.15 and a post-IPO trading range of $26.61 to $43.50.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.