Dropbox, Inc. (NASDAQ: DBX) has maintained stable subscription growth in recent quarters, despite an increase in prices. Maintaining the uptrend, the online file hosting company ended the fourth quarter with more than14 million paying users. Earnings and revenues increased and surpassed estimates, triggering a stock rally on Thursday evening.
Dropbox reported adjusted earnings of $0.16 per share for the December-quarter, up from $0.10 per share reported last year and above analysts’ consensus estimate. On an unadjusted basis, it recorded a net loss of $6.6 million or $0.02 per share during the period, compared to a loss of $9.5 million or $0.02 per share last year.
Revenues up 19%
Fourth-quarter revenues advanced 19% annually to $446 billion and topped the Street view. At the end of the quarter, Dropbox had around 14.3 million paying customers, which is higher than in the preceding quarter. At $125, the average revenue per paying user was up 5% year-over-year.
“Our strong Q4 marked the end of an exciting year for Dropbox as we launched our vision for the smart workspace. Moving into 2020, I’m confident in the team we have onboard and the opportunity ahead,” said CEO Drew Houston.
One key development that influenced the results is the launch of Dropbox Spaces last year, which is designed to allow clients to build smart workspaces that mitigate distractions linked to the use of technology.
Of late, Dropbox has been facing competition from free cloud storage providers like Microsoft (MSFT) and Google (GOOG). However, the company’s aggressive portfolio revamp and introduction of new features give it an edge over rivals.
A recent study showed that the cloud storage service market is poised for a major expansion in the next few years, which bodes well for Dropbox.
After experiencing a great deal of volatility, Dropbox’s shares shifted to recovery mode early this year. The stock has been in a downward spiral ever since the company went public two years ago. It closed Thursday’s regular session higher and continued to gain during the after-hours session following the announcement.
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