Categories Earnings, Technology

Earnings Preview: Dropbox to store more bytes in Q2

Dropbox (DBX) is likely to report its earnings for the second quarter on Thursday after the market closes. After beating estimates in the maiden quarter, the company has a huge task in hand to accumulate paid users and increase premium plans adoption. The cloud storage company intends to satisfy its investors and returning to the upward momentum. Analysts expect upbeat results for the quarter.

On average, analysts expect the company to post earnings of $0.07 per share for the second quarter on revenue of $330.90 million.

During the recently completed first-quarter, revenue climbed 27.5% on higher paid user growth and a rise in premium plans adoption. The loss widened to $2.13 from $0.17 per share a year ago. Paid users increased 23.6% year-over-year to 11.5 million, while average revenue per paying user grew 3.1% to $114.30.

At the first quarter release, Dropbox had announced business relationships with Salesforce (CRM) and Google (GOOGL), which the company expects to act as a tailwind in revenue growth going forward.

Related: Dropbox beats market consensus in its maiden quarterly report

The company, which was formerly known as Evenflow, was founded in 2007 and is headquartered in San Francisco, California. Dropbox provides a collaboration platform worldwide that allows individuals, teams, and organizations to create, access, and share content online. The company makes money by selling cloud subscriptions to their product.

Recently, Dropbox has increased the cloud storage plans from 2TB to 3TB for the Business Standard teams at the same $12.50 per month cost, while the unlimited Business Advanced costs $20 per user a month. For Professional, the company raised the plans from 1TB to 2TB with the same $16.58 per month pricing, while Dropbox Plus remained at 1TB for $8.25 per month.

The company had faced the difficulty in turning the users into paid ones as only 2% of over 500 million registered users are paying for the service. Dropbox is looking for a breakthrough so the numbers can convert to the long-term profitability. Experts believe that this depends on how the company can promote itself and attract the users at large.

It is expected that during the second quarter, the company might give additional details about its plan to shift in 2019 the headquarters to Mission Bay, San Francisco. Earlier in mid-October 2017, the company had intended to take possession of the four-building, which is developed by Kilroy Realty, in three phases starting mid-2018.

Shares of Dropbox have risen more than 9% for the year-to-date, while it has fallen about 1% for the past one month.

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