Dropbox presented its quarterly report and announced the continuation of the buyback.

Last week, Cloud storage solutions provider Dropbox Inc. (DBX) presented a quarterly report demonstrating continued steady growth. But despite this, the company’s shares continue to trade 30% below 52-week highs. 

At the auction on February 22, Dropbox stock was worth $21.59. However, like many other technology companies, Dropbox suffered due to a correction on the stock exchange. 

However, its leading indicators remain high; the company reported that revenue grew by 12.2% year-on-year in the fourth quarter to $565.5 million. Moreover, even though Dropbox is not in rapid growth mode, it has increased its regular annual income (ARR) steadily over the past few years. At the end of 2021, ARR was $2.26 billion, 24% more than 2019. The growth driver is a steady increase in paying users and average income per user (ARPU). 

At the end of 2021, Dropbox Inc. had 16.8 million paying customers compared to 14.3 million two years ago. ARPU was $133.73 in 2021 compared to $123.07 in 2019. Dropbox received a free cash flow of $161.4 million in the fourth quarter and $707.7 million in 2021. By 2024, management predicts the growth of this figure to $1 billion. The development is to be associated with integrating the recent acquisitions of HelloSign and DocSend and new products to its platform (Dropbox Replay, Dropbox Capture, etc.). Thus, the addition of new tools increases the value of Dropbox solutions and is likely to ensure the growth of ARPU and ARR over the next few years. 

Note that last week Dropbox also announced a $1.2 billion buyback program. At the same time, the company already spent $1 billion on share buybacks in 2021. In total, the number of Dropbox shares outstanding has decreased by 7% over the past three years. As management plans to buy back more shares, this downward trend should continue in the next few years.