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Dropbox (DBX) Reports Q3: Everything You Need To Know Ahead Of Earnings

DBX Cover Image

Cloud storage and e-signature company Dropbox (Nasdaq: DBX) will be reporting earnings tomorrow after the bell. Here’s what investors should know.

Dropbox met analysts’ revenue expectations last quarter, reporting revenues of $634.5 million, up 1.9% year on year. It was a strong quarter for the company, with accelerating customer growth and a solid beat of analysts’ EBITDA estimates. It added 60,000 customers to reach a total of 18.22 million.

Is Dropbox a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Dropbox’s revenue to be flat year on year at $637.2 million, slowing from the 7.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.53 per share.

Dropbox Total Revenue

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Dropbox has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 0.9% on average.

Looking at Dropbox’s peers in the productivity software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Microsoft delivered year-on-year revenue growth of 16%, beating analysts’ expectations by 1.6%, and Atlassian reported revenues up 21.5%, topping estimates by 2.8%. Microsoft traded down 6.3% following the results while Atlassian was up 19%.

Read our full analysis of Microsoft’s results here and Atlassian’s results here.

There has been positive sentiment among investors in the productivity software segment, with share prices up 7% on average over the last month. Dropbox is up 1.8% during the same time and is heading into earnings with an average analyst price target of $26.88 (compared to the current share price of $25.93).

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