Dropbox (DBX)

Darren Yip Head, IR
Drew Houston Co-Founder and CEO
Ajay Vashee CFO
Yamini Rangan Chief Customer Officer
Alex Zukin RBC Capital Markets
Mark Murphy JP Morgan
Richard Davis Canaccord
Heather Bellini Goldman Sachs
Charlie Rogers Nomura Securities
Hannah Rudoff D.A. Davidson
Joey Marincek JMP Securities
Jason Ader William Blair
Justin Post Bank of America Merrill Lynch
Call transcript
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Good afternoon, ladies and gentlemen. Thank you for joining Dropbox’s Third Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions.

As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Dropbox's website, following this call.

the Relations. to hand Head Yip, now Investor of will call Darren over Dropbox's I ahead. go Please

Darren Yip

Thank you. and call. Good afternoon XXXX third earnings quarter welcome to Dropbox's

actual uncertainties Dropbox future including prospects. subject statements that differ during from could our quarter the projected this our to the overall risk financial that our quarter on those call, included Today XX, future of These call the strategy, September that relating the to our in ended long-term and performance unknown the earlier. and Form factors business, factors this in results statements, Form described ended are will materially XX-Q to distributed risks results, XXXX included XXXX. known or Statements results forward-looking June include expected discuss will XX-Q for for financial statements in and implied particular, were risk XX, cause in and those be quarterly growth

our as beliefs to as on except and on based by them and this assumptions rely make required not undertake no on we forward-looking law. call we as future should predictions events. of forward-looking that statements update You are statements All obligation of today

Form measures. These X-K on found at with may be today in GAAP to in non-GAAP our discussion posted will investor found in which non-GAAP a filed supplemental Relations our materials with our results. earnings reconciliation of SEC measures in GAAP website A include Our furnished to also the and release, investors.dropbox.com. the isolation should Investor results be may or today considered be was and for non-GAAP financial addition substitute as not from our

Drew? Chief Drew the to to call like Dropbox's Houston. Co-Founder now Executive and over would turn Officer. I

Drew Houston

earnings Good afternoon, everyone, welcome our call. to and

Yamini On the Ajay will us also Officer. is join me our our during And Vashee, Q&A. call Customer Financial Chief Rangan, Officer, Chief with

touch on business for of will provide and our our expansion results, guidance about our and and go-to-market highlights QX. talk review I'll QX ecosystem. Ajay our strategy, financial Today, product the continued

XX% year-over-year, users In results QX, we increases paying strong delivered by ARPU. driven business. Revenue in grew both across our and

robust demonstrate expense continue drove collaboration our margin of our further balance to profitability. results the also and We efficient despite as go-to-market some global of strength discipline. headwinds growth deliver These platform, operational our strategy, we expansion, and a non-recurring

So, where continue let's make announcements. number exciting with start our product we update to of a

their they before. users app together recall, we everyone new the of things may never organize the a Dropbox, Photoshop they docs the you in files Docs, need our launch And to not As new in distracting into workspace included because your conference one unveiled to you experience Dropbox traditional a experience that content. the Google can folder helping to in technology had you with with important to and we place, have you. cloud connected Dropbox surface uses of September, users to when your With and Dropbox in workspace at are. our believe ways should the also further offers step focus, everything organized Spaces introduction have tools for foreground smart files. the they of workspace desktop content took category, all-new you shared our bring wherever June, users live Spaces. product all to machine content, in new unified intelligence This that's user need cloud It and transforms and connecting Dropbox a work be it, place. access Paper their including one PowerPoints Spaces, all your next so Users stay can we

within previews they need file see searching just or image, like the name. they users fidelity don't see finding even application the what time new save by the files, Office they can Dropbox, a can users AutoCAD And from installed. natively have rather high search, image smarter the our if in With images than of

focus priority and activity users they're machine step suggesting you and to addition, by relevant intelligence likely bring helps projects most Team colleagues the users also can stay the the distractions. without highlights give a their into need. from the ahead In visibility content in most

our by users providing prepare integration and for access upcoming to And suggested meetings those quick calendar related meetings helps for templates. files content effectively more suggesting and meeting

loop no milestones made User using notified are and comments team helps the key store and shared work. places to in Spaces writing tools they add resolve by picture context Spaces, of progress the sync, Dropbox dos and to folders Users right Finally, collaborative big on prefer. base folder. feedback. home making work the are stay get descriptions, users’ on overview the view alongside create, when their can it can desktop, on updates the the content to the They getting can are easier and files close right longer With they to by for projects. see just

we've and introducing continued to to features also addition new new to to Spaces, add value more even deliver products Dropbox. In the

Paper additional our few the updates we Over months, Extensions and partner to past ecosystem. added to made

integrations all the systems, Starting easier kits partnerships, for as new with to supporting making new respect for Paper had paper. search Dropbox, We've built users and new With Paper. easier and tool has we're it discover create, it Paper to their constantly support teams natively goal into building making docs platforms Dropbox and applications, the expand. users operating of to and always organize

more these teams, and will docs. assets, track actions WeVideo, and add year industry to from help DocSend seamlessly files edit a by last partner files. support on late even letting capabilities users on on XX to Gmail, email apps take launched launching take we last In users Notarize down new feature. chats, able be including which added highly interactions content manage apps FreshBooks, or and users cut for And month to Dropbox With Extensions receipts, file notarize also new media QX, app actions to other is those in switching Dropbox. we to requested stored support introduced Microsoft We by

announced admins need they brings we to breed with scan businesses integration, to business BetterCloud, processes. critical environment, secure which manage security new offering enforce and new Dropbox of tools a we automate addition, and policies, customers. for content the SaaS exclusive partnership a enabling to sensitive this best With an data In custom give

rolled while new And only of XXth, of used a following positive. out Dropbox desktop have In weeks new GA six people to early we've app. are our the far, millions indications small thus on September percentage the users

users use experience, core toward first to an smart as of exciting step pictures like Dropbox's people interactions bringing foreground establishing our we show part in engagement are an is by features we're increase a profile First, Facepile This among which differentiated seeing with to the the users. workspace.

Dropbox. than also In and addition, found This who rates that [ph] are comment, meaningfully in don't. seeing take in is collaborative action, a we're actions notable convert retain that higher users collaborative for we leaving because solo those users the more instance, new that taking

positive get in We've a daily that new across their experience. Trivago desktop on from of work new have QX, share rolled applications its We're out SAP use to customers out variety also received feedback the a roll to Trivago’s that base. existing excited basis done. begun to employees the Dropbox employee app

believe among serves for solution company’s usage best Paper for the coordination and for the Slack, is management, flexible solution XX% employees Dropbox their live a new given example, that communication. that of can number focus as foreground with breed now side the SaaS chat, reduce new switching and project Slack, Dropbox and side will in context experience. of employees, by our improve applications, For They over Paper while internal

foreground users follow docs With click notable HelloSign of launch will and no new HelloSign our the some in last surface other we few based menus, features new in Spaces quarter. on we allows are to Beyond down Dropbox, experience, to the longer the made a the updates integration users file we sign In out September, the product new intelligently over also instead clicks. that rolled just announced investments need type. a

content of launched edit colleagues also a our this Creating earlier their elegant like from original into transfer availability found Dropbox clients. Transfer recipients can copy the piece making users that of the Showcase, learnings send we to We workers the Dropbox to knowledge Based work, and month. way is a need large fast file. general a on

password the create delete and page time, in expiration stay links user control add a date, and a in of ability custom download any to With content. their

their Built-in times viewership many alert tell and files are links senders viewed get when stats how them notifications also downloaded.

user customers, New with their capabilities helping workflows teams. are streamline and like these sync our partners in stay and their

Dropbox team’s cloud And to files. started a new biggest the the content. Dropbox and now ever a folder all smart made changes Dropbox workspace Spaces into and transform for Dropbox we've our represent for product as your your out

your important all you believe company that the most the and at anyone matters. work the technology center of and In content. We the a ties content ecosystems world can that workflows apps this where the smart focus than distracting, workspace at that's solve together fragment be problem. in us helps else that universe in on better work positions the revolve That using to different collaborative around and

our it through walk results. to now turn I'll Ajay, over CFO, financial to our

Ajay Vashee

Thank you, Drew.

rates basis growth the the and our demonstrate paying Total have results for delivering by a and increase million, across $XXX quarter on total revenue users a was of relative XX% year-over-year healthy QX QX expansion. would of top-line balance ARPU driven currency up XXXX, been Our to execution year-over-year an On XX%. profitability. growth constant strong to average and in focus

XX plans We a our well with our QX, $XXX.XX driven X% new The users. Advanced of SKU. was from repackaging adoption was by by repricing Plus up ARPU paying paying and primarily $XXX.XX strong year QX Professional users the ago. and of as ended million Premium, as expansion ARPU in year-over-year

and focused value drive on users remain converting by retention. to highest driving growth sustainable revenue our monetization We

ways a this on strategy. Let me highlight few been we've executing

are healthy levels made more customers. product we continued we across announced that plan, and new our Not raised of we've help by of of plans, improvements individual with additions approximately the Plus by our being and the We're features users to retention expectations. our above we our our conversion to quarter drive volumes we plan, to a that enhancements Plus managed only have to happy our work well-received plans efficiently. Professional XX%. made announce to to number also Plus price Last SKU those We to

initiative, a of do repricing we repackaging anticipate this paying to revenue. net over couple users to expect impact to we the and strong it While be from new tailwind next quarters some

to interested may science pricing flow in addition the engagement access better that connecting their also to created we've team machine within to our changes, To Dropbox, users help users, retention. for data users applications, drive and platform. from and new be our our algorithms third-party worked suggest improve learning on-boarding apps to In packaging favorite

to integrations of and applications these Zoom, able we a foreground our experience drive be our leading leveraging user number with base, including global levels better we'll by integrates to collaboration. and to of Slack Dropbox believe And Atlassian. higher desktop highlight activity

project as legacy and engineers of Department implement part also including a and workflows we external legal to had project The has In its based is have customer Dropbox Department verticals and highway wins collaboration fragmentation excited number will been QX, governance. Transportation excited of We're business data work content a contributed approach holds for organization’s their Many range across technology, Transportation to often to new workers share feature healthcare. and Dropbox is government, improve who construction that retail, our remotely which the from sites. also the inefficient of a collaboration. of of sharing customer. email, now to on Massachusetts of

pleased a replace recent several access mobile Japan comes to deals we're improve facilitate Construction several heels devices This our licenses that will on customers other look announce over we've construction aging job as such one seamless the year, on of Toda the data Construction. is to deployments now addition, Sho-Bond as our several SKU. firms and among Construction construction Dropbox on Construction This infrastructure, site firms Japanese customer. enterprise and In Tobishima of won sharing. at across deploy Enterprise more to external thousand past Toda Dropbox win is

measures otherwise of expenses indicated, want on move unless compensation, income purchased I note statement related I to and exclude that amortization the and all stock-based follow P&L, to our acquisition of non-GAAP rest intangibles to Before the the of that HelloSign. certain

materials net release, our found posted excludes Form was equity filed on X-K income reconciliation the A gains investor earnings SEC today our be GAAP losses non-GAAP with in website. to the non-GAAP may and Investor Our investments. of and which our furnished in results also with net on supplemental Relations

unit margin teams. gross in P&L, which by margin by our cost gross percentage of made quarter the to efficiency investments XX%, was our infrastructure point quarter an in increase The partially the we for Moving to customer compared of gains support XXXX. the hardware, driven X was continued primarily third was offset increase with

be gross roughly We QX to with QX. margins in expect consistent

Moving our overlapping move we've recognize to new quarter, QX the both OpEx in final headwinds into operating and headquarters to all quarter. as the for we new old headquarters. expenses, of related facilities continue our categories we these now our expenses across completed the incurred was

Third expense increase a XX% $XXX revenue driven QX was of The in investments and product as quarter XX% headcount in primarily testing. R&D revenue or ago. higher percentage by year to development compared was million a of and new

brand quarter of was compared campaign. lower The expense to QX XXXX XX% or decrease S&M to we revenue investing was spend third XX% due a to when were million year global $XX in of in the relative QX marketing a in ago.

of consistent with G&A in prior the expense percentage $XX year. is was a XX% our G&A or expense as of revenue, revenue which million

operating together, a operating QX This compared operating improvement is margin QX. XX% million to in in translates Taken XXXX. margin, we a $XX to in which profit modest of earned our

margin purchase overlapping quarter expenses the HelloSign facilities associated of included integration the deferred write-down Operating related impact accounting XXXX in its our from well the revenue. the of a as from as X-point third headwind and of

Net $XX weighted ago. ago. up a share, income in was up quarter based XXX diluted was from average $X.XX outstanding, EPS from the million shares for a per $XX million, $X.XX million QX on Diluted year year

the was Capital cash expenditures with in improvement our of yielding million tenant Moving million Cash spend CapEx in flow included cash on $XX on flow. operations or balance from $XX QX We and billion. which QX to short-term million, quarter. $XXX free million were allowances. of investments ended flow of $XXX of revenue. cash $X.XX $XX million XX% headquarters of offset cash new by was and

flow equipment. In spend headquarter revenue. lines data or also would cash been for of of net $XX QX, $XXX million, TIAs the we million to XX% center free added lease million Excluding have $XX capital of our

We continue going on basis forward. digits capital single to to revenue as of lines high expect lease be annual additions a percentage to our an

Now, our guidance. let's turn to

currency the average For the to a the million weighted of trailing to of to million, be would $XXX fourth year-over-year across year-over-year revenue $XXX On growth million QX quarter constant of basis, growth. XX% expect in XXXX, of XXXX, relative or to average to the be be XX.X% rate in XX% we average XX.X% range XX-day non-GAAP margin price. the range XX%; million operating XX%; $XXX outstanding to our based share approximately shares range to to be diluted in on of to $XXX

For billion revenue On the XX%. or year-over-year full billion FY the we raising growth our a previously constant to billion year relative year-over-year XXXX, across billion guidance, currency XX% be rates which basis $X.XXX was to $X.XXX to $X.XXX average would are $X.XXX XXXX, growth. to

be approximately our approximately We includes margin of to expect related non-GAAP XX%. to integration operating expenses points HelloSign figure revenue. of headquarters X This non-recurring and percentage new

we previously new the of trend million. range includes free of the one-time to corporate range This cash provided spend midpoint build-out million to towards $XXX to related our of expect the flow headquarters. We $XXX

cash the free million spend, $XXX to flow million. $XXX be Excluding would

range expect in diluted to we million Finally, on share XX-day $XXX $XXX weighted outstanding XXXX trailing be of million, shares average based average to our the price.

we're profitability. balance we've conclusion, about to our and delivering made business growth In and excited remain healthy of investments a in committed the

we our plans, beyond. continued focus deliver across we're high-value features in new fiscal paid the announced, conversions, growth to and our believe added a With well-positioned of XXXX recently premium strong QX driving and the we've products we on

closing it turn to remarks. back for I'll now Drew

Drew Houston

you, Ajay. Thank

partners. and team's Building thus that progress step We're proud from Dropbox workspace about on people launch far and the early Spaces both one more. Dropbox new smart I'm helps be of the our the I'm there and will response and environment is of with many focus matters. creating work what the excited customers

On behalf like to Dropbox customers, thank take a partners the to of our and team, management entire moment our team. I'd

excited us, I'm about and front We have in opportunity of really future. a the huge

I'd And to Operator? Officer join Customer and Ajay to me like Q&A. our Yamini, with Chief that, for invite


comes Thank you. with from Capital first [Operator Instructions] Our Markets. question RBC Zukin Alex

is Your open. line now

Alex Zukin

quarter, on guys an maybe for update. can see I Analyst my And thanks to a strong and was talk provide Congrats you really number just QX, Ajay. ARR something taking mentioned QX if in one questions. Hey, about follow-up. Maybe you Can Day? the at for got the first for then, I've hoping quick you guys. a

Ajay Vashee

Thanks for Sure. question, the Alex.

Day, that for from So, ARR driven grew metrics to But, by to in paying continuing billion ARPU also disclosed well in evaluate share our saw in we I strength user in ongoing at are in with at QX, And, can improved that's as as growth being up and net QX, growth retention Analyst net our QX. also to revenue we about retention, ‘XXs, to $X.XX revenue $X.XX September, noted had and as billion that that's that we Day ARR namely what mid revenue, expansion. then the Analyst trends that similar and our consistent we disclosure.

Alex Zukin

can how user then, from a couple see think, you're I revenue. provide of forward. to And with and was maybe that a retention. you was it tailwind to to terms you but I about around next prices, to revenue dynamics if you should items happy think quarters, over in hoping impact modeling could raise made comment guys very mentioned any you the the of few also we able see both there quantification adds perspective around And you just going some user -- around, you a a were where adds

Ajay Vashee


a the net remarks, the ARPU deliver to new we give we mentioned price really year. additions growth this of well. features repricing modeling changes on prepared more some a the a announced next year from implications of But, commentary paying kind by would that reminder received those and really subscription I more are the generally, users, a guidance our a to plans for the over and and earlier for made for to bit the new a initiative, of with I quarter Overall, repackaging we as -- the quick perspective, color product of at being as about raised during look I in level to across and would Plus, expect our of high sense number So, for SKU XX%. revenue

are and upgraded our really for price began sorry, in so, few [indiscernible] on plan continue our annual the process will that And The of the July, the subs existing next cycle, of features in [indiscernible] June, renewing point higher annual Plus the based at quarters subscribers. cycle.

But, overall, that's and as for a been you guidance tailwind revised Alex, mentioned, reflected strong revenue, very in has to year. the our initiative

relates we're retention it the As net across stable seeing to users, paying business.

lower [ph] have with So, of our consistent remained would retention September. opportunity. strength repricing we earlier continues expect to and has 'XXs, than we slightly trend in the of I then, Analyst teams expectations revenue say like our our as in really manage we’ve as of and annualized Day NMPU repackaging, over executed our growth the couple initiative launched against mid the how that And net across lower that rates. expectations our result disclosed do quarters retention But a in able the healthy as been mentioned board initiative. at we launched the when Churn I next to terms the when overall, we


you. Thank

Mark with Murphy comes question Morgan. from next JP Our

now is line Your open.

Mark Murphy

a or in Yamini, your to evolve on ways the to them look have that you maybe you. seeing far of Spaces, to you if product Thank service question engaging the foreground when are for engagement? do acceleration. the Congrats user new Dropbox able in so, background A see what you'd at that that for you Drew from it data just see a thus you service? upside the in And order be you want terms increase to that confidence and

Drew Houston

Thanks for Yes. the question.

launch So, far. we're how has really the so with happy gone

and and in Dropbox about are new making six we're Spaces to our broadly expectations. generally So, things available. weeks the in with Dropbox line post

which changes. engaged people have with engagement And with new big of seeing in the millions collaborative are focus app. features, of are product increases a our we desktop So,

particularly examples. that's so, of with drive. helps our -- engagement, products engagement to drive something couple continuing then collaborative monetization to, And attention and seen that we're And we as we've of and paying or others other a products with then, drive as

at So, link use a they as people if or Paper, rates. higher apps retain ecosystem they up-sell and

we patterns the similar So, Dropbox. new expect with

Mark Murphy

is quick paying you of net remarkable a chunk as a kind added in prior. pay And follow-up, that XXX,XXX your yet starting very the about consistent with to of for is good more which users quarter, XX% and users it are Dropbox still

incremental that value us us other you So, Do or churn. actually app are is the think priced, product it doesn't some that of that's the functionality the showing users new seeing you it appear is saw that still you’ve telling added? under desktop and from

Ajay Vashee

this Ajay. that to I'm answer So, is question. happy

I a it’s a it that's value and users, think, high that value level, our shows lot of delivering at them. to we're with resonating

lower when it at so, will earlier, think when users than trending that churn, deliver couple we're the brought able we able we work well. a brought paying resonating really as over some expect expectations retention slightly I rates. repackaging we value. to initiative, healthy say we've level, certainly is the made I do our value market user our And relates really initiative. launched we as But manage to and We been next of I repricing proposition high to to through that generate quarters a value, as the lower comment and the to growth


you. Thank

question Richard next with Canaccord. Our from comes Davis

is line now Your open.

Richard Davis

a mean, that can strategy my help companies, when do Hey, software, it's a a hiring is Thanks. you success side on area, this are team, thanks. of organic? are down of get incremental good in that Mark’s job building great But, customer done because the your I’m out companies margins this topic. out that's because this, do if just you question. that. What's wanted say equation? you on because I on Maybe -- piggybacking to way leaning generate pushing you have of on you my most driving Basically, all to I'm people your you've really engagement, on say how look, all it super I And high on margins. drill

Drew Houston

Sure. Dropbox seeing Well, the that about are our customers to certainly around with, starts collaborating level, challenges it when the they high begin at motivation a the our for they are files, And between but lot and collaborate experience. you have. Dropbox cloud from different think also all it customers with toggling came fragmented Docs their things around Google and these and forth different and And tools. workers of a kinds back Paper distracting knowledge spend all and of docs day and it's really new

And they give engagement the people Dropbox one to so, when of shift smart across tools. driving to and of tools pull workspace, purpose it where this having Dropbox give bunch comes different we together these one -- new is all a collaborate the can of Spaces workspace instead and

share So, just were open and place, work more your to long system. collaborate Dropbox people place attention coordinate for to all more -- in of to organized just you being their to a do, of day able be useful and more way the at being be have we and when done, creates that get communicate, opportunities a operating couldn’t work it for limited to activities

knowledge think So, we've use the one have. all selected workers just I that is case

are fact engagement. foreground then, can -- where we more a is that And And for the so the Dropboxes the that experience we useful. that's lot this means foundation that's -- have kind of there

progress to engagement other made we said monetization the we're from adoption, driving that. that -- attention excited in we everything and driving before, I follow as about paying we're are so, really doing making of we collaborative want, that certainly then terms sure driving things including and the many And of


Thank you.

from Bellini comes with Sachs. Our next question Goldman Heather

now open. is line Your

Heather Bellini

just couple I of of of quarter of expected paid wondering a a the over slightly lower you're signings minutes just Great. you the share One, apologies it wondering that commented few kind the this, experienced the in my us few with monthly I questions. in year. that about I'm next I you Thank you quarters. I'm you thinking. user very But, had sub driving didn't hear anniversary magnitude the and think could what's And correctly, increase know that March question you if growth to could magnitude much. helpful. and you would XXXX. about ago, XXXX being last that what's color if on deceleration giving wondering exiting saw if you could have other talked would kind I'm line thought top-line, the be the past see feel ‘XX. that to you you're and guys any you you. guidance related then, not roughly But, still and give being stop be way. XXXX confident just and the in that, be QX why, the where us Thank able you for in I with

Ajay Vashee

that to Sure. It's I'm Plus happy say, relates to the the it answer repackaging, I reiterate made repricing earlier. those would points Heather. questions, I Ajay. as and I can a of couple

guidance tailwind to our the has very revenue, initiative reflected overall, revised strong for in year. been So, a

gave in of consistency and of net rate relates lot annualized that mid has business, stable As that our we're our Analyst the retention it churn, net today. in ARR seeing the revenue across a retention retention rate remained to Day We September and at update against and ‘XXs.

ago, continues a expectations always modest than exercise churn initiative. whenever higher trend uptake our a a expectations. with years we have rate manage a when to And but lower There of than saw retention our initiative launched repricing is you to very been like the couple like overall we healthy and able this, launch grandfathering repackaging

We consistency we're NMPU some strong now metric, Plus and result upside guide that formally tailwind of had expectations launched with of growth we with next quarters. the of lot that it's that repricing there initiative live couple slightly And to a the when lower overall, expect but that so, out to we over customers. a as But revenue. our from the see a we starting don't do and repackaging

to as have other engine what September. XXXX very Dropbox a ahead and relates make will data doing through focused to HelloSign Day new of acquisition in and on at our it framework a balance opportunity more we investments I conversion through continue it the products, us. M&A in Longer our year. Analyst then We're large our as healthy profitability, of of to we this thesis revenue, to And ecosystem, term, that there, of be is our lot we that ahead continue investments delivering line now in well with the and more can earlier our science our a like shared we say February as growth and in of unlock

more our framework back and expectations guidance issue then formal have term, shared of longer earnings kind on we months. certainly call detail few to in a So, we'll to set when we share


you. Thank

Our with comes Securities. next question Chris Eberle from Nomura

Your now line open. is

Charlie Rogers

to Rogers perhaps everyone color this along the regards the annual to the little acceleration Could mix versus Charlie a subs quarter? customers, with given in Was annual revenue. you on quarter on a shifting pretty monthly user more nice showed increases? or price bit for due Hey, shift billings, we of broad provide strength this Chris. here just to In more

Ajay Vashee

repricing This execution initiative. strengthened Sure. is Plus our against question. I the repackaging Ajay. quarter success more the Great would and speaking, broadly and say it with

electing of seeing we're billing right cycle, an seeing revenue now, are some which a cycle to our billing annual that actually customers and We to slightly from but less is move elect installed overall base actually. customer to tailwind monthly option a

a lot driving you're guidance And that's so, there. strength seeing our the of in

and don't like drive rate that that noted, higher the always consistently related or thing are the so and in for and things billings One you billings correlate and items quarter as we've revenue growth to between that well various and annual, are previously is that while predictive as growth but lower, there be I reiterate revenue something monthly kind can not as mix for so would to revenue, us, FX. us said can of

the guidance look So expect I billings just our for continue on is about growth a revenue can of a to sense quantification in we percentage for current the normalized visibility. to would And FX based point on been X point QX have share that growth billings that last and I higher.


Thank you.

with from Davidson. comes Rishi next Our question D.A. Jaluria

Your line is now open.

Hannah Rudoff

This taking Hannah on questions. for you Rishi. guys. is Hi, actually my Thank for

had as there hub desktop I any of proposition app. broad presenting been or central any mentioned noticing some is know in which to say the as you you've Just feedback pushback first Dropbox talk seeing value Slack wondering Trivago one, Slack for that customers use I Dropbox work. was new who already if the has company if their about new could you difficulty customers? you're But already the

Drew Houston

No, at all. not

In work whole that the are need can experience cases use fact, fact customers a complementary makes which just someone help breed places complementary prop -- the And is is of it even the across Dropbox place only lifts. best ecosystem many both Slack organizing the more Slack that tools, organizing and of ways, all in these different pretty the from within that new content and ecosystem working that we’re And solving their value people, lets across Suite which different Dropbox is pretty and all these you the importantly, and problem G than you the problem where lives a Microsoft our seamless. solves.

Hannah Rudoff

environment, and macro the potentially any you you're about you, particular second that's what question, And there in just talk quarter? this seeing could saw regions there's strength and of anything if is to worrisome you then,

Yamini Rangan

Yamini. question. the Hannah, you, the for Thank is take that. Yes. I'll This Yes.

an In terms it is as of consistent. major pretty from macro channel well as sales macro environment any the the climate, perspective. shifts in seeing not outbound We're

as are as executing North APJ. the consistently across and multiple We America, quarters, well in EMEA

that no are from a seeing macro and perspective. So, shifts pretty significant we consistent


Thank you.

comes Our Pat with JMP from next Securities. question Walravens

Your open. line is now

Joey Marincek

for Joey is for taking Thank This Hi. on questions. our Pat. you

space how we being these where of all you tools teams when the like done. So, goal a collaboration Slack, this wondering gets place other first and navigate off, work do to Microsoft Quip are plan have

Drew Houston

these them. handled much all have and an all The a engaging again a those tools and ever communication to our Dropbox of in now you like -- are But, apps starting for files, still most new launched Google your experience. have case operating it and older look content and only important different model to competitors our with closer over will part your handle cloud that even your it's to the experience, really we and there Dropbox and a collaborative Dropbox us of are to customer an content. use from of or when of integrate life a bring is collaborative they'll an of don't at traditional kinds we where more need. one are the and we we OneDrive and be we're and of see different more biggest we working more lot Drive, messaging and them you product organize there lot anyone is of engaging Certainly, And off And your and turning content experience. choices but we customers the have just time not as turn Well, changes we made organize until content. users what help

Joey Marincek

the going? transition And follow-up Thank HelloSign then is, to question my selling how you.

Yamini Rangan

been this of -- Ii the part has question. take can I Yes.

been In executives since all and process integration our it acquisition QX, So, the six locations, in we we international and have is really trained The of has account smoothly. started months integration process. selling going HelloSign.

qualifying of and all are account our now positioning So, executives closing.

we're traction saw In see our fact, in base. the good in quarter, and beginning some for customer HelloSign wins to we Dropbox EMEA within

perspective, have for drive continued our more experience self-serve a customers. From buying frictionless to common we

are So, billing, Dropbox you same you the HelloSign. credentials for thing then use purchasing if your you for now customer use can a and

within our eventually leveraging data science is well. to teams customer able base propensity We going will be identify that and users HelloSign, are to buy high that our also also

console well from quarter, the integration. IT a admin some force much pretty we good in as better also enhancements a Overall, made sales deeper as product

is self-serve execution, well. we So, going product integration and are excited outbound the from about going forward. this really debt an execution pretty perspective, And


you. Thank

William with comes question from Jason Blair. next Our Ader

open. is Your line now

Jason Ader

I quarters, than Yes. from understand to sure of given worse why? guidance. better over is want couple just net next repricing Do Churn your I if make your expectations. MPU to paying get the Thank the And you expect you. it guidance? users your so,

Ajay Vashee

Happy to rates of since which initiative. repackaging that the initiative. to to visibility the current not. guidance take for we've larger this and close been qualitative in work Certainly what and respect And We've our Ajay. able growth some on Plus stable we question. to contributed and user past repricing the paying we guiding live have in healthy is QX. as went trends part This our manage that deals did retention with QX with into just to to quarter higher we're and Yes. seen period, really consistent We QX,

Jason Ader

you. Got

So, to you clear, quarters. of next over couple are be not expecting deteriorate churn to the

Ajay Vashee

We've we to No. surprised very successfully part since pleasantly high rates of that's retention and been went initiative as that live. managed of continued and


Bank question Our Lynch. of Merrill Post next Justin Instructions] from America comes [Operator you. with Thank

Your line open. now is

Justin Post

quarter. Drew, new on A to was think just understand questions, deals and deferred up new the us the some bigger Spaces, Dropbox the couple that just $XX aided first, how revenues of was signed of you. larger opportunities years? quarter-over-quarter, up in couple going of over I And second, million next by you the help can open you that's picture, sales Thank that

Ajay Vashee

Sure. take the of This question. the I'll is Ajay. first part

and for subscribers larger I there a growth through contributor their closed aided of is driver are that the a of quarter, us, which annual revenue working the the part as period-to-period. lot So, deferred growth Plus But, partially revenue in as to a deals by process a well, repricing repackaging. renewal Plus we big that in deferred

Drew Houston

many, a is, because the around than our Their today as long-term for the Office of files, see differentiator lot teams Right? ultimately TAM, tools going because do is content us and use turning whole the the Dropbox we new big supports our opportunity think around, we advantage that. best thing of cloud more hard breed opportunities sales tools. is in And big all the a and fact the collaborating kinds today the but if And of to that. to Dropbox. all our pretty tools, that a new this is been business the first lives that mean, Suite only I G of expansion ecosystem, it's solution most for and course not big a has to be

with of we think some to traditional before, only allow limitation. over said be OneDrive, they a And our big I interact competitors you like time which will as files,

see increase do we drive that kinds can increase we -- many context. we because adoption see to experience we all way engagement, and it to as dedicated and of a -- fact big for Dropbox the so driver viral and more that foreground adopt in ways show collaborative you monetization have we then the you opportunities engagement this differentiation drive all and means app, So, desktop have of can this

system the even to to us if we're smooth that a in But, easier when or kinds contract. list operating for getting limited lot there team of experience save mean and of I just or set I So basics are all on of examples this. not streamlined a just files up a the a make of

weren't with have we before. a says out send promotional that Now, for that HelloSign, button these signature opportunities just are available

the think we we all a monetization. have So, drivers and of lot engagement potential across of major


I'm the back Houston time. Drew Thank showing further at like to for I not you. any any over turn call this to remarks. would further questions now

Drew Houston

forward you to and speaking for appreciate thank Well, look us Great. today. support next your everyone really with We joining you quarter. again


us. you joining This call. our for Thank concludes

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