Dropbox (DBX)

Page Portas Head of Investor Relations
Drew Houston Co-Founder and Chief Executive Officer
Tim Regan Chief Financial Officer
Mark Murphy JPMorgan
Steve Enders KeyBank
Call transcript
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Good afternoon, ladies and gentlemen. Thank you for joining Dropbox’s First Quarter 2021 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. it Page turn for Investor now Dropbox. will over Portas, to Relations I Mr. ahead. please Portas, go

Page Portas

known the XX-Q our included that to future call, impairment for as and factors those Dropbox be capitalize ability related a quarter organizational our our our particular, efficiencies year Today in other benefits acquisitions, future were result uncertainties this the statements in of Form our expected or Our opportunities growth, shareholder market those and our cash offering March and goals Statements goals repurchases, those that strategy the flow; and estimated future regarding and to cause XX, charges our the unknown a risks in of on the products ended These distributed and XXXX prospects a will our December achieving shift on including this volume ability products, our capital including ability and through by factors XX, our trends, our user revenue investments; including and to generate and sustain opportunities; the value. to materially results operational and Virtual forward-looking opportunities M&A free expectations future that performance include and including financial structure; [inaudible] XXXX. anticipated could developing and ability in call to XX-K are included Form enhancing features discuss result generate and our ended or our to risk results allocation business projected differ earlier. our business, new for expectations our will risk we and of as growth, our actual changes plans, implied impact model; upgrades to strategy during share regarding our to may quarterly from profitability expectations results business achieve First our regarding expected drive retention to and financial to financial and subject effectiveness work results overall of future work of timing remote positive described statements

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

reconciliation Relations isolation may a with like on which measures. addition release, X-K non-GAAP and now discussion or and Dropbox’s at for today considered in Investor non-GAAP our found in financial substitute Chief be Co-Founder Executive filed found should Our turn to materials will from measures may to be today not website and GAAP SEC also These our with our would results. earnings Drew investor include posted as supplemental the Form in Houston. our non-GAAP to A call results Drew? furnished I be investors.dropbox.com. the GAAP in the was to Officer, of over

Drew Houston

Earnings XXXX Call. everyone, welcome QX and afternoon, our Good to

and work. customers a and many It update contribution share customers. our provide And of our results, and of with year. chief Around a guidance up the our time our business was remainder showed we challenging and customers, and from to partners thank were along like our I'm the with time, an before I'll quarter. team employees, supported for this then sudden of the quarter their product I'd call unprecedented our certainly global last shift to to and On officer QX for Tim we Tim today quarter. second Regan, the our financial financial and the through managing the results, support highlights year, pandemic our to proud outlook way the their successful distributed review will for our get

decisions reflected our distributed skew this time increased professional within and demand some remote same there's collaboration focused rise challenges on were in rise building roadmap instead software grappling strategies. be shift has in ahead. never own customers And flexible already for in given While collaboration. execution. spikes virtual changed excited or we in what home made this And decisions to content. rich trends At new of of new the our new and customers in of freelance now adopting in connect forever. demonstrates as to capabilities We've new workflows address work their the that history of way quarter for to I We've media entire businesses, seen time, a is We've us face previously, remote and several expansion, our heightened the these first a to economy about also working seen shared hybrid seeing our road shift work, play. trends reorganized the with as and been to traditional this video the adjusting our has in progress environment. working and And about the are many business our clear, to new still person the in our accelerated of combining we're best product teams opportunities streamlined companies cloud. we're an against the growth reoriented way This both workforce era fully and with our that one calling of we're to I'm about SMBs content better thing we that

efficiencies strong the a non-gap execute strategy, operating our meaningfully to saw to is operational against in on positive stayed expanded and our targets. continue momentum as we and margin growth with drove revenue Turning our we we the business course as quarter, long-term

ability to several which thesis, speak more execute We improved will also completed transactions detail. our to against financial our Tim that in investment

and and business. progress new operational made I'm shared In I one, against the execution update these. in for strategic let's start core our the priorities of on proud we quarter, excellence. business, first priority, each products As driving last core we've the with an the of evolving devolving investing three have XXXX team's

building this to is on more our and strategy on our the intuitive help tools, of simple and focused reminder, Dropbox seamless users, strength content, content improve around a and workflows. As collaboration functionality, organize experience make core the

As way we they'll we believe user investments, make from these and of drive improve levels core retention, revenue One higher experience. the stronger ultimately better business. engagement, our we

content seamless more also we're Evolving a to able cross while in engage promotions to now conversion more Dropbox purposefully basic the optimal to user skews. prompts average the of work. our our number in promotions. was and sell quarter our to their of volumes can on is promote product Dropbox flexibility gives the and product drive to more were This value focus encourage paid leveraging product strategically successful with total We of surface their core in our upsell The to overall still newer This our maintaining users people simplified our retaining reducing experience ensure adoption about prompts our conversion while result, at products. products. sees as way a to to delivering streamlining users moments

a beyond version better and FSS capabilities of launched users to to connect as Dropbox For paid them launched passwords users core passwords Freemium them and offer introduce to that some all of our we our of recently part product. example, to organized the stay their we help year, more to value premium basic And tools. last our we deliver

I'm As users excited as into introduced more made will which to migration premium these exposed to find and this late quarter. transfer, and we also basic standalone retention we in plans. payment the help are activation the believe value we've share skew progress in first a features, drive with

plan will our uplift in more and Now drive users making transfer retention our it's base. easier discover this We in the and which expect we paid first to user additional for broadly available to the to product rates. the user see basic step as upgrade transfer conversions

believe As releasing share in and our to and by the Dropbox passwords backup terabytes great. our with tens videos transfer plan. building family share and our traction our their on we plan. important keeps invest to connected like content true plan and growth the on features to delivering personal to file our continuing helps routes example and of an Dropbox organized of the streamlining premium even making the number products, vault of continue own update see evolving centralized rooM&Access and and one feedback's digitalize collectively supports promotions, users we're product seen healthy philosophy, ability final folders, will up two within help finding focus feature thousands and core manage We videos, important in Customers experience us users our our with and six core with documents. share with this use I'll with making people growth the passwords. evolving family business. progress remaining ARR to been to strengthen transfer, value an unique Since The to easy more drive created, work a simple shared photos, while our total to rooms basic our progress on experience on both great as customers like exciting users upsale to we've We're the It share, and each set funnels core lives. differentiated a our for basis families users of sync launching easily personal like photos to family and our storage how value place iterate family of family we're their ongoing for we're sustain family fall, core relationship with their solutions and a last that and are

cultivate priority, Let's products to core new scale experience. we in investing additional Dropbox is the second capabilities and move beyond which our as

DocSend on Dropbox, increase These great products Dropbox also of leads It's acquisition a document will fit sharing using customers viewers of users a DocSend Today. within full year, seltzer millions to end-to-end core handful and are a a expand DocSend product on portfolio. billion The product drive business success added of share how help results. of into ARR, as expands of critical hundreds success have broader and opportunity documents analytics powerful As content. adjacent are of on we and acquisition Sharon. our we our security we areas. Offering and new engaging product. them of The big every to manage We're viral combination with hello along document work like capabilities. upon reached expansion retention. ultimately sign companies workflows with a meaningful of invest $X announced our freelancers and in of acquisition This believe powerful and TeleSign tools ours generation that environment. business have one sharing SAS DocSend our distributed and March, tapping that to new strength to In only we ever build the of builds secure key and so the and SMBs of suite in analytics and their our give which next

to portfolio. drive meet extend can and products everything needs. For upsale acquisition to track want forward more value together. professionals only and hello, unlock the example, services, rely deliver to look on I does to Dropbox projects the welcome three allow a sign client to combination for team, deliver and our going DocSend proposals and this product already a sign functionality we're to presentations teams Doc sends great will our to creative help Not achieve and family customers, who collaborate documents, and of to these organize Dropbox us can adoption warm to and addition customer's use across and but DocSend to use contracts. on greater I engagement and the our

of turn made health leading team the progress e-signature in a two Let's market solution becoming in the science, towards great to be continues growing one our international SMB markets. fastest products which goal one, to and target our in of

our launched essential professional. which bundle Plus calling and we hella e-sign. professional skew, First, we're sign Dropbox

HelloSign traction business last turn, to we've meet in and capitalizing seeing look exposing is more in by increased as users freelances SMBs. in And on our that where this functionality paid As expanded customers I to especially momentum users reflected more XX% over ecosystems skew earlier, we're our than year, this our further markets of seeing mentioned from of In comprehensive like professional for we've we're XX in their increase these needs also tailored of seen needs. year drive international solutions international additional capabilities users to to geographic HelloSign continued in offer all customers. and deliver the of languages launching the specific additional serve awareness our Japan. year, our we after value e-signature our We're engagement

through success of used great For on electronic and of increase get to into examples pipeline markets example, region. here, stamps now our next Dropbox. growth. seals, how invest we e-signatures innovation are both are stage value continue HelloSign of drive in products support to with our users Concow our Dotson core which and We'll spaces expanding organic and the like in in building often adjacent the we're of to that lieu experience M&A, that from

stay third Finally, priority focused on of we'll our excellence. operational

security As we ROI our operational our discipline our structure and reliability, for of efficiency, the cap technical improve while investments. and infrastructure high capital optimizing increasing

us profitability alignment margins on profitability, of on in investments. believe This focused shareholder while number investing future. growth more based operating quarter to against we summary, proud up reinvest debt metrics, with results. to on a in value. on we're And our ahead, our initiatives still important authorization we'll new In be implementing XX building quarter, focused driving a we sets while an enhance our billion improvement towards executed convertible we I'm res products. $X ability nimble, more balancing efforts we including our And for initiatives, growth to We've a and these against be our innovative, additional our making disciplined these always share our continue making great resources progress remain and thoughtful and first repurchase ROI generating continue investment in against and believe point recent closing thesis of and the decade their three looking capital been priorities executed

to against profitability users on As with strengthening seamless new our XX Delivering collaboration we priorities. demand our our address our while continue execute for to more we XXXX improving value core balance and to well relied both products software, more growing the and sheet capabilities strengths our all.

Now, turn walk to over through results. it I'll to Tim our financial

Tim Regan

And decisions we've execution share tenants I to these growth, follows XXXX, the a our line that of period, our free the before, Thank to in acquisitions a headed. you outlines, We progress aligned by financial driving for XX% financial our the in objectives. financial objectives investing how executing by Today, repurchases value and allocating operate we our doubling are margins to tied with we for revenue and as the continued believe free count. remain flow improvements against The with making cash I'll for this to reminder this organic some to to billion plan and demonstrate capital annually talk our targeting and and all capital allocating as will done through with the long-term of annual cash-flow where but reducing to objectives to trajectory. shareholders our business drew, performance I've committed of significant portion share for our quarter, the in of that core our the goal against generate updated we actions year operating want these it's guidance $X of objectives with annual XX% and context begin taken back for shareholders. as strategic are provides returning financial initiatives

highlight ARR to at that from and ago, quarter of adoption driven go P&L period. million Total like in expansion and of on turn of plan, rates note the We $XXX.XX in awareness DocSend. used XX% drive the year first capabilities XX% period quarterly and revenue to added new foreign high up and end we paying basis, in of our constant market guidance, release some plan. with year XX% as quarter to results. ARR users wins approximately quarter beating QX the over $XX growth. I'd exited billion the in of our net the to million FX each was year by paying first hollow and part science XX.X, quarter grew to year error through Average Let's two I'd our X year for the user users $X.XXX over acquisition features, exchange such rates Total the $XXX it and year, the update a skews, enhancing was increased for calculate the of a revenue of provided positive sequentially the we new momentum value million the first the per X.X XXX,XXX of to the before in market the ARR start the continue family family introduction our currency to growth turned paying

strategies reminder, both our as market As motion. go well sales our to involve a motion, self-serve as our outbound

self-serve users side, the improvements On and recently meaningful we skews. way made purchase our to paid the discover

requests. well file sharing adopt for of plans, robust is has users as stemming to to helped plan, pro revenue and webpage selection rates our family transfer which more saw these and our our have a individual as our the our features, Now, performance. corresponding we In conversion migrate new in QX, paid functionality SMBs discover offers changes, clearly These plan. improvement each improvements surface also offers. our plan as, helping drive helped This to resulting from

homes the that to from allowing On also external the chose XXX company announce across share Dropbox They of Dropbox creative while are nationwide outbound is and to and that workflows marketing customer. to locations we with an design to enterprise American securely building over helped receive their retailer rendering a transform vendors. retail now has and enable content resources. has side, take them The teams millions digital their materials excited place

aforementioned the expenses our effect on net income and related purchased tax P&L, expenses, losses all are income net I Before we otherwise would adjustments. and investments includes compensation, excludes force also statement certain the tangibles related continue with real stock-based in unless further and non-gap to excludes discussion of gains note estate mentioned our equity like measures that non-gap acquisition and and of of our to indicated income of assets impairments reduction amortization our

model, a taken transitioned given real existing virtual have first have previously estate to de-cost portfolio steps we our we mentioned, we that by subleasing As our to facilities. have

$XXX we an of we We QX, by brings a including factors. of additional QX. impairment impairment estimated date year, the San factors, and of $XXX charge charges cumulative up the expect several transition from with DocSend's have million to total additional recorded charge recorded driven million. sale in Francisco vast associated the incur impairment lease our to incurred and million $XXX majority the of million to This $XX stemming other to Last impairment headquarters this we of of costs our representing impairment

high end be estimate continue exposure the We our million. to of $XXX to total

to $XXX million continue which an between cash subleased of XX As years. to leases, predominantly duration the in expect excess a of XX reminder, over generate course we these range inflows and in

Now, let's categories continue de-costs, related home note or working facilities lower continue with the that driven employees, to in expense from P&L depreciation. by I'd all benefit from reduction

representing gross As in as as down lower from result XX% in in the over for of efficiency our quarter of unit year took an impairment on the a which points estate QX was the year related aforementioned reduction, represent two cost stemming gross overall basis. assets is effect a write a costs our result percentage margin of gains well workforce margin to primarily increase real infrastructure. improvement with our The

XXXX. million First quarter XXXX expense compared revenue, which XX% decreased to XX% to quarter first the revenue expense quarter or was of or $XX of first which marketing million sales and $XXX in revenue XX% decreased the of of in revenue, XX% compared of was R&D of

shares expense we $XX which is which first operating the was to quarter first ended our the and $XXX leases million million, XXX% the a which resulted $X.XX And center quarter Cash for moving XX% expenditures quarter of was of weighted cash expected added the million record we are point a or per XXXX average $X.XX in revenue first of over based In more now compared free second diluted do, from and XX%, to a of This outstanding in you to initiatives, as cash billion. cash was million to were our cash equipment. XXXX, for $X.XXX income the on to percentage EPS operations of know, earned from balance share in in quarter on million quarter QX $XXX million, represented million marketing of billion the to of Net we $X compared of revenue, first million a finance $XXX short-term operating XX XXXX, result, share X% the $XXX per XXXX. which $XX flow than in which of with data the addition, of first Capital We is the first XXXX. flow. was diluted profit investments $XXX an in half compares And the during certain occur. also first first XXXX which decreased $XX for quarter, quarter. quarter. quarter, delayed of improvement improvement flow quarter margin the

favorable over share seen return the this day support of some share growth and our share, culminated capital per some and $X.X value million including allotment our options we ahead, executed a in quarter offering, roughly remain most $XX initiatives, capital sheet on offerings conversion years, to update proceeds we shareholders allocating related to I'd to us overall also of then the In on comprised provide our important to which ROI terms was to opportunities. which towards also allows and our notes. conversion the debt an successfully to premium the $XX in over high enable looking net but financing of pursue improve of structure, disciplined XXX% like not offering. the and coupon our billion, M&A delivering hedge We zero shareholders. price the repurchase will raised seven continue repurchases, warrant bond, use us in in back the over capital strategy. the share organic year through initiatives price the through equivalent of representing to and that strengthens nearly transaction transactions, raised recent February, comparable of notes only effectively executing collective balance a five We pricing convertible exercise These

our the we approximately these to of new In existing $XXX QX. call, as of $XXX XXXX As a our announced end accordingly. million starting our in spending quarter have we nearly repurchase shares. of during signaled pace repurchases repurchased repurchase share first we course fourth and increase exhausted our $X convertible with subsequently $XX share repurchase million approximately we over of QX, the $X repurchased share authorization remaining billion were notes billion figures earnings authorization million of the the our November authorization. $XXX result. shares on which And include not in offering, QX, related million a program We share conjunction our as We

rates. to efficient, of year, to that of assumed are utilizing rates that leverage XXXX, account the We and exchange of of guidance and the continue average full to recent to for in growth and believe our capital of the for at we our balance guidance of based quarter guidance we in expect historical $XXX shareholders sheet for combination mid-point approximately a our the share for this returns million strength $XXX second million to to let's is deliver will back range QX repurchases on for with points revenue the two be currency and turn

non-gap expect be XX%. to operating in to We range XX.X of the margin

the range outstanding price raising of XX average midpoint previously based $X.XXX for billion a historical average to and $X.XXX weighted are average to to based full are points this be guidance guidance of account our was growth day billion at year, on rates. recent billion in and alluded expect which we the Finally, exchange two $X.XXX Currency million $XXX billion. guidance for combination our trailing rates in to of the assumed $XXX on million to range, approximately shares $X.XXX share revenue shares, we of

expect gross margins We be continue to XX%. to approximately

XX continue expect in XX%. We margins to the be of non-gap range to operating to

of $XXX which $XXX to outflows million. the severance $XX cash-flow cash our $XX related $XX hold our HelloSign. for million in $XXX range to net We comprised million acquisition in million time to consideration, to payments includes million of XXXX expect to improvement expenditures allowances. continue related installments we previously are million deal of the range, to tenant be XXXX million This $XX free to back to million raising And our one was guidance reduction $XXX of force, in capital million $XX approximately for of of

of to our be expect in continue X% XXXX. to We approximately additions revenue lines to lease finance

Finally, count to down shares. weighted be we anticipated reflects an expect share outstanding a average million program repurchase our share range reduction of commitment $XXX guidance from XXXX million the to impact in million of on shares context this guidance. to $XXX $XXX million our range shares, of in This some to share diluted previous our to $XXX additional

strength are We of our our to relates full DocSend. year the in year are acquisition the to this raising of guidance from revenue half increase half to organic And approximately relates growth, XX% XX% the midpoint contribution over or year the remaining of we seeing our revenue business. from

well year. With the regard call to to our ASP's, large business, guidance as we paying in February, mentioned FX up, and impact with away deals are the other And as an favorable organic during being from shift rates. make we while users guidance, our our could from shifting and in I paying business. sell margin in health business to paying second of as growth on indicator on best of due of billings as to we basis and operating marketing to in continued users relative see focus confidence as We concurrently increase free ARPU half our the raising forward we DocSend we QX low ARPU, both skews, revenue go to of our variability for ARR plan maintaining expected increased user as therefore growth, to long-term plan back flow drive pursuing family our trends. to historical are drive long-term cash the DocSend a absorb the as and We into into P&L strategic certain as planned investments the initiatives initially

on are operating for focused margin long-term we planned gross of we margin approaching some reinvest remain Accordingly, while revenue to growth. rapidly savings. Lastly, the targets, investing our we and sustainable

the delivered bottom and start We the activity did balance goal and free to initiatives year. growth model target strong ROI. our capital remain generating our with conclusion, sheet both solid our are reduced the strengthened efficiency see share potential our committed value. We we're acquisition compelling shareholder we generating by line from of we accelerating In our results opportunities, a across Therefore, share repurchase off and DocSend. count cash-flow billion our of our our to into to XXXX to $X raise, top through where growth a enhanced

objectives for Drew financial it We continue now to remain targets. long-term to his execute that. thoughts. against to I'll achieve on concluding course turn our our we With and back

Drew Houston

And Tim. thank for you, Thank you all us joining today.

remain at results our QX executing to priorities, goals well and our believe our long-term our the XXXX shareholders. commitment we on opportunity of ahead financial focused positioned we're demonstrate, us. As meet We to

As that the open for team, And our to helps our that, to and customers, I'd partners, call up for continue the like with adapt team. of behalf working management look Dropbox thank entire environment. our to customers them I'd the operator? Q&A, technology On evolving to rapidly like


comes Thank Mark Murphy you. The question [Operator with from Instructions] JP Morgan.

open. is mind Your

Mark Murphy

bit. Yes. Thank is rate you a that improving very a the deceleration I'm much. quite And result, noticing healthy so congratulations of on

a sustainable rate diesel? in that products, kind in how terms conversion retention, year. improving and you're quarters of just know, is You and this think know, et which do any influence growth on consecutive the half revenue have XX light you XX on of, cetera, a other you to Can that, to lifting half a you're where you and pulling you three basically it words, shed percent is new and levers of that improvement

Drew Houston

growth of a mark. core have but on Sure. broader start we're in, it can I Well, can and at is products. building Tim in a comes I from driving and thanks and we lot specifics, build look the mean, we portfolio opportunity from of the is business way the true This

core we see some the to we've improvements been So all we the plan, lots and of and levers drive in experience business, then spoke transfer passwords, there making and the growing to family good like portfolio. conversion KC the we're and things And examples. of retention and improve

organic fastest dock of has we'll growing our We're organic broader have pipeline And M&A. been a those HelloSign a So to at scent. businesses. innovation continue and bets on one just

of, many a about we're progress and levers. have we've So different making. they're pulling lot added of excited to all say, we the We're been

Tim Regan

us is on right. so the ROI. adding many a from from That's And other of plan, the have that in shared compelling February, guidance passwords is family we half growth, And basic DocSend, seeing it's continue standalone initiative. really our any HelloSign we guidance performance. to transfer invest overly reliant the about drew we're skew, half attributed the will that from the at we the working we're DocSend success and expected that, XX% on increase all where are to drive or at is and factors we which where build in a exactly and absolutely mid-point, organic the the growing have X% discussed of to does growth remarks, to plan, drive on prepared launching And sustainable one initiatives to our not his revenue maybe to

Mark Murphy


onset which diversified office quick funnel is of would other that to think had like of that So you across I'm the one funnel I top recall the top activity subside. And wondering just at return activity. effect we the and business the a wanted the, portfolio the pandemic. start that one the it to of were I it's, now, know, just the, how ask then expecting spiked cycle it's I sounds of recovery? into, to kind logically has across behaving products the

Drew Houston

it. mentioned, overall, certain, before customers need stable. pretty I in they'll first it's big been afterwards business QX and tailwind a Sure. started customers the time. mean, adopting it kind you, And as is way lockdown as our demand our a said, mean e-signature sign for Dropbox of mean, there's I for there's last hello see year. lockdown a of as has that surge so been during lots I a the need But of I you

for in improvement most the be some a tools a big in think total we move world And towards there's as, for reopening, have room as So as will use model, moving manage lot kind we to deal and hybrid we our of to distributed business. that. the work companies of

thinking health broadly you to. of examples, doc but So we're a much know, sign center, couple more


you. Thank

Brent question Jeffrey. next from comes Our with Thill

is line Your open.

Unidentified Analyst

with could into the vision for and number maybe a one send, Hi, insight ask DocSend you you from quarter. is the bit questions too if of the talk on little great many, users taking this Wanted ER, [indiscernible] and us maybe to you. congrats any for thank Brent the to about a or guys contribution my on acquisition on give for

Drew Houston

a start just level. Sure. I high at can

the control DocSend's billions documents us think opportunity does visibility, we share this reasoning where So for, Misys customer They docs and Dropbox And of and national is Dropbox. for a they their, there's documents. is critical analytics. give help in great fit that and of powerful tens engagement was expansion customers a leaders and helps this more for manage

And of them more Our to growth are cycle natural end. we and whole, We audience. a them. want accelerate the with can of these plus broadly lot do these address and whole can help adjacencies document we more or then workflows their Dropbox address a DocSend plus the means a and workflows then customers reach that with of things can help production. The on larger the life combination HelloSign

with start you analytic, in and sign docs it can it feedback through hello contract share iterate you So saved it and on a Dropbox, then sign. get and in can

collectively And natural their and the exciting to dimensions, needs then an and able They to strategy, an really on to then obviously so of handle it's growing, office opportunity financial model better motion. can't think a rely big whole there's Silver, on environment efficient particular self-serve in world a many individually content, product experience, opportunities. documented to color similarly great these there's where it's market really work the fit to it together. big where really there's and are additive the the overall, markets but being particularly have they're and give their ways managing And go and on lots being of try we was alignment me as let scalable. you CVS and in some moves the is shooter the impact.

roughly over to paid executives back the be we held for key about with deal structured we to HelloSign. with So $XX how Doxepin million million purchased $XXX for a three-year similar period,

further insight the ARR We record ARR Docksin we in reminder, period. And companies a acquired from million to $XX the acquisition. quarter. closed the in some about contributed the Whereas

to be the deal where their we that then impact QX roughly revenue as P&L are for to do guidance. a closed And has full point related We on expect half users And contribution this into of to been was our expenses factored March our absorbing revenue. the P&L into XXnd total we our totals. paying also added year, nominal to the our the about as XX,XXX

Unidentified Analyst

one a quick the sort I know might've Got year, like are you the span, impact earlier, on top SMB seen that it. the was funnel question SMB that in know, Great. of maybe know, so last from, followup obviously And overall be side, guess of going demand, forward? will, you from the asked you I some seeing terms of comeback? will you tailwind

Drew Houston


Fortunate we is to thing, in, lot seeing are been one and dynamic doing right. then they're so be our skew a impacted have then a on are to of the Dropbox tend one And The, good been really SMBs less has has which stability thing. workers, knowledge mean, that professional well. relatively I which,

and we we have our small business. reach growing can been acquire big is Dropbox through profitably we viral we year. And one So XX% strength motion and self-serve over it's as can year that

customers, conventional had nuclear, this more a we Salesforce. on the reliant freelancers So if more is VSN views than

to creators we're whole the and seeing falling So demand part is of rising tailwind freelancers economy, that just demand. a we contribute expect. passion There's


you. Thank

question with Steve KeyBank. next comes from Enders Our

is line open. Your

Steve Enders

Great. for taking Hi. Thanks question. my

product. up on a and into, wondering little rest how you're on then plans on, the the thinking follow about there the dock into of to incorporating doc the bit Just sent

similar you kind at you plans HelloSign HelloSign, where or at If but into the, of the, the you what's expectation. you you incorporate or the to the where kind of to that do where going have plans build forward? are where plans, in what's expectations Similar to

Drew Houston

immediately Well, I we'll go-to-market them we're integrating already start to starting where our into Sure. integrate motion.

hello DocSend building and customers then bringing it we or through integrations see to So and together. that. our closer We more see available similar our were making to those similar deductions sales as product We're into the experience sorry, team sign.

be then so distribution DocSend building driving towards And trainer same mainly parallel in on And we'll focused audience. we're integrations. of the

Steve Enders

the helpful. That's And you're you. think that about how of know, forward. laid to last M&A to things buybacks quarter, know think kind from Got rank of there, the I going think the, you I you that you how you just Okay. but out plans guess about ordering order the about rank the then I organic few are of those importance of thinking convert a you plans the growth, but as raised kind in

Drew Houston

do absolutely room of we to think them. I the one have each

to allocate our that's annual absolutely. share to plan we repurchases portion So significant of flow a free cash

plan And of to a be our M&A disciplined continue the where pursue our strengthened in HelloSign, valuations. can continue those strategy examples will be important at with So to the part to continue look in. we we're of strategies. that will and absolutely interested balance convert with types And sheet deals of great we we

organic growth structured invest continued we growth, able where to to M&A in pursue share to be we to So repurchases. continue and business our continue in invest


line next comes question open. is Instructions] Ben Rose, your our [Operator from

Unidentified Analyst

could as as quarter either from last items, is changed to international to the wanted of international about I and that It's on revenue contribution total international revenue. hasn't during that changed ask a of far you sure one Yes. XX XX temperature I'm or how the couple the contribution year? to a materially. split speak

but And part a that'll as tomorrow, so, changed XX not key be yeah, materially. disclosed of filing has

just a whether increases or the price And any contemplating the anticipating was how you Okay. user to are just product question over thinking plans, curious various pricing then about for you of pricing base on know time?. are different

Drew Houston

we we are there. plans for future represent users about one share mean, opportunity. thing I to a have of focused is big specific base an enormous on Nothing which

and broader points we're And We entry a creating will also optimizing certainly continue new plans, the menu but pricing general. standard to in them and options Dropbox drive basically. to subscription packaging of

launched of down transfer of experiment working. a, skew. So what's standalone example and on We double and an we'll to is a in QX continue Dropbox

So that important we an packaging or at to continue at us. we that's certainly and pricing are general monetization looking for lever look pricing and in

model users the you to curious that over been I growth quarters. has how was ask and seeing sales I know, on of several strong just your direct know thoughts we're on on less last the your just additional know self-serve part that months you know, the recent of may question, emphasis doubling if the contributing down And one sort changes that has reaching Okay. been to Yes. in

But when to our and Dropbox that for rationale I efforts. going is that's it one large some And comes mean, and So be our customers. strengths our streamline sizes, larger is, this continue strengths organically acquisition, adopted play serve of of disciplined we'll our companies, including customer and our investments you to is know, we all continue. to of to companies want in to paid is,

motion our So land and in our efforts to expand really we tend efficient end that and the model the market and enterprise. segment, is mid-market profitable outbound high profitable be more find than general. self-serve and in mid or And the some scalable of in of

XX% our customers motions. revenue. on more most of customers very find focus doubling revenue and, from the about coming and the market large are sees less And to go just changes we So are these really large efficient down very that than


And further I'd at no turn over to questions which to was the currently you. like Drew the call showing on Houston I'm back mark. this Thank time.

Drew Houston

are us. Great. staying we'll next you Well, hope you and and see thank safe everyone family families your quarter. We and for joining well, you


call. conference today's concludes This

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