Loading...
Docoh

Dropbox (DBX)

Participants
Karan Kapoor Head of Investor Relations
Drew Houston Co Founder and Chief Executive Officer
Tim Regan Chief Financial Officer
Jason Ader William Blair
Joey Marincek JMP securities
Brent Thill Jefferies
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good afternoon, ladies and gentlemen. Thank you for joining Dropbox's Second Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] 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 Dropbox. Karan turn Investor Head now for Relations will over Kapoor, to of I Mr. go please Kapoor, ahead.

Karan Kapoor

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

products, our remind today Before regarding flow that guidance fiscal for and revenue technology, long-term such like and assets, as our events. to started, that new year our on we financial operating uncertainties SEC. today's materially. assumptions these set cash to statements also as profitability, including risks future are They we demand could and get as our and in Factors our could quarterly our results a and include will cause from information users, objectives remarks subject expectations, forward-looking obligation or are markets. materially third today, strategies, on undertake statements, with free growth, statements update to to result I'd as XXXX and you the forward-looking forecasts our actual our and and XX-Q expectations regarding no and margin filed that release well are of business, risks employees, our them These results to quarter in differ based differ forth of actual earnings cause Form as report

Officer, provided call Accounting Executive and also investors.dropbox.com. to turn earnings We our at Accepted of Dropbox's now financial over Drew A like Principles. prepared our Houston. results in to Co-Founder Generally measures, on discuss with reconciliation is non-GAAP and in would will which are the Drew? release Chief accordance not I website GAAP and non-GAAP

Drew Houston

our afternoon, earnings good call. XXXX and QX Karan, everyone. Welcome to Thanks,

review I'll execution quarter our our the QX business and Regan, financial provide plans managed against challenging today the Teams will pleased Officer. for our continued in Financial and highlights macroeconomic resilience first and the guidance of saw results, Tim in outlook and and is the product backdrop. me Professional and Chief our year. the quarter, with from performance update really I'm the our for of We our QX, Joining strong our third remainder our share especially then in business. sales growth business Tim And

We adoption products, newer more our delivering announced and Dropbox of pricing also and June, to update and security of protection. in some and saw customers increased our Advanced Teams and data we Backup packaging around for Standard the plans value Capture,

deliver business, to Lastly, continue profitability will across Tim discuss we efficiencies which shortly. operational the through

we're of strategy we While at the that our the eye outlined certainly remain environment, keeping an confident macro we in beginning on the year.

continuing we're by our and retention to First, evolve growth. monetization FSS business to stabilize core improving

serve more of around and we're video teams, adoption small to solopreneurs documents distributed Second, beyond and driving FSS workflows creators. better businesses,

with year-over-year. in continuing the last maintaining our of saw how This and overall churn the foundation core core was a stable core experience, we And it. FSS quarter, start and workflows on we're fall operational our I'll the and result more once mobile. being we're business, excellence again improvements evolving that with profitability. our rate business. solution growth around ongoing our Finally, content all to particularly of a with user Consistent your we're achieve vision organizes cloud a laying the by healthier groundwork

active to to app who compared content example, percentage on our For we mobile app, of faster driving iOS enhanced the our quarter ago. users speeds nearly the double the significantly on experience led for uploads users, a which upload

and on the app, in This number the design year. the which talked the We start performance content over of we the driving around most builds and do ongoing overall on our these are increased mobile videos. are of their the These enhancements experience to also web. especially allowing time them our some more on of the users, and the faster by pages them tab previewed improved photos work since saving for previews about with quarter Photos photos performance mobile and traffic last services the of XX%

UX Dropbox seeing we're do multiple features retain increased to paid than of that those users. higher multiple And we're our improvements, addition among customers leverage at rates adoption discovering In not. capabilities who that

Dropbox For seeing example, haven't don't. higher Similarly, these levels Backup Dropbox at that than early paid there those retain those Passwords Backup. signals millions individual who are of users higher who we're on at than customers users turned and using use who retain rates

account to and reps progress strong our seeing we update QX, in Building management structure our this upsell, our macro see encouraged our with the monetization plans due this, that early we're monetizing earlier strategy saw out Similarly, of retention our our to multiple sell despite Earlier HelloSign this activity healthy crop history, FSS and new activity renewal as and really already driving capabilities account our add-on. encouraging, products business. some how opportunities business, called result update and I'm year. premium in year. first I'll cases, adoption rolled on our the extend offer were Extended we implemented a Standard with that like the Early in the Advanced customers strong renewal through wins, allows and users suite experimenting conversion. Dropbox are cross-sell sales history I'm pleased our retention. a form our year, number other uncertain among I'm activity with early we the to pricing healthy we released renewal deleted our see in our This we of how to to also quarter. and self-serve last Dropbox, add-on self-serve on packaging force data to DocSend. progress managed environment, a to here. larger is Outside days XX a combination purchased And of In excited improved revenue expand core has adoption. motion drive to file-recovery and business, in able efficient version Plus to of see multiproduct also saw These of us strong customers optimizing strategic Version in progress to costs, can Passwords additional part products. low from we we governance which a of add-ons Given been a Teams we're users purchased made cross-sell customers made but our of to self-serve higher incremental users. broader our seamlessly aligns in we where of sales adoption moment, discuss require

channel represents an rate in top-of-funnel basic improve see acquiring to targeted to through in an targeted converting new And for we and increased more through continue important also our activity marketing QX, users. opportunity prompts. mobile. We Mobile mobile conversion

driven adoption by enhancements of saw an Pro made due the landing mobile to also mobile mobile increase on We trials page. to higher in

packaging we Another Teams data pricing security rolled of number out In and features important users. piece protection and June, is of a highly for our and changes. around Advanced monetization strategy requested Standard our

to are breached. plans the Passwords, saw One dashboards whether for the its of these consolidated strong Passwords weak, provides Dropbox of made early we which inclusion was Teams reused admins them enhancements to or in passwords alert first activation month.

of see how shared enabled ability revoke receive the admins where outside their to needed. capabilities files and Teams monitoring to also are access folders with and We to reporting being

bundling and will offering In but our new drive our against data early strong paid our for really By discuss protection external SKU Teams paid pricing response this premium this standalone for added more, launched addition, early recovery. number backup and capabilities ability providing I'm Individual as the of feature monetize new we ransomware. pleased of a following attacks protection, we ransomware and and highly we're new with Tim of essential. our we're our offers to a that successful capability and products value requested important we of and updated Teams focus strains that machine confident adoption. learning value. find and Through introduced new Teams, monitor saw the on for reflect rollout plans, to last our into to Advanced relies plans. Backup customers quarter existing through And our behaviour security detection offerings, a plans, on This to

adoption video beyond and its Moving to in is of and year Replay. has accelerated them. which DocSend, of part DocSend we around now with second driving second and as documents objective our Capture Dropbox, HelloSign acquired its of since specifically with workflows FSS, growth

as Dropbox to enhanced ability of joint we some In of well. plans pockets QX, experience, processes unified organic a growth the and experience in automate integration cases a documents the verticals. Dropbox, click. cohesive API. enabling solid integrating from capabilities the seeing to campaigns of into greater venture further the potential the capital which new continues moderating build agreement file save continue consistent track to added We Dropbox, DocSend the uploads. image driving integration This capabilities through shift a And resulted DocSend following audience especially within and quarter. space. to We're and a view the the plan awareness offering looking we revenue integrations Dropbox an launched continued HelloSign expanding allows revenue marketing in higher the healthy and significant DocSend's and offer HubSpot, of to our we're areas account final opportunity with growth which a into users these the investing video, broader we from fundraising, price into pandemic we as users forward last encouraging, we've a of Dropbox the having to QX, expand show upsell viewer developer's announced feedback our for opportunities is images increasing HelloSign continue both despite improve is teams experience. to workflow. differentiate deeper of offering softness to as momentum month, which greater well synergies. DocSend We're one this DocSend an in use excited to additional continues I'm with in While And one users. for Initial stickier the more like allows to browser, Save to creating sales instead explore along about with API. of content saw businesses, and Last in as more to increase critical strong in our to surge towards month, mix In HelloSign to to out marketing see we ability eSignature synergies more as DocSend with well

Capture's product in an increase product Capture, these opportunity with We're of tool and part an uploading, further video its versus which evaluate QX. users into work quarter, to ease Capture suite. last and product I'll packaging base. and asynchronously it. again and the as convenience pricing users, weekly competition. teams approach audience share drive around saw their adoption organic of ideas tool to Beta request among an of strong viewing. to once from for adoption top including awareness removed active and the a which We for experiences its improving. the essential seen significantly beta due engage and is continue Dropbox communication with Finally, already has our We limit Replay, customer increase also to drive in leaning become scores the creator we our users bets the that visual opportunity X-minute helps see and our an video, to users was user all-in-one percentage Replay and grow cover our see performance audience Capture use, the monthly Capture wider best user videos, saw active that as sharing Dropbox we've a satisfaction strong to of for retention differentiating

managed coming quarters. build focused increased from in adoption, for this look And about recent about potential a sharing with potential excited significant our expand given The here our work we've from we mix security. We to balance and The is to folders improve content to to multiproduct operating Dropbox we key which business. sinking opportunistic was and progress to forward strength our larger acquisition to for more retention more their growth files of several need rise, challenging Tim cloud continues of done what and I'm and creators last FSS changes faster remain strong performance is for Capture our creating enhanced and see around for evolving why packaging workflows core wins, reach our platform's we're distributed continues faster In also over our the bets. to we're our environment, our excited I on all types, healthy your approach focused and to teams. macroeconomic quarter And workflows. solid with more Teams, financial around content. even customers, in they closing, we position the I'm a pricing this that, video organizing a it and the experience of foundation disciplined important and business. into allows make strong and part continue Search flywheels Universal especially and with this we over our our to resilience us in to to our of solving financial with believe during Replay performance sales easily. as it more road through As I'll strengthen on walk updated sheet And our results. the be map, do work most profile hand years

Tim Regan

you, Thank Drew.

with reminder start to like our I'd strategy. results, quarterly our to financial a of turning Before

balancing We of on by in our delivering operating objectives, and XX% to XXXX. to XX% growth profitability cash long-term billion committed free flow of focus to disciplined continue remain and a margins annual generating way. $X thoughtful, including We

I'll objectives each guidance also to which growth updated execution that repurchases. returning talk value as in allocating We through in to will on generate the a the Today, also principles. well focused these our for for share initiatives, flow shareholders that significant these of continue long-term line business free remain portion against organic year, quarter the our believe for of our cash shareholders. to while performance our and form of capital the We both operate acquisitions, with we to as demonstrate

results. for the million, to of revenue range $XXX quarter our $XXX million increased second Total million. to quarter our guidance with $XXX year-over-year begin X.X% Let's beating

for and $X a X.X% constant rates Total headwind. the currency basis, constant for million provided a basis, Foreign year-over-year exchange by grew billion. headwind $XX quarter previous million grew above an to $X.XXX year-over-year. of approximate growth a range our total was $X sequentially currency X.X% growth, On of ARR ARR year-over-year guidance a On X.X%. million

growth our $XXX.XX and which, to FX renewals mobile in and by XX.XX net stronger solid DocSend $X.XX We by as in is retention continue account new a second Professional drive paying primarily team show added well and strength lower quarter. from with plans, to We HelloSign activity. as ARPU revenue also in as exited decreased by ARR cross-sell approximately user with Teams paying and strength six and QX. driven to Average million the compared continued comprised a healthy in profile. users to headwinds users ARR the improving XXX,XXX year-over-year, continued paying plan, growth. our QX, through enhancements reminder, due seats management per was carries Family rate of and therefore, quarter ARPU

stock-based are investments. acquisition-related unless P&L, estate of that Before exclude net we real our our discussion statement of would equity with and gains non-GAAP otherwise further I all indicated, assets impairments on continue to of note figures mentioned like certain intangibles, and compensation, income purchased amortization expenses,

now we as effect of taking income includes the Our are on update part where the progress in of non-GAAP In our provide to our estate Virtual tax First as San well our Seattle. continue aforementioned brief against real de-cost real portfolio the income we strategy, also to model. to second a as net steps goals, adjustments. estate subleases I'll transition executing quarter, make our our Francisco

of we result, have a planned now our Francisco. subleases of outside executed San all As

total expected that, $XXX to be in our an impairment Francisco continue sub an in points gross of nearly impairment cumulative that charges our let's XX% estimate up to basis. in center well million support. data continue million, in San additional our we percentage in X resulted lower driven million. was customer $XXX bringing margin $X infrastructure than our primarily on While with With QX, efficiencies charges the margin to impairment in will ongoing by quarter, onboarding improvement outsourced year-over-year Gross of P&L. The was increase a as as representing for the slower-than-expected leasing

of increased to we compared saw by last attrition expense Second was R&D levels R&D The of in we elevated revenue the initiatives. and to or reprice XX% second headcount primarily growth revenue, other key invest in in increase to the increase was continue which quarter year of an in of XX% as driven quarter $XXX and XXXX. million

expense Sales XX% revenue Second remained $XX of shift marketing a or was from basis, expense increased marketing as quarter to quarter of percentage of compared sales and and the a sequential a to second revenue, million flat marketing QX. by which XXXX. of some on QX driven campaigns

to profit operating second represents million margin flat is the decreased the was the revenue $XX we Second which compared an quarter in which XX%, to compared million second of XXXX. an earned of of revenue, second quarter In which in of expense of G&A X% quarter quarter, XXXX. $XXX X% operating total, or of

of which per second based second operating down margin, in well versus shares average diluted million, from average of from timing hiring was outstanding guidance was for XXXX. Diluted over outstanding, QX T&E EPS as weighted Our efficiencies by million QX the costs is shares gross XX% stronger-than-expected by from shifting points, future $XXX for based on the exceeded quarter decrease locations, weighted margin share quarter lower-than-expected second per quarter a the share income $X.XX quarters. diluted $XXX lower-cost stemming on the Net X spend driven as to $X.XX XXXX. $XXX of million

our our of and new Our income net the tax NOLs now R&D non-GAAP for purposes. income and have through declined that we EPS utilized significantly legislation expense tax year-over-year given tax as year-over-year increased impact fully

compared finance for million quarterly second the data and ended quarter, $XXX in in flow were $XXX investments the billion. and QX we of was cash second million free in our the cash million cash expenditures to center quarter. balance equipment. added We of to to $X.X Capital resulted Cash $X million This cash million operations flow. on leases from In Moving $XX quarter $XXX our short-term quarter. the during XXXX. of flow with

X.X our Let's $XXX approximately million. activity. share turn repurchase shares, to QX, we repurchased spending In million

exhausted billion QX, XXXX and began previous that in executing our year. against $X authorization this QX was approved billion our we from authorization new During $X.X share repurchase of

an second will of and guidance. quarter, the some guidance the end on third our context now the behind full approximately guidance. of remains to for As XXXX to our like billion I $X.X provide provide I'd the quarter share also this under authorization. year current thinking the update

revenue to XXXX, million. of For expect to the third range the quarter of be in $XXX $XXX we million

approximately Thus, on We in year-over-year currency currency constant QX's $XX quarter. of a a we to the are growth headwind with assuming roughly third revenue that million QX. of basis, expect consistent be

We driven in operating initiatives, primarily from margin planned growth expect hiring operating on The non-GAAP approximately to decline by progress expected in QX be XX%. levels the XXXX continued project as is towards spend margin of headwind. sequential non-income tax QX increased our of the expenses reserves strategy T&E FX the as QX from well onetime quarter. an incremental in also release operating and benefited certain

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

For previous $X.XXX strengthening significant the $X.XXX by of $X.XXX our million to our since the last billion billion. as-reported range are down guidance revenue to $X.XXX range $XX dollar U.S. of from the revising billion XXXX, guidance full billion to due year to our we update,

prior approximately from currency headwind to to estimate prior to a of on forecast efficiencies. $X.XXX ongoing forecast revising approximately billion be as by of the a currency from $X.XXX range $XX up million $XX We XXXX to $X.XXX prior now However, million. compared we $X gross billion. margin to $X.XXX range due our of We our billion full year million basis, to expect guidance our up constant XX% infrastructure XX.X%, now are billion, up of

guidance a X to our margin guidance estimate headwind approximately to We of guidance to up of XX% from from operating point compared are our approximately also This XX%, FX XX.X%. of raising X.X margin approximately is inclusive operating between point. prior an as prior

holdbacks. cash in million million $XXX flow range to the acquisition-related $XX be guidance We consideration outflows the This the of XXXX installments includes are deal maintaining for in to free cash million. of $XXX our

headwind cash Additionally, is and newly of guidance our from effective $XX of free in tax an R&D inclusive million resulting impact the flow XXXX. estimated legislation

continue XXXX $XX to million. We for million capital to $XX expect in expenditures to range be of the

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

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

constant $X by raising XXXX, For revenue guidance our revenue, currency range million. for are we up

a a to financial high include the dollars As reminder, sales, sanctions guidance discontinuing the new this mid- our of with Russia, resulting continues in along of to to revenue in in single-digit impact headwind millions year.

reflects and also guidance announced pricing Teams our in to that for this plans we our approach updates June. packaging Additionally,

Standard were Teams plans, As Drew discussed, prices protection. Advanced we bundling our data recently capabilities around These and planned updated new of and raised security by a number XX%.

began began July. customers existing and customers at higher point price in renewing higher-priced in June, starting plans the purchasing starting the New

XXXX. As a flow the customers' our benefit of through the change subset total increase base that The is change. X/X occur in comprises impact see will cycles subject recognition month given flowing XXXX the the we our to of customers And revenue ARR both the with flow user first our of of approximately and pricing the model, monthly price ARR. to will ratable revenue billing as to reminder,

thus signals this are far. change pricing seeing on early We and packaging positive

positive reception are guidance range. in currency Given as customer retention, well our continued year-over-year constant raising improvements this as we revenue

which support, gross high long-term quarters. long-term range to within coming ultimately related level gross to in gross reverting parameters of end in above As achieved while margin, customer target we margin our the to of invest our QX, expect the will the result the we in range continue in guidance margin

our New expenses to ability outside with talent while FX T&E, As we high-cost office tech San our related such to incremental of XXXX Seattle. we traditional as hire operating and margin hubs restrictions pandemic top experiencing are are guidance raising have reopening York Francisco, as continue operating margin, and we to success headwinds, as soften,

As are free flow, cash XXXX related to year full free we our maintaining cash flow guidance.

the the cash maintaining more now flow introduced range a to guidance. that the million than our U.S. significant strengthening the dollar, of are of is of We a beginning headwind $XX as I year free the at which result initial we has that model. of on impact revenue more flow operating hence, our year, absorbed cash margins. immediate will revenue, ratable increased benefits be larger a compared billings and FX know to cash offsetting Thus, a recognition the our as impact given this

Lastly, efficiencies. unpredictable we driving while remain we during that, the an over execute for XXXX. targets macro delivering towards our a discipline position of continued committed well With turn strength margins operate from to environment to customers conclusion, billion to XX% our us $X free operational operator long-term flow focus execute we and to allows and achieving demonstrating operating long-term objectives. on stabilization Q&A. of as now This stability and to continue I'll it annual our our cash to In of against XX% initiatives, of by continue

Operator

Instructions] [Operator from of comes Markets. Capital question RBC first Our Poland of Richard the line

Unidentified Analyst

This is pricing the start want Teams Richard I on to plan on [Phil] in Poland. update. for

pricing a So one positive to next give the since months not is But about in change. the us on moving the me. seems talked a terms Maybe XXXX, early on sense of it linearity you're potential to the so can about some reasonable talk receiving increase, maybe it and subscribers incredibly looks like monetization of you the this? signals new -- you over price first impacts or mistaken I'm about the then XX assuming of any XX% pricing? on And renewals

Tim Regan

Yes, sure.

this is Tim. So I'll that take one.

not XX%. for Teams plans and is Standard by these raise which Advanced in did 'XX. prices we plans, have we So prices our these This changed

the exactly total see revenue we the right. the cycles price reminder, higher it price to for renewing ARR. ratable And impact The And have is the you're benefit the pricing comprises user as starting model, ARR's the through they will to new in flowing subject of Again, began -- that for revenue of our X/X of starting flow monthly first existing of point the customer July. XXXX customers, a our our higher and customers, will base about in flow occur, these subset June. to at began given change. So customers both month in And change XXXX. then with billing to through recognition plan

those you the a so annual customers represent subject to third obviously about one X/X, And whereas our user is to other give customers customer monthly point that the sense is X/X our change in the timing, the largely our tend will maybe be about along of just monthly lines, to of where quarter. customer base,

expect the we the therefore, of So flow most to impact through in third quarter.

Unidentified Analyst

released quantified to That's the a VC-backed it, a It your your VC market. it. don't I also for that noticed the very you I you us give sense Dropbox know helpful. but And exposure softness then, pie. Maybe some mentioned Startups startups? in you Drew, may Got we're seeing VC customers. recently. talk about seems your if like of And for expectation on great

Drew Houston

Sure.

early use certainly and DocSend case or that's for some a popular and start-ups. investors traction So with got founders they

seen of said, some to of analytics and much externally Pretty that a closing deals involve roles there's That and as is use we've needing beyond off, more company some that security lot reflected DocSend. deals sharing on there cases And activity in DocSend content cooled -- so fundraising. are of or a or lots for that options.

a just more ecosystem. So founder lot clear, capital there's to beyond customers and -- venture the be

functions need to richly. many you if and sales share marketing other and think about So that

was let's Startups. about we the of there's then are And on a to continue question think and excited there. -- customers part And I of see. be lot think other there So we the so DocSend target -- adjacencies Dropbox other for and

common So pretty creators there a lot a are and freelancers think that have lot those adopt more of finding folks solopreneurs I who needs. broadly, Dropbox. And of we're and

to their you people that, need storage. think of fit of kind if a we too, then So And number core or is portfolio more something other and Dropbox about opportunities for see All with of eSignature for HelloSign. starting a in companies a bundle. solopreneurs great certainly, professionals and need DocSend they our fundraising, give then you're

we that, So still that's area early an on but innings opportunity see growing.

Operator

Our next from the Ader of Jason of William comes question line Blair.

Jason Ader

about any impact seen the you've from other environment. talk macro Drew, Maybe

talked You of saw about that would a in we're the just weaker environment? in that that suggest but anything economic you metrics other the fundraising regions, business any space, verticals, in the terms

Drew Houston

I Overall, situation, our really Obviously, lot and by have you of things the been softness business given in pretty environment. -- the we're single-digit to international there's so overall. by we the things macro -- And heard material And Sure. to we've like about that's like in mix not immune millions fundraising, on. affected Russian-Ukraine high we're while FX Dropbox stable. about most kind a like not impacted companies, been talked mean revenue

to a that a just optional. signal, signal. it's our things, is a it Dropbox of in We say but environment not a find customers, they lot wouldn't to So need huge we Dropbox, like I quantify customers thing, mission-critical is for all macroeconomic when talk really our

after pandemic to during and the before was Dropbox think I pandemic. People the need illustrative.

we see in while business run we necessarily the core Dropbox a a run-up also down. so didn't didn't see And huge during COVID,

also the the we're we're we no say, look what to to exactly is one macroeconomic So -- all pretty mindful and holds. that stable. that not things knows Again, immune future environment

early far, been we're not monitoring stable. positive that's good isn’t anything as So for everything our business. our the have customers or for But signals carefully so good

Jason Ader

talk some and ARPU over to you got you've price you the ARPU trend about our where then, Tim, expect right And and time, dynamics can Okay. now increases.

there? the just plan, maybe know got a here, takes puts moving parts You've bunch Family the just us but talk through of I and

Tim Regan

sure. Yes,

where play $XXX.XX. a sequentially, So FX did in that. we QX part about at ARPU did decline end $X.XX did with big It

So our family us. then, carries course, of greater sequential FX which, And of you six $X.XX about headwind know, adoption with was for licenses plan, plan. as each

as As from pricing far guide to about looking obviously play part a not us. in to well again, FX. Clearly, do a as as forward, be But some don't we that pricing family perspective ARPU. for part. a There change will tailwind these We're play that. ARPU, the will as factors will have guiding, formally headwinds we are that the plan but

Jason Ader

And Okay. one quick Great. Drew. then one last for

kind base? you be churn, just features I hitting free talk around doing some there specific to reducing you're nice plans. that. and user Maybe on people monetization of us -- keeping think new things you upsell around Are platform, rhythm a the through the to of adding also guys seem

Drew Houston

Sure.

freezer certainly be of priority monetizing -- of ways a have us, lot and base our better So doing we monetizing continues that. a to for

So adding is portfolio. product broader one a just

some to our years few the newer we so DocSend. just but HelloSign maybe Replay a offer will Dropbox with and be bets have Capture core and and ago, like on. had Shop portfolio So That and growing of product now we

other subscription on into so And that a paid or a And of launched also pricing we have price platform get lower number general. at we continue to a SKUs iterate the onto packaging in and people point. the

So of Backup SKU our an example is that.

kind So computer. -- -- lighter or with we customers found that. weight these backup need may Customers needs to a of

into path upgrade that that for and So an a cheaper we provides mainline our plans. more launched SKU

focused so users user. we've and monetization in ability curves of lot free still to But there's after creators just that be we suites. getting of the doing their on monetizing there's about here So and of customer then and to growing particular in different both, to into of lot our users, those kinds bundles first solopreneurs And a portfolio paid on of a year and very few kind years and before. seen we're some in then people segments. gains a talked better raising of or I with base focus iterating and the we on of a kind of better headroom obviously, on monetize -- plan, that first being ton continue

Operator

comes of question Securities. of JMP next the line from Joey Marincek Our

Joey Marincek

out know I uncertainty but lot a there's where in for Dropbox opportunity you Drew, term? the of there, near I'm curious most the see

Drew Houston

a near a -- the in with different we've success for So I term, lot lot of levers there's of growth. had mean,

to we're And protecting you a talked security, what the when that or of has means. home, our of kind advanced -- challenges. our We what means working had and And have new standard was in world lot all adding a this changed that value in about found flywheel COVID. you're plants. security plan, or kind pricing distributed digital a number your a of new that most Teams so we've it after packaging And a lot when customers environment about think of lot plans from and brings example demands recent of and we

of kind our of problems opportunities category result. has work changed that one So as a for thinking the about way then new and customers solving

has for example, half tripled the some dramatically year. any don't businesses And of Small are ransomware in we with half and or that businesses of quadrupled going small number resources that last the found X/X the so victims increased, like to of have attacks Teams the cybersecurity. to back

So adjacency there our us. We're protecting is natural for files. already a

product Passwords, in our we add can also plans. our ransomware and Passwords we then in Now protection, Dropbox Teams included

new prices features And perfect create where of value of packaging can more and into portfolio. our combine we we these or both we're a better kind our value, customers. opportunities broadly, our example how we there's But providing. value to these increase that plans, think then as I then the for have customer add our update new More so propositions across pricing reflect

participating of I from innings. lot sinking area personally that really content. the their about excited Dropbox An I'm organizing is think in we're files just your early in evolution of your are that all to cloud a markets

cloud like our tabs all of our kind it's XXX They a mess. kind bought have, think all these cloud called docs, of are XXX in we files started we as out So search. last a in Command And E drives, example are desktop manage problems And of company I year. do as another universal we browsers. these now what

in that the think lot addressing early we we're a in lot a -- universal that I problems So innings. of we're are believe areas there's of in that

exciting So to finding a build. really time

Joey Marincek

One follow-up. quick

pullback valuations, Any sort the weigh a thinking do of versus decision in given there? Just transformative how deal M&A you maybe between the more a thoughts time? tuck-in? are at this you about How

Drew Houston

great question. Yes,

was were, were they challenging where deploying multiples capital about certainly transformative disciplined. when M&A our minds. on efficiently And being and pretty something our Doing lot and we a care

multiples that continue as M&A So M&A becomes easier meet return attractive then to for much moderate, hurdles. to

to going be here. we're So opportunistic

pretty said, M&As, feel lot opening. business a to product that think sustainable happy business people lot of continue we other need, are window and sheet, balance grateful continue good resilient disciplined, model, is of to where in healthy our of back. we're and that but a is stable be general, invest. opportunity having places pull going able to to I we'll That to be to offense a companies play

Operator

from of comes Thill question next Our Jefferies. Brent

Brent Thill

what's can if little more a give you just Maybe not [Audio Gap] embedded, us color.

Drew Houston

Hey, Brent, have your missed I question. might

Tim Regan

Yes, we tail only end the caught question. of that

Brent Thill

as -- or you're not the on this Just a guidance, what you just how saw taking environment? in you within what mean improving ultimately than yes, I relates the embedded conservative your to what's embedded Sorry, through view? ultimately, view you taking guide? more is guidance? it are And kind thinking are quarter, curious of the maybe same

Tim Regan

Yes.

remain I'd that business environment. in macro So say resilient our this challenging does

As currency we about talked million about, about X.X% midpoint. or $X by the we're revenue raising our the for constant guidance year at

services single-digit our what's does included, million our high impact Russia. include as the range to mid- to from As discontinued far

change we we As are packaging on coming seeing signals far certainly thus expected. in seeing than our better rates driving and pricing far, positive early raise, churn what's as the

guidance. seeing has many So across to. clearly, again, our has we're pricing And different the that retention into year-over-year alluded factored Drew in been areas improvement continued

growth upsell, new that and So clearly of in such HelloSign, feature very about areas positive we're on cross-sell, perspective, are new been products, including perspective. a many has philosophy play, adoption, as all DocSend opportunities that

have and continue from approach, visibility to our no degree have we guide changes high of to We we a into. historical what material

to on front. on things So the points, certainly macro keeping Drew's economy. we're earlier seeing eye like But an strength that

factored into our that, is All of course, of guidance.

Operator

time, conference. this participation. today's you Thank you. conclude And for ladies Thank does and gentlemen, that your at

disconnect day. at time. great You Have this a may