Dropbox Revenue Impacted by FormSwift Tool Wind Down
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
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Should l Buy DBX?
Source: stocktwits
- Revenue Decline: Dropbox's revenue fell 1.1% to $636.2 million in the December quarter, although it exceeded analysts' expectations of $628.9 million, marking the fourth consecutive quarter of declining sales, indicating ongoing challenges for the company.
- Profitability Improvement: Adjusted earnings per share decreased from $0.73 last year to $0.68, slightly below the expected $0.67, yet cash flow increased from $213.8 million to $235.4 million, suggesting that the strategic focus on operational efficiency is yielding positive results despite revenue pressures.
- Market Sentiment Shift: Following the latest earnings report, retail sentiment on Stocktwits shifted from 'bullish' to 'extremely bullish', reflecting increased investor confidence in the future of the AI-powered Dash product, even as the stock price continues to decline.
- Strategic Adjustment: CEO Drew Houston stated that the company is reshaping its investment strategy to strengthen its core File Sync and Share foundation while accelerating the development of Dash, although the ongoing wind-down of FormSwift is expected to remain a revenue headwind, impacting about half of the decline in paying users.
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Analyst Views on DBX
Wall Street analysts forecast DBX stock price to rise
3 Analyst Rating
1 Buy
1 Hold
1 Sell
Hold
Current: 24.680
Low
29.00
Averages
31.33
High
35.00
Current: 24.680
Low
29.00
Averages
31.33
High
35.00
About DBX
Dropbox, Inc. provides tools to help distributed teams prioritize, get organized, and keep work moving securely from anywhere. The Company’s products include Dropbox Passwords, Dropbox Backup, Dropbox Sign, DocSend, Dropbox Dash for Business (Dash), Dropbox Replay and FormSwift, among others. Dropbox Passwords allows users to sign in to Websites and apps by creating and storing usernames and passwords across devices. Dropbox Backup automatically syncs folders on a user's computer to the cloud. When turned on, files on the user's personal computer or Mac are continuously backed up on the cloud. Dropbox Sign is an e-signature and document workflow platform that enables customers to easily sign, send and receive documents through its intuitive Web and mobile-based interfaces. DocSend is a secure document sharing and analytics platform. Dropbox Dash is an AI-powered, universal search tool, which enables teams to search, organize, share, and protect content from across their connected apps.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
- Financial Performance Exceeds Expectations: Dropbox reported Q4 revenue of $636 million, surpassing the upper end of guidance, and despite the wind-down of FormSwift, flat revenue for the year indicates significant operational efficiency improvements that are expected to lay a foundation for future growth.
- Cash Flow and Margin Improvement: The company generated over $1 billion in unlevered free cash flow in Q4, with gross margins at 80.8% and operating margins at 38.2%, enhancements that are likely to boost investor confidence and support future strategic investments.
- Strategic Focus on Dash: Dropbox identifies Dash as a crucial evolution of its core product, with early tests showing significant user engagement increases and a successful six-figure international deal signed in Q4, indicating potential for future revenue growth.
- Leadership Change and Future Outlook: The hiring of Eric Webster as Chief Business Officer signals the company's commitment to driving business growth, with management projecting 2026 revenue between $2.485 billion and $2.5 billion, reflecting a cautiously optimistic stance towards the market.
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- Revenue Decline: Dropbox's revenue fell 1.1% to $636.2 million in the December quarter, although it exceeded analysts' expectations of $628.9 million, marking the fourth consecutive quarter of declining sales, indicating ongoing challenges for the company.
- Profitability Improvement: Adjusted earnings per share decreased from $0.73 last year to $0.68, slightly below the expected $0.67, yet cash flow increased from $213.8 million to $235.4 million, suggesting that the strategic focus on operational efficiency is yielding positive results despite revenue pressures.
- Market Sentiment Shift: Following the latest earnings report, retail sentiment on Stocktwits shifted from 'bullish' to 'extremely bullish', reflecting increased investor confidence in the future of the AI-powered Dash product, even as the stock price continues to decline.
- Strategic Adjustment: CEO Drew Houston stated that the company is reshaping its investment strategy to strengthen its core File Sync and Share foundation while accelerating the development of Dash, although the ongoing wind-down of FormSwift is expected to remain a revenue headwind, impacting about half of the decline in paying users.
See More
- Market Sentiment Rebounds: U.S. stock futures rose after closing lower on Thursday, with all major benchmark indices showing positive trends, indicating investor anticipation for the upcoming fourth-quarter GDP data that could influence future monetary policy.
- Stable Rate Expectations: The CME Group's FedWatch tool indicates a 94% likelihood that the Federal Reserve will keep interest rates unchanged in March, providing some stability to the market despite ongoing inflation pressures.
- Divergent Stock Performances: Copart Inc. (NASDAQ: CPRT) dropped 6.64% following disappointing second-quarter earnings, while Comfort Systems USA Inc. (NYSE: FIX) rose 4.57% after reporting better-than-expected financial results, reflecting varied market reactions to company fundamentals.
- Analyst Optimism: Scott Wren from Wells Fargo upgraded the U.S. GDP growth forecast from 2.4% to 2.9%, and despite increased market volatility, he recommends investors focus on sectors like Financials and Industrials that benefit from economic growth, viewing current dips as opportunities to enter large- and mid-cap stocks.
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- Market Dynamics: U.S. stock futures are trading higher this morning on Friday, reflecting an optimistic sentiment among investors that could influence trading decisions today.
- Investor Focus: With futures rising, investors may pay closer attention to individual stock performances, particularly in the context of increasing market volatility, seeking potential investment opportunities.
- Expectation Shifts: The positive market trend may lead investors to reassess their portfolios, especially in light of upcoming economic data and corporate earnings reports that could impact market conditions.
- Trading Strategy Adjustments: Investors might adjust their trading strategies based on changes in the futures market to capitalize on short-term market opportunities, particularly given the mixed performance of individual stocks.
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- Akamai's Q1 Guidance Cut: Akamai's forecast for Q1 adjusted earnings between $1.50 and $1.67 per share falls short of the $1.75 consensus, leading to an almost 8% drop in after-hours trading, indicating market concerns over its future profitability.
- Dropbox Slightly Beats Expectations: Dropbox reported Q4 adjusted earnings of 68 cents per share, narrowly exceeding the 67 cents expected by analysts, with revenue of $636 million also surpassing the $629 million forecast, demonstrating its growth potential in a competitive landscape.
- Newmont's Record Cash Flow: Newmont's adjusted earnings of $2.52 per share exceeded the consensus estimate of $2.04, alongside a record $7.3 billion in free cash flow, highlighting its strong performance and financial health in the resource extraction sector.
- Opendoor's Revenue Surge: Opendoor's Q4 revenue reached $736 million, significantly above the LSEG estimate of $549 million, although it anticipates an adjusted EBITDA loss in the low to mid $30 million range for Q1, management remains confident in achieving positive adjusted net income by the end of 2026, reflecting a strong long-term strategy.
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- Strong Earnings Report: Dropbox's Q4 non-GAAP EPS of $0.68 exceeded expectations by $0.01, with revenue reaching $6.363 billion, reflecting an impressive 888.7% year-over-year growth, indicating robust market performance.
- Share Buybacks: The company repurchased approximately 14.4 million shares for $414.6 million during the quarter, demonstrating management's confidence in future growth and contributing to an increase in earnings per share.
- Annual Performance Comparison: Total revenue for fiscal year 2025 was $2.521 billion, down 1.1% year-over-year; however, excluding FormSwift, revenue grew by 0.2%, showcasing the stability of its core business.
- Strong Cash Flow: Net cash provided by operating activities was $951.8 million, up from $894.1 million last year, with unlevered free cash flow reaching $1.016 billion, reflecting the company's effective cash management capabilities.
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