Dropbox Reports Strong Q1 Earnings, Expanding Margins, Raises FY21 Guidance

Dropbox Inc DBX reported first-quarter FY21 revenue growth of 12% year-on-year to $511.6 million, beating the analyst consensus of $505.1 million.
Total ARR rose 13% Y/Y to $2.112 billion, and paying users rose 8.5% Y/Y to 15.83 million. The average revenue per paying user rose 4.9% Y/Y to $132.55.
Non-GAAP gross margin expanded 190 basis points to 80.2%, and Non-GAAP operating margin expanded 1,300 basis points to 29.1%.
Non-GAAP EPS of $0.35 beat the analyst consensus of $0.3.
Dropbox generated $115.7 million in operating cash flow and held $1.9 billion in cash and equivalents. The company had raised $1.31 billion in upsized convertible debt offering during Q1.
Dropbox completed the acquisition of DocSend, Inc for $165 million on Mar. 22.
Guidance: The company announced the Q2 and FY21 outlook during the earnings call. Q2 revenue of $522 million - $525 million is above the consensus of $517.65 million. Non-GAAP operating margin guidance lies between 27.5% - 28%.
Dropbox raised FY21 revenue outlook from $2.095 billion - $2.115 billion to $2.118 billion - $2.130 billion, above the analyst consensus of $2.11 billion. Non-GAAP operating margin outlook lies between 27% and 28%.
Price action: DBX shares closed lower by 1.33% at $24.53 on Thursday.

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