Dropbox attracts 1.25 million paying users year-on-year

Results also show better than expected revenues for the third quarter

Dropbox has attracted 1.25 million paying users to its service since the start of the year, third quarter results have shown.

The San Francisco-based cloud collaboration platform reported total Q3 revenues of $487.4 million, an increase of 14% from the same period last year.

Non-GAAP earnings were announced to be at 26 cents per share, beating market expectations of 18 cents a share with revenue of $483.64 million.

Dropbox reported that the number of paying users ended at 15.25 million, compared to 14 million for the third quarter of 2019. The average revenue per paying user was $128.03, compared to $123.15 for the same period last year.

Total annual recurring revenue was announced to have ended at $1.981 billion, an increase of 12% year-over-year, while cash, its equivalents, and short-term investments ended at $1.226 billion.

Commenting on the results, Dropbox co-founder and CEO Drew Houston said that, in Q3, the company “saw momentum across the business with strong operating income, profitability, and free cash flow”.

“Our margin expansion demonstrates the strength of our business model and execution against our long-term targets. We believe the opportunity to redesign work has never been bigger, and now, as a Virtual First company, we'll truly live our mission as we build better products for distributed teams,” he added.

Last month, Dropbox told its staff that permanent remote working will become the norm, joining a string of the world’s biggest tech companies in abandoning physical office spaces in favour of working virtually. The company's existing remote work policy is expected to continue until at least June 2021, in line with policies adopted by the majority of tech companies due to the continued effects of the COVID-19 pandemic.

The company also outlined plans to establish at least four Dropbox Studios in sites across the world when it’s safe to do so, starting with San Francisco, Seattle, Austin and Dublin, for employees who prefer to work in-person.

By becoming a virtual-first company, the decision means that remote working will become the default for all Dropbox employees and the day-to-day default for individual work.

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