Dropbox reported fourth‑quarter revenue of $636.2 million, a 1.1% year‑over‑year decline from $643.6 million in Q4 2024. Full‑year 2025 revenue totaled $2.521 billion, down 1.1% from $2.548 billion in 2024. The decline is largely attributable to the wind‑down of the FormSwift business; excluding that event, revenue actually grew 0.4% in Q4 and 0.2% for the year.
Adjusted earnings per share for the quarter were $0.68, beating the consensus estimate of $0.67. The beat reflects disciplined cost management, including a 20% workforce reduction that helped lift operating margins and offset the modest revenue decline.
Non‑GAAP operating margin expanded to 38.2% in Q4 and 40.6% for the full year, up from 25.5% and 36.4% respectively in 2024. The margin improvement is driven by the workforce reduction, higher mix of higher‑margin services, and overall cost discipline.
Management guided for Q1 2026 revenue of $618 million to $621 million and a non‑GAAP operating margin of about 38%. For fiscal 2026, revenue is projected between $2.485 billion and $2.5 billion, with a non‑GAAP operating margin of 39% to 39.5%. The flat revenue outlook signals cautious confidence in demand while maintaining margin targets.
CEO Drew Houston said, "We closed out 2025 on a strong note, exceeding the high end of our revenue and operating margin guidance and demonstrating our continued operating discipline."
Investors reacted with mixed sentiment, balancing the earnings beat and margin expansion against concerns over top‑line stagnation and the competitive landscape for AI.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.