--- title: "Dropbox | 10-Q: FY2026 Q1 Revenue Beats Estimate at USD 629.5 M" type: "News" locale: "en" url: "https://longbridge.com/en/news/285771147.md" datetime: "2026-05-08T20:18:39.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/285771147.md) - [en](https://longbridge.com/en/news/285771147.md) - [zh-HK](https://longbridge.com/zh-HK/news/285771147.md) --- # Dropbox | 10-Q: FY2026 Q1 Revenue Beats Estimate at USD 629.5 M Revenue: As of FY2026 Q1, the actual value is USD 629.5 M, beating the estimate of USD 619.99 M. EPS: As of FY2026 Q1, the actual value is USD 0.48, beating the estimate of USD 0.4345. EBIT: As of FY2026 Q1, the actual value is USD 178.1 M. #### Segment Revenue Dropbox, Inc. operates as a single operating segment, with financial information reported at a consolidated level . **Total Revenue** increased by $4.8 million, or 0.8%, to $629.5 million for the three months ended March 31, 2026, compared to $624.7 million for the same period in 2025 . This growth was primarily driven by Individual plans and positive foreign exchange rates, partially offset by the strategic reduction and wind-down of FormSwift operations . **Revenue by Geographic Area**: **United States**: $351.6 million for the three months ended March 31, 2026, a decrease from $356.4 million for the same period in 2025 . **International**: $277.9 million for the three months ended March 31, 2026, an increase from $268.3 million for the same period in 2025 . #### Operational Metrics - **Gross Profit** decreased to $501.4 million for the three months ended March 31, 2026, from $508.0 million for the same period in 2025 . - **Gross Margin** decreased to 80% for the three months ended March 31, 2026, from 81% for the same period in 2025, mainly due to a 9.8% increase in cost of revenue . - **Cost of Revenue** increased by $11.4 million, or 9.8%, to $128.1 million for the three months ended March 31, 2026, compared to $116.7 million for the same period in 2025, primarily due to higher infrastructure costs . - **Income from Operations** decreased to $172.8 million for the three months ended March 31, 2026, from $183.8 million for the same period in 2025 . - **Operating Expenses** totaled $328.6 million for the three months ended March 31, 2026, compared to $324.2 million for the same period in 2025 . - **Research and Development** expenses increased by $5.8 million, or 3.3%, to $184.2 million for the three months ended March 31, 2026, from $178.4 million for the same period in 2025, mainly due to higher employee-related costs . - **Sales and Marketing** expenses decreased by $5.1 million, or -5.5%, to $86.9 million for the three months ended March 31, 2026, from $92.0 million for the same period in 2025, primarily due to reduced advertising and lower employee-related costs . - **General and Administrative** expenses increased by $3.7 million, or 6.9%, to $57.5 million for the three months ended March 31, 2026, from $53.8 million for the same period in 2025, partially due to lower expenses in Q1 2025 from the release of non-income tax reserves . - **Interest Expense, Net** increased by $22.1 million to - $36.7 million for the three months ended March 31, 2026, compared to - $14.6 million for the same period in 2025, due to increased interest from the fully drawn term loan facility . - **Other Income, Net** increased by $5.0 million to $5.3 million for the three months ended March 31, 2026, compared to $0.3 million for the same period in 2025, primarily due to foreign currency transaction gains and a gain on datacenter equipment resales . - **Provision for Income Taxes** increased by $7.7 million to - $26.9 million for the three months ended March 31, 2026, compared to - $19.2 million for the same period in 2025, influenced by the One Big Beautiful Bill Act, reduced stock-based compensation tax benefits, and changes to unrecognized tax benefits . - **Net Income** was $114.5 million for the three months ended March 31, 2026, compared to $150.3 million for the same period in 2025 . #### Cash Flow - **Net Cash Provided by Operating Activities** was $204.5 million for the three months ended March 31, 2026, an increase from $153.8 million for the same period in 2025 . This $50.7 million increase was mainly due to decreased cash outflows from changes in operating assets and liabilities in 2025, partially offset by a decrease in net income adjusted for non-cash items . - **Free Cash Flow** was $203.3 million for the three months ended March 31, 2026, an increase from $153.7 million for the same period in 2025, driven primarily by the increase in cash provided by operating activities . #### Unique Metrics - **Total Annual Recurring Revenue (Total ARR)**: $2,560 million as of March 31, 2026, up from $2,526 million as of December 31, 2025, and $2,552 million as of March 31, 2025 . This increase was due to favorable foreign exchange rates and growth in Individual plans, offset by the FormSwift investment reduction . - **Paying Users**: 18.09 million as of March 31, 2026, an increase from 18.08 million as of December 31, 2025, but a decrease from 18.16 million as of March 31, 2025 . The quarter-over-quarter increase was due to Simple plan growth, partially offset by Teams plans softness and FormSwift reduction, while the year-over-year decline was mainly due to the FormSwift investment reduction . - **Average Revenue Per Paying User (ARPU)**: $141.18 for the three months ended March 31, 2026, compared to $139.26 for the same period in 2025 . This increase resulted from favorable foreign exchange rates, offset by the FormSwift investment reduction . #### Future Outlook and Strategy Dropbox, Inc. anticipates its revenue and revenue growth rate to continue decreasing if it cannot reverse the trend of decreasing average revenue per paying user or offset slower growth/declines in paying users . The company expects cost of revenue to increase in absolute dollars, while gross margin is projected to remain relatively constant, and research and development costs are expected to decrease both in absolute dollars and as a percentage of revenue . Strategic decisions include winding down FormSwift operations by the end of 2026, which negatively impacts current metrics, and making significant investments in AI technologies for future growth, despite associated costs and no guarantee of user adoption or return on investment . ### Related Stocks - [DBX.US](https://longbridge.com/en/quote/DBX.US.md) ## Related News & Research - [Insider Selling: Dropbox (NASDAQ:DBX) CAO Sells 1,306 Shares of Stock](https://longbridge.com/en/news/286976961.md) - [Arbejdsmarkedets Tillaegspension Takes $22.05 Million Position in Dropbox, Inc. $DBX](https://longbridge.com/en/news/286638262.md) - [Sangoma Announces Third Quarter Fiscal 2026 Results | SANG Stock News](https://longbridge.com/en/news/286317217.md) - [Electro-Sensors GAAP EPS of -$0.03, revenue of $2.6M](https://longbridge.com/en/news/286518577.md) - [ONWARD Medical to Announce First Quarter 2026 Results on May 26, 2026 | ONWRY Stock News](https://longbridge.com/en/news/286858298.md)