Dropbox(DBX) - 2024 Q4 - Annual Results

Revenue and Growth - Fourth quarter revenue was $643.6 million, an increase of 1.4% year-over-year; on a constant currency basis, growth was 1.1%[2] - Total annual recurring revenue (ARR) was$ 2.574 billion, up 2.0% year-over-year; on a constant currency basis, growth was 1.3%[4] - Revenue for Q4 2024 was $643.6 million, a slight increase from$ 635.0 million in Q4 2023, resulting in a year-over-year growth of 1%[17] - Gross profit for the year ended December 31, 2024, was $2,103.1 million, compared to$ 2,023.1 million in 2023, reflecting a growth of 4%[17] User Metrics - Paying users reached 18.22 million, compared to 18.12 million in the same period last year; average revenue per paying user increased to $140.06 from$ 138.83[4] Profitability - GAAP net income for the fourth quarter was $102.8 million, down from$ 227.3 million year-over-year; non-GAAP net income was $222.6 million, up from$ 170.8 million[4] - Net income for the year ended December 31, 2024, was $452.3 million, slightly down from$ 453.6 million in 2023, indicating a decrease of 0.3%[17] - Income from operations for the year was $538.7 million, with an operating margin of 21.5%[29] Cash Flow and Investments - Free cash flow for the fourth quarter was$ 210.5 million, compared to $190.3 million in the same period last year[4] - Free cash flow for Q4 2024 was$ 210.5 million, up from $190.3 million in Q4 2023, representing a 6.5% increase[33] - The company reported a total annual free cash flow of$ 871.6 million for 2024, up from $759.4 million in 2023, reflecting a 14.8% increase[33] - Cash, cash equivalents, and short-term investments ended at$ 1,594.2 million[8] Expenses - GAAP operating margin was 13.7%, down from 42.1% year-over-year, impacted by $47.2 million in workforce reduction expenses[4] - Research and development expenses increased to$ 243.0 million in Q4 2024 from $222.1 million in Q4 2023, marking a rise of 9%[17] - The company reported stock-based compensation expenses of$ 85.7 million in Q4 2024, up from $82.9 million in Q4 2023, a rise of 3.4%[21] - Research and development expenses totaled$ 936.5 million, with a margin of 37.4%[29] Shareholder Returns - The company announced a new share repurchase program for an additional $1.2 billion of its Class A common stock[5] - In fiscal 2024, the company repurchased approximately 49.5 million shares for$ 1.2 billion[9] Assets and Liabilities - Cash and cash equivalents as of December 31, 2024, were $1,328.3 million, significantly up from$ 614.9 million in 2023, representing an increase of 116%[19] - Total assets grew to $3,325.2 million in 2024 from$ 2,983.5 million in 2023, reflecting an increase of 11.5%[19] - Total liabilities increased to $4,077.6 million in 2024 from$ 3,149.3 million in 2023, a rise of 29.4%[19] Operational Efficiency - The company plans to scale its AI-powered product, Dash for Business, and integrate it with existing services to enhance customer value[3] - The company completed a term loan facility, resulting in proceeds of $1,000.0 million during the year[21] Financial Metrics - Free cash flow margin improved to 32.7% in Q4 2024 compared to 30.0% in Q4 2023[33] - Non-GAAP net income for the year was$ 803.8 million, with a diluted net income per share of $2.49[31] - Dropbox emphasizes the importance of non-GAAP financial measures to provide a clearer view of operational performance and trends[34]