Dropbox Posts $637.3M Q3 Revenue; Plans $350M Tigris Deal

San Francisco cloud-storage company Dropbox Inc. posted third-quarter revenue of $637.3 million, up 0.5% from a year earlier, and said it agreed to buy object-storage startup Tigris Data Inc. for about $350 million in cash.

Excluding FormSwift, which Dropbox finished winding down by the end of the quarter, revenue rose 1.0%, or 0.2% on a constant-currency basis, the company said in its investor release Thursday. Breaking The News carried the same headline figures. Investing.com said the results topped consensus estimates of about $629.7 million in revenue and $0.73 in adjusted earnings per share.

Users, ARR and margins

Total annual recurring revenue was $2.555 billion, up 0.8%. Excluding FormSwift, ARR grew 1.9%, or 0.4% in constant currency. Paying users reached 18.20 million, up from 18.07 million a year earlier and up 20,000 from the prior quarter. Average revenue per paying user was $138.76, versus $139.07 a year earlier.

GAAP operating margin held at 27.5%. Non-GAAP operating margin rose to 42.2% from 41.1%. GAAP net income was $116.1 million, or $0.52 a diluted share, compared with $123.8 million, or $0.47, a year earlier. Non-GAAP net income was $197.8 million, or $0.88 a diluted share, up from $0.74. Diluted share counts were 225.1 million this year and 265.1 million a year earlier.

Operating cash flow was $259.2 million. Unlevered free cash flow was $303.9 million. Cash, cash equivalents and short-term investments stood at $1.142 billion as of Sept. 30.

Tigris purchase

Dropbox said the Tigris deal is for a globally distributed object-storage platform and is expected to close in the fourth quarter of 2026, subject to customary closing conditions and purchase-price adjustments. The company said revenue growth excluding FormSwift and non-GAAP operating margin both exceeded its guidance for the quarter.

Sources: Dropbox Investor Relations, Breaking The News, Investing.com