Close to 13 million paying users
It’s been just over a year since Dropbox (DBX) was listed as a public company. Dropbox has managed to consistently beat earnings and revenue estimates over the last four quarters. Last year, Dropbox’s sales grew 26% year-over-year to 1.4 billion.
Though Dropbox reported robust growth last year, its growth came in below its sales growth of 31% in 2017 and 40% in 2016. Dropbox’s revenue has been driven by a rise in paying users and ARPU (average revenue per user).
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Dropbox’s ARPU in 2018 rose to $117.64, up from $111.91 in 2017. Its number of paying users also rose to 12.7 million in 2018, up from 11 million in 2017. Last year, Dropbox claimed that it identified 300 million users who might convert to a paid subscription.
This outlook indicates a significant growth opportunity for Dropbox. It, however, competes with tech giants such as Amazon (AMZN), Google (GOOG)(GOOGL), and Microsoft (MSFT) in the cloud storage space. These companies have large cash reserves and are willing to enter into a price war to expand the user base.
Last year, Dropbox acquired HelloSign for $230 million in a cash deal. HelloSign is a company in the eSignature space.
Sales expected to grow 17.8% in 2019
Dropbox is expected to grow its sales 17.8% to $1.64 billion in 2019, 14.5% to $1.88 billion in 2020, and 13.6% to $2.13 billion in 2021.