The growth of Dropbox‘s paid users has been slowing down despite its trial offer to buy freemium, prompting investors to worry about its ability to convert free users into paid ones.
The company‘s deferred revenue, which measures future business for subscriber-based software vendors, increased 6.7% to $ 517.3 million, but was below estimates of $ 528.2 million, according to three analysts surveyed by Refinitiv.
File-sharing company Dropbox Inc. reported its slowest growth in paid users since its release last year and did not raise expectations for a quarterly revenue metric that indicates future growth, sending stocks down. its down 5% on Thursday.
The number of paying users rose to 13.6 million from 13.2 million in the previous quarter and 11.9 million a year earlier. Analysts had expected 13.4 million paying users, according to FactSet.
Dropbox, however, beat earnings and revenue estimates for the second quarter ending June 30th.
D.A. Davidson analyst Rishi Jaluria said the beat results were much smaller than expected by the company.
Dropbox competes with Alphabet IncGoogle, Microsoft Corp as well as Box Inc. It reported average earnings per user of $ 120.48, which narrowly missed estimates of $ 120.8, according to IBES data from Refinitive.
The company expects third-quarter earnings in the range of $ 421 million to $ 424 million, above analyst estimates of $ 419.2 million.
Dropbox’s revenue rose 18% to $ 401.5m, beating the analyst average estimate of $ 400.9m. Excluding items, it gained 10 cents per share, above expectations of 8 cents per share.
Net loss expanded to $ 21.4 million, or 5 cents per share, for the second quarter ended June 30, from $ 4.1 million, or 1 percent per share, a year earlier./Investing.com