Stock Story -
Cloud storage and e-signature company Dropbox (Nasdaq: DBX) will be reporting results tomorrow after market hours. Here's what investors should know.
Dropbox met analysts' revenue expectations last quarter, reporting revenues of $631.3 million, up 3.3% year on year. It was a solid quarter for the company, with accelerating customer growth and a significant improvement in its gross margin. It added 40,000 customers to reach a total of 18.16 million.
Is Dropbox a buy or sell going into earnings? Find out by reading the original article on StockStory, it's free.
This quarter, analysts are expecting Dropbox's revenue to grow 1.2% year on year to $630 million, slowing from the 8.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.52 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Dropbox has a history of exceeding Wall Street's expectations, beating revenue estimates every single time over the past two years by 0.9% on average.
Looking at Dropbox's peers in the productivity software segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Pegasystems (NASDAQ:PEGA) delivered year-on-year revenue growth of 17.7%, beating analysts' expectations by 8.1%, and ServiceNow (NYSE:NOW) reported revenues up 22.2%, in line with consensus estimates. Pegasystems traded up 12.7% following the results while ServiceNow was also up 13.2%.
Read the full analysis of Pegasystems's and ServiceNow's results on StockStory.
Growth stocks have been quite volatile since the start of 2024, and while some of the productivity software stocks have fared somewhat better, they have not been spared, with share prices down 4.8% on average over the last month. Dropbox's stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $27.6 (compared to the current share price of $21.81).