Dropbox CEO Drew Houston speaks on stage during the Dropbox Work In Progress conference at Pier 48 on September 25, 2019 in San Francisco
Matt Winkelmayer | Dropbox | Getty Images
In this weekly series, CNBC takes a look at the companies that made the inaugural Disruptor 50 list, 10 years later.
One year after graduating from MIT in 2006, Drew Houston began working with Arash Ferdowsi in hopes of creating one of the first cloud-based file-sharing platforms that would eliminate the inconveniences of physical hard drives. The result was Dropbox, a company that has now made a name for itself as one of the leading organization and collaboration tools around the world.
Today, Dropbox reports that it has more than 700 million registered users in more than 180 countries and regions globally. The company generated $2.2 billion in revenue in 2021 and is a CNBC Disruptor 50 five times.
With goals to reduce busy work and help organizations stay in sync, Dropbox offers cloud storage, password managers, and computer backup systems, among other capabilities. It has grown its bid to acquire companies such as HelloSign in January 2019, Valt in November 2019, DocSend in March 2021, and CommandE in October 2021.
In its most recent quarter, Dropbox reported $591 million in revenue with a net profit of $83.2 million. More than 17.5 million users pay for its services, and the company said more than 90% of its revenue comes from individual consumers who buy subscriptions.
“In particular, we are pleased with the results of the changes to our team plans, and we are also excited about the progress we’ve made in innovating around new products and driving multi-product adoption, including the release of Capture to all Dropbox users and the introduction of the renamed Dropbox Sign,” Houston said. , who is now CEO of Dropbox, said in the earnings release. “As we look ahead to 2023 and beyond, I am proud of our team’s execution of our strategy while maintaining a healthy balance between growth and profitability.”
dropbox It went public in March 2018, with a highly anticipated $756 million initial public offering listing on NASDAQ. One of the largest IPOs in tech at the time, Dropbox was valued at more than $12 billion on its first day of trading. Its performance since the initial boom has been rocky.
As one of the first companies to embrace the shift to a virtual workplace at the start of the pandemic, Dropbox announced its “first virtual” work setup in October 2020, with remote work the “core experience” for all employees and “day-to-day virtual” for individual work. The program, which officially launched in April 2021, was a significant shift for a business that once boasted perks like award-winning food in the cafeteria and a first-class gym and yoga studio, all at no cost to employees.
The change also cost the San Francisco-based company nearly $400 million in real estate, making it unprofitable in the fourth quarter of 2020, but the company’s CFO Tim Regan made it clear on the Q3 2020 earnings call that while steps ” Cost Reduction “The real estate portfolio will result in quarterly impairment charges, generating a return on facilities through sub-lease contracts and balancing headcount through hiring in lower cost locations, resulting in a net positive impact on the financial statements by the time.
Even with some reports of the business seeing high turnover rates attributed to former in-office bonuses being taken down, Dropbox has “boomerang” employees, bringing many former employees back to the company because of the workplace flexibility it now offers, Houston said at the CNBC Action Summit in October.
“We’ve been able to outperform our weight class,” Houston said at the CNBC Action Summit. “I think companies that offer that flexibility will be able to recruit companies that don’t, continue to outperform them, and outperform.”
Dropbox continues to take on many competitors in the cloud space — Google, Microsoft, and Apple, to name a few, as well as previous IPO startups, can. The company forecasts revenue of $2.3 billion for 2022 and forecasts revenue of between $592 million and $595 million for the fourth quarter. But the stock is still well below where it traded on the first day of 2018, and at about half the value of its highest market peak, as it got caught up in the technology downturn that caused the collapse of many former high-growth, high-growth startups.
“We’ve always lived in a competitive environment… More importantly, all of our growth has happened in that environment,” Houston said at the time of Dropbox’s IPO. “We don’t see Amazon in our space. You know, things can change. We don’t count anybody.”
In order to create long-term value, Dropbox is building on momentum by promoting new products and acquisitions, Houston said on CNBC’s “TechCheck” in November 2021. The company plans to offer more of its products to existing customers in hopes of increasing the number of paid products. users on its platform, Houston said.
“We’ve definitely made a lot of progress since going public, and we have a lot of opportunities ahead of us,” Houston told TechCheck.
Correction: Dropbox charged real estate depreciation fees due to its move to a virtual first business model in the fourth quarter of 2020. The new model makes remote work the primary experience for employees. An earlier version of this article misstated the earnings period and incorrectly described the default business first approach.
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