Dropbox tops Q3 profit estimates as revenue rises 0.5%

Dropbox (DBX) topped profit estimates for the quarter ended Sept. 30, 2026, with adjusted earnings of 88 cents per share against a 74-cent consensus. Revenue rose 0.5% to $637.3 million, in line with the $636.02 million consensus. Shares were little changed at 9:37 a.m. ET, from a $35.76 close.

Here's how the company did:

• Adjusted EPS: 88 cents vs. 74 cents expected
• Revenue: $637.3 million vs. $634.4 million a year earlier, against $636.02 million expected
• GAAP diluted EPS: 52 cents vs. 47 cents a year earlier
• Non-GAAP operating margin: 42.2%, up from 41.1%

Excluding FormSwift, revenue grew 1.0%. FormSwift wind down was completed as of quarter end.

Total annual recurring revenue reached $2.555 billion, up 0.8% from a year earlier. Excluding FormSwift, it grew 1.9%.

Paying users totaled 18.20 million, up from 18.07 million. Average revenue per paying user was $138.76, down from $139.07. Paying user growth came mainly from the Simple plan, with slight growth in Teams offset by the FormSwift wind down.

GAAP net income was $116.1 million, down from $123.8 million. Non-GAAP net income was $197.8 million, up from $196.7 million.

Cash and capital returns

Net cash provided by operating activities was $259.2 million, compared with $302.1 million a year earlier. Unlevered free cash flow was $303.9 million, down from $314.2 million.

Common stock repurchases totaled $150.2 million, against $389.8 million a year earlier. Cash, cash equivalents and short-term investments ended the quarter at $1.142 billion.

Stock-based compensation expense was $77.0 million, and workforce reduction expense was $8.1 million.

Tigris Data acquisition and DBX Agent Cloud

Dropbox agreed to acquire Tigris Data Inc., a globally distributed object storage platform, for about $350.0 million in cash, subject to customary purchase price adjustments. The company expects the deal to close in the fourth quarter of 2026, subject to customary closing conditions.

Dropbox also introduced DBX Agent Cloud, a new infrastructure business for companies and developers building AI applications. It starts with standalone, S3-compatible object storage and will expand over time to include filesystem and content-processing capabilities.

Co-Chief Executive Officer Ashraf Alkarmi said that with DBX Agent Cloud and the Tigris agreement, "we're putting the infrastructure we've built over nearly two decades to work for companies building AI applications, opening a new avenue for growth."

The company also launched the new Dropbox experience, which lets customers find, understand, create and edit content directly in Dropbox.

Outlook

Dropbox will provide forward-looking guidance on its conference call and on its investor relations website. The release itself does not carry new guidance figures.