Cloud storage and e-signature company Dropbox (Nasdaq: DBX) will be reporting results tomorrow afternoon. Here’s what to expect.
Dropbox beat analysts’ revenue expectations by 0.7% last quarter, reporting revenues of $643.6 million, up 1.4% year on year. It was a slower quarter for the company, with decelerating customer growth and a miss of analysts’ billings estimates. It lost 20,000 customers and ended up with a total of 18.22 million.
Is Dropbox a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Dropbox’s revenue to decline 1.8% year on year to $620.2 million, a reversal from the 3.3% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.62 per share.
Analysts covering the company have generally 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 0.8% on average.
Looking at Dropbox’s peers in the productivity software segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Pegasystems delivered year-on-year revenue growth of 44.1%, beating analysts’ expectations by 33.1%, and Atlassian reported revenues up 14.1%, in line with consensus estimates. Pegasystems traded up 28.8% following the results while Atlassian was down 8.9%.
Read our full analysis of Pegasystems’s results here and Atlassian’s results here.
There has been positive sentiment among investors in the productivity software segment, with share prices up 17% on average over the last month. Dropbox is up 12.5% during the same time and is heading into earnings with an average analyst price target of $27.05 (compared to the current share price of $28.61).
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