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Sep 30, 2025
Dropbox Q3 2025 Earnings Report
Dropbox reported steady Q3 performance with expanded margins and solid free cash flow despite a slight revenue decline.
Key Takeaways
Dropbox posted Q3 2025 revenue of $634.4 million, a slight decline from the prior year, but exceeded guidance. The company saw strong profitability, with GAAP net income of $123.8 million and free cash flow of $293.7 million. Dropbox launched Dash, its AI-powered assistant, driving product innovation and future engagement.
Revenue was $634.4 million, down 0.7% YoY.
GAAP net income reached $123.8 million; EPS was $0.47.
Free cash flow grew to $293.7 million, a 9% YoY increase.
Launched AI assistant Dash, integrated across platform for 575K+ business users.
Forward Guidance
Dropbox did not issue specific numeric forward guidance in the release, but emphasized ongoing product innovation and operational efficiency as growth levers.
Positive Outlook
- Continued rollout and early adoption of Dash AI assistant
- Improved retention metrics across user base
- Expanded operating and free cash flow margins
- Strong cost discipline and reduced headcount expenses
- Positive response to deeper integrations across the Dropbox platform
Challenges Ahead
- Total ARR declined YoY and QoQ
- Paying user base decreased from prior year
- Revenue declined 0.7% YoY and 1.2% on constant currency
- Gross margin declined due to higher depreciation
- No specific revenue or EPS guidance was issued
Historical Earnings Impact
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Avg. Return Before/After Earnings
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