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 Winkelmeier | Dropbox | Getty Images
In this weekly series, CNBC takes a look at the companies that made the first Disruptor 50 list 10 years later.
A 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 annoyance of physical flash drives. The result was Dropbox, which has now made a name for itself as one of the leading tools for organization and collaboration worldwide.
Today, Dropbox reports more than 700 million registered users in more than 180 countries and regions around the world. In 2021, the company generated $2.2 billion in revenue and was ranked #50 on CNBC’s Disruptor 50.
With the goal of reducing workload and helping organizations stay in sync, Dropbox offers a suite of systems that include cloud storage platforms, password managers, and backup systems. It expanded its offerings by acquiring platforms such as HelloSign in January 2019, Valt in November 2019, and DocSend in March 2021.
In its most recent quarter, Dropbox reported revenue of $591 million with net income 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’re pleased with the results of our team’s change plans and excited about our progress in new product innovation and multi-product adoption, including the release of Capture to all Dropbox users and the introduction of the Dropbox rebrand. Sign,” Houston, who is now CEO of Dropbox, said in a statement. “Looking to 2023 and beyond, I’m proud to see our team execute on our strategy while maintaining a healthy balance of growth and profitability.”
Dropbox went public in March 2018 with a highly anticipated $756 million IPO on the Nasdaq. One of the largest tech IPOs at the time, Dropbox was valued at more than $12 billion on its first day of trading. Its performance since its initial surge has been erratic.
As one of the first companies to embrace the transition to a virtual workplace at the start of the pandemic, Dropbox announced its “first virtual” remote work setup in October 2020, asking employees to work remotely 90% of the time. The program, which officially launched in April 2021, is a significant shift for the business, which once flaunted perks like a dedicated kitchen in its cafeteria, a top-notch gym and a yoga studio, all free to employees. The shift also cost the San Francisco-based company nearly $400 million in real estate, making it unprofitable in the fourth quarter of 2021.
Despite some reports of high turnover related to the removal of bonuses from previous jobs, Dropbox has boomeranged employees, bringing many former employees back to the company due to workplace flexibility. proposals, Houston told CNBC’s Labor Summit in October.
“We were able to punch well above our weight class,” Houston told CNBC’s Labor Summit. “I think companies that offer that flexibility will be able to outperform, outperform, outperform those that don’t.”
Dropbox continues to face numerous competitors in the cloud space – Google, Microsoft and Apple to name a few of the most prominent – as well as fellow former IPO startups. the box. The company is forecasting revenue of $2.3 billion for 2022 and is forecasting fourth-quarter earnings of $592 million to $595 million. But the stock remains well below its first day of trading in 2018 and about half the market’s highest peak, engulfed in a tech slump that has cratered many formerly big, high-growth startups.
“We’ve always lived in a competitive environment … and importantly, all of our growth has taken place 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 out.”
To create long-term value, Dropbox is building momentum by promoting new products and acquisitions, Houston said on CNBC’s “TechCheck” in November 2021. The company plans to introduce more of its products to existing customers in hopes of increasing the number of paid users on its platform, said X Juston.
“We’ve definitely come a long way since going public, and there’s a lot of opportunity ahead of us,” Houston told TechCheck.
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