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Dropbox Inc. has announced sales and revenue forecasts far exceeding Wall Street's expectations on Thursday, but has released forecasts that have disappointed investors.
Dropbox
DBX, + 0.39%
stock dropped about 3% when the cloud storage company released the results just after the closing bell. After Ajay Vashee, chief financial officer of Dropbox, released the outlook for 2019, shares fell by nearly 10%.
The company reported net losses of $ 9.5 million in the fourth quarter, or 2 cents per share, against losses of $ 37 million, or 19 cents a share, over the same period of time. Previous exercice. After adjusting for stock-based compensation, earnings were 10 cents per share, up from 3 cents a share a year ago. Analysts surveyed by FactSet had estimated adjusted earnings at 8 cents per share.
Revenues increased 23% to $ 375.9 million and average revenue per user was $ 199.61. At the Thursday night teleconference, executives said Dropbox would not generate revenue from its recent acquisition of HelloSign and that revenues of about $ 20 million by 2018 would not be in the company's top line in 2019.
Vashee said during the conference call that, due to accounting rules, Dropbox would write a "significant share of HelloSign's reported earnings".
See also: Dropbox share drops 7% after profits easily exceeded expectations
Pat Walravens, a JMP Securities analyst, told MarketWatch on Thursday that Dropbox shares were likely selling at the end of trading due to the company's 2019 margin forecast.
"So look, long-term fundamentals seem to be very intact," said Walravens. "It's the fact that your users and your average revenue per user are increasing. As long as these two things are happening, society will do good things. [The stock drop] This is really the direction of the margin, which was disappointing. It's just below what people expected. "
Walravens said the company predicted that the acquisition of HelloSign would consume about 100 basis points. In addition, as Dropbox moves to San Francisco, it will have to pay rent on both sites in 2019, which will result in a further 200 basis point reduction in the company's margins.
"Growth is solid," said Walravens. "They do what they have to do. There are just headwinds in the short term. "
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Paying users went from $ 11 million to $ 12.7 million a year ago.
For the forecast, Dropbox expects sales of $ 379 to $ 382 million for the first quarter and sales of $ 1.63 to $ 1.64 billion for the year. Analysts had modeled first-quarter sales of $ 378 million and 2019 fiscal year revenues of $ 1.6 billion.
According to Vashee, the company expects a slight decline in gross margins under generally accepted accounting principles in the first two quarters, as it opens a new data center to support its expansion. Dropbox expects full-year non-GAAP gross margin of 10.5% to 11.5%.
Before Thursday's drop after hours, Dropbox shares had risen 18% in the last three months, the S & P 500 Index
SPX, -0.35%
increased by 4.7%.
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