Dropbox (DBX) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue ranged from $625.7M to $634.5M, down 1.4% year-over-year, with strong operating margin performance driven by efficiency initiatives and product improvements.

• Net income for Q2 2025 was $125.6M (GAAP), up from $110.5M, while non-GAAP net income reached $197.7M; diluted EPS was $0.45 (GAAP) and $0.71 (non-GAAP).

• Paying users declined to 18.13M as of June 30, 2025, from 18.22M at year-end 2024, with ARPU at $138.32.

• Strategic focus remains on scaling Dash and enhancing the core FSS business, with positive early signals in Dash adoption and engagement.

• Completed a 20% global workforce reduction in late 2024, incurring $3.5M in related expenses in H1 2025, with most cost savings realized in R&D and marketing.

Financial highlights

• Q2 2025 revenue: $625.7M–$634.5M (down 1.4% YoY); H1 2025 revenue: $1,250.4M (down 1.2%).

• Gross margin for Q2 2025: 80%–82.2% (down YoY); non-GAAP operating margin: 41.5% (up from 35.9%).

• Net income: $125.6M (GAAP), $197.7M (non-GAAP); diluted EPS: $0.45 (GAAP), $0.71 (non-GAAP).

• Free cash flow for Q2 2025: $258.5M; H1 2025: $412.2M; TTM free cash flow: $893M.

• Cash, cash equivalents, and short-term investments ended Q2 at $954.7M.

Outlook and guidance

• FY25 revenue guidance: $2.490B–$2.500B (GAAP); constant currency: $2.488B–$2.498B.

• FY25 non-GAAP operating margin expected at ~39%; unleveraged free cash flow at or above $970M.

• Q3 2025 revenue guidance: $622M–$625M.

• CapEx guidance maintained at $25M–$30M; finance leases to be about 6% of revenue.

• Paying users expected to decline by about 1.5% (300,000 users) for the year, with FormSwift accounting for roughly half.