Dropbox (DBX) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 revenue was $2.521 billion, with Q4 revenue at $636.2 million; excluding FormSwift, Q4 revenue grew 0.4% year-over-year, reflecting stabilization in the core business and improved efficiency.

• Generated $1.016 billion in unlevered free cash flow for 2025 and reduced diluted share count by over 50 million through repurchases.

• Ended 2025 with 18.08 million paying users and over 700 million registered users, maintaining a leading position in the content sharing and collaboration market.

• Dash, an AI-powered layer, showed strong early engagement and is being scaled to more users, with monetization focus planned for the second half of 2026.

• Leadership changes and renewed focus on product, pricing, and retention drove steady growth in the individuals business and set the stage for team license growth in 2026.

Financial highlights

• Q4 2025 revenue was $636.2 million, down 1.1% year-over-year; excluding FormSwift, up 0.4%.

• Fiscal 2025 revenue was $2.521 billion, up from $2.502 billion in 2024.

• Non-GAAP gross margin was 81.8% for 2025 and 80.8% in Q4; non-GAAP operating margin was 40.6% for 2025 and 38.2% in Q4.

• Net income for Q4 was $174 million (non-GAAP), with diluted EPS at $0.68; fiscal 2025 non-GAAP net income was $775.4 million.

• Ended Q4 with $1.04 billion in cash and short-term investments.

Outlook and guidance

• Fiscal 2026 revenue guidance is $2.485–$2.5 billion (GAAP), flat year-over-year excluding FormSwift; non-GAAP gross margin expected at 81.5%–82%, operating margin at 39%–39.5%.

• Unlevered free cash flow projected at or above $1.04 billion; CapEx $20–$25 million, with finance leases at ~4% of revenue.

• Diluted weighted average shares outstanding expected to decrease to 227–232 million, assuming full share repurchase authorization is used.

• Modestly negative net new paying users expected in Q1 2026 due to seasonality and FormSwift, with flat paying user growth for the remainder of the year.

• Management expects to drive engagement and adoption of Dash and invest in future growth in 2026.