Balance sheet analysis
Dropbox’ s total assets were $3 billion and $3.1 billion in 2023 and 2022, respectively.
Cash and cash equivalents were $615 million as of December 31, 2023, accounting for 20.5% of total assets.
Short-term investments were $741 million in 2023, consisting of 24.7% of total assets.
Current assets were $1.5 billion in 2023, comprising 50% of total assets.
Total current liabilities were $1.2 billion in 2023, in which deferred revenue was $725 million.
Deferred revenue don’t need to be repaid ,but need to provide customer with service.
The combined of cash, cash equivalents and short-term investment was slight more than $1.2 billion in current liabilities.
Total liabilities were $3.15 billion in 2023.
Dropbox ‘s debt ratio was 105% for 2023.
The debt ratio was very high, but Dropbox would not go bankrupt.
Convertible senior note, net was $1.38 billion in 2023, which would be not repaid.
Actually, the debt ratio was lower than 105% , combined with the company’s strong cash flow, the company will not go bankrupt.
We don’t like that the company repurchased stocks by deteriorating its balance sheet.
Profitability analysis
Dropbox ‘s revenue was $2.5 billion, $2.3 billion and $2.16 billion in 2023, 2022 and 2021, respectively.
The company’s revenue in 2023 was up 8.7% year-on-year.
Revenue in 2022 was up 6.5% year-on-year.
Operating income was $539 million, $181 million and $274 million in 2023, 2022 and 2021, respectively.
Operating profit margin was 21.6%, 7.9% and $12.7% in 2023, 2022 and 2021, respectively.
Operating profit margins are highly volatile, which mean that cost control is unstable.
Stock-based compensation expense was $338 million, $330.7 million and $287 million in 2023, 2022 and 2021, respectively.
Is stock-based compensation expense high?
We think stock-based compensation expense is high, which reduce valuation in company.
Cash flow analysis
Net cash provided by operating activities was $784 million, $787 million and $730 million in 2023, 2022 and 2021, respectively.
Common stock repurchases were $540 million, $795 million and $1.06 billion in 2023, 2022 and 2021, respectively.
Conclusion
Dropbox returned stockholders by repurchasing stocks, but we should considering the size of stock-based compensation to value this stock.
It is also inappropriate to increase debt to repurchase stocks.
Dropbox ‘s stock price is $23.32 per share, which is equivalent to $7.89 billion in market capitalization.
We reckon that Dropbox is worth $4 billion.
Disclaimer: The content is for reference only and does not constitute investment advice.
Introduction
Dropbox, Inc. (the “Company”, “we”, or “us”) is the one place to keep life organized and keep work moving.
We were founded in 2007 with a simple idea: Life would be a lot better if everyone could access their most important information anytime from any device. Over the past decade, we’ve largely accomplished that mission by building tools to help people work from anywhere—and along the way we recognized that for most of our users, sharing and collaborating on the Dropbox, Inc. platform (“Dropbox”) was even more valuable than storing files.
Our market opportunity grew as we’ve expanded from keeping files in sync to keeping teams in sync. Today, we are well-positioned to reimagine the way work gets done. We’re focusing on reducing the inordinate amount of time and energy the world spends on “work about work”—tedious tasks like searching for content, switching between applications, and managing workflows. We believe the need for our platform will continue to grow as teams become more fluid and global, and content is increasingly fragmented across incompatible tools and devices. Dropbox breaks down silos by centralizing the flow of information between the products and services our users prefer, even if they’re not our own. In a world where using technology at work can be fragmented and distracting, Dropbox makes it easy to focus on the work that matters.
The popularity of our platform promotes viral growth, which has allowed us to scale rapidly and efficiently. We’ve built a thriving global business with 18.12 million paying users as of December 31, 2023.
