Dropbox Inc.’s forecast for the current quarter and results for the second quarter beat Wall Street estimates on Thursday, with the online storage firm earning more from a higher number of paying subscribers.
Shares of Dropbox, however, came under pressure and slipped nearly 10 per cent in extended trading after the company decided to advance its lock-up expiration date by several trading days.
The lock-up period, which is now set to expire on Aug. 23, will unlock an additional 356.4 million shares for trading.
The company, which competes with Alphabet Inc.’s Google, Microsoft Corp. and Amazon.com Inc., as well as Box Inc., said it expects third-quarter revenue to be in the range of US$350-million and US$353-million. Analysts were expecting revenue of US$345.9-million.
Chief executive Drew Houston said more individual and corporate clients signed up for its recently introduced plans that offered bigger storage at higher prices, leading to a higher average revenue per user (ARPU).
The company, which started as a free service to share and store photos, music and other large files, has worked to build up its enterprise software offering.
The company’s ARPU rose to US$116.66 in the quarter and beat expectations of US$113.95. Dropbox’s paying subscribers rose 20 per cent to 11.9 million at the end of June and outpaced the average analyst estimate of 11.73 million, according to FactSet.
Shares of the company were also weighed by the departure of its chief operating officer Dennis Woodside, who played a vital role in its initial public offering in March.
Dropbox said Mr. Woodside will step down in early September after four years with the San Francisco-based company. He will remain an adviser until the end of the year. Dropbox had a blockbuster debut on March 23 as investors bought into the biggest technology initial public offering in more than a year, with shares closing up more than 35 per cent in their first day of trading.
The company, which is yet to turn profitable, reported a smaller loss of US$4.1-million in the second quarter of 2018, compared with US$26.8-million a year earlier.
Excluding one-time items, Dropbox earned 11 U.S. cents a share, beating estimates of 6 U.S. cents.
Revenue jumped 27 per cent to US$339.2-million, above Wall Street expectations of US$330.9-million.