Dropbox (DBX) 5 Nov 212021 Q3 Earnings call transcript

Good afternoon, ladies and gentlemen, and thank you for joining Dropbox's Third Quarter 2021 Earnings Conference Call. All participants are in a listen only mode [Operator Instructions].

As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Dropbox's Web site following the call. I will now turn it over to Karan Kapoor, Dropbox's Head of Investor Relations. Mr. ahead. go please Kapoor,

market generate anticipated call work financial good capitalize and volume opportunities future amendment call. In described our XX-Q in welcome expectations XX-Q of XXXX. June free the for the projected Form results expectations remote estimated and ended quarter XX, differ including risks related for Today, were and ability goals potential our XX, and resulting on first results included and financial offering products result our materially closing those user included on future generate including our virtual uncertainties model; quarter actual those including ability Francisco and repurchases; to our to risk growth, other acquisition; results, from quarterly our and Dropbox's or performance flow; profitability prospects our value. share upgrades achieve as and charges and that XXXX investments; future cash regarding drive that a and statements shareholder our this those in call. a the Statements work and earlier. earnings opportunities Dropbox implied by this expectations ability ability impact, distributed These our plans, impact positive and and the expected in previously to forward-looking lease and unknown are and our afternoon. factors you, of announced timing opportunities; our or as will of business quarter our to statements, subject allocation to to our to retention and future trends factors acquisitions; potential through growth, regarding And M&A our the the and San Form ended subleasing third impairment financial results, include and that revenue September products regarding be to income financial cause developing could XXXX risk enhancing Thank sustain as during our well to potential will features shift our new known particular, to including capital goals strategy, discuss overall and our

not we should on them, of make this statements our rely events. except forward-looking as on on beliefs undertake You by statements based to obligation assumptions forward-looking are future no update law. we today, as as and and call of All that predictions required

earnings measures will reconciliation measures. A be to substitute today considered non-GAAP include SEC also our from our filed to found non-GAAP investor at Web results which not GAAP and of the in may financial www.investors.dopbox.com. in site release, non-GAAP supplemental posted should materials Form These in for in found results. addition with and was Our GAAP a with be our discussion or X-K isolation the may our today furnished on be Relations as Investor

like used Additional also in Officer, to Chief supplemental Co-Founder I and Drew? turn our our materials. may regarding rate now found call be exchange Dropbox's investor assumptions would Houston. the information to the over in Drew guidance Executive

to Thanks, XXXX good QX everyone. Karan, call. our afternoon, earnings and Welcome

continued the SKU, small We our outperformance momentum of driven strong our remainder the in teams across teams by with QX quarter. provide Tim and product with our professional results workflows Chief Officer. had business We're around to meet teams free term from share across Regan, and the one to long of then call product strategy well will content. is Financial achieving And and with in outlook on core update and organized of mobile, freelancers, our of evolving another the board creating financial way our review it. great to with adjacent while I'll the their Dropbox growing our all me Tim our On all record more flow. content and against progress our today, users, update vision the our quarter for cash workflows and expansion mobile while better on revenue strategy help investing place experience highlights an do year. in achieving customers needs for made the your retention We the

from world. around through some this why I want highlights Before quarter, share today's context vision matters we I walk believe to the in

overwhelming. one from of the accelerated consequential us the as in like moved is level, working As call become chaotic and transformation play have working them many on primarily most permanent pandemic this and in even these in that screens at to offices knowledge us. where for shift. the we most, the year economy. this we digital believe just and primarily But digital trends we're already on was rise more most changes the screens, physical creator a shared before, It's and was relying workers digital And probably of the highest the of XXXX globally

sea icons clear across Over are creative problem apps. a the your Helping last businesses of solution Dropbox and this browser on into extended several many years, a work. What desktop work a our the has place where their has shined spotlight on now lives tabs that of important been always freelancers more to XXX their used work or The area so them us. for productivity the do your web-based to organizes it's the they're browser. whether organize remote in customers, ever. and that digital most need long has teams and focus shift than everything be XXX we been small

the natural So in back we we're version solving that of saw XXXX. XXXX focused on the now it's problem

map and here. against iterate more the long about excited execute our building I'm product to strategy, current for we and progress road on also vision, As term our we're our this foundation share

Now turning quarter. to the

in our foundation and by first, long growth. our strategic the year nearly priority where executing was use that from journey. for our most for two We've on first Dropbox half term business the ways: to users second, strengthen reminder, freelancers, of as Dropbox a new solopreneurs experience core been Dropbox As passionate small priority such and this earlier against mobile this work, customers evolve begin offering by their teams; and focusing improving

For identifying SKU, and for making the We've delivering and pleased checkout pro, added the focused from get the corresponding Dropbox see paid, talked them prior our business pro the more right intuitive and it in all users, sharing, QX. and we're seeing most strength or we to I'm steady quarters professional the economy these and creator optimizations we're the translating on solid and into improvements experiences in rise And the about to whether around users of driving wins. that We've they easier sign basic onboarding made up. reliability. to process continue for the better in or momentum moment saw value onboarding strategy

to plans, externally. make solid both sharing invite our science for to team's in driving it more ARR admins We represented new leverage net addition solopreneurs, we're and significant activity data expansion a In users, internally and additional which team contribution to to seamless around these in QX. members

self-serve of security features also to In requested some free drive users driving we conversion to retention. into highly paid teams, addition released

remains further to teams, accounts we Shifting them half our enforce saw mobile in strategy, to we their managed in coming their sales being strategic and made vast have our the improvements where of improvements to basic users is our also retention nearly are all due go-to-market motion. with new from. over how for control admins while the more link ability edit majority shared. content protection giving of Now self-serve expiration and password And

download in for QX, sharing shared create the As better users Dropbox our steps And seamless drove reliability and their we for app app a Dropbox store them to enhancements discussed and non-Dropbox on last by satisfaction users. experience of mobile call, new mobile XX% primary sharing for is more users higher ratings made number a we sharing. be increased experience early customer around faster Things further in speeds, content, like experience reducing to a downloading Dropbox. giving for earnings number visibility upload mobile reason say improved scores. to the with all the basic of improved doing

So we're offerings foundation improvements and in our as who for serve Dropbox map your our channel. for vision of All mobile continue road it. around confident among driver the these content users be to all important enhancements product to the of organized building workflows core and and these retention will place an higher the conversion a subscribe one

QX Next, in I'd like we to this highlight the new to better product vision. experiences introduced address

will We retention functionality view users of competitive hear as a customers This For work. organization help teams to for the is they number work, on work. their advanced for drive introduced new common majority this their and use a their of need we information accessing finding more both do and week, platforms, features advantage one can conversion. delivering users I'll been their philosophy. a on. we always around product which so functionality they core is they complaint trouble the what cover search time spend later people need easy-to-use have And organize and our we also of our most they while place content cloud store helping universal their number can cloud to keeps a company, content, growing that acquired a automatically content has and organized Dropbox different Simple, that in to

so and types. names tagging. paired users And files, content at that on converting, and updating naming multiple seen saves users to beyond first focused to easily workflows into defined By with users And we've uploaded folders, automated we our other sorting their beyond around based fastest see a workflows, our quarter capabilities outperformed user experience files fundraising, automation learning the such increases and workflows, both same such in can as tasks remain categorize investing improving building quickly. retention. modified investing automated this growing explosion the this on to allows categorizing, straight format our second usage media file type added evolve been on keywords it creation are for in which momentum. new rich functionality new year, capabilities of on DocSend expectations on and stocks as time there's helping customers followed of sort the input critical or file or growing can traditional on criteria. of control. videos on in PDFs. is we've were over files that our platform. automatically customize our human with step content Dropbox last billion types Dropbox and address users’ organize by do by always the shared an and With most work being fastest XX the alone. with year users These office We content. like been implement with their to the in are machine on our businesses. complementary organize adjacent as PDFs platform, continues user adding or the more Nearly in and common So adding these videos better the DocSend focused find DocSend Multi-file the folders To and our time growing PDFs conventions, the Dropbox, last Organizing HelloSign, in their we're date, and

announced For save sign an users HelloSign, to SharePoint send, their using within workflow. now Microsoft we documents SharePoint, integration and HelloSign with allowing

saw excited but good the small a complete channel in we're a and for integration significant cross greater platform. also growth We the for remains the of growing document transactions. core And and HelloSign and workflow streamlining offer is customers which of business. solution DocSend opportunity more a into our for There part selling to Dropbox HelloSign,

excited new about. introduced really product I'm also experiences We that

As dramatic a images on needs. teams started collaboration we've Dropbox. that video recently, and around last we of distributed shared year, in and have found And lot unmet a seeing increase creatives we

currently to which production it billion Over replay, in were all respond hearing video to teams shared not. customers most more to content is been and X.X build excited manage a do to the of video in and example that and saw a good enable from Replay GA makes XXXX already Replay in way collect, collaboration in first editing Replay Dropbox how workflows streamlines we natural added in a is it content traditional it’s since simple number them of So a Dropbox. we've UI early is with they to one this offer place. and towards half type. tools videos XXXX. Premiere like Adobe is platforms video integrated their have on Pro, love to for video our some beta of feedback that with that existing is simple lightweight tool but video opportunity customers storage files are feature out we're already their A set solutions new, also easier by now

enables which And their offers teams long way seamless Capture, e-mails. Shop, stored to meetings a Dropbox video digital and freelancers to distributed introduced for also reducing the short communicate already clips, creators which We Dropbox in synchronously and through content need Dropbox. sell

in stages, to we ability While into towards help agreement term search took customers productivity very these E, to last week, really we we're do all definitive acquire and early long our a their new introduce vision with are more as company. another just Command a universal our our excited capabilities step important about content. entered to And

E Dropbox. central become other shared I acquisition to stay opening that the design our the great files, content philosophy can immediately an of As user accessible for teams web-based need universal we and open search work. organized. need do to a across a functionality fit for E one differentiator. has work, be Command easily powerful And everything in recent even in the even desktop users Command a making maintaining share and apps and will more to makes tools, apps knowledge team my to do believe their access browser they it productivity as bar. And we the you the We information all across browser belief cloud built tools competitive from and need are so work and is remarks, our and your the distributed folders, focused the ecosystem, product in harder

of value operational remain into and customers. driving able balance great while we thoughtful content early acquisition integrate finally, not creating being disciplined that stage around we any Dropbox, workflows our one to impact it. excellence take grow QX identify on our be E how organized our is have It's step to to of to term time on sheet to to technology healthy will this in your expect long We an towards also to a close XXXX business. example and ultimately guidance. our bring ability place Command some important for our can And leverage vision with focused it And by more our material and

technology chain. when supply side, increase shortages we infrastructure the storage the a of a advantage to of at there On and bit efficiency, are SMR continue in particularly our adoption time

efficiency users we recruiting in product our good with in the a each higher On cost Replay efforts, to remain and to side, Tim talent generated, I'll we teams, front make to after continue our committed outside to Through initial virtual goals. across than Shop long first staffed of hiring less drive was company idea lean our to towards hand model, continue and our the walk it these year progress the that, financial to term locations. results. our top over through And with

Drew. you, Thank

of results, reminder Before to like turning I'd our our quarterly strategy. financial with to a start

vision XXXX. to including We we align allocate We capital And repurchases. quarter talk form cash Today, for that returning our in that continue the to principles. the line with year operate updated the these I'll a organic continue XX% and XX% our to to by cash balancing focus flow of of in Drew outlined annual and and on business to while with billion of for the way. share to profitability disciplined term acquisitions generating thoughtful, guidance remain to and also long demonstrate our objectives, through that growth initiatives $X operating committed we free shareholders margins delivering in to the continue performance

the our to third beating $XXX Let's quarter Total $XXX guidance increased range of quarter turn to to million. million our revenue million, year-over-year third results. $XXX for XX.X%

sequentially XX.X% Total ARR total by grew constant a On $X.XXX quarter tailwind and exchange $XX year-over-year XX% provided million X basis, a rates point approximate billion. for year-over-year. ARR of to grew currency Foreign an growth. the for

SKUs retention teams by our in and user paying and family We attract approximately specific serve continued users million per to work strength Our to plan. was our XX.XX self paying net drive our of Average emphasis in revenue new quarter, added new with driven the a in QX. ARR users with in and $XXX.XX users improving efforts premium to the adoption growth and paying experience reflects continued teams better by the quarter exited user users. mobile, on XXX,XXX

Before to I P&L, some the quarter. our like of progress go-to-market I'd the turn highlight in to

both As a well as motion sales self our reminder, as our motion. go-to-market our strategies serve involve outbound

in we potential discussed, driving self increase as and team saw an licenses with our members. in making they team better-than-expected right more team. of invites per with a expansion it Drew seamless to SKUs users for As invite a net content additional serve prompted result suggested invites teams shared member, We after

to year, the this than number that We a of also our dedicated creators. momentum more by grew customer reps as doubled about we in earlier as outbound ongoing in are made in we by our driven Professional and once change renewals. saw business sales of Drew where adoption freelancers fully again, saw year-over-year, the improved we strategy highlighted. result SKU, the And XX% Pro retention by

users help with common match the offer pertinent We understand enhancing to their most path by we continue onboarding cases to our Pro's solutions functionality. use our most that pro

we As help developed how a a Pro their them get trial stronger our as of improved appreciation saw users work users done. result, conversion

Finally, from we our continue family paying new plan. users healthy to to contribution see net our a

highlight near uplift their our our or quarter, thus, storage basic the driving to quotas, that we were above redesigned family plan pages During upgrade users in better to conversion. an

amortization our of assets related discussion and Before non-GAAP we force. our like are of expenses, stock indicated, intangibles, of P&L, acquisition impairments purchased all income note to mentioned related to measures continue compensation, otherwise estate in that I and expenses our reduction with further certain exclude would statement unless based real

also effect tax our of real brief where non-GAAP steps and to gains estate to de-cost the the on our model. real strategy, net aforementioned and income portfolio taking excludes of are also estate transition our as losses to investments virtual on part a I'd we income provide adjustments. a net like includes Our update equity first

progress Ireland Seattle to goals, quarter. against continue past We this our make subleases Austin, in executing and

result, to no additional impairment remain As $XXX of in unchanged. charges we incurred impairment a previous our million in up expectations total

$XX to savings where If use long would future we our would target Francisco generate in with as buy achieve of addition, to our gain billion we subtenant. to a roughly this roughly our we'd Thus, million the discussions XXXX. have this executed, financial this would exceed a by existing the are ability expect pay lease San In an $XX we on landlord term aid out portion generate that efficient $X amounts would rent from cash payments our million. avoided our an free capital otherwise be sublease and by of our flow

In free us space. this would service to addition, obligation executing this the from buyout operational

We sense this our factored continue I'd future, the assets, time. I'll guidance, In home in depreciation estate impairment. year that, pending economics should may on from that of into landlords real therefore facilities and from the as lower make this deals from touch to other benefit continue arrangement though no aforementioned With reduction related are P&L. expect quarter by down to all there costs, a the buyouts the for we write the in let's our into us, this expense working at shortly. employees our our this note enter with execute driven fourth have and which categories the with in a result stemming similar

for across roll hardware last representing prudent internally and infrastructure. of storage as an hiring. margin point are the the our our improvement is year data continued a The result increase was managed of quarter, Our and in of margin to personnel on gross at in X reduction of relative levels a result efficiencies primarily year-over-year our percentage out subsequent basis. also a force reduced XX% costs Gross

investments or the Third Sales was marketing revenue decreased quarter and which the XX% to quarter product of revenue, million $XXX of third XXXX. awareness was $XXX of relative revenue, of of compared quarter which XX% roughly in expense brand and marketing campaigns. XX% as XXXX expense R&D in million we was to made or flat third

the the decreased in operating in we're the seeing While expense for a which X total, the third XXXX. improvement share we third XXX of Diluted per represents of G&A third profit third In improvement average to the margin the of Net of diluted or percentage impression was it's XX% from compared to in an quarter per revenue third which million share we of quarter up XX% are million, early, quarter quarter third of XXXX. trends operating based income which million $XX revenue, shares of encouraged earned or was EPS point quarter, is by quarter $XXX was $X.XX of outstanding, XXXX. XXXX. search X% compared on million XX% $XXX volumes. for over $X.XX the weighted

million in with million our third during expenditures We million to $XXX operations the quarter, record on $X.XXX cash equipment. flow. the cash the This were data ended compared flow Moving cash free resulted was short quarterly third Cash quarter million leases XXXX. term of investments to added quarter. center flow and $XX of quarter $XXX cash our and of balance billion. QX and from in $XXX capital million finance we in also to In $XX the for

turn repurchase share our Let's to activity.

I’ve million to previously purchased million. million share share intend our spending QX, we X.X end our return to count. only share the also authorization. approximately to QX, $X $XXX our $XXX of shares, approximately repurchase to we leverage remaining program we In but not reduce capital our At repurchase shareholders, mentioned, on billion had As

to We returns strength guidance believe sheet to let's back QX and repurchases our share leverage our capital turn full efficient continue for deliver for With the year. of is that and shareholders. to balance to utilizing the we our will for that,

guidance account average expect a and recent For exchange combination at XXXX, of the midpoint assumed million. and guidance of to points in approximately to range quarter of based for are X the million in we be rates. revenue Currency the growth $XXX historical $XXX rates of this of fourth on

operating margin non-GAAP expect approximately be We XX%. to

million average to XX share of weighted Finally, XXX diluted be on day our expect price. trailing range million based we outstanding XXX average shares to the shares in

year billion range, growth average $X.XXX are to billion. XXXX, account points billion, we approximately X to which a combination guidance previously rates. for guidance and based rates are full midpoint $X.XXX Currency was guidance $X.XXX billion, $X.XXX recent the of to revenue in our and at exchange assumed the this on historical raising of For of

We approximately XX.X% margin are year. gross our updating for the to guide full

which improvement free was to of We $XX be previously the range XX% now approximately buyout $XX be XX.X% for a space income. to of guidance, range cash which approximately guidance, to $XX aforementioned the are raising optimize approximately million our sublease million year to million, in million XX.X%. our $XXX into for XXXX expenditures includes was potential to a $XX million complete quarter. non-GAAP XXXX allowances we as for now to first flow and previously of operating their account of in Taking reduction investments our the capital opportunity, to We tenant expect severance occurred million. force, in deal expect our be we full related $XXX onetime margin installments This $XXX of which payments buyout, to of of our approximately net cash outflows million comprised lease lease HelloSign in our consideration acquisition related lease holdback the order

additions revenue We in to XXXX. approximately finance X% continue lease to expect be of lines our to

expectation shares. XXX XXXX XXX diluted the shares Finally, range million weighted for million we be are average to outstanding in our maintaining to of

on targets. thoughts some cash long-term me Lastly, flow free let share operating and margin our

Therefore, focused expectations now year-over-year. on XX% long improve invest we by while of support while that our we our on outstanding, range are and sustainable is on to to target to operating within strategically expected cash inorganic ways and expected consider for to take product by profitability growth our driving progress free approximately more of plan points portfolio. profitability, to to this hiring by this every we are our important to It's to by funding track term on with margin are margins step flow exploring now year expand expect a operating product progress We awareness compelling marketing initiatives, revenue than X sizable grow $XXX this outperforming drive we growth. equally to forward XX%, magnitude don't And million year. year

addition, employees and rates as XXXX work our In from in FX overhead profile benefited from reduced home. costs our favorable well as as margin T&E

we areas pandemic company, While these expenses will a should restrictions year soften. see we next remain additional in virtual may first

and at operating We his we of this continue our XX% Given believe that term XXXX XXXX goals. conclusion, and these we to against XX% billion. With considerations shareholders. against Drew time, goal generate flow to target remain we In these margin will execute making back maintaining $X now value our for trajectory. free remarks. long are of well to our with progress to objectives term that, line turn it committed financial And in I'll long closing decisions this our for cash

customers work our believe work. the technologies of solution solidifying thank to them on Operator? and Thank goals with to I'd up positioned today. We call you, proud our the focused quarter joining for look us. continue position that and like and third that, rapidly our for Tim, executing XXXX distributed go-to adapt open remain strategic And the Q&A. environment. is well further incredibly us you long I term I'm as our Dropbox priorities, to all results excited about evolving for financial the help opportunity our against of as for ahead

[Operator Instructions] Rishi Our with first question comes from Jaluria RBC.

wanted a is issues. made comment prepared touch, supply in which chain I regarding to you Drew, remarks, your First, on

more a then obviously, SMR can understand, talk of I little impact what with the much maybe so worry? of more does got some follow-up. And the how plans, there supply your CapEx point to a I've about and become future a probably some insulated. But you a you efficient bit little have does So bit at you've other investments made, this with infrastructure start chain issues out

can to on. add I free start. feel Well, And Tim,

proactive team been front securing mean, I keeping supply reason an never. pretty a we we we today, how in chain. out don't with imagine, had always of year, we're in unpredictable inside good why of It's obviously, We've you change. This has this. our the about something done say it. that been partners. infrastructure team been job keep see never And relationships to on somewhat to and shortages you'd have able about our has is environment would feel vendors top but our a date, our supply on So eye The great I obviously mean, excellent close as the teams need. we've

And philosophically think virtual-first about a then maybe model. want to little I the

model have So Delta more keep lessons think How first kind importantly, forward? that of years what you And companies seems announced same really that virtually you you maintaining since were later, have pushed so like also you looking that like maybe think guys reopenings other out, going view more it as guys that pioneered. shaped to to you the flexibility model about things that's to do much strong you Dropbox first of mover companies these in this. very as are looks it more sort culture while out? been kept want? do has that for pushed going all emulate how early virtual what in maybe of sort wanting And and it feels you extent office And the virtual and like a has that first your adopting certain

mind QX the mean although, have we on that October. I decisions, mean, hand, or like And a things decisions sequence could things I top way. next the in. I'm and really or think with many the companies kind and direction year. Delta. for able we one in happy continue only lot think virtual with beyond make we're the And experience different are don't made still me, of of hopefully, a a very of remote tech some companies think I'd to happen going to and only, are a lot in in like I things reintroduce haven't trend really Well, And in-person meaningfully I we of mean don't about predicted I consistent last anybody to positive that's others. I exactly a been of year other Delta

to have version compromise sort nor commuting have worst that able have given mean, two fully the was a the of two week, like we hybrid the degree of is all been didn't I where say I most issues So but hybrid envision then days I companies utilization to that you their like anticipate of haven't anticipate don't which is have office you models. are you -- work has fully And able and of out. people you're a not, think team proud then something even a if a well, we that the week, is five consensus would if to kind problem we of I'm been But we of it's fully to some done these the neither days, it's to the days major days think same week, the have we worlds empty really where both that you implement three really of get which where spread default community. sort lose, issues.

of in of commuting So on remote find think places well remote having former most office a -- I finding double percentage outside of they're others, to themselves way commuting number old of outside they for companies, workers distance. the even now distance and and companies population of world, hiring their their more in anti their are digit a

snacks office or and office your whole all getting in paying to And has hours suddenly then a to further multiple you're for many your who cases hybrid person on before is space, models, Zoom commute if or remote, like people these team they so you on the situation to be back Zoom and even meeting in that where without in on and in your happen is were matters then -- environment. massively why dog, in than the the this without setup dysfunctional then one have given you're you're noisy this

the of hell work lot of be come want really we proud did other a that what and the companies is tried not model team on the that default source envision up found. there models did with that of we've I'm the open build that we to going have to a circle to sort of researching the We other. with and lot we from it. So have learned

first everything that online in talking our I'm virtual we've toolkit. about So here posted

And So to to iterate for the in-person we next going experience. where basically, forward We're I'm are. to I'm happy looking on year. I'm with reintroducing excited continue this.

We of we lot doing continue think on can how ideas I this. got a further. iterate we'll

Our next with question Jefferies. Thill from Brent comes

the Drew. have economy, current think levers, the you teams, to help on momentum? like be will, DocSend. you three HelloSign, sustain front, creator wanted echo top for well you innovation growth I different to of Brent. will levers us quarter. the first from or on about Sodha the the Could Luv talk maybe question as you like is sounds Maybe two that would your a This It you congrats solid lot another if

are we pillars against the for ones top kind the that mind of that mean me of about. are talked I fall

So our excellence, there's future in each and investing core areas. in exciting products there's happening those of in things and evolving there's business, there then are operational

of there So lot continued on improvements. a sustained core side, the are

Some ratings invested things retention, better really experience examples of the and that. are, we've in the driving funnel, a conversion, we've improving app top mobile there store lot of like been sharing, and our

them are a really they're I'm those somewhat all I your our and more think evolve as organizing business a content. to in So our your cloud core we change is excited what lot about kind from to growth. but of sustain of improvements, transformative important files incremental as But syncing really well

have been this screens. is this sort that of big think living we I think remote living our But a life, deal. out find as of hybrid I we all

Our overwhelming be distracting screens, digital our places. can very environments fragmented and and

that places. something is different easier knowledge my questions some like, knowledge saw is why that it human knowledge, like like increasingly I XX my than of own that in now lives stuff, we of it given own have, company's Google dynamics search my it And with the to all and even before

that solve. So Dropbox sight of problems -- dynamics these in to well like is kind plain really so huge hidden positioned are

with XXXX XXX have I -- files solving desktop. on and then, we or or about, the hey, devices So team, icons problem we're XXXX your was version solved your across it it my files the talked in back was XXX syncing maybe back we that

your Now browser. in tabs that's XXX

shift we're Dropbox -- it, that ways oriented our for better a as core fragmentation. of pay there's on And ways all top business all we but as of of shift around lot resulting workflows, keeping in we the to this we our customers have transforming -- file cloud, workloads so more need about that today if you all think

that. company capabilities in in step like We'll And will The so be have delivering great of founders about pretty a the that in things vision. lot Command I'm lot companies, progress We're on and very making instrumental more that that the there. of a share excited future. search a lot universal identified similar of to things The acquisition that of have built very direction. E,

a So cloud we'll there's historical in of the native customers, lot us a where of constraints, lot I a customers think totally I our core file think and call them I breaks native But free -- business. offer native it have TAM as in to [Indiscernible] a of addition there's cloud customers. content. And far the as portfolios our do our customers then everything workflows to that we native of rest lot cloud for lot around product portfolio,

being XXX as a for users so in pieces different want. there more billion of scale registered home hundreds verbs are users, just our customers of content our And and that do able we're our screen of millions given content, to lot that for your of

and The very what with we building and usage interested I'm I'm excited document and on of an collaboration our DocSend. platform on do documents workflow in document workflow. in and has exploded end-to-end the year. HelloSign PDFs has DocSend, on exploded of we what very taking have PDF the terms about HelloSign last and So Dropbox in

of huge tooling then like it's shoots Replay, creator with think And audience, which the a massively new solopreneurs, macro see that our these green media around freelancers, or audience and the like and are And some solution. the some an workflows product elevated a experiences us. people Shop, other economy, of and address the demand cross platform rich with creative explosion opportunity like Capture love platform trends you that. and the for with I on Dropbox video better and really of need to have

the portfolio core -- one end of incremental mind and of spectrum, the green we things Those be we'll to of of that manage and are where shoots workflows improvements, around it top kind So for about. me the a then of the near a this excited content. term manage lot on all as some transformation are

And to strategic Tim, maybe having a just the on you're accounts. ask, quick it's teams wanted follow-up see momentum really for great and to

more on Going self-serve forward, to that still side more to committed we see, guess, expect or on investing strategic I you could investments motion? the are

at of encouraged of specifically, on our and And our certainly to team the self-serve doubled execute beginning while continues more of reps motion, we we strategy the than focused team's So the vast the against year. number go-to-market majority does outbound adopted by execution, well that remain the renewals. the

And driving improvements is is we're newer in investing which in team more and They traction. in products were retention. this cross-selling like So add-ons our also also the gaining DocSend. HelloSend then channel,

we're in pleased certainly side. the levels with team that the and with how our of overall, efficiency So outbound is seeing performing higher

that, on we motion integrated building these journey. as see customer also or And one one

an team. where enough or start self-serve with land Dropbox But often become motion that the you in go have motion and self-serve a engage really free a do where folks a on with and there's expand it expansion to and bring outbound more the a individual using So self-serve need company version it you or then coworkers at SKU they side and have using hit to managed then limits people IT where wall-to-wall, channel. you

managed self-serve these see more into we a from between a teams as then So graduating two connection moving efforts. and of mode

the important. in they're different journey a and kind of wall-to-wall the both So is motion account. kind of is at the the at -- end larger They of at motion self-serve sit the start

Church with question next Our Sachs. Goldman Dan from comes

Kash for is Rangan. Dan on Church This

and you for with Just seeing couple kind see seeing DocSend With then follow-up of update me. with to the doing Can give --it’s the size and quick new products two an our us safe to HelloSign kind frame acquisitions? cross-sell any way ones kind quick of or we're a of plan. respect growth you're outperforming And better from traction a the the of kind to the the me. of on and margins on for momentum? And

bundle signature overall I'd of Dropbox professional early integrations and any early our early very the and product of things we're of terms our HelloSign, with terms integrations, space. integrations. innings some DocSend So the like pretty say pretty first depth of round in in with we've of the innings penetration But those done

want invest in big opportunity. it's where So coming something to we more much here years,

quarter, two it mean, Actually, and again self-service strategic last you rates. an the mentioned last in kind quarters, on the We're hearing the side. both side from retention improvement overall I of tonight,

respect we to bit of the with you You driving kind touched us rate more an are now durability of the renewals. that? with what's IPO update retention maybe and if self-serve a to the respect little should doubling guess on set on thinking us where of side, level would be color how year or be of and kind on And give directional focused adding on kind I you versus it reps that great? the any can at kind of where about and of we time are where could we levers we the are last

add. can start can I Tim and

to our retention And -- of the mean, spend people just they more time mobile I more as becomes quality as -- as been So mix starts or have experience. there's on with a important shift, of -- phones our mobile. that come a desktops, and experience something half or new sign-ups becomes laptops more top like the half of funnel our addition of of part from in

and works, back getting sure simple is that lot that's product of or kind and as pays and different friction it things from to removing streamlined been or from So fast philosophy experience of a our always and is and basics sign-up making dividends. sharing just

seen I things big similar it And we've self-reinforcing and sounds App -- for important. sharing example easier it sort seen I could improved say about of of I kind very Store mean all we've retention, but recent and flywheel. activity or making -- -- the but So improved mean is ratings like record it's improvements, one basic, just conversion these

get that what possible it team flywheel. returns kind as of easy them pays signed team in and whole figuring as big your up, self-serve to making simplify the that in of of or really viral Just if to you're steps a remove many experience are all terms out trying

that and that all in and translating to what across to conversion, from the possible things and better of we So the better And understanding as engagement between are those link see simplicity direct experience possible. trying our virality, customers to steps into better funnel do having work as make parallel. a we as retention, to better easy really a see and improvements the we few

encouraged quarterly, And the year-over-year maybe by but in add latest don't factors churn on improve briefly update the revenue to just to trends, sequentially certainly metrics and efforts. We but did churn obviously that, results our Dan. guidance of and these

And have with Pat Walravens from JMP. we a question

forward? bit on I for was quarter. remarks of adoption on and as little another Enzo going strong again if you Congrats expect how Pat. looks curious just set self-serve I of there of kind a trend is during guys now, you about to could is growth This expand stands color what little a that know the opportunity that looks it family that what plans. the prepared like like bit on then

a I at mean level can Tim then to can high and add speak on. I

was popular use the that the hand, family is because that family personal Dropbox the is on And of of good that it's the bring So was requested things where like personal something and pretty commonly true been us. between I home well. we thing many doing that clear Dropbox same after up between is it handle many how and of and work like plan the be work like the fully a has one mean and of I that physical our big and often majority, stuff pandemic plan all use virtual use -- for for also can example managing been working -- is Dropbox vast dissolved I on life the mean have work, subscribers appreciated we're boundary personal most that one for a customers home stuff machine hassle. boundaries and always together. work same And both your the and while

the Tim can make momentum. we'll So to growth that. like of more And to continue speak investments

quickly to just Maybe add on.

their enhance quotas the quarter, family for for storage third upgrade time. the offer first approaching our them plan in those we did did pages the So where we

traffic conversion. net in incremental and paying is you helped that XXX,XXX place users, that quarter in drive about we paying new one maybe added new do users. see where net the So And

family teams So plan was the in to contributor was the as a as professional. strength was in that strength

a from KeyBanc. have Steve with Enders And question we

match the was you the road Dropbox the In product just broader of of that term. look kind But here ambitions and remarks set vision longer happened if and content wondering you what the kind of outlaying? map there does are about prepared How evolve around that quite a is product like at workflow to thinking lot that. content how around

in to mean, evolution from your the content. at the I that business, Well, syncing it's cloud level all core highest organizing files

block reside there big box places. And Comandi people fragmented working instead give is index one tools view like of of organization how universal people wherever is being of to search And services with XX of help XX search. building so do then like box search and instead different you of that of great instead all having different kind you of their visit a of of how search may build -- stuff like cloud able part to search example and do pretty boxes. your regardless a one and have different important one fully

as all are. So in then is I'm those organization, navigation, second of maps the search, those content, excited each areas about those mentioned. our workflows of where certainly experience and road all pillars really future I around are the

excited for the like And Dropbox so components, contract we can those you finally, media there of the of have opportunity all there's to that in encompasses workflows, a then with to that in build it the are our together the those So and completed it DocSend, signed feedback out Dropbox, together. get do lot HelloSign, products really send workflows. tie rich in more Dropbox, a lot those creative in contract bringing so document when with about end-to-end solution DocSend, that HelloSign more DocSend. each workflows a products HelloSign, I'm say

help lot Dropbox digital monetize goods Replay, from to without our like together their stitch customers monetize where tool they to having things communication So five which collaboration visual or content have the Dropbox different we in Dropox things. find Capture, a video tool, have is we demand Shop, a of a and

there's of So pretty a big and potential portfolio products growth levers.

know come Replay these play we the years, rolling you out kind think couple and see that about in of out does Shop of how past But new of kind the I develop? the you do there with and how would ability next mentioned to And you've incrementally out solutions monetize Passwords that how in you're Capture, and over year. and

mean, investments over of time I think I portfolio different a it's going be to a going and each is to different these magnitudes have scale.

the then biggest improvements then And obviously of transformation we'll that a of to got week, always to kind by businesses. won't DocSend, double iterating, of but measured and to scale is lever, more in happen will more being of are a we'll meaningful month I've workflows years. improvements it down business and what core portfolio we’re kind the have HelloSign 'XX. thing, the green month of business already material this more incremental transformative portfolio more our mean, range changes, I And the keep similar and week of that broader shoots works kind in we’ve growing take, incremental talked So about fastest and by which where be the on in

further Thank remarks. for further call I'd And the like to to in questions no any you. queue. Drew back Houston turn there are

right. your quarter. today. look really for forward to next thank with continued We everyone, you, appreciate support and joining again you Well, All speaking

you call. Thank participating. conference today's concludes This for

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