good afternoon. Karan, Thanks, and
his for first Aaron, to their wanted today just I begin, know week. and I'll Charlie, filling I everyone wife, this child, Drew Before that be because he let in welcomed
share recent on first provide Drew to company product wishes highlights QX his of an strategy and to year. well for results our I'll our moving and guidance the the family. congratulations big So before update on some rest and and
to commentary think outlook. offer our you will also about XXXX some help I
we again beat second revenue our drove continue we and to for straight individual by the SKUs we profitability. guidance, an climate, within economic driven quarter, navigate our While uncertain strength better-than-expected
within our workflow to FormSwift. customers we continue seasonal and across see document pressure However, teams, softness businesses, including
end update on our I approach to we XXXX, quickly the want As of company strategy. provide an
simplified earlier As business the you focus objectives. year, around main our recall, two in we
The AI-powered our experience universal centered provide starting around and integrating product core introduction machine leveraging offering, of for content, a the with more all other building Dash, order organizing cloud first customers' Dropbox to share product continuing search second is the in improvements seamless learning. experiences evolve to is stand-alone product AI and AI objective a workflows. And
while we a realign after actions order product our core We longer-term these to how AI We're company, to investing with have business more a in first focused strategy this resource vision in QX towards stride with in allocation. able a pleased staying ahead discuss unified initiatives. as our product workforce look and responsible took run we're on refocused to more changes teams efficient taken how, while
moving Now the recent we've of product AI our progress portfolio. made building on to some
first including Universal I'll Search. market Dropbox reminder, major as in of this AI-powered new opportunity product we introduced June, products, first AI. Dropbox this products, As our Dropbox within Dash generation a opening on generation of a represents focus of our next Dash see our launch and and we
solve content New organizing these around met with in Drew York, we problems of of month, same has position distributed points the to pain scale a platform their our challenge world we work. we're And in in the for about a echoed talked and growing neutrality. new with of Last many while fragmented and new good work. hundreds believe this customers
advancements in to AI, software in search from new market. along We and also see opportunities, way market discovery and the folders, shift the recent files particular, knowledge giving with
believe we over triple billion as Dropbox this a years. this to with we're part well take market the DASH. positioned today that's to sizes expected next $X secular And IDC to X wave
into and whether Workspace Dropbox apps that it. Dash pulled search AI use from cloud Microsoft powered content or it a is your allows machine quickly Asana. place, reminder, your you you a Outlook connecting Dash tools, while and leverages As bar. priorities, or And single Google everything one learning, more to because It learns find about by content in users is the
customer and and of select carefully address we've the product iterated group to to we've a pain Since of summer, months, to introducing test Dash in ways users scaling to the product first order few capabilities. our on top learned points. out number insights a In from close observe the users over engagement rolled and in the beta valuable their
initially For Dash. experiencing and within process, establishing noticed connected work many during users example, not were to apps onboarding friction we the
which We a of number users at new experience, to adopt of We've onboarding and retention. Since steps number who the in we've quality. versus intent overall results. it sign-up relevant the connected web-based in semantic more also revamping least to and rolled behind search out the before. currently deliver process reducing apps. We've our this search query seen increase seen app a context add out onboarding improved rolling functionality, processes also significant significantly in one the user improvement easier connected We're made search flow,
to of this rely users we're wording content. share. from has on piece to as and lastly, stacks previously to intuitive find exact had the to right more feedback roll for create make users continuing And more Early using positive been
smart retrieve quick are and stacks way that save, links to for reminder, offer organize collections a URLs. a As
with organized URLs in stacks and Just organized like playlists that's group to way a easy share topic songs, by colleagues.
don't. part stacks we links to of add who retention more important that that as users with higher a adoption stack profile than have those strategy an more found Driving of Dash is our
distribution. to As evolve Teams' an complexity. to opportunity who even we sales customers information sell overload with are in we also investing more Dash drive continue we'll And Dash, to Dropbox and marketing be user education more and grappling and see to
the of AI for making also build looking in We are compliance keep they're we their Dash in safe sure a content rapidly with so This recognize admin transparency world team a we're can and we're tools to they organization. where small is evolving security customers controls, can trust whether features This and in customers right why Dash, feel safe. large or is building deploying the mind.
with X Dash, list activating. of observe the now the weekly progress by We're beta. in since in half early encouraged users and and we of month, first which We've healthy users returning open retention with number wait to engaged is the weeks continue product to X of seen we removed growth the the within activation use rates roughly to last
we're base and Dash into proposition launch XXXX. is in plan user believe for Dash. long-term growing near-term with to customers, value for our continuing the Our before focus we the to resonating improve potential part the GA of earlier product excited and is the We
videos. Moving workflows on seamlessly and our around to documents experience address second to Evolving share and the objective. customer user Dropbox existing file sync
For years, content we've adding capabilities it's of organic we storage, videos. signing Dropbox within that unaware can a documents new even or from time are had distributed important and or whether that Dropbox. era everything offered, editing been functionality more our in customers more and work. discovering so difficult through We've with creating they of they were functionality acquired their heard assets users often beyond within do our These today's
intuitive that we the a experience. editing we why users That's It experience tools announced event last users it a was new at month, a for PDF, to tracking the easier for stay and web right message entirely team clear the at to makes a it's our access a simplify to recording Whether web video productive. an or needed web right modernize customer helps proposal client, the time. sent and redesign
business saw between switch web all provide adaptive a are on customers we more plans, number discover also tab on, redesign, to With opportunity based seamlessly, of With our making value easier And with can to having from our the interface, can what an such on the for to a these working capabilities them as plans page. an our dedicated users it e-signatures. avoid view apps. directly changes Dropbox to focused users integrated refresh
and select our to confusing self-serve plans how just and plan the to they It like Previously, more discover purchase we could of X Professional eSignature additional disjointed customers plan capabilities was separate the also than our right but package, for was storage difficult sold for some looking for it's experience products, end-user navigate. with them.
I'm our Dropbox PDF capabilities editing. to Business packaging for integrated offerings out of excited offerings generation new new for e-signature, fully analytics larger essential small Dropbox the and teams. including customers, and that for Business tracking first rolled to added Plus Dropbox These announce teams and are professionals, we've bundled solo and such as value, updated pricing reflect for we've the
website our in plan be as More presentation. details on each our can of as investor well found
We existing ARPU over seen bundles and we're today, plans plans improvements can rates. multiple for significantly see as an customers customers these opportunity customers as products retain the lift their higher from migrating purchase the at adoption price. new an at provide to who retention we've New these well user as currently new existing use planned time to
about of million. growth update on results. to commentary our move and highlights QX for to to targets Total to outlook. range now some from I'll of think with quarter our year, X.X% in increased million, XXXX the this $XXX million $XXX how our year-over-year with third financial guidance on guidance beating our Starting and QX rest along revenue offering $XXX
growth. exchange approximately an million to headwind Foreign provided rates $X
businesses. revenue basis, by X.X% we total year-over-year grew which teams revenue offset quarter currency again driven headwinds see grew across strength by year-over-year. constant The document our X.X% workflow partially were was our for a $X.XXX across to once On plans, the for Individuals outperformance of a and billion. ARR Total continue
sequentially of lapped currency and year-over-year, less $XX by to pricing users added last that half billion we individuals. June, million QX, first X.X% XX.X driven constant in ARR made added net we've paying and to changes note our basis, Teams We users I'd a ARR XXX,XXX plans net the sequentially. largely and paying with grew On new packaging primarily hence, XXXX. quarter the the approximately quarterly and relative new exited
QX $XXX.XX, over $X increase a plans. to Teams year-over-year, but per premium the pricing user driven paying revenue for basis, a Average as slightly shift on was well FormSwift down up by as sequential
acquisition-related unless our and certain estate to statement our in expenses, note Before figures we purchased otherwise indicated, continue force. I assets intangibles, reduction with amortization income impairments compensation, real all are our related further would and discussion of of stock-based to of P&L, that exclude mentioned like expenses non-GAAP
income income of adjustments. effect Our the tax also non-GAAP aforementioned the net includes
been real fourth estate sublease have our space San we actively strategy, for the estate This in in approximately in real is a remaining this buyout majority landlord X space, Francisco. million to to over will flow of we October, an which previously seeking XX% of San our not free into we provide approximate Moving In and years $XX an was $XX our payment of factored Francisco our paid the update of this buyouts executed subleases XXXX where with latest I with our view quarter vacant year. be a of share our on and for year. beginning million cash when guidance, payment
this Overall, over be the we duration. buyout the XX-year remaining we payments lease long aggregate as in over area million rent term significant expect avoiding savings fees to and will common $XXX drive in maintenance
We will see actively seek additional we and continue buyouts returns. pursue favorable to where subleases
driven our let's the XX%, beat for of the QX. on roughly primarily margin We up was we guidance compared incur Operating hiring also professional operating XXXX. delayed focused points, margin basis with cost the Gross XX% was P&L. prudent roughly continue With XXX the quarter being spend, by to flat XXX services approximately with that, year-over-year. third quarter margin points are We third quarter, as remain expect marketing of basis in to discipline. we by which pace and
XX% quarter based for third share for outstanding $X.XX XXXX. weighted operating weighted the of on Net income million third on outstanding, was up XXXX, million, was average versus driven income $X.XX share Diluted $XXX diluted growth. XXX per third XXX shares of average quarter shares EPS the quarter by based the from up diluted per million
billion. to compared and In quarter. the to QX short-term on quarter. finance balance ended to $XX million leases $XXX cash million XXXX. in data of quarter, of We $X.X in quarter our during Cash resulted $XXX our quarterly were the cash also $X cash in equipment. was investments million cash flow center the million expenditures from added for million This free flow of the we operations flow. Moving and Capital with $XXX third
on we share spending repurchase X our activity. repurchased Moving $XXX million approximately shares, to In million. QX,
of remaining current of $X.X the As the we third have end quarter, approximately under authorizations. repurchase our billion
cash free to to committed flow a of our we allocating portion reminder, a remain significant As share annual repurchases.
context I'd in will also and some now I guidance guidance. on where our like behind full to for this the provide thinking XXXX, the share QX turn, year
of the of $XXX to revenue XXXX, fourth $XXX range million. the quarter million For be expect we in to
in range of $XXX are currency million. and currency a a approximately quarter, headwind revenue of to revenue We constant expect on in thus, the we the basis, assuming $XXX $X million million to be fourth
We XX approximately from to expect includes be non-GAAP operating FX This and roughly XX.X%. margins headwind point basis a FormSwift.
we be in to outstanding Finally, shares million trailing based XXX the average to of average diluted price. million XX-day weighted our expect shares share range on XXX
$X.XXX as previous are of full $X.XXX versus billion to roughly the reported we raising our For to revenue guidance by year to $X billion. midpoint range billion XXXX, million our $X.XXX the of $X.XXX billion range
a to now XXX currency a billion currency a range headwind of by to headwind raising point basis, basis $XX to XXXX million year midpoint $X.XXX or We billion. an approximately of million $X constant full we approximately growth. are estimate On $X.XXX the roughly
FormSwift We XXX expect continue points of to basis to nearly contribute growth.
gross XX% our We XX.X%, up be to from prior expect to of margin XX%. guidance
of We approximately from our FormSwift. operating from XX guidance headwind expect basis be is XX%. FX inclusive up an XX.X%, margin of and prior approximately non-GAAP approximately This point to
cash our shortly. $XXX elaborate the at range guidance to million, which to $XXX free $XX million We to million will on narrowing of the $XXX guidance I $XXX relative and previous are our by flow reducing to million million midpoint range
our As capital now million, end to expect expenditures, range. the prior $XX low guidance be it relates we to of CapEx approximately
X% from prior up our of lease finance X.X%. In revenue, approximately addition expectations of to be lines to
guidance shares. we XXXX XXX outstanding maintaining of million diluted XXX range million our Finally, average shares weighted to are
To share some guidance. additional context on this
for better-than-expected plans as Individuals plans. raising DocSend has across to by QX. revenue revenue, also the well new performance will net macroeconomic related note expect uncertain paying Alongside As Teams QX we as seasonally quarter our are user net our I for new in guidance is This paying Sign. macroeconomic our headwinds a users. driven outweighed XXXX, I environment, and lower that additions slower both on
plans we part of plan launch and as have page on Additionally, changes, plans page. our prominence our skews family bundles recent minimized the
as at While still it we cost. users were available that using this to a customers, business licenses to lower found is SKU a loophole existing obtain
As of rate. a result to our we trend paying historical run expect net lower users factors, new these relative to
as our to XX are as is up to operating related increase margin prior to operating revenue by raising compared approach guidance. hiring which margins we our to is translating for As driven both This our XX.X%, to well disciplined XXXX, savings. our subsequent guidance approximately risks, basis points to outperformance as our
and As related to within particularly files users plan, have use years, reminder, as increasing uploading videos which for to as recent allows finance of much seen leases, to high-density advanced we as in images platform, our such needed. levels as customers Teams our storage a
QX, purposes design. this, that sunsetted as in we that model. much using you metered the a discovered need address benefit for of meet the spirit also plans We to some customers as storage transitions and space did policy To the were not our
this impacted with support with customers an the vast window the them to of accompanied extended we for However, transition. grandfathering majority
a translate advanced leases the ultimately will SKU the lead in uptick storage plan indicated the this grandfathering the it profitable in short incremental to long support finance term, in term, will by window. as While to costs to more
those we as seeking from longer of a no to that change customers expect solutions and also expect modest offer. ARR We churn this refunds headwind degree we incremental some for storage
full this There few guidance flow, are our range. decrease. cash cash are a reducing As year factors related to we driving free free flow
was lease, our not portion the San is previous into factored First of a aforementioned our which guidance. of Francisco buyout
due million quarter. and fourth is of the the in buyout tranche first is $XX The
store our expect XX of in roughly now installment Second, receive payment $XX we only million we app from Thus, to receive December now January an XXXX. monthly partner in XXXX. of payments to expect
Looking receive in ahead, payments to still XX we expect XXXX.
factors. due are fourth we to Lastly, quarter a two the billings in reduced level also expecting of
which given macro of and these risk. U.S. FX, is headcount second, dollar, the reduced are has to First pressuring as immediate marketing subsequent seeing more on the attribute workflow and investments incremental billings. Teams we And businesses, impact as the softness well we in our a to recent document which environment our the strengthening businesses
cash result I approximately mentioned also guidance several million to free for the unique outflows calls, on This flow range $XX holdback for acquisition-related approximately R&D an cash include that continues E, prior onetime installments million related approximately of including and have in consideration XXXX a force reduction headwind to deal Command legislation. severance as of our and DocSend payments $XX tax million of $XX
expectations margin thinking guidance where our I specific to me wanted targets. at growth XXXX and cash will early to on share time. operating flow free brings offer our XXXX, This this revenue I XXXX not and some revenue
I next the as for excluding FormSwift, to organic also However, would our point currency increase. year 'XX price of constant lap growth we Teams expectations, a revenue fair QX underlying proxy benefit the our rate growth as
As use is our savings slowdown This, a of strategy lines. in investments the those share fund more in year continued investments to term. document and those headwinds, in was become sync over in business legacy along our rips long to reminder, and away this legacy from file rotate areas businesses growth these to to billings areas a to potential earlier translating behind the and with macroeconomic efficient higher workflow
beyond. and introduced not GA Separately, while video we these are our only being initiatives Thus, be later be to growth to that contributors investments and market expect not will will the making meaningful until in products Dash, bundles our early longer-term going to in either progress products, these or on we are XXXX. XXXX new recently until
cash to brings me targets. and our margin This XXXX free flow operating
over levels commitment at driving we or quarter, of factors to I'm face progress continue to these as our next our Francisco our of in free cash San will significant against has targets also years lease business X flow. and to made the have as flow headwind profitability that disciplined a while And since above of targets, buyout manner. to a ago, year. margin a as serve since free grown on we progress last we targets, FX, higher operate which cash flow, continue free as including such our where and introducing to them we the these We made challenges proud cash a will well remain as partial headwind
tax In light addition, initially not planning now repealed. though to as targets, after which we developed our are legislation, the came we will be R&D
could So we over initiatives, mounting in long-term come headwinds, as these withhold such investments our DASH.
we that would this shortsighted believe However, be approach. a
As such, we the R&D be are approximately for expected adjust flow cash to tax billion $X million free legislation now in lowering our XXXX. target to $XX
are words, other $X R&D to resetting target be we minus amount. billion ultimate tax flow free legislation In cash the the XXXX
our We where XXXX will and impact potential FX cash monitor we February. to such also free factors to official will as guidance on XXXX flow continue provide exogenous its in expectations,
In our more to our conclusion, we've been run finding product focused road businesses on legacy efficiently. opportunities map longer-term investing towards while
macro better changes to necessary While we position Dropbox this making believe year navigate long been we the continue to headwinds, we've for term. the
continue future next work step of important see we representing our brand first new enter products. generation opportunities around leverage of the to with Dropbox We centered opportunities in our Dash as scale AI-powered and to market an
I'll We it shareholders. operator And for will to long-term efficiently while Q&A. our that, on for driving our remain the turn allocating focused and with value customers capital
