According to its IPO prospectus, Dropbox now has 11 million paying subscribers (and 500 million registered users on the service).These subscriptions now account for 90% of the company's $1.1 billion in revenue. Their shares will vest if Dropbox's stock achieves a series of price hurdles ranging from $20 to $60 within a decade of the offering's close, the filing said.
The beloved, easy-to-use (if somewhat stagnant) file syncing service had documents unsealed at the SEC today revealing plans for an initial public offering, where Dropbox is looking to raise up to $500 million.
Companies often grant large blocks of equity to executives when they go public, saying such awards are necessary to keep them on the job. That's less than the $210 million loss the year before and 2015's deficit of $326 million. The company also impressively posted $305 million in free cash flow in 2017 - far better than Box, which had only a positive free cash flow of $6.3 million in its latest quarterly filing at the end of 2017. But the losses are shrinking each year as revenue climbs.
Dropbox admits that out of its 500 million users, only 11 million are paying subscribers, and that 90% of its revenue comes from this group. There are over 500 million registered users, with 100 million just from 2017 alone. So let's dive in to see some more details on the matter.
In the company's registration for the IPO, it said it granted about $190 million in stock awards to three top executives previous year.
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Dropbox was last valued at $10 billion in a 2014 venture-capital round.
However, Dropbox warned on competition in the market, saying that "certain features of our platform compete in the cloud storage market with products offered by Amazon, Apple, Google, and Microsoft, and in the content collaboration market with products offered by Atlassian, Google, and Microsoft". But the company still isn't profitable, according to the filing.
Dropbox is popular among individuals users who like the simplicity of the company's cloud storage products, but it has struggled to make inroads in the enterprise space.
The IPO is likely to attract a lot of attention because Dropbox's service is so widely used.
While Dropbox still loses money, those deficits are narrowing.