Dropbox’s (NASDAQ:DBX) strong quarterly earnings sent the stock up by over 20% on the day after the report. The stock’s downtrend is finally over. The cloud storage player is evolving into a collaboration tool. Although the shared collaboration environment is clunky, users are nonetheless subscribing to the service. This suggests that the stock will reward investors for 2020.
Dropbox posted revenue growing 18.6% to $446 million. The firm now has 14.3 million paying users, 80% of the subscribers using it for work, and over 600 million registered users. The addressable market is enormous if Dropbox converts the registered users to paying ones.
Dropbox is building what it dubs the first smart workplace. In effect, the virtual work environment brings everyone together. Files, content services, and work graphics are just a few tools that keep everyone on the team synced.
In addition to driving subscription growth from the existing users, Dropbox plans to add even more product experiences to grow the paying user base. Plus, its subscribers may opt for a better plan, which increases profit margins. Dropbox is no longer sitting still: it will more aggressively ask users to upgrade to a premium plan. DBXi, or Dropbox machine intelligence, proactively suggest relevant content and personalizes the experience. This will keep users on the platform and increase the chances of conversion.
