What is dropbox and why do i need it1/6/2023 More recently, Dropbox acquired Docsend on March 22 for $165 million in cash. According to management, signature requests on Hellosign grew 70% from 2019 to 2020, which indicates that so far, Dropbox has been successful in cross-selling the product to existing users. The goal is to integrate Hellosign within Dropbox and upsell the product to the over 15 million paying users of Dropbox, allowing them to easily send digital contracts all through one platform. It acquired Hellosign, a software tool similar to DocuSign, in 2019 for $230 million. One of Dropbox's biggest initiatives outside of improving its workflow management offering is to acquire new products and companies. Investors should expect Dropbox to steadily grow its free cash flow in line with its customer and sales growth as a sign that the company can achieve steady profitability at scale. Right now, it has $641 million in deferred revenue sitting on its balance sheet, which won't get picked up on the income statement, leading GAAP net income to only hit $47.6 million in the quarter. Free cash flow is a better metric than net income for evaluating Dropbox's profitability due to the fact it has to defer revenue over the life of customer contracts. On the bottom line, Dropbox generated $108.8 million in free cash flow during the period, which was more than four times the $25.5 million it generated last year. All of these inputs led to Dropbox growing its most important top-line metric, annual recurring revenue (ARR), 13% to $2.11 billion. Paying users hit 15.83 million in the quarter, up from 14.59 million in the year-ago period, while average revenue per user (ARPU) increased 5% to $132.55. In its latest report, Dropbox generated revenue of $511.6 million, up 12% year over year as it works to continue upselling its paid cloud management and file-sharing tools to the hundreds of millions of customers using its free product.
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