DBX - Dropbox may see 'slight acceleration' in Q1 sales growth Monness Crespi Hardt

2023-05-03 10:35:52 ET

Dropbox ( NASDAQ: DBX ) is slated to report first-quarter results tomorrow after the close of trading and investment firm Monness, Crespi, Hardt is expecting a "slight acceleration" from the prior quarter, even as the company deals with an uncertain economy that has led to recent layoffs .

Analyst Brian White, who has a neutral rating on Dropbox ( DBX ) shares, said the company is likely to generate 7% year-over-year growth to $603M and earn 38 cents per share, due in part to "incremental" revenue from the company's FormSwift acquisition.

Dropbox ( DBX ) acquired FormSwift for $95M in cash in December 2022.

A consensus of analysts estimate Dropbox ( DBX ) will earn 36 cents per share and generate $601.11M in revenue.

The results are slated to come just days after Dropbox ( DBX ) said it would cut its global workforce approximately 16%. It expects to incur between $37M and $42M in charges in connections with the layoffs and comes as White said the company's last earnings call was "troubling."

"Given the massive layoffs across the tech industry in recent quarters, we are not surprised by this downsizing, especially given Dropbox’s revenue growth has decelerated sharply in recent quarters, even with the tailwind of the work-from-home movement," White wrote in an investor note, noting that the company saw just 6% in the previous quarter, down from 19% growth in the fourth-quarter of 2019.

Despite the concerns over slowing revenue growth, White noted the company should benefit from a "leaner cost structure" as it faces a tumultuous economic environment.

Looking ahead, White expects Dropbox ( DBX ) to see a 7% year-over-year growth in sales for the second-quarter at $612M and expects full-year sales of $2.49B, along with $860.2M in free cash flow and $1.72 per share in earnings.

More on Dropbox

• Dropbox to cut global workforce by 16%
• Seth Klarman's Baupost adds Herbalife, Altice USA, exits Dropbox, Enhabit
• Dropbox acquires FormSwift for $95M in cash

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