I'm not an expert in Dropbox financials, I was just pointing out that the numbers are not necessarily as good as they seem and some care is needed to compare it with other companies. I have no idea how much the capital lease adjustment would represent. If your point is that from a valuation perspective it looks better than many other companies I agree. But I'm not sure it is so easy to "print cash". If they stop developing and marketing the product revenue will decline, they are not in a segment where you can milk a stagnant product for long.
> If they stop developing and marketing the product revenue will decline, they are not in a segment where you can milk a stagnant product for long.
I would argue the exact opposite. This is one of those products where most people just "set it and forget it". As long as the desktop sync continues to work as it does for all major OS's then they most certainly can milk their product for cash.
> I was just pointing out that the numbers are not necessarily as good as they seem and some care is needed to compare it with other companies.
I mean, you can make the argument that any company comparison requires "care" when analyzing it. This is literally why analysts still exist.
> But I'm not sure it is so easy to "print cash".
I think we're getting bogged down in semantics here. For most users of Dropbox, it's literally just a file sync - that's it - and it already works fairly flawlessly (compared to their competition at least). Which means at 70% GM it requires very little effort to continually advance the product. ~$700M alone is being used to continually fuel growth.
Fun question:
Q: Do you know when NetSuite turned a profit for the first time?
A: 2009[0] Yes that 2009, when the economy went to shit. Weird huh?
As long as the desktop sync continues to work as it does for all major OS's then they most certainly can milk their product for cash.
iOS and MacOS have changed how they have handle third party syncing a few times over the past 4 or five years. Microsoft and Apple are both adding features to make Dropbox unnecessary and Microsoft has a large enterprise and consumer marketing budget to chip away at Dropbox’s profitable enterprise base.
While Google isn’t as entrenched in the enterprise as Microsoft, it is becoming more entrenched in education and it gives away a lot more storage for free.
If you think any software maker can just sit on its laurels, see what happened when MS tried that with IE.
