With all of these opportunities for add-on services and the rapid adoption of digital tools worldwide, there is a clear path for Dropbox to grow ARR about 10% annually for the foreseeable future.Ĭheap valuation and returning cash to shareholders Investors should expect these small acquisitions to continue over the next few years. In the fourth quarter, the company acquired Command E, a search tool that will be embedded into the Dropbox platform to help people more easily search for files and documents. Third, management continues to hunt for buyout targets that can be bundled into the Dropbox subscription suite or added on as core products. If these tools add value for Dropbox subscribers, this will help the company raise prices over time without increasing churn, helping with ARPU and ARR growth over the next few years. These include a video manager called Dropbox Replay, a screen recorder called Dropbox Capture, and many other tools. Second, Dropbox continues to add new products to its workflow platform. On the earnings call, management said the two subsidiaries were two of its fastest-growing businesses in 2021 as Dropbox cross-sells their products to its millions of existing customers. How does management plan to grow its ARR? First, investors should expect a boost from the recent acquisitions of HelloSign and DocSend.
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