Dropbox (DBX) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $631.5 million, up 0.9% year-over-year; excluding FormSwift, revenue grew 1.7% year-over-year.

• Added 96,000 net new paying users in Q2, marking the third consecutive quarter of growth, with total paying users at 18.19 million as of June 30, 2026.

• Non-GAAP operating margin was 39.7%, ahead of guidance but down year-over-year; unlevered free cash flow was $283.5 million.

• AI-powered product enhancements, including Dropbox Dash and integrations with Claude and ChatGPT, drove user engagement and retention.

• Leadership transition underway, with Ashraf Alkarmi set to become sole CEO and Drew Houston moving to executive chairman.

Financial highlights

• Total ARR was $2.566 billion, up 1.0% year-over-year; excluding FormSwift, up 1.7%.

• GAAP gross margin was 80.2% (flat year-over-year); non-GAAP gross margin was 81.6% (down from 82.2%).

• GAAP net income was $95.8 million (down from $125.6 million); non-GAAP net income was $170.0 million (down from $197.7 million).

• Average revenue per paying user was $139.68, up from $138.32 year-over-year.

• Cash, cash equivalents, and short-term investments totaled $1.114 billion at quarter end.

Outlook and guidance

• Fiscal 2026 revenue guidance raised to $2.513–$2.523 billion; non-GAAP operating margin guidance increased to 40.0%–40.5%.

• Unlevered free cash flow guidance raised to at or above $1.070 billion.

• Q3 2026 revenue expected between $627 million–$630 million.

• Gross margin for 2026 expected at approximately 81.5%, with some quarter-to-quarter variability due to AI rollout and infrastructure efficiencies.

• Management remains cautious due to macroeconomic uncertainty, early-stage adoption of new initiatives, and ongoing product transitions.