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DropEverything! DropBox DropsDocs to DropStocks

Cloud file system upstart files for IPO

DropBox today formally filed for its IPO – its initial public offering, its stock-market debut, whatever you want to call it.

The cloud storage and collab upstart picked the Friday news dump window to unseal its S-1 paperwork with the US Securities and Exchange Commission: it previously submitted its plan to the regulator confidentially.

The filing does not give an exact date for the IPO, nor an indication of what the asking price on the first day will be. The outfit is eyeing up a $500m injection from its stock-market debut, although this target can and will probably change. It will use the stock ticker DBX.

"Over the past decade, Dropbox has pioneered the worldwide adoption of file sync and share software. We've since expanded our capabilities and introduced new product experiences to help our users get work done," San Francisco-based DropBox said in its formal filing.

"As one of the few large-scale collaboration platforms that serves customers of all sizes, we also have an opportunity to reach a broad population of independent knowledge and creative workers. We believe that this market hasn’t traditionally been included in IT spending estimates."

The unsealing comes after months of speculation that DropBox was building towards an IPO. The biz was already said to have begun stirring up interest in January with a "confidential offerings" stock campaign.


Today's document provides more insight into DropBox's financial workings. The company said its annual revenues topped $1bn for the first time last year. Profits still elude the cloud file-sharer, but last year's $112m net loss was better than the $210m burned in 2016 and $326m in 2015. Its annual revenue per paid user is $112, down from 2015 but better than 2016, and its gross margin stands at 67 per cent.

Among the risk factors cited were the admissions that "our revenue growth rate has declined in recent periods and may continue to slow in the future," and "we have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to achieve or maintain profitability."

DropBox also counts 500 million registered users, but only 11 million who pay for the premium services. In total, DropBox said it juggles more than 400 billion files on its service.

It also revealed it deletes long-term inactive or abandoned accounts to keep storage and infrastructure costs down.

And moving away from using Amazon's AWS S3 cloud storage, beginning in 2015, saved it $75m over two years, although it spent $53m building its own data center facilities to hold customers' documents.

It is estimated the outfit – which has Amazon, Google and others as its rivals – has taken at least $1.5bn in private funding and financing since its founding in 2007, and has about 2,500 staff spread over a dozen or so offices worldwide. CEO and cofounder Drew Houston has control over 24.4 per cent of the organization.

The IPO would be the first major offering in 2018, and the biggest for a tech house since MongoDB went public in October last year. ®

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