Dropbox Gears Up for IPO

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Dropbox has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). The company did not mention any pricing details in the filing, but it values the entire offering up to $500 million. The company intends to list its shares on the Nasdaq under the symbol DBX.

The underwriters for the offering are Goldman Sachs, JPMorgan, Deutsche Bank, Allen, Merrill Lynch, RBC Capital Markets, Jefferies, Macquarie Capital, Canaccord Genuity, JMP Securities, KeyBanc and Piper Jaffray.

This company is a global collaboration platform where more and more of this content is created, accessed, and shared with the world. It serves more than 500 million registered users across 180 countries.

Ultimately, management believes the need for its platform will continue to grow as teams become more fluid and global, and content is increasingly fragmented across incompatible tools and devices. Dropbox breaks down silos by centralizing the flow of information between the products and services its users prefer.

Management also believes that its current registered user base represents a significant opportunity to increase revenue. It’s estimated that roughly 300 million of registered users have characteristics — including specific email domains, devices and geographies — that make them more likely than other registered users to pay over time.

The firm detailed its finances in the filing as follows:

Our revenue was $603.8 million, $844.8 million, and $1,106.8 million in 2015, 2016, and 2017, respectively, representing an annual growth rate of 40% and 31%, respectively. We generated net losses of $325.9 million, $210.2 million, and $111.7 million in 2015, 2016, and 2017, respectively. We also generated positive free cash flow of $137.4 million and $305.0 million in 2016 and 2017, respectively, compared to negative free cash flow of $63.9 million in 2015.

The company intends to use the net proceeds from this offering to repay its debt, as well as for working capital and general corporate purposes.