Dropbox’s ‘Virtual First’ strategy pays off, reports revenue of $565 million in Q4

Dropbox reported its financial results for the fourth quarter of its 2021 fiscal year. The company saw double-digit percentage growth across both revenue and net income figures for the quarter and fiscal year. 

For the final quarter, Dropbox took in total revenues of $565.5 million, up from the $504.1 million posted for the same quarter in 2020. 

Net income here was $124.6 million, or $0.33 per share, up massively from the $398.2 million, or $0.84 per share, lost in the year-ago quarter. That loss was the result of an impairment charge during Q4 2020 relating to “the company’s decision to shift to a Virtual First work model, as well as an income tax benefit.” 

For the entire 2021 fiscal year, Dropbox reported revenues of $2.16 billion, up from 2020’s $1.91 billion figure. 

FY net income reached $335.8 million, or $0.87 per share, rising far over the $256.3 million, or $0.62 per share the company lost as a result of blunting its Q4 2020 impairment charges with profits over the remainder of the previous year. 

Dropbox Co-Founder and CEO Drew Houston called 2021 a “strong year for Dropbox.” The chief executive reiterated his belief that Dropbox made the right decision in becoming a “Virtual First company” despite the financial costs that move entailed. 

More: Facebook adds Dropbox CEO Drew Houston to board of directors

The continuing shift to a Virtual First model included the launch of its own password manager and the debut of several new features specifically designed to support distributed work teams during the 2021 calendar year.  

The tumultuous period also saw the termination of some 315 employees and the departure of COO Olivia Nottebohm. 

Despite all of this, Dropbox’s new direction seems to be paying off, with it meeting or exceeding performance estimates every quarter since the beginning of 2021. 

On the strength of this performance, Dropbox’s board of directors approved an additional $1.2 billion in share repurchases of the company’s Class A common stock. This will be executed through open market purchases or privately negotiated transactions.