Dropbox posted fourth-quarter revenue of $636 million, down 1.1% year-over-year but above its guidance range. Total annual recurring revenue ended the quarter at $2.526 billion, down 190 basis points year-over-year yet roughly flat excluding a 160 basis-point FormSwift headwind. Executives highlighted retention gains in self-serve SKUs and stabilization in the core file synchronization and sharing business as key drivers.

The company generated $1 billion in operating cash flow and $251 million in free cash flow for the quarter, marking a 44% year-over-year increase in free cash flow per share. Dropbox repurchased approximately 14 million shares for $415 million in Q4 and exited with $1.04 billion in cash plus $1.17 billion remaining under its buyback authorization. Management noted continued emphasis on shareholder returns supported by strong unlevered cash generation.

Management guided flat full-year 2026 revenue of $2.485–2.5 billion with a non-GAAP operating margin target of 39–39.5% and free cash flow at or above $1.04 billion. Strategic initiatives include rolling out Dash and Teams to drive expansion, simplifying pricing and packaging, and sunsetting FormSwift as part of modest paying-user growth expectations. Early Q4 tests showed improved Teams trial conversions and engagement with embedded Dash AI features.