SAN FRANCISCO—Timothy Regan, Chief Financial Officer of Dropbox, Inc. (NASDAQ:DBX), recently sold shares of the company's Class A common stock. According to a Form 4 filing with the Securities and Exchange Commission, Regan sold 2,500 shares on December 13, 2024. The shares were sold at a weighted average price of $29.9899, resulting in a total transaction value of $74,974. The transaction comes as Dropbox, currently valued at $9.52 billion, has seen its stock surge 45% over the past six months, with InvestingPro analysis indicating the stock remains undervalued despite the impressive rally.
The transaction was executed under a Rule 10b5-1 trading plan, which Regan adopted on May 15, 2024. These plans allow company insiders to set up a predetermined schedule for buying or selling stock to avoid potential conflicts of interest. Following the sale, Regan retains ownership of 416,264 shares, some of which are subject to vesting conditions through February 2028. The company maintains impressive gross profit margins of 82.3%, reflecting strong operational efficiency. For comprehensive insider trading analysis and 12 additional key insights, access the full Dropbox InvestingPro Research Report.
In other recent news, Dropbox has announced a new share buyback program, authorizing the repurchase of an additional $1.2 billion in shares. This comes on top of a secured $2 billion loan primarily arranged by Blackstone (NYSE:BX) Credit & Insurance, and the initiation of a significant workforce reduction of 20% announced during its Q3 2024 Earnings Call. BofA Securities maintained an Underperform rating on Dropbox, despite these developments, with a consistent price target of $28.00. The analyst from BofA Securities recognized the new buyback program as a positive step in returning capital to shareholders, but expressed caution due to the uncertain pace of the share repurchases. Dropbox's Q3 revenue increased slightly by 0.9% year-over-year to $639 million, with the company gaining approximately 19,000 new paying users and reporting a Non-GAAP net income of $190 million. Looking ahead, Dropbox projects its Q4 revenue to be between $637 million and $640 million, with a full-year forecast of $2.542 billion to $2.545 billion. However, due to severance costs from workforce reductions, the free cash flow expectations for 2024 have been lowered to $860 million to $875 million. The company expects its 2025 constant currency revenue to remain flat compared to 2024, with free cash flow projected at or above $950 million. These recent developments reflect Dropbox's strategic focus on its new AI-powered product, Dropbox Dash, and its ongoing business transition.
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