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Q4 2024 Earnings and Investor Presentation
- 1. Financial Results & InvestorPresentation Q4 2024 1
- 2. This presentation containsforward-looking statements. These statements may relate to, but are not limited to, plans for growth, technological capabilities and new features and products and the long-term financial targets of Dropbox, Inc. ("Dropbox," "we," "us," or similar terms), as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "intend," "potential," "would," "continue," “ongoing” or the negative of these terms or other comparable terminology. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are based on information available at the time those statements are made or management’s good-faith beliefs and assumptions as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in, or suggested by, the forward-looking statements. In light of these risks and uncertainties, the events and circumstances contemplated by the forward-looking statements made in this presentation may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. These risks and uncertainties are described in greater detail under the heading “Risk Factors” in our quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2024 that we filed with the Securities and Exchange Commission (the “SEC”) on August 9, 2024, and include, but are not limited to, the impact to our financial results, business operations, the business of our customers, suppliers, partners and the economy as a result of general macro economic, political and market uncertainty, as well as the potential for a more permanent global shift to remote work; our ability to retain and upgrade paying users, and increase our recurring revenue; our ability to attract new users or convert registered users to paying users; our future financial performance, including trends in revenue, costs of revenue, gross profit or gross margin, operating expenses, paying users, and free cash flow, including, in all respects, with respect to any future targets described herein; our ability to maintain profitability; our liability for any unauthorized access to our data or our users’ content, including through privacy and data security breaches, significant disruption of service on our platform or loss of content, particularly from any potential disruptions in the supply chain for hardware necessary to offer our services; any decline in demand for our platform or for content collaboration solutions in general; changes in the interoperability of our platform across devices, operating systems, and third-party applications that we do not control; competition in our markets; our ability to respond to rapid technological changes, extend our platform, develop new features or products, or gain market acceptance for such new features or products, our ability to manage our growth or plan for future growth; our acquisition of other businesses and the potential of such acquisitions to require significant management attention, disrupt our business, or dilute stockholder value; our ability to attract and retain key personnel and highly qualified personnel; our capital allocation plans with respect to our stock repurchase program and otherinvestments; and the dual class structure of our common stock and its effect of concentrating voting control with certain stockholders who held our capital stock prior to the completion of our initial public offering. These factors could cause actual results, performance or achievement to differ materially and adversely from those anticipated or implied in the forward-looking statements. Additional information will be available in other future reports that we may file with the SEC from time-to-time, which could cause actual results to vary from expectations. Except as required by law, Dropbox does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. In addition to financial information presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this presentation includes certain non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating income, non-GAAP operating expenses (including research and development, sales and marketing and general and administrative), non-GAAP operating margin and free cash flow. These non-GAAP measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. These non-GAAP measures have limitations as analytical tools, and they should not be considered in isolation or as a substitute for analysis of other GAAP financial measures. The non-GAAP measures Dropbox uses may differ from the non- GAAP measures used by other companies. This presentation also contains statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. This information may be based on many assumptions and limitations, and you are cautioned not to give undue weight to such information. We have not independently verified the accuracy or completeness of the data contained in the industry publications and other publicly available information. Dropbox does not undertake to update such data after the date of this presentation. All third-party logos appearing in this presentation are trademarks or registered trademarks of their respective holders. Any such appearance does not necessarily imply any affiliation with or endorsement of Dropbox. Safe Harbor Statement 2
- 3. $2.548 billion 1.9%84.0% 36.4% 18.22M $872M Financial Performance TTM¹ revenue TTM revenue growth TTM Non-GAAP gross margin TTM Non-GAAP operating margin TTM FCF² Paying users³ (1) TTM: Trailing Twelve Months (2) FCF: Free Cash Flow, defined as Operating Cash Flow less Capital Expenditures (3) Paying users as of 12/31/2024 3
- 4. 1 Scaled platformdriven by our core File, Sync, and Share product offering 2 Subscription-based, recurring revenue model 3 Loyal users with a high retention profile 4 High margin business supported by self-serve model 5 Strong free cash flow conversion 6 Self-funded investments for high-growth opportunities 7 Consistent capital return to shareholders Investment Highlights 4
- 5.
- 6. Design a more enlightenedway of working DROPBOX MISSION 6
- 7. Our Journey Dropbox Launches in2008 File, Sync, and Share WHERE WE STARTED DROPBOX TODAY Organize and Secure All Cloud Content DROPBOX TOMORROW Business Overview (1) Content Sharing and Collaboration applications are classified as applications that enable users to store, synchronize, and share file-based content and folders across designated devices, people, and applications. 1 2 3 • • • Multi-device usage and universal file sharing in its infancy Migration to online cloud storage begins Flagship product: File, Sync, and Share • • • A leader in the $12bn content sharing and collaboration applications category¹ Large-scale infrastructure to support 700m+ registered users and 18.22m paying customers Collaborative working tools and advanced security features • • • • Dropbox evolves from syncing your files to organizing all your cloud content The proliferation of SaaS tools and content platforms has created new challenges for end users around finding, organizing, securing, and sharing content Solving for fragmented content experiences in a cloud-first workplace Leveraging AI to solve for cloud content organization, security, real-time suggestions, knowledge management, and data insights 7
- 8. Secure Organize Share Secure,streamlined content management with robust scalable solutions Enhances where and how you work with seamless integrations and intuitive content organizations Effortless sharing and collaboration across teams and external partners A workplace for digital collaboration DROPBOX TODAY Business Overview 8
- 9. File Sync andShare (FSS) Plans FOR BUSINESS TEAMS Business Overview Standard $18.00 / user / month $180.00 / user / year 3 users minimum Business Advanced Business Plus 5TB of storage (pooled) 9TB of storage (pooled) 15TB of storage (pooled) 15TB of storage (pooled) $18.00 / user / month $180.00 / user / year 3 users minimum $30.00 / user / month $288.00 / user / year 3 users minimum $30.00 / user / month $288.00 / user / year 3 users minimum Enterprise As much storage as needed Negotiated pricing Dropbox Today FOR INDIVIDUALS Basic Plus $11.99 / month $119.88 / year Family $19.99 / month $203.88 / year Essentials $22.00 / month $216 / year Free 2GB of storage 2TB of storage 2TB of storage 3TB of storage 9
- 10. • • • • • Compliance for Filesand Data Two-factor Authentication Device Approval and Management File Permissions and Locking Version History and File Recovery Business Overview Our robust security features protect proprietary information and provide peace of mind to customers as they build relationships with their own teams, clients, and partners. Secure Dropbox Today 10 10
- 11. Organize • • • • • File naming, sorting,tagging, and starring Smart-search Automatic file backup and sync Microsoft co-authoring PDF annotation Business Overview We make file organization effortless and intuitive with easy-to-use folder structures and seamless integrations, allowing customers to quickly find what they need so they can get more time to focus more on high-value work. Dropbox Today 11 11
- 12. • • • • • • Advanced sharing controls Assignto-dos Large file sharing and file transfer Digital watermarking Password protection Folder permission management Business Overview Sharing is key to growth, so we've focused on creating a simple and efficient experience for sending large files, managing access, tracking document activity, and syncing edits in real-time, helping teams work together more effectively. Share Dropbox Today 12 12
- 13. • • • • Secure sharing Document analytics Videoanalytics Dynamic watermarking Business Overview DocSend gives teams a single, scalable deal platform that maximizes file sharing security and minimizes file viewing friction all while delivering instant alerts that track engagement with documents. We remain focused on making execution faster, data-driven, and more secure. Sign makes agreements easy with simple and secure eSignatures. With Sign, anyone can set up a document for signature, eSign, and track the agreement process for their most important documents • • • • Advanced data rooms Secure client portals eSignature One-click NDA • • • Standalone or integrated into Dropbox FSS Unlimited signatures Tamper-proof documents • • • • • AES 256-bit encryption Signer fields with data validation Template links Audit trail 22 languages 13 Dropbox Today
- 14. 15.48 15.48 16.79 16.79 17.77 17.77 18.12 18.12 18.22 18.22 2020 2021 20222023 2024 $128.50 $133.73 $134.51 $139.38 Paying Users ARPU Scaled User Base 700M+ Registered Users 18.22M Paying Users Business Overview Q4'24 User Metrics 575k Paying Teams ~ Dropbox Today $140.23 14
- 15. Globally recognized brandin 180 countries 57% FY'24 United States Revenue 43% FY'24 International Revenue Business Overview more revenue less revenue Dropbox Today 15
- 16. Business Overview DropboxToday Sydney Tokyo Singapore Taipei Stockholm Oslo Berlin Frankfurt Amsterdam London Milan Paris Madrid Atlanta Ashburn New York Chicago Toronto Dallas Miami Seattle Hillsboro Palo Alto San Jose Los Angeles Denver Served by scaled infrastructure Network Point of Presence (POP) Public Data Center Core Data Center Incheon 16
- 17. 2020 2021 20222023 2024 2,100 2,800 3,700 4,600 4,700 Total Customer Storage (Petabytes)¹ Securing and organizing 1T+ pieces of content Business Overview (1) Petabytes are rounded to the nearest hundred Dropbox Today 17
- 18. Our FSS business: acategory leader Business Overview Total Market: $11.6B (1) Source: IDC, May 2024 (2) Content Sharing and Collaboration applications are classified as applications that enable users to store, synchronize, and share file-based content and folders across designated devices, people, and applications. Dropbox Today Rest of Market 15.9% Apple 8.6% Box 8.8% Google 16.4% Microsoft 29.4% Dropbox 20.9% 18
- 19. Ranked by G2as a leader in customer satisfaction and market presence Cloud Content Collaboration Software: All Business Overview G2 scores products and sellers based on reviews gathered from our user community, as well as data aggregated from online sources and social networks. Dropbox Today 19
- 20. Business Overview Growth Drivers Convert Driveregistered users to become paying users of Individual and Team plans Activate Drive top-of-funnel engagement through increased sharing and signup activity Upsell Prompt existing users to upgrade to premium plans, additional licenses and add-ons, and new product experiences such as Dash Retain Enhance the core sync experience with a focus on performance and reliability File, Sync, and Share Dropbox Today 20
- 21. Why customers choose Dropbox Wecan’t imagine doing any of this without Dropbox… We just wouldn’t be able to stay organized the way we do now—it’s completely integrated into our workflow." " Ausolan's added value comes from the professionalism of our staff and the differentiation of our services. Dropbox plays a key role in the technological infrastructure we need to meet that goal, helping us to work faster and better, in both our internal and external processes. We know how important it is to complete our work on time and to the highest quality for our clients. And during the pandemic, that would not have been possible without Dropbox.” " – Ausolan – DeMuro Das Ease of use Security Seamless Collaboration Speed & Reliability Neutral platform Storage Capacity 21 21
- 22. Forces Impacting theLandscape Cloud Content Collaboration • • • Rise of comprehensive platform ecosystems Teams seek multi-cloud networking solutions and ways to search and organize their cloud content Content modernization and a shift to public cloud solutions will be a sustaining growth factor with the share of public cloud solutions growing from 77.9% in 2023 to 87.3% in 2028¹ Software Proliferation • • • Knowledge workers seek efficiency and organization as they continue to adopt additional software tools As of May, 2023, The average number of applications a knowledge worker used was 11, compared to six applications in 2019² More than two-thirds of workers say they waste up to 60 minutes at work navigating between apps, and 68 percent of workers toggle between apps up to 10 times an hour³ Security & Compliance • • • Material driver of user adoption and customer purchase decisions Growing significance as teams adopt new tools and look to AI-enabled solutions. 72% of security executives have increased their risk management investment in AI governance and 67% say GenAI increases their cyber attack vector⁴ Artificial Intelligence • • • • OpenAI’s ChatGPT release triggered industry-wide development of LLMs Platforms integrate AI and ML for enhanced content management, search, and collaboration Early stages of long-term implementation More Than 80% of Enterprises Will Have Used Generative AI APIs or Deployed Generative AI-Enabled Applications by 2026⁵ Business Overview (1) Source: IDC, Worldwide Content Services Applications Forecast, 2024–2028, May 2024 (2) Source: Gartner, Digital Workers Struggle to Find the Information Needed to Effectively Perform Their Jobs (3) Source: RingCentral, From Workplace Chaos to Zen (4) Source: PWC, 2025 Global Digital Trust Insights (5) Source: Gartner, 2023 Gartner Hype Cycle for Generative AI Dropbox Today 22
- 23. 23 Find anything. Protect everything. DropboxDash for Business combines universal search and organization with content access control. Find, organize, share, and secure content across all your apps effortlessly—so you can focus on the work that matters most. Dash for Business Announced October 15th, 2024
- 24. Centralize company dataand enable teams to work smarter, faster, and more securely. Dash combines AI- powered search, organization, and content control to save time and boost efficiency. Business Overview 24 Unlock the power of your data Dropbox Tomorrow Find AI-powered universal search helps teams find content quickly, saving time for more valuable work. Share Stacks are shareable content collections that simplify organizing and sharing, improving alignment across teams. Secure Protect and Control content governance tools enable teams to manage access permissions and prevent unauthorized sharing across all platforms in seconds. Organize AI-powered insights help teams quickly summarize documents and submit queries to enhance understanding of critical business information.
- 25. Save time, savemoney Enlist AI to take over low-value tasks and free up time for employees to do more work that impacts the business. Speed decision-making Give employees all the company information and knowledge they need to make better informed business outcomes. Provide a consistent experience Create a cohesive internal culture by giving all team members a unified starting point for their workday. Y our company will feel the impact daily Establish a source of truth Always be in control of the latest company data and content with a centralized platform. Protect and control your cloud data Helps to ensure that employees and external partners see only the right content, and that sensitive company data isn’t surfaced unintentionally. Our data access governance tools helps keep your company data secure. Dropbox Tomorrow Business Overview 25
- 26. $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 2023 2024 20252026 2027 2028 $6.5 $8.1 $10.5 $13.6 $17.4 $21.6 Business Overview Dropbox Today Worldwide Search and Knowledge Discovery Software* TAM Category tailwind for Dash for Business: AI-powered universal search +27% CAGR Note: $ USD in Billions Source: IDC, Worldwide Search and Knowledge Discovery Software Forecast, 2024–2028 *Search and knowledge discovery software is software that can find, locate, and provide answers, products, or information for users. 26
- 27. Media Manufacturing Professional ser vices T echnology AE C Our Go-To-Marketapproach Our Go-To-Market approach Core FSS • • • • Lead with a self-serve sales motion, complement with managed sales Ease of use Low onboarding friction Platform neutrality Viral expansion Dropbox Dash for Business • • • Lead with managed sales Target installed base of Teams customers SMBs between 100 - 1000 employees Expand to include self-serve motion PRODUCTS OTHER DISTRIBUTION CHANNELS KEY INDUSTRIES • • • • • • • Distributors Direct Market Resellers Value-Added Resellers System Integrators Managed Service Providers Independent Software Vendors (ISVs) OEMs/Telcos (architecture, engineering, construction) Dropbox Tomorrow Business Overview 27
- 28. Dropbox Dash for Business Cross-sell Createan integrated and bundled experience within our existing install base of 575k paying teams customers Develop Self-serve Motion Build Dash for self-serve teams to reach the broader SMB market and individuals Create Standalone Purchasing Options Add net new (non-FSS) users to the Dropbox ecosystem by selling standalone licenses of Dash for Business Feature Innovation Enhance the Dash user experience by leveraging user feedback, improving existing features, and introducing new functionalities Dropbox Tomorrow Business Overview Our Go-To-Market approach 28
- 29.
- 30. 2022 2023 2024 $2,325 $2,502$2,548 Revenue (as reported) ($M)⁽¹⁾ 2022 2023 2024 82% 83% 84% Non-GAAP Gross Margin⁽¹⁾⁽²⁾ 2022 2023 2024 31% 33% 36% Non-GAAP Operating Margin⁽¹⁾⁽²⁾ 2022 2023 2024 $764 $759 $872 Free Cash Flow ($M)⁽¹⁾⁽³⁾⁽⁴⁾ (1) Graphs presented in this illustration are not drawn to precise scale relative to each other. (2) Non-GAAP gross margin and non-GAAP operating margin exclude stock-based compensation expense and certain non-recurring adjustments. See appendix for non-GAAP reconciliation. (3) Free cash flow is GAAP net cash provided by operating activities less capital expenditures. See appendix for non-GAAP reconciliation. (4) Free cash flow in 2023 is inclusive of payments of ~$39M related to the reduction in force and ~$28M for the termination of a part of real estate lease in San Francisco (5) Free cash flow in 2024 is inclusive of payments of ~$52M related to the reduction in force and ~$15M for the termination of a part of real estate lease in San Francisco Financial Highlights Annual Performance Strong performance at scale 30
- 31. Q4'23 Q1'24 Q2'24Q3'24 Q4'24 $190.3 $166.3 $224.7 $270.1 $210.5 Free Cash Flow ($) Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 $635.0 $631.3 $634.5 $638.8 $643.6 Revenue (as reported) ($M) Non-GAAP Operating Income ($M) Financial Highlights Quarterly Performance Non-GAAP Operating Margin Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 204.7 230.7 227.9 231.5 237.4 (1) Graphs presented in this illustration are not drawn to precise scale relative to each other. (2) Non-GAAP operating margin excludes stock-based compensation expense and certain non-recurring adjustments. See appendix for non-GAAP reconciliation. (3) Free cash flow is GAAP net cash provided by operating activities less capital expenditures. See appendix for non-GAAP reconciliation. (4) Free cash flow in Q4'23 is inclusive of ~$28M for the termination of a part of real estate lease in San Francisco in Q4. (5) Free cash flow in Q4'24 is inclusive of ~$52M from the reduction in force, primarily consisting of severance, pro-rata bonuses, employee benefits and related costs. 32.2% 36.9% 36.5% 35.9% 36.2% (2) (2) (3) (1) 31
- 32. (1) Graphs presentedin this illustration are not drawn to precise scale relative to each other. (2) Total ARR for 2021 and 2022 are revaluated using exchange rates set at the beginning of fiscal 2023. 2022 2023 2024 $134.51 $139.38 $140.23 ARPU ($)⁽¹⁾ 2022 2023 2024 $2,430 $2,523 $2,574 Constant Currency ARR ($M)⁽¹⁾⁽²⁾ 2022 2023 2024 17.77 18.12 18.22 Paying Users (M)⁽¹⁾ Financial Highlights Annual Key Metrics 32
- 33. Q4'23 Q1'24 Q2'24Q3'24 Q4'24 $138.83 $139.59 $139.93 $139.05 $140.06 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 $2,540 $2,556 $2,573 $2,579 $2,574 Financial Highlights Quarterly Key Metrics Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 18.12 18.16 18.22 18.24 18.22 ARPU ($)⁽¹⁾ Constant Currency ARR ($M)⁽¹⁾⁽²⁾ Paying Users (M)⁽¹⁾ (1) Graphs presented in this illustration are not drawn to precise scale relative to each other. (2) Total ARR for 2023 are revaluated using exchange rates set at the beginning of fiscal 2024. 33
- 34. Financial Highlights Liquidity Overview Note:Amounts shown in USD in Millions ($M) (1) Cash and Investments includes cash and cash equivalents and short term investments (2) DDTL: Delayed Draw Term Loan Q4'24 Cash and Investments Total Liquidity $1,594 $2,594 (1) $1,000 Remaining Availability on DDTL $2.6 billion Available Liquidity (2) 34
- 35. Gross Debt :$2.7 billion Net Debt : $1.1 billion T TM Gross Debt / Adj. EBITD A : 2.6x T TM Net Debt / Adj. EBITD A : 1.1x Term Loan Financial Highlights Debt Maturities $1.0B (SOFR + 3.75%) $696M (0% Coupon) $693M (0% Coupon) 2025 2026 Convertible Notes 2027 2028 Convertible Notes 2029 Term Loan $696 $693 $1,000 Note: Amounts shown in USD in Millions ($M) (1) Includes total debt and finance leases (2) Includes total debt and finance leases less cash and cash equivalents and short term investments (3) Adjusted EBITDA is a Non-GAAP measures that includes certain adjustments to GAAP Net Income. See Appendix for Non-GAAP reconciliation. Maturity 2029 Additional $1.0B accessible via delayed draw (1% ticking fee) Convertible Notes Maturity 2026 2028 (1) (2) Leverage Ratios (3) 35
- 36. Share Repurchase Program Financial Highlights ShareRepurchase Summary 2020 2021 2022 2023 2024 398 1,059 795 543 1,240 419 396 363 346 323 Share Repurchases ($M) Diluted WASO (M) • • • • In Q4'24, the Company repurchased approximately 13M shares for ~$350M In FY'24, The Company repurchased approximately 50M shares for ~$1.2B On December 11, 2024, the Board of Directors authorized the repurchase of an additional $1.2 billion of Class A common stock As of December 31, 2024 the Company had approximately $1.4B available under the current Board authorization Note Amounts shown in USD in Millions ($M) WASO: Weighted Average Shares Outstanding, shown in millions (M) $ $ $ $ $ 36
- 37. GAAP Revenue Constant CurrencyRevenue Non-GAAP Gross Margin Non-GAAP Operating Margin Unlevered Free Cash Flow Capital Expenditures Reduction in force cash expense Lease buyout Diluted weighted average shares outstanding $618-621 $621-624 ~38.5% 299M - 304M $2,465-$2,480 $2,483-$2,498 37.5% - 38.0% 283M - 288M $36 ~$11 $25-$30 ~$940 ~82.0% Q1 2025 FISCAL 2025 Financial Highlights FY25 Guidance Note: Amounts shown in USD in Millions ($M) 37
- 38.
- 39. Income from operations- GAAP Stock-based compensation Acquisition-related and other expenses Amortization of acquired intangible assets Net loss (gain) on real estate assets Workforce reduction expense Income from operations - Non-GAAP Non-GAAP operating margin 181.3 330.7 13.8 2022 Financial Highlights Non-GAAP reconciliation TWELVE MONTHS ENDED $ 18.0 30.9 719.0 — 175.2 $ % 538.7 338.0 28.2 2023 $ 30.9 32.8 819.9 39.3 (155.2) $ % 486.2 346.5 25.8 2024 $ 21.7 36.4 927.5 47.2 0.1 $ % Note: Amounts shown in USD in Millions ($M) 39
- 40. 127.8 92.3 7.0 SEPTEMBER 30, 2024 $ 4.4 36.2 231.5 — $ % Incomefrom operations - GAAP Stock-based compensation Acquisition-related and other expenses Amortization of acquired intangible assets Workforce reduction expense Income from operations - Non-GAAP Non-GAAP operating margin Financial Highlights Non-GAAP reconciliation THREE MONTHS ENDED Note: Amounts shown in USD in Millions ($M) Net loss (gain) on real estate assets — 267.4 82.9 7.1 DECEMBER 31, 2023 $ 4.3 32.2 204.7 0.4 $ % 143.5 78.0 6.2 MARCH 31, 2024 $ 3.0 36.5 230.7 $ % — 127.0 90.5 5.8 JUNE 30, 2024 $ 4.6 35.9 227.9 $ % — (157.4) — — DECEMBER 31, 2024 87.9 85.7 6.8 $ 9.7 36.9 237.4 47.2 $ % 0.1 40
- 41. $ 759.4 $ 871.6 $ NetCash provided by operating activities Capital expenditures Free cash flow 797.3 (33.8) 2022 Financial Highlights Free Cash Flow reconciliation $ 763.5 783.7 (24.3) 2023 $ 894.1 22.5 2024 $ TWELVE MONTHS ENDED Note: Amounts shown in USD in Millions ($M) 41
- 42. $ 224.7 $ 270.1 $ NetCash provided by operating activities Capital expenditures Free cash flow 175.5 (9.2) Financial Highlights Free Cash Flow reconciliation $ 166.3 230.6 (5.9) $ 274.2 (4.1) $ Note: Amounts shown in USD in Millions ($M) SEPTEMBER 30, 2024 THREE MONTHS ENDED DECEMBER 31, 2023 MARCH 31, 2024 JUNE 30, 2024 200.3 $ (10.0) $ 190.3 210.5 $ 213.8 (3.3) $ DECEMBER 31, 2024 42
- 43. Gross margin Research anddevelopment margin Sales and marketing Sales and marketing margin General and administrative General and administrative margin Financial Highlights Non-GAAP reconciliation AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS ACQUISITION-RELATED AND OTHER EXPENSES Gross Profit Research and development Income from operations Operating margin GAAP STOCK BASED COMPENSATION NON-GAAP — —% (1)% $ (9.6) —% —% — 2% 9.7 3.6 1% —% $ — —% — (3.2) 1% 6.8 534.7 83% 22% $ 142.4 8% 48.0 17% 106.9 37% 237.4 522.8 81% 38% $ 243.0 10% 62.9 20% 128.9 14% 87.9 5.9 1% (10)% $ (61.3) (2)% (12.2) (1)% (6.3) 13% 85.7 THREE MONTHS ENDED DECEMBER 31, 2024 (0.1) Note: Amounts shown in USD in Millions ($M) Net loss (gain) on real estate assets — — 0.1 Net loss (gain) on real estate assets margin —% —% NET LOSS (GAIN) ON REAL ESTATE ASSETS WORKFORCE REDUCTION EXPENSE —% —% 0.1 —% 2.4 (5)% —% (2)% (12.5) 7% 47.2 — — —% —% — —% —% —% — — —% (2.6) — (0.1) —% (29.7) —% — —% $ 43
- 44. Gross margin Research anddevelopment margin Sales and marketing Sales and marketing margin General and administrative General and administrative margin Financial Highlights Non-GAAP reconciliation AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS ACQUISITION-RELATED AND OTHER EXPENSES Gross Profit Research and development Income from operations Operating margin GAAP STOCK BASED COMPENSATION NON-GAAP — —% (1)% $ (4.3) —% —% — 1% 4.3 3.7 1% —% $ — —% — (3.4) 1% 7.1 522.4 82% 25% $ 158.9 8% 47.7 18% 111.1 32% 204.7 513.0 81% 35% $ 222.1 10% 61.3 19% 119.6 42% 267.4 5.7 1% (9)% $ (58.7) (2)% (13.5) (1)% (5.0) 13% 82.9 THREE MONTHS ENDED DECEMBER 31, 2023 Note: Amounts shown in USD in Millions ($M) Net (gain) loss on real estate assets — — (157.4) Net (gain) loss on real estate assets margin (25)% —% NET (GAIN) LOSS ON REAL ESTATE ASSETS WORKFORCE REDUCTION EXPENSE —% —% (157.4) 25% —% (0.1) 0.4 — — —% —% — —% (1)% —% — — —% (0.1) — 157.4 (25)% (0.2) —% — —% $ — —% —% —% — 44
- 45. Gross margin Research anddevelopment margin Sales and marketing Sales and marketing margin General and administrative General and administrative margin Financial Highlights Non-GAAP reconciliation AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS ACQUISITION-RELATED AND OTHER EXPENSES Gross Profit Research and development Income from operations Operating margin GAAP STOCK BASED COMPENSATION NON-GAAP — —% (1)% $ (19.5) —% —% — 1% 21.7 13.1 1% —% $ — —% — (12.7) 1% 25.8 2,141.5 84% 24% $ 618.1 7% 184.1 16% 411.8 36% 927.5 2,103.1 83% 36% $ 914.9 9% 241.2 18% 460.7 19% 486.2 22.9 1% (10)% $ (247.6) (2)% (52.3) (1)% (23.7) 14% 346.5 TWELVE MONTHS ENDED - 2024 Note: Amounts shown in USD in Millions ($M) Net loss (gain) on real estate assets — — 0.1 Net loss (gain) on real estate assets margin —% NET LOSS (GAIN) ON REAL ESTATE ASSETS WORKFORCE REDUCTION EXPENSE —% —% —% (12.5) 47.2 — — —% —% — —% —% — — —% (2.6) — (0.1) (29.7) —% — —% $ 2.4 (1)% —% 2% (2.2) —% —% 0.1 —% —% 45
- 46. Gross margin Research anddevelopment margin Sales and marketing Sales and marketing margin General and administrative General and administrative margin Financial Highlights Non-GAAP reconciliation AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS ACQUISITION-RELATED AND OTHER EXPENSES Gross Profit Research and development Income from operations Operating margin GAAP STOCK BASED COMPENSATION NON-GAAP — —% (1)% $ (22.2) —% —% (8.3) 1% 30.9 14.6 1% —% $ — —% — (13.6) 1% 28.2 2,063.9 83% 26% $ 648.9 7% 179.7 17% 415.4 33% 819.9 2,023.1 81% 37% $ 936.5 9% 237.1 19% 466.0 22% 538.7 23.3 1% (9)% $ (237.6) (2)% (55.1) (1)% (22.0) 14% 338.0 TWELVE MONTHS ENDED - 2023 Note: Amounts shown in USD in Millions ($M) Net (gain) loss on real estate assets — — (155.2) Net (gain) loss on real estate assets margin —% NET (GAIN) LOSS ON REAL ESTATE ASSETS WORKFORCE REDUCTION EXPENSE —% —% —% (6.7) 39.3 — — —% —% — —% —% — — —% (1.9) — 155.2 (27.8) —% — —% $ 2.9 (1)% —% 2% (0.4) (6)% (1)% (155.2) 6% (6)% 46
- 47. 452.3 (9.7) 57.5 DECEMBER 31, 2024 $ (13.9) 346.5 623.5 137.3 $ NetIncome - GAAP Other (income) / expense, net Interest (income) / expense, net Tax provision Depreciation & Amortization EBITDA - Non-GAAP Stock-based compensation Financial Highlights Non-GAAP reconciliation TWELVE MONTHS ENDED Note: Amounts shown in USD in Millions ($M) Net gain on real estate assets — 21.7 Acquisition-related and other expenses 0.1 Net (gain) loss on real estate assets 47.2 Workforce reduction expense 1,039.0 $ Adjusted EBITDA - Non-GAAP 47