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Dropbox Q3 Results Beat Estimates; Shares Up 7%

Shares of Dropbox Inc. (DBX) gained 7% in extended trading session on Thursday after the company's third-quarter adjusted earnings and revenues trumped Wall Street estimates.

San Francisco, California-based Dropbox's third-quarter loss narrowed to $5.8 million or $0.01 per share from $14.1 million or $0.07 per share last year. Adjusted earnings for the quarter rose to $0.11 per share from $0.07 per share last year.

Revenues for the quarter grew to $360.3 million from $286.7 million last year.

Analysts polled by Thomson Reuters estimate earnings of $0.06 per share on revenues of $352.57 million for the quarter.

Paying users rose to 12.3 million from 10.4 million last year, with average revenue per paying user increasing to $118.60 from $112.05.

Gross margin improved to 75.0% from 68.1% a year ago.

"We delivered another quarter of strong execution in Q3, driving healthy top line growth and expanding free cash flow margins," said Dropbox Co-founder and Chief Executive Officer Drew Houston. "We're shipping product features and updates our users love, based on a deep understanding of our customers and the tools they need to do their best work. Combined with our ecosystem of best-in-class partners, Dropbox is becoming an even more central part of our customers' workflows."

DBX closed Thursday's trading at $24.74, down $0.27 or 1.08%, on the NYSE. The stock, however, gained $1.86 or 7.52% in the after-hours trade.

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